The real unemployment rate is about 19%. Times are BAD. I know I act like a know-it-all youngster but all of the older people I talk to say that even though this news fluff comes out stating optimistic reports - or at least reports that neutralize the negatives, they really haven't ever seen it this bad. We live in a different world than we did in the '30s. Our basic needs and standard of living are different. Capitalism and government function differently. You can't easily just compare unemployment numbers from the Great Depression to those current.

 

 

 

I don't doubt that data at all, though the big difference between this calamity and the 30s is that fact that the feds will keep the money flowing through the food stamp system. I'd imagine some folks find the experience of living on a very limited food budget to be very challenging for a couple months until you learn how to cook and eat more cheaply.

 

I wonder if there is now a huge spike in interest in the art of cooking. Whether it's people dusting off their old cookbooks, asking people in Kroger isles for food advice or calling up their grandparents for advice on preparing food. Everyone was so used to just running to Chipotle or McDonalds or City BBQ or what have you. Some women my age don't even know how to cook eggs. Now people have to take basic things from the grocery store and actually come up with something. Imagine that! What a concept! But it's interesting that companies like Kroger, Biggs, and Giant Eagle can count on a steady supply of business and rely on a monthly business cycle due to the food stamps. Maybe they are or will actually see an increase in profit from people buying their merchandise as opposed to eating out so much.

I would love to see people cooking at home. It's generally more healthful, it's much cheaper, and maybe we could get rid of the overflow of junk restaurants that have done nothing to help the American waistline.  That right there is a major difference between the 30s and now, but I think the true main difference is credit cards.  With your plastic, you can still go to Chipotle or McDonald's.  In the 30s, if you didn't have the money for food, you didn't eat, so you figured out how to really make do with rice or beans or whatever.

And they say retail sales are up. I don't believe anything they say anymore. They can tell us anything to make us feel better about the situation.

And they say retail sales are up. I don't believe anything they say anymore. They can tell us anything to make us feel better about the situation.

 

I work in retail.  I can tell you that sales are holding up better than expected, and have had a very noticeable uptick in the last couple of weeks.  I don't know if it will continue thru the holidays.

 

Keep in mind... you aren't exactly comparing apples to apples anymore.  A number of retail stores are no longer in business.  The remaining retail outlets are gaining from the disappearance of Circuit City and such.  Not sure if they are capturing 100% of the previous sales from these defunct outlets, but they are capturing quite a bit of it.

 

Retail has seen a major shift down the scale during this recession.  Sales of lower-priced stores (walmart) are doing very well.  Middle-tier stores are losing some (dept stores).  The high-end is losing much more, but it's a much smaller piece of the overall picture.

 

I do believe retail sales are rising for the remaining companies.  Plus, the population is growing at nearly 1%/yr, so that serves as another impitis for sales growth.

 

I think a big trend taking place right now is that people are spending money on "little luxuries".  They can't afford to take a nice vacation, expand the house, or buy a new car.  So they make themselves feel better by buying a new cell phone, TV, or such.  So some money that previously went into the 'travel & leasure', home remodeling, and 'automotive' sectors is now flowing into retail.  It could be that the overall pie of consume spending is shrinking, but there is a noticeable rearrangement of the categories that get the remaining money.

 

David, I'll tweak your point a bit. People are definitely cooking more at home, but McDonald's is doing fantastic and Chipotle is doing just fine. Generally, you can't get as many calories from home cooking as from eating fast food. The real hurt is being felt further up the chain - the sit-down meal places. It also isn't just about eating at home, but more about learning how to maximize the food stuffs you bring into the house. Americans are still exceptionally particular in the cuts of meat that we eat compared to the rest of the world.

 

Things are undoubtedly rough, but I don't think we are going to have a 32-33. I think the modern economy and state will allow the economy to jump to 34-35. I think this will be a long slow slog out of it. You will know things are taking a turn for the worse if the U.S. has a '75 Saigon moment in Iraq or Afghanistan in the next couple years.

David, I'll tweak your point a bit. People are definitely cooking more at home, but McDonald's is doing fantastic and Chipotle is doing just fine. Generally, you can't get as many calories from home cooking as from eating fast food.

 

I think it depends on what you make. McDonalds has a lot of clout over the beef industry so if you compare a hamburger from there, to a hamburger at home, then the home made hamburger might not look favorable.

Economic survey: Job losses to bottom out in 1Q

 

"Economists expect the joblessness that has weighed down the nation's economic recovery will start to slowly abate in 2010, but they predict consumers will continue to keep a tight rein on spending, according to a new survey."

http://news.yahoo.com/s/ap/20091123/ap_on_bi_ge/us_nabe_survey

 

Lets fix this first quote of the article:

Wall Street Voodoo experts looked into their crystal ball hoping that the joblessness that has weighed down the nation's economics might some how, hopefully stop falling in 2010, but their crystal ball clearly says consumers will continue to keep a tight rein on spending, according to a survey completed by those employed by Wall Street financial firms.

 

Anyone else like to take a shot at it?

This discussion was originally titled something like "Housing bubble causes US recession?" -with a big discussion on that ending question mark.

 

Here is a nice little review of the past decade, year-by-year, looking at the housing boom/bust and it's effect on the US economy.

 

 

http://realestate.msn.com/article.aspx?cp-documentid=22693129&icid=msnre_moneyhp

 

 

Boom to doom: The decade in housing

 

It was the best of times, it was the worst of times … really. The last decade started with a bang and ended with a whimper as real estate boomed and busted more spectacularly than anyone had ever seen before, taking down not only the U.S. economy but fortunes around the globe. It was a decade that managed to change even the most basic belief about real estate......

 

 

 

Anyone else like to take a shot at it?

 

How about simplifying it a bit...

 

"Highly paid industry experts who predicted no recession would occur have another prediction they'd like to share with us...."

 

 

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20091124&id=10762249

 

Imports restrain U.S. growth in Q3

 

[2009Q3 GDP estimate revised down from 3.5% to 2.8%}

WASHINGTON (Reuters) - The U.S. economy grew more slowly than initially thought in the third quarter, held back by strong imports and weak investment in nonresidential structures, hinting at a lackluster recovery.

....

 

What I find interesting in the article is how far off the initial estimates were in each of the specific categories. There were HUGE revisions in imports, commercial construction, business inventories, etc. 

 

I guess these large revisions are to be expected at an inflection point of the economy.  So much of the estimating is based on "last period plus/minus x". Unfortunatley, they don't seem to look into the "x" components very closely until well after the time period.

 

Anyone else like to take a shot at it?

 

How about simplifying it a bit...

 

"Highly paid industry experts who predicted no recession would occur have another prediction they'd like to share with us...."

 

 

 

I like it!!!! One sentence and the truth is revealed.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20091124&id=10762249

 

Imports restrain U.S. growth in Q3

 

[2009Q3 GDP estimate revised down from 3.5% to 2.8%}

WASHINGTON (Reuters) - The U.S. economy grew more slowly than initially thought in the third quarter, held back by strong imports and weak investment in nonresidential structures, hinting at a lackluster recovery.

....

 

What I find interesting in the article is how far off the initial estimates were in each of the specific categories. There were HUGE revisions in imports, commercial construction, business inventories, etc.

 

I guess these large revisions are to be expected at an inflection point of the economy. So much of the estimating is based on "last period plus/minus x". Unfortunatley, they don't seem to look into the "x" components very closely until well after the time period.

 

 

You are just to nice. I think they work very hard not to look at X. They knew the number was inflated and it's still inflated. Give them a year or two or three and it will be half what it was originally reported. Its sad, but I will give them one thing, they have been very consistent over the last few years with the process of reporting one number then reducing it before the next number comes out. (Not just GDP, but almost all the data they report.)

 

Sheep, are we awake yet or are the majority of the flock still listing to the bearded shepard tell bedtime stories.

Lets fix this first quote of the article:

Wall Street Voodoo experts looked into their crystal ball hoping that the joblessness that has weighed down the nation's economics might some how, hopefully stop falling in 2010, but their crystal ball clearly says consumers will continue to keep a tight rein on spending, according to a survey completed by those employed by Wall Street financial firms.

 

Anyone else like to take a shot at it?

 

The headline says "job losses to bottom 1st quarter".

 

Based on those monthly Ohio employment graphs I've been posting the 1st quarter is always the low for the year...January, February, March. 

 

We've already dropped quite a bit since 2006/2007, so, sure, I expect less employment in the first quarter, since the usual winter low will be added to an already weak jobs situation.  The question is what is going to happen in the 2nd and 3rd, which is usually when the Ohio economy adds jobs or makes up for the big winter dip in employment.  If this is weak, like it was this year, or like it was in 2008, the employmen low will be the first quarter of 2011, not 2010.

FDIC reports biggest drop for business loans on record

 

"U.S. banks are earning money again, but they're writing fewer business loans, threatening a fragile economic recovery.

 

"Until small businesses are able to borrow, we can't have a robust economy, because that's your largest source of jobs," says Richard Posner, a law professor at the University of Chicago and a federal circuit judge. The Small Business Administration has said that small businesses created 64% of new jobs in the past 15 years."

http://www.usatoday.com/money/industries/banking/2009-11-24-fdic-bank-profits_N.htm

 

It has become very clear Banks are not loaning money to anyone. Not for home loans, business loans, etc. What they are doing is using the taxpayer money to buy stocks, commodities and government debt. All at 0% interest rate. Most people could make money if the money they are getting it basically free. The great American wealth transfer continues on.

We need to hit rock bottom for us to become a better nation. We need everyone on the same page. Band-aids aren't working.

We need to hit rock bottom for us to become a better nation. We need everyone on the same page. Band-aids aren't working.

 

No more calls.  We have a winner!

So, I take it you two are willing to lose your jobs/homes/saving for this to happen?  I mean, otherwise, you're asking someone to make a sacrifice that you wouldn't yourself.

So, I take it you two are willing to lose your jobs/homes/saving for this to happen?  I mean, otherwise, you're asking someone to make a sacrifice that you wouldn't yourself.

 

I'm not reading it that way.  I'm reading it as once we hit rock bottom some policies/procedures need to put in place and a whole 'lota personaly responsibility needs to come into play, ie teaching those who purposely living above your means.

 

 

I'm not sure what "rock bottom" means to the two of you, but to me it means a lot more people lose the ability to support themselves and their families.

I think we expect too much. I think we only think of ourselves. We only live one time and all we think about is buying a 56 inch tv? A 500,000 home?  I think we are greedy. No one wants to be at the bottom, but we can learn alot from being there. Life is what we make of it.

http://money.cnn.com/2009/11/25/markets/premarkets_friday/

Wall Street prepares to plunge

Dubai World's hesitancy to pay off its debt inspires worldwide stock plummet.

 

NEW YORK (CNNMoney.com) -- U.S. stocks were set to plunge Friday in tandem with worldwide markets, as Dubai World and its debt woes threatened Wall Street's confidence.

 

Dow Jones industrial average, Nasdaq and S&P 500 futures plummeted, by nearly 300 points on the pre-market Dow alone, hinting that stocks could take a dive during their abbreviated session on Black Friday.

So, I take it you two are willing to lose your jobs/homes/saving for this to happen? I mean, otherwise, you're asking someone to make a sacrifice that you wouldn't yourself.

 

I'm not reading it that way. I'm reading it as once we hit rock bottom some policies/procedures need to put in place and a whole 'lota personaly responsibility needs to come into play, ie teaching those who purposely living above your means.

 

You want to speak on mindless spenders who have no self control but you seem to always leave executive leaders out of the picture. You don't care about the people who lost their life savings and whose kids cant go to college because toleration of uncertainty is a privelage for the elite. You made it perfectly clear in another thread that you would be fine if the economic crisis extended to you.

 

That scares me because the people at the top who need to be innovative and invest in human capital are the ones not being put in shock mode the way the people in the middle and at the bottom are, who are losing everything.

 

If  you ask me, the whole business world needs to re-assess risk.

 

 

Productivity surges 8.1 percent, most in 6 years

 

"Productivity surged in the third quarter by the largest amount in six years while labor costs fell. While that indicates inflation is remaining under control, it also signals that workers' wages are getting squeezed, raising doubts about the durability of the economic recovery.

 

The U. S. Commerce Department said Thursday productivity rose at an annual rate of 8.1 percent in July-September period, the biggest jump since 2003, while unit labor costs fell at a 2.5-percent rate."

http://www.ibj.com/productivity-surges-81-percent-/PARAMS/article/14893

 

What is 'good' for Wall Street short-term doesn't always equal something good for main street, short-term and/or long-term. Less employment, lower wages, equals less spending. This 'recovery' has almost no legs.

 

But...but... but.... but....

 

U.S. services sector contracts

 

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20091203&id=10827478

 

The U.S. services sector contracted in November, with an index measuring activity falling to its lowest reading since July, according to a report released on Thursday that was a shock to economists forecasting the economic recovery was gathering pace.

 

The Institute for Supply Management said its services index shrank to 48.7 in November from 50.6 in October. That was slightly below the 51.5 median forecast of 62 economists surveyed by Reuters. A reading above 50 indicates expansion in the sector.

 

The services sector represents about 80 percent of U.S. economic activity and includes businesses such as banks, airlines, hotels and restaurants.

But...but... but.... but....

 

U.S. services sector contracts

 

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20091203&id=10827478

 

The U.S. services sector contracted in November, with an index measuring activity falling to its lowest reading since July, according to a report released on Thursday that was a shock to economists forecasting the economic recovery was gathering pace.

 

The Institute for Supply Management said its services index shrank to 48.7 in November from 50.6 in October. That was slightly below the 51.5 median forecast of 62 economists surveyed by Reuters. A reading above 50 indicates expansion in the sector.

 

The services sector represents about 80 percent of U.S. economic activity and includes businesses such as banks, airlines, hotels and restaurants.

 

I think you left out a 't' in your first line. That extra 't' would help define the Wall Street 'economist' a little better.

 

Butt...butt... butt.... butt....

Who that has taken 10th grade economics be shocked by that?

Who that has taken 10th grade economics be shocked by that?

 

That is why the 'economist' have become a joke. They have sold their souls to big business and can no long objectively review data and project future data.

Jobless rate unexpectedly falls to 10 percent

 

"The U.S. unemployment rate unexpectedly fell to 10 percent in November as employers cut the smallest number of jobs since the recession began, the Labor Department announced Friday morning.

 

The rate had been expected to remain at 10.2 percent, the same as in October, a 26-year high."

http://www.ibj.com/jobless-rate-unexpectedly-falls-to-10-percent/PARAMS/article/14942

 

Wow, what a turn around in our fortunes.  :wink: I don't think I have ever seen this type of spread between ADP's data and the FEDs?!!! You know one of two things happened here, either our employment situation really improved or the FEDs are taking the data manipulation to a whole new level.

So who actually believes today's unemployment rate dropped to 10%?

"Not I," said the duck.

So who actually believes today's unemployment rate dropped to 10%?

 

Just the tooth fairy

 

So who actually believes today's unemployment rate dropped to 10%?

 

Just the tooth fairy

 

 

I am not sure even this tooth fairy would go for this one.

So who actually believes today's unemployment rate dropped to 10%?

 

That's because of seasonal employment. It'll go back up.

So who actually believes today's unemployment rate dropped to 10%?

 

That's because of seasonal employment. It'll go back up.

 

It should be interesting to watch since the services sector contracted in November.

Here are two very interesting charts to take a look at.

 

The first chart shows how much debt the FEDs (taxpayer) has taken onto the books.

http://s.wsj.net/public/resources/images/P1-AS590A_Fed_NS_20091119194042.gif

 

The second chart shows the growth of our debt vs GDP.

http://img177.imageshack.us/img177/5528/graphfeddebtrecent.jpg

 

These charts should make the average American very concerned for the long term stability of our country's financials.

The second chart shows the growth of our debt vs GDP.

http://img177.imageshack.us/img177/5528/graphfeddebtrecent.jpg

 

Doesn't make me sweat bullets.  This chart seems to reflect government reaction to recessiions.  Pretty steady throughout the 1970's, then the recession hits at the end of Carter's term.  It doubles during the Reagan and GH Bush administrations (30%-60%), continues to increase but then drastically decreases under Clinton, then goes on a steady climb after 9/11 with the wars and associated costs, and finally makes a monumental jump with the bailouts and stimulus bill under the last days of Bush and the start of the Obama administration.

 

The problem I have with playing backseat driver on these issues is that the effects are speculative.  Perhaps the dramatic increase under Reagan and GH Bush led to the proseperous times we had under Clinton.  Maybe GW's and Obama's bailout/stimulus increase will do the same for the next administration.  How bad off would we be right now if the banks had not been bailed out?  Where would we be as a country if the New Deal had never been put in place by FDR & Co.?  Would we have ever recovered from the great depression if those measures were not taken?  Etc., etc., etc.  No one knows, and since this is the road we chose to travel, no one will ever know. 

The debt doesn't bother me. What bothers me is all the turbulance in our economy. High highs and low lows. What are we bi-polar? Markets get way too hot and then they bottom out. We make interest rates artificially low then too high. Investment bankers are so concerned about competing with each other that they take on too much risk; the short term changes in stock price have become a hell of a lot more important than the long term dividends. I feel bad for people whose pension funds were put towards real estate projects.

I have a feeling this and the great depression will have nothing on whats coming in the NEAR future.  We are already seeing companies filling big boxes with little product or much less, than in the past. We will be at a point of no return.

I have a feeling this and the great depression will have nothing on whats coming in the NEAR future.  We are already seeing companies filling big boxes with little product or much less, than in the past. We will be at a point of no return.

 

Honey what train are you on?  For a lot of people, we're already at the station called "the point of no return" where more passengers will board.

I have a feeling this and the great depression will have nothing on whats coming in the NEAR future. We are already seeing companies filling big boxes with little product or much less, than in the past. We will be at a point of no return.

 

I think we will be alright.  My Great Uncle, who is your typical pipe smoking old man longing for the 1950's, has been saying this Country is going to hell in a hand basket for the past 30 years.  Still waiting....

The debt doesn't bother me. What bothers me is all the turbulance in our economy. High highs and low lows. What are we bi-polar? Markets get way too hot and then they bottom out. We make interest rates artificially low then too high. Investment bankers are so concerned about competing with each other that they take on too much risk; the short term changes in stock price have become a hell of a lot more important than the long term dividends. I feel bad for people whose pension funds were put towards real estate projects.

 

The debt concerns me because it will ultimately lead to high cost to brough from other nations to continue our lifestyle. It will also burden the taxpayer soon or later with higher taxes to pay the interest on the debt. While I don't believe we are at default levels yet, countries like England and Japan have debt levels that may lead to such an event. This would shock the world financial system severely.

It will also burden the taxpayer soon or later with higher taxes to pay the interest on the debt. While I don't believe we are at default levels yet, countries like England and Japan have debt levels that may lead to such an event.

 

It will burden the taxpayer, true. That's why I think employment is such a big issue. The unemployment rate is (supposedly) 10% but we know it's much higher than that when you factor in other things. Even when the unemployment rate is technically 'good', around 5%, it doesn't account for part time workers and people who are encarcerated (which there are millions). That means the debt burden is straining those who actually DO pay taxes and work the most. They have to carry everyoen else. I don't like how major American and Japanese corporations have a bias towards short term profits that ultimately lead to temporary workers, part time employment with no benefits, short term contracts and outsourcing. That's no way to develop a society. It inhibits human capital and ultimately promotes unemployment/underemployment. Japan is even worse than us when it comes to that. You said their national debt is approaching default levels? I certainly wouldn't be surprised. 

 

 

 

 

Labor Dept: Available Labor Rate Increases To 10.2%

 

December 5, 2009 | Issue 45•49

 

WASHINGTON—In what is being touted by the Labor Department as extremely positive news, the nation's available labor rate has reached double digits for the first time in 26 years, bringing the total number of potentially employable Americans to an impressive 15.7 million.

Enlarge Image Solis

 

Hilda Solis briefs the press corps on the unprecedented level of untapped manpower.

 

"This is such an exciting time to be an employer in America,"...

 

 

 

http://www.theonion.com/content/news/labor_dept_available_labor_rate

speaking of jobs... or lack there of...

 

http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html

 

 

I love the terminology. "Available labor rate" wtf?

Gallup: Holiday spending off 21% from 2008

 

"After a diffident start to the Christmas shopping season, consumers have turned pessimistic — very pessimistic.  According to the latest Gallup survey, sales have dropped 21% compared to 2008, a year that was itself a disaster:.."

http://content.usatoday.com/topics/article/Organizations/Companies/Gallup/0ffJh2Jebz78E/1

 

This won't be good for the economic 'rebound'.

We don't have new technology producing job like the dot bust in the early 2000's.  Wind or green technology is still years away to produce the kinds jobs that would make a difference. We need some kind of breakthrough to produce new jobs. Expecting our current F1000 companies to start producing new jobs again won't happen because they are so scared of their bottom lines. I mean really how many jobs can the medical field support? That's about the only field that's growing. We are so screwed when gas gets to even only $4 a gallon.

I think China is going to start growing, use petroleum, drive up the price of energy and henceforth "burn up" the "fuel" of our economy.  I think high oil prices are what weakened the economy and busted the bubble of derivatives. 

We don't have new technology producing job like the dot bust in the early 2000's. 

 

People were too confident in new technology; that's what caused the dot com bust. IPOs would generate millions of dollars from venture capitalists and a lot of the companies didn't even have a sound business model. People were paying high prices for worthless stock. People finally realized the limitations of the internet and e-commerce when it went bust and the market corrected itself.

Gallup: Holiday spending off 21% from 2008

 

"After a diffident start to the Christmas shopping season, consumers have turned pessimistic — very pessimistic.  According to the latest Gallup survey, sales have dropped 21% compared to 2008, a year that was itself a disaster:.."

http://content.usatoday.com/topics/article/Organizations/Companies/Gallup/0ffJh2Jebz78E/1

 

This won't be good for the economic 'rebound'.

 

I can only do so much people!