Idk if this is the right place to post this, but I found this article to be a really interesting look at how the economy is affecting where people are choosing to live.  If people really are flocking towards locations with low cost of living, this could be a huge boon for Ohio.

 

http://www.theatlantic.com/business/archive/2010/09/why-oklahoma-city-could-represent-the-future-of-america/62897/

 

While afforadable housing and cost of living is one part of the formula, the availability of jobs is even larger. I think areas that can do both, clearly have an advantage. OKC currently has both of these items going for them.

What on earth are they talking about, a world job crisis (in the US and Europe)? Didn't they get the memo, the US recession was over a year ago. Don't they know, if the Hamptons and Washington are flush with money then everything is fine.

 

IMF fears 'social explosion' from world jobs crisis

 

"America and Europe face the worst jobs crisis since the 1930s and risk "an explosion of social unrest" unless they tread carefully, the International Monetary Fund has warned."

 

 

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8000561/IMF-fears-social-explosion-from-world-jobs-crisis.html

Cincinnati in particular have been on the center of our relocation radar screen now for a couple of years. Housing is afforable and the old houses I love are abundant there

 

Old houses in the Cincy area - that's me!  Mine is a painted lady (1870s) on 3.5 acres north of the city. All original woodwork that inspectors, appraisers, and general visitors just drool over.  And I paid less for it than a condo in Las Vegas.

 

But I'm veering off topic.  Email me if you want to now about old houses north of Cincy.  I've been in quite a few during my search.

Mean duration of unemployment increasing over time?  Must be the side effect of a more and more specialized workforce.

 

(based on chart just above posted by RageRunner)

I know there has been some discussion on weather consumers have been cutting their credit card debt. It appears those first few reports forgot to take into account defaults. Defaults up, credit card debt up as well. Not a good combo for the future. This will only bring more defaults and bankruptcies in the future. It will also put more pressure on the ability to spend and increase America's number one economic engine.

 

Credit card debt falling? Not really

 

"Credit card debt decreased by about $12 billion in the second quarter of 2010, compared with the previous quarter. However, the charge-off rate over the same period increased from 10.1%, or $21.7 billion, to 10.8%, or $21.8 billion. With this data included, CardHub reported, the total U.S. consumer credit card debt actually increased by $9.7 billion."

 

"What we are seeing is that consumers are charging off their debt in record numbers, and the consumers who are not charging off their debt are accumulating more," said Odysseas Papadimitriou, the CEO and founder of CardHub."

http://articles.moneycentral.msn.com/Banking/YourCreditRating/credit-card-debt-falling-not-really.aspx

WOW!  :o :o :o :o

Mean duration of unemployment increasing over time?  Must be the side effect of a more and more specialized workforce.

 

 

The Cleveland Fed has some stuff online on this employment issue, pretty much confirming that foreign report (but withouth the histrionics on "social unrest", which I don't think is in the cards for the USA).

 

Yet, this is becoming a big deal, a defining feature of this recession, even if its really just a magnification and intensification of a trend that started in 2001 or so (for Ohio, and certain parts of Ohio).  Also, Brookings is tracking this via their Metro Monitor series.  Seems like this is a very sticky number for certain places (Dayton and Toledo, for example).

Here's one article from the Cleveland Fed

 

Unemployment a New Natural Rate?

 

The past recession has hit the labor market especially hard, and economists are wondering whether some fundamentals of the market have changed because of that blow. Many are suggesting that the natural rate of long-term unemployment—the level of unemployment an economy can’t go below—has shifted permanently higher. We use a new measure that is based on the rates at which workers are finding and losing jobs and which provides a more accurate assessment of the natural rate. We find that the natural rate of unemployment has indeed shifted higher—but much less so than has been suggested. Surprising trends in both the job-finding and job-separation rates explain much about the current state of the unemployment rate.

 

(but withouth the histrionics on "social unrest", which I don't think is in the cards for the USA).

 

I think Americans have a much higher tolerance for bullsh!t than people in Europe or Asia do. It takes longer for workers and voters to realize they are being sold up the river. Or hell, it just takes longer to get any accurate/crucial information since the news media is a circus carnival that has gone well beyond Sky.

 

I would agree Americans are a lot more tolerant and take longer to have 'social unrest' comparied to Europe and many other places. We really have the mentality that it will get better, just be patient. I think this has helped our country and probably hurt our country at different times.

I have recently posted a lot of stats on how we may not have 'soup lines' but the concept is there, just in a different format. I came across a very good article that demonstrates this issue and how it is getting more pronounced. I think this continues to show a growing segment of the US population is closer and closer to the edge.

 

Watching Wal-Mart at Midnight

 

"Bill Simon, CEO of Wal-Mart’s U.S. business, at a Goldman Sachs conference last week, on behavior at a Walmart store around midnight at the end of a month:

 

“The paycheck cycle we’ve talked about before remains extreme."

 

“And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs,and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

 

“And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason.”

http://blogs.wsj.com/economics/2010/09/20/watching-walmart-at-midnight/

Generally, the first leg down of a depression doesn't bring social unrest, but when hope appears and then seems to disappear is when the trouble starts. Coxey's Army, The Bonus Army, the big Champion spark plug riots were 3-5 years into the economic miasma and the worst violence actually came during WWII when folks started feeling like the Depression was behind them finally. Bread riots also start to get more common.

 

I think we'll probably start to see rubbling next winter if things don't turn around. It is probably worth mentioning that employment is always a lagging economic indicator. The higher ed market in the humanities exists this year, whereas it was all but non-existent the last two years (though it seems to be mostly institutions w/ lots of money and high on the food chain or those at the bottom that have lots of enrollment as folks run to college to avoid the job market).

what does "charging off" the debt mean?

I think it means the credit card company decides the debt is uncollectable and takes the loss (or sells it cheap).  In truth, it sounds as though the lenders are doing the "charging off", not the consumers as the article states.

 

I still hate these kinds of articles though; aggregate and average credit use or debt are not terribly useful for describing the borrowing habits of American consumers unless you know how distributed those habits are.

what does "charging off" the debt mean?

 

Lender takes a loss; they realize they're not going to get their money (you can't squeeze blood out of a turnip), so they sell the debt to a third party, i.e "charge it off". The third party negotiates the debt, often settling for less than what you owe. This has happend to me when I was 18 and got overloaded with fees that went on to accumulate interest and it was a downward spiral from there as I couldn't keep up with it.  I was dumb and naieve with a 730 credit score but I didn't bother to learn all the stipulations of the agreement. They assumed my parents, like those of any other 18 y/os would bail me out of trouble but they didn't, so the problem just just escalated. I'll be so glad when credit card reform is done.

The Fed study that I linked to has a few more charts and a lot of discussion of flows into-and out-of unemployment.  But it is only looking at the unemployment rate....

 

...near the end of the study is this passage:

 

There are other reasons to believe that unemployment rates may stay well above the long-term rate for an extended period of time. Because of the length of the recession, there is a considerable number of potential workers who are not formally in the labor force. We have seen one of the sharpest drops in the labor force participation rate in the postwar data, as many unemployed workers simply stopped looking for a job. If some of these discouraged workers decide to search for a job as aggregate economic activity picks up, unemployment might decline at an even slower rate because the pool of unemployed workers is being replenished with workers re-entering the labor force.

 

...which is the number I've been looking at, the employment number, the ability of the economy to produce work.

 

Maybe what's going on is that the rise in the dual income household over the past 30 years or so means that there is some built-in cushion to job loss if one household member loses his or her job.  If they both lose jobs and unemployment runs out I guess that household is screwed.

 

Also, to some degree, these extensions of uenemployment insurance are postponing the inevetible downward mobility for some percentage of the unemployed, which is what C-Dawg alluded to in his post about finding work at Taco Bell. 

 

It might be that it will take a three or four job household to achieve subsistence levels (for unskilled/less educated workers) vs the old two-job household that we've become accustomed to.

 

@@@

 

Generally, the first leg down of a depression doesn't bring social unrest, but when hope appears and then seems to disappear is when the trouble starts. Coxey's Army, The Bonus Army, the big Champion spark plug riots were 3-5 years into the economic miasma and the worst violence actually came during WWII when folks started feeling like the Depression was behind them finally.

 

I was thinking of the 19th century panics, before we had social insurance, but I guess Coxey's Army was from that era.  If I recall right the big Pullman Strike was in the same era as Coxey's Army, and in the 1870s there was also a big railroad strike (vaguely recall something about this), and the rise of the Knights of Labor.  Those were sort of industry specfic and not around generalized economic discontent, though, which is what that study was talking about.

 

 

 

Yeah, the Railroad Strikes of 1877 were nationwide and quite violent. 1873 was the beginning of that post-war depression, though the economics of the late 19th century are complicated by the massive changes in the economy alongside of continued deflation and economic insecurity.

^

I think the 1870s recession saw a hiatus in house construction, too, based on some informal research I've done using old insurance maps of Louisville (though its not a good idea to generalize from one city).

 

@@@@

 

Back to our modern recession, here is an excerpt from Brookings' Metro Monitor report on the "Great Lakes" area:

 

Comparing Great Lakes metros’ low point for employment with their current job numbers shows just how far they have to go in making a full recovery from the Great Recession. Most Great Lakes metros, like the nation as a whole, hit their employment trough in the first quarter of 2010. Since that low point, eight Great Lakes metropolitan areas—Cleveland, Des Moines, Grand Rapids, Indianapolis, Louisville, Madison, Pittsburgh, and Syracuse—have recovered a greater share of jobs lost during the recession than the nation as a whole. Meanwhile, Chicago, Dayton, Detroit, and Milwaukee have recovered less than 2 percent of the jobs that they lost during the recession. Detroit lost more than 350,000 jobs between its peak at the end of 2004 and its trough early this year, and had regained less than 700 by the end of the second quarter.

 

...so we see, in Ohio, a range of performance in terms of employment, with Dayton still in the doldrums.

 

However, Cleveland is looking good. As is Youngstown, in manufacturing (maybe this is that Marecellus Shale thing KJP posts about, and that Jim Russell also discusses...

 

Manufacturing drove some of the job gains in Great Lakes metropolitan areas in the second quarter. Of the 21 largest Great Lakes metropolitan areas, 18 added manufacturing jobs between the first and second quarters of this year, with Youngstown’s manufacturing employment leaping by 8.9 percent, the biggest gain in the nation. In fact, of the 10 large U.S. metropolitan areas with the highest percentage gains in manufacturing jobs from the first to second quarters of this year, six are in the Great Lakes. Nationally, the manufacturing sector has been gaining jobs since January, and has been considered a bright spot in the Great Recession. But this did not translate into job gains in most Great Lakes metropolitan areas until recently: Less than half of the large Great Lakes metropolitan areas (9 out of 21) added manufacturing jobs in the first quarter of the year, and during the last half of 2009, small losses in manufacturing jobs were the rule in the region’s large metros. While these recent job gains are welcome, they do not signal a turnaround for manufacturing in the region. Manufacturing output in the region’s 21 largest metros, for example, was 9.2 percent lower in the last quarter than it was at the end of 2007.

This whole Recession can be summed up in 3 words: Perot was right.

 

Back when he was running for President in the 96 election, he was a vocal opponent against the NAFTA.  One comment he was dead on was "That giant sucking sound you hear is the sound of jobs leaving America...."  Truer words could not have been spoken.  I have an engineering background and pretty much all my friends from college frequently travel to China or Mexico either setting up shop there or working with suppliers who already have.

 

So now we have high unemployment, the home market is stalled out, the stock market is in flux...  because Perot was right.  Allowing all the manufacturing operations to relocate to foreign countries has been the #1 downer for our economy.  I don't care what anyone says about bundling bad loans together or adjustable rates exploding etc.  None of that would be an issue if there were still plentiful good paying jobs here.  I have 2 cousins that are recently graduated from OSU in engineering, neither can find a job.  That was UNHEARD of a few years ago.   

 

If this country is going to get on the right page, we need to go back to MAKING things.  That's the only real way the middle class will be restored and have sustainable income.  To hell with stimulus programs, tax programs, every other stupid govt program...  Get people jobs and the rest will take care of itself.  Healthcare included!!!

This myth of manufacturing as some vanished savior who will come again to make our world right continues to persist.  NAFTA is a plus for the country, and for Mexico.

 

I wonder if, back in the days when the agricultural sector was shrinking from 70% of the labor force to 2%, people were bemoaning the loss of agricultural jobs and trying to move backward instead of forward.  Probably.

 

Manufacturing is vastly more efficient today, as is transportation.  Technology and globalization have both opened up a better world for the vast majority of humanity and made it impossible to go back to the days of costly, inefficient manufacturing that so many in this part of the country seem to think was some kind of great thing.

^ I've been saying this for years, but it's a complex issue. In order for more manufacturing to be done in the United States, a few things need to happen.

 

As a culture, we need to be willing to accept paying higher prices for goods. The demand for a limitless supply of cheap goods to match our ever-increasing consumption is one of the reasons companies have moved manufacturing jobs overseas -- it allows them to keep up their profit margins while providing goods at the low costs that you and I demand, or have simply become accustomed to. A reduction in consumption could have this effect as well.

 

Making labor here more competitive might help as well. Unionized labor, for all the good it's done, has had its negative effects as well. The wage and benefit demands that unions push for are not an incentive for companies to hire American workers in certain industries. And when I say excessive benefits I'm not talking about basic things like health care, I'm talking about things like the jobs bank that the UAW had with GM, where workers who weren't needed were kept on payrolls.

 

Of course, if executives at American companies could do without the excessive salaries they receive right now, maybe some of that money could go toward hiring people. Just saying.

Manufacturing is vastly more efficient today, as is transportation.  Technology and globalization have both opened up a better world for the vast majority of humanity and made it impossible to go back to the days of costly, inefficient manufacturing that so many in this part of the country seem to think was some kind of great thing.

 

What's your point?  Cars are made in China pretty much exactly the same as they would be here in the US.  Same goes for everything from cell phones to air conditioners.  The technology is the same regardless of where the manufacturing is.  But that technology is also going to be focused at the location of the assembly plant.  Which needs to be here in the US.

 

Congress created the legislation which enacted NAFTA and created the outsourcing of so much manufacturing jobs.  Close up that loophole and stop the outsourcing.  Work with companies and unions locally to bring the jobs back.  It can be done.  It needs to be done.

Manufacturing is vastly more efficient today, as is transportation. Technology and globalization have both opened up a better world for the vast majority of humanity and made it impossible to go back to the days of costly, inefficient manufacturing that so many in this part of the country seem to think was some kind of great thing.

 

I don't think anyone's advocating a return to outdated methods of manufacturing, just for some of the current manufacturing that's being done in places like China and Mexico to return to the U.S.

^ I've been saying this for years, but it's a complex issue. In order for more manufacturing to be done in the United States, a few things need to happen.

 

As a culture, we need to be willing to accept paying higher prices for goods. The demand for a limitless supply of cheap goods to match our ever-increasing consumption is one of the reasons companies have moved manufacturing jobs overseas -- it allows them to keep up their profit margins while providing goods at the low costs that you and I demand, or have simply become accustomed to. A reduction in consumption could have this effect as well.

 

I don't think there's anything particularly desirable about becoming a culture that deliberately pays more than necessary for goods.  If we can manufacture higher-quality goods here, then there's a real difference in value that could justify the higher cost.  If we're talking about paying $20 for a T-shirt manufactured by an American rather than $10 for the exact same shirt manufactured in the Philippines, I don't see that that economic nationalism as socially or economically beneficial.  It's trying to turn inefficiency into a something praiseworthy.

 

Making labor here more competitive might help as well. Unionized labor, for all the good it's done, has had its negative effects as well. The wage and benefit demands that unions push for are not an incentive for companies to hire American workers in certain industries. And when I say excessive benefits I'm not talking about basic things like health care, I'm talking about things like the jobs bank that the UAW had with GM, where workers who weren't needed were kept on payrolls.

 

Each one of those things has a cost, though.  We may think that health benefits are more worthy than jobs banks, but in terms of making the numbers line up, they're economically similar.  Not identical, but similar.

 

Of course, if executives at American companies could do without the excessive salaries they receive right now, maybe some of that money could go toward hiring people. Just saying.

 

Those paychecks might allow the story-hungry media to whip up a few envy-fueling stories, but they're not all that much in the scale of entire economies.  The CEO of Timken, for example, made about $3.9 million last year, mostly in stock options.  He made $985k in cash.  There's only one of him, though, and the company grossed $3.1 billion last year in a dramatically down year; it was $5.7 billion in 2008.

Those paychecks might allow the story-hungry media to whip up a few envy-fueling stories, but they're not all that much in the scale of entire economies. The CEO of Timken, for example, made about $3.9 million last year, mostly in stock options. He made $985k in cash. There's only one of him, though, and the company grossed $3.1 billion last year in a dramatically down year; it was $5.7 billion in 2008.

 

I was more referring to the growing income imbalance. You've probably seen the statistics -- the top 1% of earners take in something like 30% of all income in America. The old rhetoric "the rich are getting richer and the middle class is disappearing"

Manufacturing is vastly more efficient today, as is transportation. Technology and globalization have both opened up a better world for the vast majority of humanity and made it impossible to go back to the days of costly, inefficient manufacturing that so many in this part of the country seem to think was some kind of great thing.

 

I don't think anyone's advocating a return to outdated methods of manufacturing, just for some of the current manufacturing that's being done in places like China and Mexico to return to the U.S.

 

A lot more of it is still here than is commonly appreciated.  As this report from the U.S.-China Business Council notes, while manufacturing employment is down, manufacturing output has continued to rise, except during recessions: http://www.uschina.org/public/documents/2006/09/us-manufacturing.pdf.  (The report is from 2006; I've been looking for an updated version to see the effects of the 2008 recession.)

 

See also here: http://midwest.chicagofedblogs.org/archives/2010/08/bill_strauss_mf.html.

What's your point? Cars are made in China pretty much exactly the same as they would be here in the US. Same goes for everything from cell phones to air conditioners. The technology is the same regardless of where the manufacturing is. But that technology is also going to be focused at the location of the assembly plant. Which needs to be here in the US.

 

On the contrary: most factories in China are very inefficient, dirty, and wasteful.  I speak from personal experience in the printing equipment manufacturing industry. For what it's worth, most of these factories produced goods for domestic consumption within China, whose printing industry is about three times the size of the States'. They are able to turn a profit because they are not faced with crushing triangular regulation costs and have a much lower base wage cost.

 

I mentioned triangular regulation--between this and crushing payroll taxes, it is one of the gravest obstacles to economic recovery in the United States today. In most social democracies (and China), the costs of regulatory compliance are absorbed by government bureaucracy. In the United States, most of these costs rest with the business owner, such as product testing costs, tax compliance, environmental surveys, etc. These all increase the implied cost of doing business in the States, driving businesses to more beneficial areas.

 

There's no need to demonize corporations for outsourcing. They are profit-maximizing entities, without which we would be worse off. Enacting a protective tariff or stricter regulatory restrictions will simply accelerate the process and make us all less wealthy. The same argument is applicable to corporations who lobby government for special dispensation--when the horses are allowed to the government trough, they will drink. There is nothing nefarious about the act itself, but the only way to really put a check on it is to close the doors to the halls of government to everyone and give no special dispensation.

 

Payroll taxes and other attendant social insurance costs have become crushing burdens on employers--they can raise the cost of employing a single worker by 30-40% over the cost of paying base wages. Look no further for this as the root cause of the incredible tightening of the U.S. labor force over the last 25 years.

 

It is ironic and sad that this recession-conscious Congress continues to pile on the regulatory costs and throw up more barriers to new business starts. Every new regulation discourages more entrepreneurial types from contributing more value to society. And the larger organizations who created the condition requiring the regulation in the first place are able to dodge the consequences through its lobbying power. The result is that large corporations foreclose the potential competition from starting new businesses. The only way America is going to turn around its long decline is to stop killing its entrepreneurial spirit with onerous burdens.

Jeffrey - I think you're seeing the effects of postwar changes in the Kentucky economy playing out in Louisville, especially the end of slavery and the violence against a whole of Union supporters. I'd bet there was a whole lot of westward migration of folks from that area in that period into Indiana, Illinois and beyond.

One of the main problems with NAFTA as opposed to the EU or other regional agreements is that they don't have the massive differences in wealth and regulations as you cross their borders that we do. They don't have a Third World country bordering their richest country. In the EU, nations get slowly poorer as you head east. Here, you can just cross a line and drastically reduce your expenses. Jobs went to Mexico.

 

In the case of Canada, they have nationalized health care, so companies doing business there aren't directly saddled with shelling out 30% more per employee like we are. Jobs went to Canada.

You make it sound like all that health care up in Canada is "free" and actually involves a 30% reduction in costs.  It doesn't.

No, the cost is shifted. I'm not totally up on the specifics, but I know employers aren't writing checks to an insurance company. Can someone explain how the Canadian health care system is funded?

You make it sound like all that health care up in Canada is "free" and actually involves a 30% reduction in costs. It doesn't.

 

According to this graph it looks like closer to a 45% reduction in costs:

 

http://www.fivethirtyeight.com/2010/01/healthcare-spending-and-life-expectancy.html

^unfair chart. None of those other countries are close to the US in population.

That data is per capita, and adjusted for purchasing power.

As for the chart: life expectancy isn't really a good proxy for quality of health care, especially considering lifestyle choices and that a good percentage of the U.S. population self-medicates because they are not aware of their eligibility for Medicaid or Medicare. The JAMA has in fact made the claim that the U.S. health care system is the very best in the world for the elderly, and the chief problem is the uninsured and underinsured, which doesn't necessarily point out a problem with health care providers. As for "health care spending," there is no way to strip out the costs of medical research and development done at research hospitals; here the U.S. spends the lion's share of the world's medical research dollars.

 

Canada's health care is provided mostly by private hospitals and doctors who bill the government, also known as single-payer health insurance. Canadian employers sometimes provide supplemental insurance to cover dental and other non-medically necessary needs, but the cost of this benefit is typically very low.

 

This is a digression, though, so let me bring it back to the point: 90% of privately insured Americans have their health insurance tabs paid by their employers. The older and riskier their pool is, the higher the premiums will be (although typically insurance companies guarantee that premiums will not rise more than a given amount over the life of the insured, as long as they stick with that insurer).

 

The tax code in the U.S. provides incentives for employers to provide health insurance to their employees. So our culture has grown around the idea that health insurance should be provided by the employer. It's my opinion that this destroys the pricing signals between the insurer and the insured, leaving the insured free to overconsume without regard to cost, and leaving the insurer free to provide terrible service at no consequence (the employee can't take their business elsewhere).

 

As for the rest of payroll taxes, Congress did pass the HIRE Act, which gives a tax credit of 6.2% of a new employee's salary if the new hire was previously unemployed. This is a step in the right direction, but it's merely a drop in the bucket compared to the entitlement, payroll and other taxes that add up to 30% on top of an employee's salary. (Should I mention that the HIRE Act also authorized $20 billion in highway spending?)

 

The tax code in the U.S. provides incentives for employers to provide health insurance to their employees. So our culture has grown around the idea that health insurance should be provided by the employer. It's my opinion that this destroys the pricing signals between the insurer and the insured, leaving the insured free to overconsume without regard to cost, and leaving the insurer free to provide terrible service at no consequence (the employee can't take their business elsewhere).

 

Indeed. Insurance for the masses has created generations of price-insensitive health care customers. Back in the cash or Lodge-covered health care days, the focus was on providing low-cost yet satisfactory care.

Speaking of Europe, protests and IMFs warning of potential instability.

 

Demonstrators protest spending cuts across Europe

 

"LONDON (MarketWatch) -- Thousands of demonstrators gathered in Brussels to oppose austerity measures Wednesday and protests against planned spending cuts were set to take place in cities in Greece, Ireland, Italy and Latvia, news reports said. A general strike was also under way in Spain. The AFP news agency said labor leaders hoped to see 100,000 people from 30 countries gather in Brussels to propose austerity measures."

http://www.marketwatch.com/story/demonstrators-protest-spending-cuts-across-europe-2010-09-29

 

Spain endures strikes, awaits downgrade

General strike cripples country as financial markets eye downgrade

 

"The two main unions in Spain declared the action a success, with 72% of workers participating. Some food markets were shuttered as well as some businesses fearing vandalism; car factories, street cleaning, postal services and even some television stations were not operating.

 

Buses, trains and metros were all running at minimum service, which for many meant long waits to get to work. Some airline services out of the capital were disrupted.

 

In the early part of the day, Madrid’s Gran Via, which runs through the heart of the city, was blocked to traffic by protestors who lay in the street, while some protests got violent in parts of the country as bus and truck drivers were blocked from moving by protestors."

http://www.marketwatch.com/story/spain-endures-strikes-awaits-downgrade-2010-09-29

The primary effect of that general strike, and the more general culture of general strikes in Europe, is that I'm more likely to go visit Seattle than Barcelona.

^Are you sure that's going to be the primary effect?

So how big is that 'shadow inventory' that we have talked about? And its still growing at a nice clip. This will continue to put pressure on the economy, banks, RE industry and home values for years to come.

 

S&P: $460B Shadow Inventory Will Take 41 Months to Clear

 

"It’s no secret that the volume of distressed residential properties is weighing heavy on U.S. housing markets and is prolonging any meaningful recovery. Of even greater concern is the industry’s growing backlog of homes that need to be liquidated and resold but have yet to make their way to the market – that menacing shadow inventory that threatens to asphyxiate appreciation of home values and drive the industry to a new low in this down cycle."

http://www.dsnews.com/articles/sp-460b-shadow-inventory-will-take-41-months-to-clear-2010-09-29

The primary effect of that general strike, and the more general culture of general strikes in Europe, is that I'm more likely to go visit Seattle than Barcelona.

 

Something tells me that the European Union hopes that is the only primary effect. I am not so sure it will be. Time will tell.

Moody’s downgrades Spanish debt to Aa1

Cites weak growth prospects and deteriorating government finances

 

"Moody’s cited weak growth prospects, a “considerable deterioration” in government finances and worsening debt affordability as key reasons for the downgrade.

 

The move, though widely expected, comes a day after the first general strike for the country since 2002, with thousands of protestors taking to the streets across the country to oppose austerity measures."

http://www.marketwatch.com/story/moodys-cuts-spain-debt-rating-to-aa1-2010-09-30

 

Cost of Anglo Irish rescue may hit $47 billion

Allied Irish Banks slumps after being told to raise more cash

 

"LONDON (MarketWatch) — The cost of bailing out nationalized lender Anglo Irish Bank could soar to as much as 34.3 billion euros ($46.6 billion), the country’s central bank said Thursday, as it also unexpectedly told Allied Irish Banks to raise a further €3 billion."

http://www.marketwatch.com/story/irish-banks-may-need-another-19-billion-2010-09-30

 

 

The primary effect of that general strike, and the more general culture of general strikes in Europe, is that I'm more likely to go visit Seattle than Barcelona.

 

Something tells me that the European Union hopes that is the only primary effect. I am not so sure it will be. Time will tell.

 

What does Europe have against Gramarye?

Methinks I've surrounded myself with the sardonically-challenged.

What really matters for Europe is that Gramarye has decided against visiting Barcelona.

Moving on from Gramarye's vacation plans......

What's a small 60,000 miss to the economist, just another payday.

I am sure when the FED numbers come out on Friday things will look better. That birth/death model sure comes in handy when job loses are high. It also helps when the model just assumes X amount of government jobs are being created every month. Even though state, county and city governments are axing away.

 

Private sector sheds 39,000 jobs in Sept: ADP

 

"WASHINGTON (MarketWatch) -- Employment in the U.S. private sector fell by 39,000 in September, the first drop since January, according to the ADP employment report released Wednesday.

 

The drop surprised economists who had on average anticipated a 20,000 increase. U.S. stock futures pointed to a flat start on Wall Street after the report’s release."

http://www.marketwatch.com/story/private-sector-sheds-39000-jobs-in-september-adp-2010-10-06

Our friends at Goldman are giving us a glimps into their crystal ball and what a crystal ball they have proven to have.

 

Goldman Sachs: US Economy May Be 'Fairly Bad'

 

"Goldman Sachs Group Inc. said the U.S. economy is likely to be “fairly bad” or “very bad” over the next six to nine months."

 

“We see two main scenarios,” analysts led by Jan Hatzius, the New York-based chief U.S. economist at the company, wrote in an e-mail to clients. “A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.”

http://www.bloomberg.com/news/2010-10-06/oldman-sachs-says-u-s-economy-to-be-fairly-bad-recession-is-possible.html

 

 

So a recession ends with permanent 9%+ unemployment rate?? Or more than when the recession started. It don't make sense.

unusualfire:  The issue is that it takes more than just the lack of a recession to keep unemployment down.  An economy that is growing at an anemic rate is neither in recession nor truly healthy.  Our population continues to grow.  Our ability to automate jobs also continues to grow.  Therefore, to continue high levels of employment, we need a level of growth and job creation sufficient to match the jobs that are made redundant or automated, as well as to handle our population growth.

 

A 0.1% growth rate would mean the recession is over.  The proper response to this fact is "so what?"

A major factor that gets overlooked is consumer confidence in the economy.  If this thread, and certain individual's "only focus on the bad" blinders, is any indication of that confidence, we are in a world of sh!te.