Once again, I apologize for breaking the unspoken rule/theme of this thread -

 

Sept. retail sales rise, third monthly increase

 

WASHINGTON – Americans spent more money on cars, furniture and at hardware stores to boost retail sales to a third monthly increase in September.

 

The string of gains since July followed declines in May and June. Those had raised worries that the country could be in danger of toppling back into recession. Economists caution that while the economy is growing, the expansion is not strong enough to lower face high unemployment and offset weak income growth.

 

FULL STORY: http://news.yahoo.com/s/ap/20101015/ap_on_bi_go_ec_fi/us_economy

^ but but how much was that from higher prices instead of volume???

but but how much was that from higher prices instead of volume???

 

I work in the retail industry.  I can tell you that volume is up significantly over last year - prices, not so much.

 

 

"Americans spent more money on cars, furniture and at hardware stores to boost retail sales "

 

CincyDad did all that recently.... New car, furniture set for the family room, and rugs, paint, lighting, fans, etc at the hardware store. 

Those retail sales are good news. Let's hope the momentum can last through Christmas.

 

Agreed. I think this Christmas will have a nice boost from Christmas 09.

Once again, I apologize for breaking the unspoken rule/theme of this thread -

 

Sept. retail sales rise, third monthly increase

 

WASHINGTON – Americans spent more money on cars, furniture and at hardware stores to boost retail sales to a third monthly increase in September.

 

The string of gains since July followed declines in May and June. Those had raised worries that the country could be in danger of toppling back into recession. Economists caution that while the economy is growing, the expansion is not strong enough to lower face high unemployment and offset weak income growth.

 

FULL STORY: http://news.yahoo.com/s/ap/20101015/ap_on_bi_go_ec_fi/us_economy

 

Please post what you want. This thread and its previous thread had all kinds of view points. Nothing wrong with that.

 

I think the consumer is spending better than last year (in my job we are seeing a nice uptick in retail sales).

 

The issues with this uptick is, how much of this is just more debt/credit cards? I posted an article just a few pages back that show Americans with credit cards are going deeper into debt on them. If that is what is supporting this uptick in retail sales, then its has issues down the road. If the increase is from the American consumer seeing raises and having more disposable income, then its very good news. I wonder which it is?

Retail sales rise chart

Quick note: There was actually a decline month over month from August to September. They revised August up making September lower. The media just didn't pick up on the revision until they had already printed the headlines.

 

 

http://www.marketwatch.com/story/in-charts-foreclosures-inflation-and-more-2010-10-15?pagenumber=5

Speaking of investors suing over mortgages

 

http://www.chicagobusiness.com/article/20101015/NEWS01/101019921/federal-home-loan-bank-of-chicago-sues-b-of-a-others

 

Federal Home Loan Bank of Chicago sues B of A, others

 

Crain's) — The Federal Home Loan Bank of Chicago has sued several of the nation’s largest banks, including its biggest shareholder, Bank of America Corp., alleging that their failure to disclose lax mortgage underwriting standards led the Home Loan Bank to suffer losses after purchasing poor-quality mortgage-backed securities from them.

 

The Home Loan Bank’s lawsuit, filed in Cook County Circuit Court, asks the court to void the sales of the securities and direct the banks to reimburse the Home Loan Bank plus 10% annual interest, according to Bloomberg News.

Speaking of investors suing over mortgages

 

http://www.chicagobusiness.com/article/20101015/NEWS01/101019921/federal-home-loan-bank-of-chicago-sues-b-of-a-others

 

Federal Home Loan Bank of Chicago sues B of A, others

 

Crain's) The Federal Home Loan Bank of Chicago has sued several of the nations largest banks, including its biggest shareholder, Bank of America Corp., alleging that their failure to disclose lax mortgage underwriting standards led the Home Loan Bank to suffer losses after purchasing poor-quality mortgage-backed securities from them.

 

The Home Loan Banks lawsuit, filed in Cook County Circuit Court, asks the court to void the sales of the securities and direct the banks to reimburse the Home Loan Bank plus 10% annual interest, according to Bloomberg News.

 

I can't believe we haven't seen more of this already. Man, the lawyers are going to be making a lot of money over the next several years.

Man, the lawyers are going to be making a lot of money over the next several years.

 

I suspect they will, but will it be from pressing forward with lawsuits, or from just being consulted via the 'Do we have a legitimate lawsuite?' fees?

 

I don't think we can really go back and undo a lot of what's already been done.  I suspect that lawsuites that make it to court will be met with a stone-faced judge who is not about to wreak chaos by reversing business decisions that were transacted many quarters ago.

 

What do you think the ramification will be if banks are forced to buy-back 20% of the mortgages they sold to investors?  And what about reversing 40% of the mortgages that buyers entered into? And what about cramming down mortgage interest rates and monthly payments for 50% of bubble-buyers?  Are courts prepared to cancel home purchases that took place 2 years ago and kick out the new owners?  I don't think so.

 

What kind of practical 'statute of limitation' will judges go by on mortgage financial issues? 

 

In other words, I think this is a whole lot of smoke with very little fire.  Desperate mortgage holders are grasping at smoke.

I'd hate to see transactions reversed, but I'd love to see the banks, and bankers, be held liable for their sloppiness- financially at least, criminally if possible.

Man, the lawyers are going to be making a lot of money over the next several years.

 

I suspect they will, but will it be from pressing forward with lawsuits, or from just being consulted via the 'Do we have a legitimate lawsuite?' fees?

 

I don't think we can really go back and undo a lot of what's already been done.  I suspect that lawsuites that make it to court will be met with a stone-faced judge who is not about to wreak chaos by reversing business decisions that were transacted many quarters ago.

 

What do you think the ramification will be if banks are forced to buy-back 20% of the mortgages they sold to investors?  And what about reversing 40% of the mortgages that buyers entered into? And what about cramming down mortgage interest rates and monthly payments for 50% of bubble-buyers?  Are courts prepared to cancel home purchases that took place 2 years ago and kick out the new owners?  I don't think so.

 

What kind of practical 'statute of limitation' will judges go by on mortgage financial issues? 

 

In other words, I think this is a whole lot of smoke with very little fire.  Desperate mortgage holders are grasping at smoke.

 

I agree. There will be a lot of drama, a few tokens of 'love' towards main street that will include a lot of 'harsh' words for the banks and that will be about it. I do think that a few large investment companies might be powerful enough to get some payback for the banks for being dishonest with the products they were sellings.

 

Any loans the banks are forced to take back will then be bought by the Feds (taxpayer).

 

A black eye for the big banks is about all main street can hope for. I think it has become pretty apparent, through all of this, who controls Washington and its not Main Street.

French retirement protests take violent turn

 

"PARIS – Masked youths clashed with police and set fires in cities across France on Tuesday as protests against a proposed hike in the retirement age took an increasingly radical turn. Hundreds of flights were canceled, long lines formed at gas stations and train service in many regions was cut in half."

 

"The protesters are trying to prevent the French parliament from approving a bill that would raise the retirement age from 60 to 62 to help prevent the pension system from going bankrupt."

http://news.yahoo.com/s/ap/20101019/ap_on_bi_ge/eu_france_retirement_strikes

 

 

I suppose the protesters don't want parliament putting their filthy government hands on their pension.  Not sure what the tie in between these protests and the U.S. Recession is...

I suppose the protesters don't want parliament putting their filthy government hands on their pension.  Not sure what the tie in between these protests and the U.S. Recession is...

 

We have discussed the concept of 'currency wars' and how that is/can affect the US and its economic state. Europe is having more and more unrest in many nations and a lot of it has to do with jobs, debt and the inability to generate increased income for its citizens. One action that a nation or nations might take to try and stimulate job growth is to devalue their currency so that their goods are potential cheaper on the world market. Japan is doing this in a big way and China is not willing to revalue the Yuan for the very same reason. Looking at these types of internal events in different nations can give insite into what pressures may be in play related to future economic decisions.

 

Japan and China's continuing attempts to keep their currencies down are clearly affecting the ability for the US to create jobs to releave the unemployment rate and in turn, stabilize the supply and demand issue for housing. Its a world economy.

On the subject of supply and demand.

 

Fed's Dudley: 3 million excess vacant housing units

 

"One reason why so little housing is being built is that many existing homes stand vacant. We estimate that there are roughly 3 million vacant housing units more than usual. And more vacancies are added daily as the foreclosure process moves homes from families to mortgage lenders. This stock of vacant homes will shrink when fewer are foreclosed upon and more of these homes are sold or rented out."

http://www.calculatedriskblog.com/2010/10/feds-dudley-3-million-excess-vacant.html

 

This imbalance between supply and demand will shrink when income and housing costs rebalance and when employment increases, with wages that support the ability to afford the average housing cost. Low interest rates simply are not solving the root problem.

 

I suppose the protesters don't want parliament putting their filthy government hands on their pension.  Not sure what the tie in between these protests and the U.S. Recession is...

 

We have discussed the concept of 'currency wars' and how that is/can affect the US and its economic state. Europe is having more and more unrest in many nations and a lot of it has to do with jobs, debt and the inability to generate increased income for its citizens. One action that a nation or nations might take to try and stimulate job growth is to devalue their currency so that their goods are potential cheaper on the world market. Japan is doing this in a big way and China is not willing to revalue the Yuan for the very same reason. Looking at these types of internal events in different nations can give insite into what pressures may be in play related to future economic decisions.

 

Japan and China's continuing attempts to keep their currencies down are clearly affecting the ability for the US to create jobs to releave the unemployment rate and in turn, stabilize the supply and demand issue for housing. Its a world economy.

 

But that is not what the article discusses and certainly is not the parts you chose to highlight.  The article is about an internal debate in France regarding the governmental set age of retirement and the protests that have ensued in France following the proposal to raise that age by 2 years.  It has relatively little to do with the "U.S. Recession" even if we are living in a world economy.

I suppose the protesters don't want parliament putting their filthy government hands on their pension.  Not sure what the tie in between these protests and the U.S. Recession is...

 

We have discussed the concept of 'currency wars' and how that is/can affect the US and its economic state. Europe is having more and more unrest in many nations and a lot of it has to do with jobs, debt and the inability to generate increased income for its citizens. One action that a nation or nations might take to try and stimulate job growth is to devalue their currency so that their goods are potential cheaper on the world market. Japan is doing this in a big way and China is not willing to revalue the Yuan for the very same reason. Looking at these types of internal events in different nations can give insite into what pressures may be in play related to future economic decisions.

 

Japan and China's continuing attempts to keep their currencies down are clearly affecting the ability for the US to create jobs to releave the unemployment rate and in turn, stabilize the supply and demand issue for housing. Its a world economy.

 

But that is not what the article discusses and certainly is not the parts you chose to highlight.  The article is about an internal debate in France regarding the governmental set age of retirement and the protests that have ensued in France following the proposal to raise that age by 2 years.  It has relatively little to do with the "U.S. Recession" even if we are living in a world economy.

 

You are entitled to your opinion.

I highlighted the part that if they didn't take some type of action the system could become bankrupt. This means that their debt levels are not sustainable nor do they believe that the current working class (employment) can sustain this debt level.

 

If you look back at my other posts that have I done related to these world events, including the IMF warnings about a global 'currency war' you would see how these items are connected and how I have connected several times these events. Since I had already posted these concepts several times I didn't feel the need to say it again. Until you asked.

 

One of the main issues I have been focusing on lately is the idea that the bank crisis is receeding some and now many nations, including the US, are starting to focus on the new crisis, jobs and debt. These types of events in France and others that have been taking place clearly show a growing need in many countries to start addressing these types of concerns, sooner than later. This has lead the IMF and others to release strong statements that they see a growing potential for a global currency war. Such events clearly can and would affect the US economy, employment numbers and ultimately housing. I would make the case current events with China, Japan and others are doing many of these things right now and are affecting the US's ability to improve its employment picture.

 

Until the US is truly able to improve the employment picture (including balancing cost of living with income - Up or down) housing is going to struggle to get out of the basement.

 

Currency pricing clearly affects a country's employment picture.

 

If you don't believe in these ideas, that fine, everyone is entitled to their view point.

I see the French protest post as evidence that the people of France (individually or collectively) are rapidly going broke and will have to cut back on their spending significantly for several years.  This is consistent with several other European countries.

 

The US is trying desperately to increase its exports.  The post (and others) shows some of our major trading partners are going broke. 

 

Not good news for a growth strategy based on increasing exports significantly.

The protests are not evidence of that.  The proposal to raise the retirement age is evidence that the people of France are going broke.  The protests are purely reactionary and evidence of people acting irrationally to what appears to be a reasonable and necessary change to the status quo of that country.

 

For the record, I read every post in this thread.  I appreciate the insight you provide ragerunner, even if I think you only present one side of the argument and overall picture.... in a very subtle way gilded with the outward appearance of objectivity.  But that's certainly your choice to make and you do make very persuasive arguments. 

The protests are not evidence of that.  The proposal to raise the retirement age is evidence that the people of France are going broke.  The protests are purely reactionary and evidence of people acting irrationally to what appears to be a reasonable and necessary change to the status quo of that country.

 

For the record, I read every post in this thread.  I appreciate the insight you provide ragerunner, even if I think you only present one side of the argument and overall picture.... in a very subtle way gilded with the outward appearance of objectivity.  But that's certainly your choice to make and you do make very persuasive arguments. 

 

Hts121,

I think its is valuable, on this thread, to have a lot of different view points and knowledge. I do believe these economic challenges are not over, so I do continue to post concepts, articles and data that I believe show the fat lady has not sung yet. If you have a different view point or other information to show things are different, I hope you do post them. It gives us all an opportunity to discuss different concepts and issues and hopefully gain a better understanding of our economy and world.

The protests are not evidence of that.  The proposal to raise the retirement age is evidence that the people of France are going broke.  The protests are purely reactionary and evidence of people acting irrationally to what appears to be a reasonable and necessary change to the status quo of that country.

 

For the record, I read every post in this thread.  I appreciate the insight you provide ragerunner, even if I think you only present one side of the argument and overall picture.... in a very subtle way gilded with the outward appearance of objectivity.  But that's certainly your choice to make and you do make very persuasive arguments. 

 

Not everybody views the world through political colored glasses.

 

But any practical economist can see that liberal economic policy is only good in theory and not in practice ;)

There is no single "liberal economic policy"

 

You are confusing socialism (which is, at least in most part, an economic theory) with liberalism (latin for "of freedom").  The key components of liberalism are individual liberty and equal rights.  From there, the views diverge within liberal factions.  I hope you are not saying that an economic policy which emphasizes individual liberty and equal rights is only good in theory, not in practice. 

 

Socialism is totally separate, despite what Rush, Beck, Luntz, Morris, Palin, O'Donnell, Rove, McConnell, Boehner, Bachmann, etc want you to believe. 

 

Now take off your colored glasses and we can continue the discussion ;)

I'd hate to see transactions reversed, but I'd love to see the banks, and bankers, be held liable for their sloppiness- financially at least, criminally if possible.

 

Depending on the terms on which some of these lawsuits settle, you may get your wish.  If these lawsuits survive motions to dismiss early on, they're very likely to settle for cash payments that effectively have the bankers share some of the pain without reversing the transactions (which would be both legally and financially complicated and probably more than anyone would want to do as part of a settlement agreement).

The protests are not evidence of that. The proposal to raise the retirement age is evidence that the people of France are going broke.

 

??

 

Was there supposed to be a "not" in there?  As written, this is basically exactly what CincyDad said ...

Nope

[EDIT: Never mind, got it.]

 

Fair enough.

^Probably falls into that line of 'distinctions' you were talking about last week that only certain people take notice of.  I can't help it.  They built me this way.

I see the French protest post as evidence that the people of France (individually or collectively) are rapidly going broke and will have to cut back on their spending significantly for several years.  This is consistent with several other European countries.

 

The US is trying desperately to increase its exports.  The post (and others) shows some of our major trading partners are going broke. 

 

Not good news for a growth strategy based on increasing exports significantly.

 

China just increased rates to slow growth and inflation. These types of actions also have the potential to affect the US exports business as well.

 

Speaking of exports and trading partners. Some UK news.

 

Danny Alexander reveals 500,000 job cuts in document gaffe

 

"It revealed that the Office for Budget Responsibility had forecast a reduction in public sector workforce numbers of 490,000 by 2014-2015."

http://www.telegraph.co.uk/news/newstopics/politics/liberaldemocrats/8073943/Danny-Alexander-reveals-500000-job-cuts-in-document-gaffe.html

 

Defence review: David Cameron says 42,000 jobs to go

 

"David Cameron, the Prime Minister, has disclosed that 42,000 defence jobs in Britain will go as part of 8 per cent budget cuts in the strategic defence review."

http://www.telegraph.co.uk/news/newstopics/politics/defence/8073455/Defence-review-David-Cameron-says-42000-jobs-to-go.html

There is no single "liberal economic policy"

Yes there is. More government and less freedom

 

You are confusing socialism (which is, at least in most part, an economic theory) with liberalism (latin for "of freedom").

Now take off your colored glasses and we can continue the discussion ;)

Bossy!

There is no single "liberal economic policy"

Yes there is. More government and less freedom

 

Speaking of viewing the world through political colored glasses....

There is no single "liberal economic policy"

 

You are confusing socialism (which is, at least in most part, an economic theory) with liberalism (latin for "of freedom").  The key components of liberalism are individual liberty and equal rights.  From there, the views diverge within liberal factions.  I hope you are not saying that an economic policy which emphasizes individual liberty and equal rights is only good in theory, not in practice. 

 

Well, singular or plural, they're all bad...the state shouldn't provide basic property to society in the name of individual liberty and equal rights.  People have the right to obtain property (generally, by working), not generically to property itself.  That's my belief anyway.

 

Socialism believes the people collectively own resources and the state should provide basic property to society in equal fashion.  The state acts as the administrator of property which the people own.

 

When the state does provide basic property to it's constituents, you get what you see in France with the masses acting irrationally because they are conditioned to be entitled to certain properties - like being able to retire at 60.  It's good in theory if you get 100% participation (why do you think the EU was formed to begin with) but bad in practice because not everyone is always going to participate or even conform to societal rules.

 

And it shouldn't be viewed as callous if someone doesn't utilize their right to obtain property and you want to leave them behind.  It's no different than any other right, but the only one where we feel the need to project it on people who are not taking advantage of it.

 

I tried to keep this short b/c the direction of this conversation can qucikly hi-jack this thread, but kind of failed at that.  So I'm just going to leave it at that rather than post any follow up discussion.

^good choice.  This thread is "US Recession: News & Discussion".  It's not "Generalized Partisan Hackery #436".  So back on topic, folks.

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up, to the point that people on the internet are selling their antique silver coins to buyers for the price of SCRAP. Historic value means nothing right now because it's worth about 24 bucks per troy oz (.999). It's a great time to buy them. When the economy picks back up, antiquity will be a luxury people are willing to pay more for.

 

 

(Anyone else who makes money off of my great idea should give me 20% of all their profits).

Unless the Chinese just keep buying it all . . .

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up, to the point that people on the internet are selling their antique silver coins to buyers for the price of SCRAP. Historic value means nothing right now because it's worth about 24 bucks per troy oz (.999). It's a great time to buy them. When the economy picks back up, antiquity will be a luxury people are willing to pay more for.

 

 

(Anyone else who makes money off of my great idea should give me 20% of all their profits).

 

On that note (and I think it's close enough to on-topic as to be a minor tangent, at most):

 

http://money.cnn.com/2010/10/18/pf/investing/buffett_ben_stein.fortune/index.htm

 

"Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up,

 

Are you sure the price of precious metals and oil has risen?  Perhaps the price of green paper has fallen?

 

(Dang!  there's that currency de-valuation thing again.)

If you wanted to hedge your bets, now would be a good time to sell gold.

If you wanted to hedge your bets, now would be a good time to sell gold.

 

I want you to remember you said that Boreas, I will. 

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up, to the point that people on the internet are selling their antique silver coins to buyers for the price of SCRAP. Historic value means nothing right now because it's worth about 24 bucks per troy oz (.999). It's a great time to buy them. When the economy picks back up, antiquity will be a luxury people are willing to pay more for.

 

 

(Anyone else who makes money off of my great idea should give me 20% of all their profits).

 

On that note (and I think it's close enough to on-topic as to be a minor tangent, at most):

 

http://money.cnn.com/2010/10/18/pf/investing/buffett_ben_stein.fortune/index.htm

 

"Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

 

I said before that gold is pretty useless in a modern society. It's used for electronics but it's pretty easy to mine. Silver, and even better - platinum and palladium, have many more industrial applications than gold. 38% of silver is used for industry. Probably almost all of platinum and palladium are used for industrial purposes like catalytic converters, surgical and dental equipment.

 

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up,

 

Are you sure the price of precious metals and oil has risen?  Perhaps the price of green paper has fallen?

 

(Dang!  there's that currency de-valuation thing again.)

 

In any case, there's nothing either one of us could do about it except try to make some money!

You know what's crazy? The recession has caused people to rush to commodities and bring the price of precious metals up,

 

Are you sure the price of precious metals and oil has risen? Perhaps the price of green paper has fallen?

 

(Dang! there's that currency de-valuation thing again.)

 

It's basically the same thing, unless you're diversified enough to have significant non-dollar holdings.

 

Even then, I'm with Buffett.  Gold makes a good store of value, but a well-run corporation doesn't just store value, it produces it.

 

The main thing you don't want to be holding in an inflationary environment is a large amount of cash.  Likewise, you don't want to be holding a large amount of bonds, because that makes you a creditor getting paid back with dollars falling in value.  Holding equities is qualitatively different.  Their nominal value tends to rise with inflation because they represent fractional ownership of something of real value.  They also have the potential for dividend payments, stock splits, and other things that you don't get with holding gold bullion.

 

Gold is a commodity like any other, though one with a bit more mystique than wheat, wool, or anything else you can barter in Settlers of Catan.

I'm going to take the conversation away from gold for a minute and ask everyone how much of an impact the Healthcare Reform bill is having on the economy.  I've talked to a number of business owners, both large and small, and the overwhelming consensus is that they are very scared of how this is going to hit their pockets.  Nobody has a good indication of what the new provisions are going to cost them and therefore they are hoarding cash, saving it for that rainy day, when they have to pay up.  That's keeping alot of money on the sidelines and not flowing in the economy.  Businesses are holding off new hires too, because they don't know how they will be impacted with the employees they have now, so why further burden themselves? 

 

 

^ Something to consider - http://www.cleveland.com/open/index.ssf/2010/10/health_care_premiums_to_rise_b.html

^good point, but it goes right along with what I was saying, that employers are scared and unaware of the real impact of the bill

ask everyone how much of an impact the Healthcare Reform bill is having on the economy

 

just my opinion....

 

I'm not savy on the new Healthcare reform bill, but I suspect that most business owners are using it as an excuse.  Yes, they are uncertain and a bit afraid of it's impact, but in reality, I don't think it will be that large of an impact on their cost.

 

Instead, I think business owners are looking at the economy and are not projecting sales to pick up, at least not enough to hire more people.  If businesses were fairly confident that sales were going to rise, and that they needed more people to meet the needs, then they would hire regardless of what they feared is in the healthcare bill.

 

Right now businesses are not confident enough in the recovery to invest much (including taking on more people).  They would rather continue to get along with the skelaton staff they have and milk the products they currently have. Midwest companies have been famous for understaffing for many years now.  That will change when the staff begin to rebel and force the issue of under-staffing.  (Of course once that happens and hiring begins to pick up, watch out for a lot of people jumping ship to a new company.)

Forget about the bank's foreclosure problems. That's all public smoke.  The real problem for banks looks to be the angry investors who bought the securitized mortgages....

 

http://www.miamiherald.com/2010/10/20/1883465_p2/banks-legal-troubles-mount-as.html

 

from the article....(my underlining)

 

Major U.S. banks are facing a double whammy from the subprime mortgage debacle: They're under siege over their mishandling of home loan foreclosures and confronting mounting investor demands that they repurchase billions of dollars in failed mortgage securities.

...

Analysts at J.P. Morgan Chase estimated this week that banks that underwrote more than $3 trillion in risky mortgage bonds will be compelled to repurchase $55 billion to $120 billion in securities over the next few years because the underlying loans are defective.

 

 

More on that from CNBC here: http://www.cnbc.com/id/39758253.

http://news.yahoo.com/s/ap/20101022/ap_on_bi_ge/us_food_stamps

 

This report is an example of something we have to correct in our entitlement system.  Contrary to what some give lip-service to, I don't want to eliminate any of our major entitlements (social security, welfare, medicare, unemployment, workers comp), but we have to tighten them up.  Everyone realizes that (contrary to common talking points).  We need to make eligibility restrictions tougher and, more importantly, properly ENFORCE the eligibility restrictions we already have.

 

If you are out of work through no fault of your own, you get unemployment comp.  If you were fired for cause or voluntarily quit, you don't.  If you don't diligently search for comparable work while unemployment, your benefits should be terminated.  That's the rule, but enforcement has become so relaxed that it has very little force at all. 

 

Most entitlement systems have similar issues.  For example, the "single" mother receiving welfare all while her "baby daddy" never left, although she told the government he did to receive the benefits.  Or the injured worker who can't sit at a desk during the week but can play golf on the weekend.

 

Another issue is fraud within the medical profession.  Some doctors are making a living defrauding the system by writing reports which defy the facts about the injuries at issue and stating it as their opinion "within a reasonable degree of medical certainty".... or in other words, "I'm 50.1% sure I'm right."

 

For every $1 million we spend on busting fraud within the systems we have, I would guesstimate a $2 million return.  It's just that rampant.

We promise, to not promise, we will not take actions that is designed to focus on our economy and job growth. But, it makes for great headlines.

 

G20 vows to avoid currency war

 

"In a final statement after two days of heated negotiation, the G20 said it would “move towards more market-determined exchange rate systems” and that the International Monetary Fund would “deepen” its supervision of exchange rates."

 

While several member countries of the G20 hailed the summit in South Korea as a success, Japan immediately broke ranks to declare that, contrary to the spirit of the communique, it would continue to devalue the yen if it saw fit.

 

“There was a criticism of the American policy of creating more liquidity,” said Rainer Breuderle, the German Finance minister. “I tried to make clear that I regard that as the wrong way to go. An excessive, permanent increase in money is, in my view, an indirect manipulation of the [exchange] rate.”

http://www.telegraph.co.uk/finance/economics/8082701/G20-vows-to-avoid-currency-war.html

Rainer Breuderle is right.  I'm not sure where that gets him, but he's right.

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.

 

The Chicago Fed has a running economics commentary (similar to what the Cleveland Fed has), and they discuss that increase in productivity...in manufacturing:

 

"By 2006, the U.S. economy employed about as many workers in manufacturing as in 1950, just over 14 million. And so, looking at manufacturing employment alone leads one to believe that the sector is in decline or at best stagnant.

 

However, a very different conclusion emerges if you focus on the amount of goods being produced by the manufacturing sector. While employment has changed very little over the past 60 years,[3] output in manufacturing has increased at an annual rate of 3.4%. Manufacturing output in 2007 (the recent peak in manufacturing output) was over 600% higher than in 1950. "

 

Bill Testa on the Midwest Economy ...scroll down to the August 19th entry entitled "Is Manufacturing Dissappearing"?

 

 

 

 

definately in decline if they would also have taken into consideration that back in 1950 the population of the usa was less than half what it is today

 

1950  151,325,798

 

According to the U.S. Bureau of the Census, the resident population of the United States, projected to 10/24/10 at 04:08 UTC (EST+5) is:

310,549,403