If their track record at predicting future data holds true, then this numbers is way low.

 

Treasury: Expect Millions More Foreclosures

 

"Despite efforts to prop up the housing market, as many as six million Americans remain at risk of foreclosure over the next three years."

http://www.businessinsider.com/treasury-expect-millions-of-more-foreclosures-2009-9

 

To help put this number into perspective.

 

Reflecting On A Legacy Of Recessions: Job Losses

 

"By any measure, the human toll of this recession has been great. More people are jobless for longer periods than at any time since the late 1940s. In the past year, almost 3.4 million homes went into foreclosure. And trillions of dollars in stock market wealth vanished."

http://www.npr.org/templates/story/story.php?storyId=112684951

 

If we think we have seen the biggest hit to the financial industry and RE industry, wait until we double the last years foreclosure numbers. And I believe this number is very conservative.

SEPTEMBER 10, 2009, 4:24 P.M. ET

Recession Takes Heavy Toll on U.S.

Poverty Rate Jumps, as Income Falls and More Lack Health Insurance

By CONOR DOUGHERTY

 

The recession has slashed families' earnings, increased poverty and left more people without health insurance, according to the Census Bureau's annual snapshot of living standards, offering sharp evidence of how much the falling economy has touched Americans of every income and race.

 

The report released Thursday showed median household income, adjusted for inflation, fell 3.6% last year to $50,303, the steepest year-over-year drop since at least 1967. The poverty rate, at 13.2%, was the highest since 1997....

 

...."There's a lot of pain for the average family," said Bruce Meyer, an economist at the University of Chicago. "It's pretty striking how fast and how far the incomes of the typical family have fallen. The decline is bigger than anything we've seen in the past, and things are almost certainly going to get worse.

 

>SNIP<

 

Source: WSJ...more detail at link

 

The recession so far, using the Bureau of Labor Statistics data for private sector employment.  These are non seasonally adjusted, which is what I’m looking for since it shows month to month employment. 

 

 

The next graph looks the pattern in a year.  There is a pattern to the BLS numbers for Ohio

 

1. Winter trough, typically the low numbers for a year, were the employment numbers drop  from the previous years highs.

 

2. Spring increase to a high in the summer, usually June.  Typically the months were the employment numbers increase the most.

 

3. Summer and fall plateau, where the BLS numbers come off the summer peak, sometimes with a second peak in December. 

 

This cycles through year after year, even in recession years.  One can compare patterns to see how employment changes;  increases may not be so steep and lows may be exceptionally low, and times of growth or stability can be times of deterioration.

 

And since these patterns repeat one should keep this in mind when hearing the monthly numbers reported in the news, because they fit into a larger pattern.  A big drop in the employment numbers in the winter does not signal a double dip recession, it is to be expected.

 

So, comparing the seasonal employment cycle for this year so far and the three previous years.  2006 & 2007 would be “good years”,, and one can see the deterioration in 2008.

 

So far 2009 is following the pattern of a summer high.  And we can expect a drop to the early 2010 trough.  We would be dropping from a low level, so the employment lows havn’t been reached yet.   

 

 

Note this might not be measured by the unemployment rate, since people would be dropping out of the labor market, not necessarily finding work.  That’s why I like to use this employment number,  rather than the unemployment rate.  Another relevant measure is the population/employment ratio (people aged between 16 through 64) or labor force participation rate. 

 

Taking a closer look at the two big subsectors.  First, goods producing…manufacturing and construction.  Oy Vey! 

 

 

No sign of any tracking of previous years patterns.  Just a sold low downslope when this sector should have been adding employment.  Maybe we wont see a big drop in the winter, too…

 

 

…because if we do the BLS number will drop below 800,000 manufacturing jobs statewide.  How low can manufacturing and construction employment go?  I think we are in uncharted territory. Ahead: here be the dragons?

 

On a brighter note, the services producing subsector, which includes medical and profession/technical employment. 

 

 

This sector seems to be doing better, tracking previous years annual employment patterns.  Now the question is if there will be a plateau like in 2006 & 2007, or a downslope like 2008.  As in manufacturing the low hasn’t been reached yet as there will be that winter trough in early 2010.

 

 

 

The Long View

 

BLS monthly employment numbers, with the last years of the 1990s boom.  One can see a sort of pattern from that boom of two peaks, on in early summer the other later.  But in 2000 the pattern distorts, something changes, with the latter part of the year being weaker.  Then the recession year of 9-11, which drags out for two years.  Finally there is some recovery in 2004.

 

 

 

What’s interesting is the 2000 winter employment low is as high or higher than the summer employment highs for the recovery years of the latter part of the 00s.  And that 2000 foreshadows the employment cycle for rest of the decade, not the pattern of 1998 and 1999.

 

A closer look at the 9-11 recession, showing how the bottom of that recession, with the lowest employment highs and lows, came two years after the recession started in 2001 (actually one can say the deterioration started in late 2000).

 

 

 

Trying to show some trends without the spikeyness of the month to month numbers, mapping out the lows and highs showing the general pattern between the last years of the 1990s boom and today. 

 

 

 

 

Something to think about when considering when recovery may come from our current recession.

 

Heres’a quick look at the goods producing (manufacturing and construction) and services producing sectors for the 2000s, showing the last three years of the 1990s boom.

 

 

 

…on can see manufacturing/construction never really recovered, and has sunk even deeper.  One wonders what the bottom is 

 

For an even longer view, here is around 20 years of Ohio employment trends, demonstrating what a good decade the 1990s was (including that little spike of irrational exuberance mid decade), and how the 2000s were pretty anemic in comparison.  The so- called 2000s bubble never hit here when it came to employment growth.

 

 

And, a closer look at the early 1990s recession that helped get Clinton elected.  There was only one year of low employment numbers, followed by a year of mediocre recovery.  Then the 1990s expansion kicked in.  In retrospect this was just a hiccup in the employment growth that started in the 1980s.

 

 

 

For Ohio, Compared to the early 1990s recesssion, the 9-11 recession was more of a true phase-shift into an economy that was weaker in generating employment. Based on these numbers at least something changed during that time that set us up for the situation we are in today.

 

It will be interesting to see where this current recession will lead, but we have probably two more years of it.  There is some indication that the leading indicators for the US economy shows an uptick.  The Ohio state governemtn offices that look at this have their own state-level indicators, and these show no uptick.  So fasten your seatbelts we're in for a bumpy night.

 

And, after the recession, who knows?  2000's stagnation, or a return to employment growth of the 1980s and 1990s?  We will be entering into the demographic shifts of the baby boom retirement era.

 

 

 

 

Jeffery,

 

You know I like you and such, so don't take this the wrong way...

 

Go away!

 

You are just too depressing with all your charts and graphs.

 

 

(just kidding about the 'go away' thing... keep posting your graphs)

 

I've been getting frustrated with long-term employment prospects in this state (and I'm in one of the better markets) for both my wife and I.  I know things aren't any better elsewhere in the US right now, but I've got to think that when the recovery finally does come, it will come earlier and stronger in most other states.

 

Maybe it's time to reconsider living in Ohio.  Maybe there just isn't a future for bright, educated people here.  Those graphs paint a picture that does not spell a rosy future for workers in this state.

 

Even after the economic boom of the mid decade, private sector employment in Ohio is some 10% lower than it was 10 years ago.

 

(not sure if you include education and healthcare as private employment, but I suspect that you include at least part of those groups.  If so, reclassifying them as gov't employess would probably yield a far worse employment picture.)

Thanks for those fantastic graphs. I'm not asking you to do this, but it would be fascinating to compare this to the fifteen year period from roughly 1970-1985. My guess is that it would look relatively similar but with a much weaker growth in the service sector to suck up those jobs being destroyed in manufacturing. In Ohio's defense, a lot of this is regional and class based. NW and SE Ohio is a gigantic anchor, while the 71 corridor has been de-industrializing with adequate growth in the new economy sectors.

 

Ohio's future is going to be tied to wherever the next growth comes from or the economy/environmental conditions going forward. A mega-drought in the SW or the ending of cheap water in Greater Atlanta probably redounds to Ohio's benefit though Tennessee is probably the big winner in that battle, but a massive carbon tax would hurt until Ohio can get more nuclear power up and running.

Maybe it's time to reconsider living in Ohio.  Maybe there just isn't a future for bright, educated people here.

 

Hey, that's my territory!

 

Sorry C-Dawg.  I'll try to leave this kind of talk to you. 

 

After all, you do it so much better.

 

(not sure if you include education and healthcare as private employment, but I suspect that you include at least part of those groups.  If so, reclassifying them as gov't employess would probably yield a far worse employment picture.)

 

This includes health care but not eduction, as in K-12 and state universities.  Adding these in would dampen the cyclic employment, and the recession drops wouldnt be as deep.  I was really more interested in private sector as this is the "worst case" number, indirectly showing how the economy is performing.

 

I'm not asking you to do this, but it would be fascinating to compare this to the fifteen year period from roughly 1970-1985. My guess is that it would look relatively similar but with a much weaker growth in the service sector to suck up those jobs being destroyed in manufacturing.

 

I wish there was numbers like this going back that far.  I think they might to the mid 1970s by year, but not with this BLS monthly data since the detail ends in 1990.  There is a yearly average that goes much futher back avaiable from an Ohio site, but it doesnt have that goods/services sector detail. 

 

However the long term trend of manfuacturing employment declining and services growing was noted even as far back as the 1960s. So what we are seeing today is that trend continuing. 

 

One interesting aspect of this is the size of the civilian workforce and worforce participation.  I think there is a long range trend of this increasing since there are more two-earner households, or the trend was in that direction.  This might be a form of unemployment insurance as it means that even if the primary wager or salary earner loses his or her job there is still another earner in the household to pay the bills.

 

It really gets sucky if both earners lose their jobs.  Then that household is really up shit creek.

 

BTW, glad you found these interesting.  I want to periodically update these with new numbers to see how things turn out, or how my hunches are going.

 

 

 

 

Cash for clunkers boosts US sales

 

"Sales rose by 2.7% from the previous month, following the surprise fall in sales in July, the official figures from the Commerce Department showed.

 

But compared with the same month last year, sales fell by 5.3%."

http://news.bbc.co.uk/2/hi/business/8257032.stm

 

If we were in the deeps of a deep recession in August 2008 and August 2009 sales are 5.3% lower, wouldn't that still be a major indicator that we are still in a recession?

 

US credit shrinks at Great Depression rate prompting fears of double-dip recession

 

"Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation."

http://www.telegraph.co.uk/finance/financetopics/recession/6190818/US-credit-shrinks-at-Great-Depression-rate-prompting-fears-of-double-dip-recession.html

 

THE PICTURES ARE WORTH A LOOK. :-o

Revealed: The ghost fleet of the recession

 

"The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination  -  and is why your Christmas stocking may be on the light side this year"

 

http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession.html#ixzz0RBg8KwUy

 

Don't retail sales typically rise in August with the "Back-to-school" purchases?

 

Heck, the 'school supplies' lists alone should boost the GDP by 1% !!!

 

Besides, a large number of states have a sales-tax holidy in August on retail items under $120 or so (depends on state, and depends on items, I know)

 

 

 

why do we need a "part 2"? thread?

 

I just read this post.  Was this cut off and made a part 2 so part 1 could be "cleaned"?

Don't retail sales typically rise in August with the "Back-to-school" purchases?

 

Heck, the 'school supplies' lists alone should boost the GDP by 1% !!!

 

Besides, a large number of states have a sales-tax holidy in August on retail items under $120 or so (depends on state, and depends on items, I know)

 

 

 

 

BTS bombed this year.

why do we need a "part 2"? thread?

 

I just read this post. Was this cut off and made a part 2 so part 1 could be "cleaned"?

 

I am not sure. I just notice that the old thread was gone. So I figured it was removed because of the new rules.

From above: "News: We are in the middle of editing thousands of posts.  If you do not see your favorite thread, do not worry.  It will be back once cleaned. "

BTS bombed this year

 

 

BTS may have bombed compared to previous years, but it was still up compared to the previous month.  That possibly explains the dicotomy between the Headlines (retail sales up in August) and RageRunner's note (retail down 5% year-over-year)

 

-----

I still had to spend over $100 just for school supplies in August for my kids, which I did not have to spend in July.

 

I bought them a few new outfits as well, but probably not as many as previous years. (they are still growing steadily, so clothes buying is spaced out over the year pretty evenly.)

 

From above: "News: We are in the middle of editing thousands of posts.  If you do not see your favorite thread, do not worry.  It will be back once cleaned. "

 

But we can't wait for stimulating discussions!  Life does not stop just because someone's doing the laundry!

(lol)

 

(besides, that message is so small it's easily overlooked.  Took me a couple of days to see it.)

From above: "News: We are in the middle of editing thousands of posts.  If you do not see your favorite thread, do not worry.  It will be back once cleaned. "

 

Actually, RNR what happened was, ragerunners post was in the original thread.  I read it. Then I refreshed and all of a suddern there was a "part 2" thread.

 

It happened instantly.  Thats why I questioned.

I can speak anectdotally that I'm seeing recovery in manufacturing. Very, very slow recovery, driven by inventory levels being stretched to the point where it's either order, or go out of business.

 

Still way down from a year ago, but better than it was in January / February this year. Based on this, and some of what I've heard from economists presenting at various events (they're the most popular speakers in town these days), I'd expect commercial activity to pick up in the 4th quarter and through 2010. What the consumer side does I can't tell, although that picture of the ships paints an ominous picture.

 

Biggest risk I'm seeing is that a double dip occurs in late 2010 through 2011 due to the sunset of cap gains taxes, higher interest rates and increasing fuel prices, combined with a lack of job growth.

 

This may have all been said before, but I'm late to the party, and this is part deux.. ;-)

I love to look at quotes like this and then compare them to the past. While today may not be a 'depression' the comments are so very similar its almost creepy. It also clearly shows the Feds and Government have know problem with creating spin and/or lies. Remember, this is from the same guy and institution that told us in 2007 they saw no impending recession and that subprime is all contained.

 

Bernanke declares 'recession is very likely over'

Unfortunately, unemployment will come down slowly

 

"From a technical perspective, the recession is very likely over at this point," Bernanke told a conference at the Brookings Institution. But "it's still going to feel like a very weak economy for some time."

http://www.marketwatch.com/story//bernanke-declares-the-recession-over-2009-09-15

 

March 8, 1930

“President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.” - Washington Dispatch.

 

May 1, 1930

“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity.” - President Hoover

June 29, 1930

“The worst is over without a doubt.” - James J. Davis, Secretary of Labor.

 

August 29, 1930

“American labor may now look to the future with confidence.” - James J. Davis, Secretary of Labor.

 

September 12, 1930

“We have hit bottom and are on the upswing.” - James J. Davis, Secretary of Labor.

^And then came the New Deal...;)

 

Actually, I do somewhat believe that Wall Street has at least begun to recover. However, I doubt we will see that success translate to Main Street any time soon. Those who have been laid off or can't find good work (me :( ) will continue to struggle because we are entering an age of a new economy where work and production has been simplified and streamlined reducing the overall size needed for a productive workforce. High unemployment will not only affect the spending habits of those who are unemployed/underemployed but it also hinders the bottom lines of smaller businesses that depend on those people to survive. These places will see an uptick in business like everyone else but probably not enough to expand significantly if at all.

 

I would hope wall street would show some movement upward, its being pumped with taxpayer dollars through the banks like crazy. They are not lending the the taxpayer money out to others, they are investing it into the stock market.

Oh please!  What recession!  Spend people...spend!  You can't take it with you.  >:D  >:D  >:D  >:D

spend!  You can't take it with you.

 

lol -

 

Whenever I hear that phrase, I simply reply....

 

"What's your backup plan in case you don't die tomorrow?"

 

spend!  You can't take it with you.

 

lol -

 

Whenever I hear that phrase, I simply reply....

 

"What's your backup plan in case you don't die tomorrow?"

 

 

............to shop till I drop!

This was funny...yesterday I got a call from a temp agency I worked for maybe 4 years ago for two weeks...for some reason I was still on file and they wanted to know if I was "working" and if I was interested in being a truck dispatcher.  This is the obvious sign of the recovery -- temp agencies desperate for truck dispatchers!

US Houshold Net worth up - first time since 2007Q3

 

 

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20090917&id=10401574

 

from the article...

 

U.S. households' net worth rose by $2 trillion to $53.1 trillion in the second quarter, the first increase since before the recession began in 2007, Federal Reserve data showed on Thursday.

 

The increase in wealth came in a period that saw the first rise in household real estate assets since the fourth quarter of 2006, and huge gains in global financial markets.

 

Household debt contracted at a 1-3/4 percent annual rate in the second quarter, the fourth consecutive quarter of declines, reflecting drops in both mortgage debt and consumer credit such as credit cards.

 

The federal government's debt increased at a 28-1/4 percent annual rate in the second quarter. The Obama administration has forecast a record $1.6 trillion budget gap for this fiscal year.

 

---------------------------------------

 

My observations...

 

1.1T of the increase (> 50%) was due to rise in stocks

 

Walking away from an underwater house improves one's personal net worth

 

Debt foregiveness (mortgage workout, short sell, CC debt forgiveness/writeoff) increases one's net worth

 

Federal government debt increases wipe out 50% of household net worth gains

 

Federal Reserve debt wipes out the other 50%.

 

Basically, we've seen a transfer of debt from households to governments. 

 

Since housholds own the government, it's all a wash.

 

 

^ a period that saw the first rise in household real estate assets since the fourth quarter of 2006

 

I heard someplace else that the household RE net worth increased around $380B.  Since home prices fell during the quarter, that means that mortgage debt payoff and "debt foregiveness" had to outstrip price declines by that amount.  Sure, people like me with a fixed rate mortgage are paying down debt each month.  But I don't think it's enough to offset the huge drop in 'market value' of homes.  I suspect the biggest part of household RE net worth increae last quarter came from removing underwater foreclosed housed off household spreadsheets.

 

One analysts believes we are in the brink of a major break-out

 

http://articles.moneycentral.msn.com/Investing/SuperModels/get-ready-to-party-like-it-is-1991.aspx

 

Get ready to party like it's 1991

 

from the artlicle...

The parallels between 18 years ago and the present are significant, and the fuel that powered a charging stock market out of that anxious era is vastly more abundant today.

...

It was because of superlow interest rates and because the government was about to spend more than $150 billion to clean up the S&L mess. Sound familiar? A massive stimulus worked massively, as a process that veteran money manager Robert Drach calls the "monetary infusion cycle" worked its magic.

 

 

-------------------------------------

While I can see where all this cash infussion can lead to an increase in economic activity, I think there are a number of important differences between today and 20 years ago.

 

1) Personal debt levels are much higher today, leaving little room for credit-driven spending

2) Wages are not stagnant, they are falling

3) Disposable income today is much less than it was 20 years ago, I believe.  When your house payment takes 40+% of your income, there just isn't as much left to spend on other things.  Add in basic services like cell phones and internet connections, and the cost of basic living in a typical household has risen significantly since then.

4) All the money pumped into the system so far has gone into the black hole of bank's balance sheets.  There is still a lot of deleveraging to do, so don't look for the cash infusion to make its way into the real world in the near term

5) I'm sure you can come up with a lot of other differences

 

The article says that 20 years ago, a lot of that money went into the tech boom companies.  It will be interesting to see if there is another such industry to drive the economy over the next 10 years.  I'm not convinced that the 'green' industries and 'alternative energy' can do today what tech did 20 years ago.  And there is no "Y2k" to create a sense of urgancy.

 

The excess money pumped into the system 20 years ago lead to the first of 2 giant bubbles - Internet stocks, then housing.  Will today's money be withdrawn in an orderly way, lead to a 3rd bubble, or to general price inflation?

 

Hey, where is everyone? 

There is always a calm before the storm.

Leading indicators show recession 'bottoming out'

Conference Board reports fifth straight rise in forward-looking gauge

 

"The positive contributions came from slower supplier deliveries, the interest-rate spread, higher stock prices, more building permits and better consumer expectations. The negative contributions to the index came from the real money supply, jobless claims and capital-goods orders. The factory workweek and consumer-goods orders were unchanged in August."

http://www.marketwatch.com/story/leading-indicators-show-recession-bottoming-out-2009-09-21

 

1. Consumer sentiment is still in the basement? So, where did they pull a 'good' consumer expectation from?

 

2. Building permits are still down year over year and 2008 was a recession. Plus, I would hope we would see a little bump in home building permits, the taxpayer is giving people $8,000 in free money. What happens if/when we cut of that free money?

 

3. Higher stock prices. If you flood the banks with trillions and they are not lending than they are probably throwing some of that money at the stock market.

 

4. We have a money supply problem? Inflation risk? I am shocked.

 

5. There is that problem category again, big unemployment numbers. You have to hate it when that just keeps getting in the way.

 

6. On top of all of this, this data was lower than the 'experts' predicted. Whistling as you quietly pass the scary haunted house.

 

 

^

I posted some graphs on the missing thread that seem to predict we (the state of Ohio) will hit the bottom for employment (vs the unemployment rate) next year at the earliest.

 

 

 

If you remove all the bailouts and public sector employment, is the recession actually ending? Private sector is still shrinking. That's what maintains an empire, that's what produces all real wealth and goods in this country. The United States is socialism for the wealthy and those with political power, and capitalism for everyone else.

 

so then what was it a year ago? the opposite?

 

 

Leading economic indicators rise in August

 

By Associated Press business staff

September 21, 2009, 10:03AM

Updated at 11:16 a.m.

 

NEW YORK — A private forecast of economic activity rose in August for the fifth straight month, the latest sign the recession has ended.

 

The Conference Board said today its index of leading indicators rose 0.6 percent in August. That follows a 0.9 percent gain in July revised up from 0.6 percent.

 

http://www.cleveland.com/business/index.ssf/2009/09/leading_economic_indicators_ri.html

^Correct. Ohio's labor force will likely hit bottom as a result of this recession sometime next year. The question is "will our state recover after that? Are we in a position to sustain another recession?" I'd argue the three states least likely to sustain themselves during a second recession are Michigan, Ohio, and California. :| Ohio is most interesting since Cincinnati and Columbus will keep doing fine while Toledo, Cleveland, Youngstown, Dayton, etc. will keep struggling to recover. Still, only Cincinnati has a stable private sector. Basically, the city of Cincinnati will be subsidizing the entire state. Actually, P&G will be subsidizing the entire state...

 

If you remove all the bailouts and public sector employment, is the recession actually ending? Private sector is still shrinking. That's what maintains an empire, that's what produces all real wealth and goods in this country. The United States is socialism for the wealthy and those with political power, and capitalism for everyone else.

 

Child.....You need to lay off what ever flavor kool-aid that is you're snorting!

You're insane. There's plenty of states struggling as much if not more than Ohio. 

There's plenty of states struggling as much if not more than Ohio.

 

I'd agree with this statement.

 

But my question is this.... Compared to other states, how poised is Ohio for job growth once the Great Recession is over?

I'm not sure, I want to say more than the boom states of the Sunbelt because soo much of their growth was built upon the real estate bubble. Atlanta looks like it might run into a water-induced brick wall. I'd actually guess that places with lots of gov't employment will do well and not much else for awhile.

Pity the Investors Counting on a Bull Market

 

"Household credit is shrinking...

Profits are shrinking...

Employment is shrinking...

Housing values are shrinking...

The wage base is shrinking...

But the recession is over!

 

Whoa... how is that possible?"

http://www.fleetstreetinvest.co.uk/daily-reckoning/bill-bonner-essays/housing-recession-us-economy-57445.html

 

One thing I have learned through these housing/recession threads is to try and keep an eye on basics. Weed out all the FED/Government/Media/RE mumbo jumbo and focus on the basics. They seem to be the items that end up determining the longer trend. I think this applies to things on the international, national, state and local level.

The next Fed-induced bubble?

 

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/22/AR2009092203737.html

 

from the article...

 

Let's start with the $1.45 trillion that the Fed has committed to propping up the mortgage market -- money that, for the most part, was simply printed. Effectively, most of that has been used to buy up bonds issued by Fannie Mae and Freddie Mac from investors, who turned around and used the proceeds to buy "safer" U.S. Treasury bonds. At the same time, the Fed used an additional $300 billion to buy Treasurys directly. With all that money pouring into the market, you begin to understand why it is that Treasury prices have risen and interest rates fallen, even at a time when the government is borrowing record amounts of new money.

 

and

 

So who is borrowing? By and large, it's not households and businesses, which are reluctant to borrow during a recession. Rather, it's hedge funds and other investors, who have been using the money to buy stocks, corporate bonds and commodities, driving prices to levels unsupported by the business and economic fundamentals.

 

------

A very interesting read that partially explains why stocks and commodities are rising, and why interest rates on gov't borrowing (T-bills) are so low.  And why banks are making money.

 

Housing Crash to Resume on 7 Million Foreclosures, Amherst Says

 

"Sept. 23 (Bloomberg) -- The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.

 

The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent..."

http://www.bloomberg.com/apps/news?pid=20601087&sid=aw6_gqc0EKKg

 

What is that huge lump under the rug and what on earth is that smell?

I think the sign that things are authentically getting better is when gov'ts start to report surprising levels of tax revenues in a positive direction. When the end of the world predictions start to shrink a bit, then I'll feel better. Until then . ..

I know I have post in the past that this economic recession would signal a shift in the balance of economic power in the world. That shift seems to be gaining speed. How much longer will the dollar remain the main currency of the world? Also note the increase in IMF power, add to this the G-8 giving the IMF earlier this year authority to print its own currency. No tinfoil hat with this stuff, just a look at what is actually happening. Power has never been just about military might, its other side is economics.

 

G-20 Near Deal on Economy

Plan Calls for Peer Review of Each Nation's Policies on Growth; G-8 to Take a Back Seat

 

"PITTSBURGH -- The Group of 20 nations is close to an agreement that would require members to subject their economic policies to a type of "peer review," according to several senior G-20 officials, in a shift that would expose the U.S. and China to broad scrutiny of the way they run their economies.

 

Also, the G-20 heads of state will announce on Friday that the G-20 will become the permanent council for international economic cooperation, eclipsing the Group of Eight, a senior U.S. administration official said."

http://online.wsj.com/article/SB125383640233239423.html

 

SNAP ANALYSIS: New world economic order takes shape at G20

 

"PITTSBURGH (Reuters) - The Group of 20 is set to become the premier coordinating body on global economic issues, reflecting a new world economic order in which emerging market countries like China are much more relevant, according to a draft communique.

 

Leaders of the G20 developed and developing nations also agreed to make the International Monetary Fund more representative by increasing the voting power of countries that have long been under-represented in the world financial body, said the draft G20 communique obtained by Reuters."

http://www.reuters.com/article/newsMaps/idUSTRE58O1FB20090925

 

I agree the dollar seems ever weaker, but when you look closely at everybody else, I'm not sure what's next. Europe is not in good shape - Spain could blow up the Euro (they have a very weak democracy). China loses a lot of comparative advantage if they abandon the dollar because suddenly the American market will get a lot harder to compete in - the same is true for Japan which has Europe's problems only worse.

I agree the dollar seems ever weaker, but when you look closely at everybody else, I'm not sure what's next. Europe is not in good shape - Spain could blow up the Euro (they have a very weak democracy). China loses a lot of comparative advantage if they abandon the dollar because suddenly the American market will get a lot harder to compete in - the same is true for Japan which has Europe's problems only worse.

 

I am becoming more convinced the next world currency will not be the Euro or the Yen, but a world currency probably printed and controlled through the IMF.

I'm not sure it will be printed. I'd expect instead some sort of reserve currency backed by IMF bonds in which all member states of the international currency are required to purchase a certain amount and then the currency market would essentially be created by a nation's ability to by bonds in the reserve currency. The question is far deeper because if a gov't doesn't stand behind a currency what provides its value over time.

I agree the dollar seems ever weaker, but when you look closely at everybody else, I'm not sure what's next. Europe is not in good shape - Spain could blow up the Euro (they have a very weak democracy). China loses a lot of comparative advantage if they abandon the dollar because suddenly the American market will get a lot harder to compete in - the same is true for Japan which has Europe's problems only worse.

 

I am becoming more convinced the next world currency will not be the Euro or the Yen, but a world currency probably printed and controlled through the IMF.

 

^ yeah i agree. broadly speaking, that has always seemed to be "the plan," but the bilderburgers are keeping mum for now.

 

***

 

ugh, i shouldve went to japan this summer when it was 100-1 on the dollar, now there is some bounce on the yen:

 

http://www.nytimes.com/2009/09/29/business/global/29yen.html?hpw

 

A look at rail transportation numbers indicates that the economy is trying to pull out of its tailspin...

 

http://finance.yahoo.com/news/Back-On-zacks-476344570.html?x=0&sec=topStories&pos=7&asset=&ccode=

 

The first few lines....

If the economy is really getting back on track, then there should be some pick up in the movement of goods around the country. We now have some evidence that this is happening.

 

Total rail shipments were down just 10.7% from year-ago levels in the last week. That is a nice improvement over the four-week average of a 13.8% year-over-year decline, which in turn is an improvement over the quarter to date 16.6% decline and even better than the year to date 18.1% decline.

 

I have some concerns about comparing YoY numbers at this point since the economic free-fall started about this time last year.  So saying that things are better because we aren't falling as fast as we were last year is not exactly a ringing endoursement for economic growth.

 

However, here are some numbers on movement of 'goods' around the country.

 

Personally, I have always had problems measuring the economy based on 'prices'.  I have always thought measuring the economy (or a company) on # of units, when possible, was a better way of doing things. Prices/Revenue can be affected by so many things, and do not always give an accurate picture.  I'm sure # of units can be manipulated as well, but probably less so.

 

Big ticket items, such as cars, planes, boats, etc, tend to report both revenue dollars and # of units.

 

I'd like to see P&G report sales of Tide based on # of ounces, over time.  It would be interesting to see if sales are falling (not saying they are) because the company is selling less product, or if the company is giving up some of its large margin to gain/retain market share.

 

A look at rail transportation numbers indicates that the economy is trying to pull out of its tailspin...

 

http://finance.yahoo.com/news/Back-On-zacks-476344570.html?x=0&sec=topStories&pos=7&asset=&ccode=

 

The first few lines....

If the economy is really getting back on track, then there should be some pick up in the movement of goods around the country. We now have some evidence that this is happening.

 

Total rail shipments were down just 10.7% from year-ago levels in the last week. That is a nice improvement over the four-week average of a 13.8% year-over-year decline, which in turn is an improvement over the quarter to date 16.6% decline and even better than the year to date 18.1% decline.

 

I have some concerns about comparing YoY numbers at this point since the economic free-fall started about this time last year. So saying that things are better because we aren't falling as fast as we were last year is not exactly a ringing endoursement for economic growth.

 

However, here are some numbers on movement of 'goods' around the country.

 

Personally, I have always had problems measuring the economy based on 'prices'. I have always thought measuring the economy (or a company) on # of units, when possible, was a better way of doing things. Prices/Revenue can be affected by so many things, and do not always give an accurate picture. I'm sure # of units can be manipulated as well, but probably less so.

 

Big ticket items, such as cars, planes, boats, etc, tend to report both revenue dollars and # of units.

 

I'd like to see P&G report sales of Tide based on # of ounces, over time. It would be interesting to see if sales are falling (not saying they are) because the company is selling less product, or if the company is giving up some of its large margin to gain/retain market share.

 

 

I have always love this type of thinkings. Its still getting worse just not as fast.

I have some concerns about comparing YoY numbers at this point since the economic free-fall started about this time last year.  So saying that things are better because we aren't falling as fast as we were  last year is not exactly a ringing endoursement for economic growth.

 

In aviation terms, a steep angle of descent pulling back to a shallower glide slope

 

 

However, here are some numbers on movement of 'goods' around the country.

 

Personally, I have always had problems measuring the economy based on 'prices'.  I have always thought measuring the economy (or a company) on # of units, when possible, was a better way of doing things. Prices/Revenue can be affected by so many things, and do not always give an accurate picture.  I'm sure # of units can be manipulated as well, but probably less so.

 

Big ticket items, such as cars, planes, boats, etc, tend to report both revenue dollars and # of units.

 

Sort of the way I use those employment or housing permit numbers.  Units not prices. 

 

 

US income gap widens as poor take hit in recession

 

"Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade's worth of gains to hit the lowest level since 1997."

http://news.yahoo.com/s/ap/20090929/ap_on_go_ot/us_census_income_gap_2

 

Kind of makes some of those monthly reports by the Government that are showing income as being up look a little off target.

 

The Government Is The Mortgage Market

 

"The Wall Street Journal reported that the FHA's reserve fund dropped from 6.4% in 2007 to about 3% today, putting it dangerously close to its mandated 2% minimum. And according to The Washington Post, nearly 90% of all new home loans are funded by the taxpayer up from 30% just four years ago."

http://www.istockanalyst.com/article/viewarticle/articleid/3510356

 

So the taxpayer backed system is taking on almost all of the new risk with the private sector showing no confidence and/or capacity to participate. The level of debt risk that the government is taking on in the name of the taxpayer is stunning to say the least.

 

 

 

I thought that was the idea behing the FHA to start with, when it started out in the Depression.  That the Feds would back or insure the mortgage market

Tax Revenue changes over the last year:

http://blogs.wsj.com/economics/2009/09/29/tax-revenue-tumbles-change-in-receipts-by-state/

 

Ohio is actually in okay shape relatively.