^^ Jeffery,

 

Ae you saying (or is the chart saying) that per-capita real GDP growth was higher during the 1930s than it was during the 1920?

 

Are you saying real per-capita growth was higher during the Depression than it was during the Roaring Twenties?

 

Per-capita has population in the denominator. The Great Depression years were the only years in United States history where the nation experienced a net emmigration.  So, the rate of population growth might be throwing off the numbers for the depression years.

Two data points that stand out in this index. First how fast and how far the index has dropped since spring and the HUGE plunge in the index as manufactures look forward. This is not painting a positive picture for the rest of the year.

 

(Side note: "The future new orders and shipments indexes dropped to their lowest levels since September 2001.")

Source: http://www.zerohedge.com/news/empire-state-index-resumes-downward-slide-misses-consensus-future-conditions-index-lowest-febru

 

Empire State index negative for third month

Future expectations lowest since February 2009

 

"The Empire State index fell to negative 7.7 in August from negative 3.8 in July, according to the manufacturing survey released Monday by the New York Federal Reserve."

 

"A key barometer of future activity that asks manufacturers about expectations six months ahead plummeted in August to 8.7, its lowest level since February 2009. The index was 32.2 in July."

http://www.marketwatch.com/story/empire-state-index-negative-for-third-month-2011-08-15

Mixed signals on the consumer economy from Bloomberg.

 

The headline says Consumer Sentiment Drops to Three-Decade Low, but the article also says:

 

A report from the Commerce Department today showed sales at U.S. retailers climbed 0.5 percent in July, the most in four months, indicating consumers are holding up even as employment slows. Purchases excluding automobiles rose more than forecast.

 

...meaning?  Meaning the great unwashed are expecting things to get worse? Since consumer confidence is maybe more foreward looking?

 

 

 

 

 

 

 

 

I posted a few pages back how the consumer is adding a lot of new debt onto their credit cards at this time. Something tells me a lot of this 'growth' in retail is just more debt for Main Street right now. It is not because MS is finding incomes on a nice rise.

German growth nearly grinds to a halt

 

"Gross domestic product rose 0.1% in the April-June quarter from the preceding three months, the German statistics institute reported Tuesday, citing seasonally adjusted data. The figures mark a sharp slowdown after German GDP expanded 1.3% in the first quarter.

 

“The German economy, accustomed to success, is unable to decouple from slowing global economic growth,” said Joerg Kraemer, chief economist at Commerzbank AG, in a note."

http://www.marketwatch.com/story/german-growth-nearly-grinds-to-a-halt-2011-08-16

 

U.K. inflation accelerates to 4.4%

 

"LONDON (MarketWatch) -- U.K. consumer price inflation accelerated to an annual rate of 4.4% in July from 4.2% in June, according to data released Tuesday by the Office for National Statistics. The increase was due to upward pressure from a number of areas, including higher housing rent and rising fees in financial services."

http://www.marketwatch.com/story/uk-inflation-accelerates-to-44-2011-08-16

 

July is usually the end of the spring/summer housing construction peak. It has now become clear their was no rebound in new home construction this year. They also revised the previous month numbers lower. (This seems to be a pretty consistent trend, not just for housing data but for a lot of data.)

 

Housing starts slip 1.5% in July, U.S. data show

 

"Starts fell to a seasonally adjusted annual rate of 604,000, down from a downwardly revised 613,000 rate in June, the Commerce Department said."

http://www.marketwatch.com/story/housing-starts-slip-15-in-july-us-data-show-2011-08-16

 

Fitch Fights S&P: USA Reaffirmed ‘AAA’ With Stable Outlook

 

"Fitch has just reaffirmed the “AAA” rating and more important is that the outlook is STABLE."

 

"Fitch did leave an out here to go negative in the future.  It said it will review its fiscal projections in light of the Joint Select committee due by the end of November as well as the near-term and medium-term economic outlook by the end of the year.  A negative outcome from the Joint Select committee or a weakening of the economy further most likely result in an outlook change to Negative from Stable. It also said that the debt ceiling is not an effective tool and it also went back to this $4.1 trillion pledge in the deficit cuts."

 

Read more: Fitch Fights S&P: USA Reaffirmed ‘AAA’ With Stable Outlook - 24/7 Wall St. http://247wallst.com/2011/08/16/fitch-fights-sp-usa-reaffirmed-aaa-with-stable-outlook/#ixzz1VCiNNLAM

Signs of the Times

 

Wal-Mart Warns of US Weaknes

...from the UK buisness paper Financial Times....

 

Walmart, the biggest US retailer by revenues, warned on Tuesday that persistent weakness in the US economy was putting pressure on its low income consumers who are increasingly worried about unemployment and becoming more reliant on government assistance.

 

The struggling US economy is continuing to take its toll on Walmart’s domestic sales as it reported its ninth consecutive quarter of falling sales at US stores open at least a year...

Yes, for the industrial side of the economy, production is up:

 

Industrial Output in US Climbs

 

Key paragraph giving the details:

 

"Part of the jump in manufacturing reflects a rebound from the supply shock caused by the earthquake in Japan, indicating it will be difficult for factories to maintain this pace of output as consumer spending and exports cool. At the same time, companies have kept inventories lean, limiting the need for large-scale cuts that could trigger an economic slump. "

 

 

 

 

Even with gas prices dropping inflation continues on. I know my wife and I have noticed some significant increase in food prices at the grocery store in the last month or so. Of course this is on top of all the previous increase over the last year or so.

Interesting to see that the increase in the PPI almost equaled the increase in consumer spending. It looks like people really aren't buying more, they are just paying more for the same amount of stuff.

 

Producer prices climb hotter-than-forecast 0.2%

 

"WASHINGTON (MarketWatch) — Producer prices rose 0.2% in July as a decline in energy costs didn’t immediately filter through the rest of the economy, according to government data released Wednesday."

 

"Excluding food and energy, core PPI rose 0.4%, the largest monthly rise since January."

http://www.marketwatch.com/story/producer-prices-climb-hotter-than-forecast-02-2011-08-17

The grocery store prices are likely due to the horrible weather we had this spring and early summer. There was so much rain and heat that many crops were planted late, more sparsely, or some did very poorly and produce has suffered. That includes corn and soy, which, together, are in about 99% of your products in the grocery, so it affects the whole food chain.

Diesel hasn't dropped as much as gasoline as well.

Wow, what a SHOCK!!!!  :wink: All the info that just keeps coming out about the big boys on wall street and how they keep getting their hands slapped, but in the end they just keep passing 'payday' and always avoiding the 'go to jail' card. At least we are learning that our FED agency(s) that are there to keep a eye on things are making sure there is very little to keep an eye on. I guess is just another day for Wall Street. If we keep this up we will destroy our nation's economy and its credibility (in more ways than one).

 

SEC may have destroyed documents, senator says

Grassley: Agency may have got rid of Goldman, Madoff documents

 

"WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday."

 

"It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what timeframe, and to what extent its actions were consistent with the law.”

 

Agency staff “destroyed over 9,000 files” related to preliminary agency investigations, according to a letter sent in July to Grassley, the top Republican on the Senate Judiciary Committee, and obtained by MarketWatch."

http://www.marketwatch.com/story/sec-may-have-destroyed-documents-senator-says-2011-08-17?dist=afterbell

^

This sounds pretty suspicious. 

 

 

Back over 400,000 and last weeks revised up to 399,000.

 

Jobless claims filings rise above 400,000 mark

 

"Unemployment claims rose 9,000 to a seasonally adjusted 408,000 in the week ended Aug. 13, the Labor Department reported Thursday."

 

"Claims in the week ended Aug. 6 were revised to 399,000 from the initial estimate of 395,000.

 

Claims have been at or above 399,000 for 19 straight weeks."

http://www.marketwatch.com/story/jobless-claims-filings-rise-above-400000-mark-2011-08-18

 

^

This sounds pretty suspicious. 

 

 

 

It will be interesting to see what/if anything comes out on this. I noticed this morning this info was already being buried in many MSM sites. Just like most of the other stuff about the banks and the FED has been. One day headline and no need to discusses it again.

I figure, if not an honest mistake of tossing old files, its the SEC staff (or staff directed by management) doing CYA.

Another leading indicator takes a BIG dive.

 

Confidence is collapsing around us

Commentary: Drop in Philly Fed worrisome, but doesn’t prove recession

 

"The 34-point drop in the Philly Fed index was the largest since October 2008, when the global economy was reeling from the failure of Lehman Bros. and the near-death of many other significant banks.

 

The drop in the Philly Fed index to negative 30.7 in August follows a weaker-than-expected survey from the New York Federal Reserve Bank earlier in the week."

http://www.marketwatch.com/story/confidence-is-collapsing-around-us-2011-08-18

 

Sales of existing homes fall 3.5% in July

 

"WASHINGTON (MarketWatch) — Sales of existing homes fell 3.5% in July to an eight-month low, with a high cancellation rate again taking its toll on an already troubled market, according to data released Thursday."

http://www.marketwatch.com/story/sales-of-existing-homes-fall-35-in-july-2011-08-18-1011410

Also from Marketwatch:

 

US, Europe may be close to recession

 

Morgan Stanley analysts cut their outlook for global economic growth in a note late Wednesday, and sounded alarm bells that the U.S. and Europe are “hovering dangerously close to a recession.” ....

 

....In the developed markets, the analysts expect growth of 1.5% this year and next, down from a previous estimate of 1.9% and 2.4% respectively.

 

 

 

^

This sounds pretty suspicious. 

 

 

 

It will be interesting to see what/if anything comes out on this. I noticed this morning this info was already being buried in many MSM sites. Just like most of the other stuff about the banks and the FED has been. One day headline and no need to discusses it again.

 

Ahhhh.... the good ole "MSM" acronym and accompanying conspiracy talk.  This explains a lot....  and I was always wondering "why all the glee?"

There is an MSM and it does miss stories from time to time.

I'll take your word for it.  Good thing they don't have 'brain control'

 

http://www.conservapedia.com/Mainstream_media

 

The mainstream media (MSM), also known, in a failed attempt at humor, by many of its very large number of vocal critics as the lamestream media, are the increasingly liberal media organs that that control our minds and censor the dissemination of news.

 

 

Back to the recession.  Heres an article from the Dayton Daily News on why we may not be seeing a lot of homelessness coming out of the dire economy.

 

Women More Likely To Work Multiple Jobs

 

Linda Borgert, 50, of Beavercreek, works full-time at the Montgomery County Law Library, teaches at Fortis College Centerville and sells Pampered Chef products. She said she works about 50 hours a week.

 

In an ideal world, Borgert said she would earn enough from her full-time job to cover the bills and maintain her family’s quality of life.

 

But she said her 57-year-old husband, Jim Borgert, has been out of work for nearly two years, and she fears his age, lack of recent work experience and the weak labor market makes it unlikely he will find another job soon.

 

...so I bet you see a lot of this.  The wife picking up the slack working "womens jobs" (see the article on the gender-izing of these jobs), while the husband remains long term unemployed. 

 

 

Not really recession related, but I thought it was funny in an ironic sort of way.  This is about a sort of cultural exchange program...or so the participants though.  I guess the program really works since it gives these foreign students a good idea an aspect of US culture, ie,  how sucky US management is in re workers...if they can exploit you they will....

 

 

 

 

Foreign Students in Work Visa Program Stage Walk-Out

 

The students, from countries including China, Nigeria, Romania and Ukraine, came to the United States through a long-established State Department summer visa program that allows them to work for two months and then travel. They said they were expecting to practice their English, make some money and learn what life is like in the United States.

 

In a way, they did. About 400 foreign students were put to work lifting heavy boxes and packing Reese’s candies, Kit-Kats and Almond Joys on a fast-moving production line, many of them on a night shift. After paycheck deductions for fees associated with the program and for their rent, students said at a rally in front of the huge packing plant that many of them were not earning nearly enough to recover what they had spent in their home countries to obtain their visas.

 

Sounds like the candy company got a cheap foregin workforce to exploit, when unemployment in the US is, what, 9% or so?

 

 

^

This sounds pretty suspicious. 

 

 

 

It will be interesting to see what/if anything comes out on this. I noticed this morning this info was already being buried in many MSM sites. Just like most of the other stuff about the banks and the FED has been. One day headline and no need to discusses it again.

 

Ahhhh.... the good ole "MSM" acronym and accompanying conspiracy talk.  This explains a lot....  and I was always wondering "why all the glee?"

 

Don't over read the comments and there never has been any 'glee' in all of this. Just a reality check on our economy. I saw a lot of the same comments before the 2007+ recession and now we are growing closer and closer to another potential recession.

 

As far as the conspiracy comment, if you go back and take a look at a lot of the MSM articles about banks (Goldman and things like trading software, etc.) they usually get one MSM article and then no more discussion or they are printed in a major European newspaper, but not the US. How is this a conspiracy comment, it just what happens. The same happens in reverse, many times you will see something about Europe in the US media but not in the MSM European media. Sometimes MSM of different nations don't like to print their countries dirty laundry (expecially when it comes to economic issues). I found if you really want to have a better understanding of current economic issues then its wise to look around, not just listen to CNN, FOX, MSNBC and the Wall Street journal. These and many other outlets have their own political spin they like to put on things. Branch out, read the BBC, Telegraph, Financial Times, even some of the New Zealand/Austrialia MSM outlets, your view of the world and what is going on in economics might just grow and yes you might even see somethings that didn't show up in the US media, for whatever the reason. The world is connect economy like never before, understanding what is going on across the globe does help in understanding it potential impacts our us and vis verses.

Branch out, read the BBC, Telegraph, Financial Times, even some of the New Zealand/Austrialia MSM outlets

 

Or just get the News360 app for your phone!

Bank of America to slash jobs: WSJ

 

"SYDNEY (MarketWatch) -- Bank of America Corp. is planning to cut 3,500 jobs this quarter, the Wall Street Journal reported Friday citing people familiar with the situation. The bank will undertake an aggressive overhaul that could result in the elimination of at least 10,000 jobs, according to the report."

http://www.marketwatch.com/story/bank-of-america-to-slash-jobs-wsj-2011-08-18

 

Global markets take fright at the return of the zombie banks

 

"The activities of financial markets are often irrational. Prices go up for no apparent reason and then suddenly the mood changes. What's worrying about the latest spasm that has convulsed bourses in Europe, Asia and North America is that the sell-off is grounded in real and ever-more pressing concerns. Make no mistake, something serious is going on here."

 

"That something can be divided into three parts. The first cause for anxiety is the global economy, and in particular the United States. The report released on Thursday by the Philadelphia Federal Reserve covers only a small part of the Eastern US but it has a good track record for charting the ups and downs of the world's biggest economy. The Philly Fed's barometer has just plunged deep into recession territory."

 

"There are also simultaneous slowdowns going on in the rest of the world. Europe's economy has slowed to stall speed, the UK is still operating way below its pre-recession level and activity has come off the boil in China, even though to western eyes growth still looks amazingly strong in China."

 

"Concern number one has re-ignited fears about the health of the global financial system. Again, markets have been operating for the past couple of years on the assumption that large dollops of financial help from the taxpayer and a return to growth have made the global banking system immune from a fresh collapse. This always looked questionable, and now that activity is slowing markets suspect that some banks may go under. In the 1990s, the Japanese government prevented its financial system from collapse but only at the expense of creating zombie banks, neither alive nor dead but kept functioning thanks to the largesse of the state. The reason the sell-off in financial stocks has been more pronounced than the fall in stock markets as a whole is that investors believe Europe and North America now have their own zombie banks."

http://www.guardian.co.uk/business/2011/aug/19/global-markets-take-fright-banks

I wouldn't read a tremendous amount inot Bof A. That has more to do with bringing their efficiency ratio in line with peers (and the CEO being called out for lack of leadership after losing $2.2B last year) than it has to do with any foretelling of where the economy is going.

Thousands Camp Out for Job Fair as Jobless Rate Rises

 

"Thousands of unemployed waited overnight, camping out in their business suits and office heels and braving the tormenting heat in Atlanta to stand in line for a job fair Thursday. Authorities treated 20 people for heat exhaustion as they struggled to keep the line moving and get people moved inside.

 

The incredible turnout at the job fair comes on the heels of the state labor commissioner’s announcement that Georgia’s jobless rate rose."

http://abcnews.go.com/m/story?id=14336519&sid=74

 

Ohio home weatherization workers face layoffs as stimulus funds dry up

 

"Community action agencies writing to the state said the layoffs would take place by Oct. 31, adding that more than 250 of the 700 already have been cut."

http://www.bizjournals.com/columbus/morning_call/2011/08/ohio-home-weatherization-workers-face.html

 

DOE approves up to 1,100 additional layoffs at Hanford

 

"RICHLAND, Wash. --  The Department of Energy has authorized its environmental cleanup contractors at the Hanford nuclear reservation to lay off as many as 1,100 more workers in the fiscal year that begins Oct 1."

http://www.yakima-herald.com/stories/2011/08/18/hanford-doe-approves-up-to-1-100-additional-layoffs

 

I wouldn't read a tremendous amount inot Bof A. That has more to do with bringing their efficiency ratio in line with peers (and the CEO being called out for lack of leadership after losing $2.2B last year) than it has to do with any foretelling of where the economy is going.

 

I am sure the 3,000 to 10,000 employees might feel this is foretelling were their future economy is going.

You are right though, BoA have got to get cost under control. They already are needing to set aside some of the largest funds for potential RE loses of all the big banks.

There is no way they would have done this. I am sure its just a mistake or some strange conspiracy theory.

 

States Go After Big Bank on Forex

 

"The legal stakes are rising for Bank of New York Mellon Corp. in a widening controversy over the way it prices currency trades for pension funds and other big clients.

 

On Thursday, attorneys general in Virginia and Florida filed civil suits against BNY Mellon alleging that the bank cheated pension funds in those states by choosing improper prices for currency trades the bank processed for the funds. The Virginia lawsuit, filed in a Fairfax, Va., state court, cites internal bank emails allegedly showing that senior bank officials knew about, and endorsed, a currency-trading method that hurt state pensioners.

 

In addition to Virginia and Florida, California and Tennessee are also suing BNY Mellon and State Street Corp. over the alleged fraud."

 

"In this case, Markopolos says BNY Mellon and State Street we’re taking about “three tenths of a percent from every forex transaction for pension funds” by back-timing the trade to benefit banks at the detriment of their pension fund clients. “It’s almost the exact same scheme as the market timing scandals of 2003,” he claims."

http://online.wsj.com/article/SB10001424053111903918104576502293798149096.html

"RICHLAND, Wash. --  The Department of Energy has authorized its environmental cleanup contractors at the Hanford nuclear reservation to lay off as many as 1,100 more workers in the fiscal year that begins Oct 1."

 

You'll be seeing more of this once those Federal reductions start hitting from that budget agreement and the one that is to come.  The deal at Hanford is that its a large single-site employer in a remote area of the PNW, so the hurt will hurt more there than, say, in DC, which has a big private sector economy that can mask the impacts of such mass layoffs.   

 

am sure the 3,000 to 10,000 employees might feel this is foretelling were their future economy is going

 

If you want to see where they are going to end up read Barbara Eherenreich or the book I'm reading now, 'Someplace Like America" (for the worst case scenario, and it's a damning book), or see my post above from Dayton about women working multiple jobs...

 

 

 

 

 

 

 

 

 

 

 

In the past a lot of these types of forecast end up being on the high side. We shall see.

 

J.P. Morgan further cuts U.S. growth forecast

 

FRANKFURT (MarketWatch) -- Economists at J.P. Morgan on Friday further cut estimates for U.S. economic growth and warned that recession risks are "clearly elevated." While the outlook for third-quarter growth looks only "moderately softer" than previously projected, the economists, in a research note, said they have slashed the outlook for fourth-quarter growth to 1% from a previous projection of 2.5%. They also lowered their first-quarter 2012 growth forecast to 0.5% from 1.5%. "Declining energy prices should help to cushion some of the weakness in the economy, and the still-low levels of cyclically-sensitive spending could reduce the chances of getting a negative GDP quarter. Nonetheless, the risks of a recession are clearly elevated," they said.

http://www.marketwatch.com/story/jp-morgan-further-cuts-us-growth-forecast-2011-08-19

Heres a link to the Baltic Dry Index site, which is touted as another one of those economic tea leaves for the global economy, since it measures, apparently, shipping volume?:

 

 

 

...graph looks like these indexes are plateauing out at a fairly low level?  Traduya por favor?

 

Source....

 

Dry Ships

 

 

One of those online wall street/investor sites says the dry index is flashing warning signs

 

 

 

 

Back to the recession.  Heres an article from the Dayton Daily News on why we may not be seeing a lot of homelessness coming out of the dire economy.

 

Women More Likely To Work Multiple Jobs

 

Linda Borgert, 50, of Beavercreek, works full-time at the Montgomery County Law Library, teaches at Fortis College Centerville and sells Pampered Chef products. She said she works about 50 hours a week.

 

In an ideal world, Borgert said she would earn enough from her full-time job to cover the bills and maintain her family’s quality of life.

 

But she said her 57-year-old husband, Jim Borgert, has been out of work for nearly two years, and she fears his age, lack of recent work experience and the weak labor market makes it unlikely he will find another job soon.

 

...so I bet you see a lot of this.  The wife picking up the slack working "womens jobs" (see the article on the gender-izing of these jobs), while the husband remains long term unemployed. 

 

 

 

Healthcare has everything to do with the fact that most jobs out there today are either 20 hours a week or 80 hours a week. Our ridiculous requirement that full-time employers provide health care rather than the government (or a lodge, or the person themselves) burdens organizations to such a degree that they can't afford to hire people. As the cost of health care continues to drastically outpace inflation in other sectors, companies have to fire more and more people. Rather than hire another person, the companies would rather pay all that overtime to one person -- even though they are paying 1 1/2 to 3 times as much an hour for someone who's productivity is in the crapper from working so many hours.

 

You know what? Funding universal health care would probably be the best economic decision we ever made as a nation. You lower a company's cost of employing a person by 30% and all of a sudden all that overseas production, automation and computerizing that destroys jobs here at home becomes more expensive than hiring an American. People have full-time jobs, they aren't 80-hour-a-week work droids, their health is better, there's a lot fewer work related accidents, people have time to spend money and kids actually get to see their folks.

 

Of course, people say, "look at Europe and all the unemployment there even though they have socialized medicine'. But, as most in this thread know, Europe reports unemployment much more realistically than we do. They can also stay on unemployment longer than we can and live in a culture where unemployment is not as shameful and devastating. In addition, it's practically impossible to fire someone over there unless they work in the service industry; companies are therefore extremely cautious about hiring the inexperienced and those with marginal skills.

From Europe..the english broadsheet the Guardian has an op-ed piece: What a Financial Tailspin Means for You and Me.

 

(the concern in Europe is more with the financial situation due to their debt/banking crisis)

 

As bank shares and stock markets plummet, and investors flock to the safety of government bonds; as obstinate EU leaders crucify their countries in a futile struggle to defend today's equivalent of the gold standard; as British and American politicians adopt austerity policies and drive their economies closer to the cliffs of depression; and as most professional economists stand aloof from the escalating crisis – what lies ahead for ordinary punters like you and me?

 

..and doenst really answer that, but says our future could be similar to what Japan has went through for the past decade or so.

 

 

 

 

This should be interesting.

 

Goldman shares drop on Blankfein attorney news

 

"SAN FRANCISCO (MarketWatch) -- Goldman Sachs Group Inc. shares dropped Monday just before the closing bell following a Reuters report that Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten. Shares of Goldman Sachs closed down 4.7% at $106.51 a share. Weingarten has represented such clients as former WorldCom CEO Bernard Ebbers and former Enron accounting officer Richard Causey, according to the report."

http://www.marketwatch.com/story/goldman-shares-drop-on-blankfeins-attorney-news-2011-08-22?dist=afterbell

Since he no longer can really lower interest rates his only real choices still left is to purchase and print. Interesting that we have comments from another economist talking about a potential market meltdown and a depression. Almost as if these are potential outcomes if Bernanke doesn't print more money.

 

If printing is the only way left to stop these two things from happening, then what happens down the road when this option also disappears and how high will commodity prices go (food, oil, etc.) in the meantime?

 

Bernanke ready for action, but when is in doubt

Central banker to deliver key speech Friday

 

"WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke is expected to use his highly anticipated speech from Jackson Hole, Wyo. to stress that he is willing to ride to the rescue to stabilize the economy.

 

When, is a different matter.

 

“Ben Bernanke is a student of history, and he is not going to be the central banker that lets financial markets melt down and the economy go into a depression,” said Mark Gertler, a professor of economics at New York University who has co-written research with the Fed chairman, who’s due to speak at 10 a.m. Eastern on Friday."

http://www.marketwatch.com/story/bernanke-ready-for-action-but-when-is-in-doubt-2011-08-22?dist=afterbell

The next twelve months or so are going to be very interesting. With the data starting to flash another recession, the FEDs tool kit down to just a few options and a heated election on the way. Volatility on Wall Street, Main Street, commodities, and data is going to be wild at times.

 

Somebody is getting the boot for the downgrade and I am sure its a warning sign to others. But the best is they are replacing him with a fox to guard the hen house. (Citibanks chief operating officer)

 

S&P president Sharma to step down

 

"SYDNEY (MarketWatch) — Deven Sharma will step down as president of credit-rating agency Standard & Poor’s and will be replaced by Douglas Peterson, the firm’s parent said late Monday."

http://www.marketwatch.com/story/sp-president-sharma-to-step-down-2011-08-22

 

Another gauge in negative territory and falling.

 

Richmond Fed gauge at worst level since June 2009

 

"WASHINGTON (MarketWatch) -- The Richmond Fed said Tuesday that its manufacturing index slumped to -10 in August from -1 in July, as shipments and new orders declined sharply. The Richmond Fed gauge wasn't as bad as the -30.7 reading of a similar Philadelphia Fed indicator but was still the worst reading since June 2009. The Richmond Fed is a diffusion index, calculated by subtracting the percentage of respondents who say activity has dropped from those who say it has increased."

http://www.marketwatch.com/story/richmond-fed-gauge-at-worst-level-since-june-2009-2011-08-23

 

Wouldn't want to be a cubical worker in the bank industry. 10,000 of thousands are going to be out of a job by the end of this year. But, don't worry little workers, I am sure the big boys will have record bonus at the end the year for cutting expenses.

 

UBS to pare 3,500 jobs as it cuts $2.5B expenses

 

"UBS's investment bank business will bear the brunt of the job cuts, accounting for 45% of the 3,500 positions to be lost, while the wealth management and Swiss bank unit will account for 35%, it said."

http://www.marketwatch.com/story/ubs-to-pare-3500-jobs-as-it-cuts-25b-expenses-2011-08-23

Durable-goods orders climb 4.0% in July

Autos, airplanes lead the way, but orders drop in most other areas

 

"WASHINGTON (MarketWatch) — Orders for U.S. durable goods jumped 4.0% in July, mainly because of higher demand for autos and commercial aircraft, the government reported Wednesday.

 

Yet orders for most other durable goods fell, reflecting continued softness in broad swaths of the U.S. economy. "

 

"What’s more, orders for another closely watched category, known as core capital goods, fell 1.5%. These figures exclude transportation and government spending on defense because those orders often jump up and down one month to the next and make it hard to get a read on trends in the private sector."

http://www.marketwatch.com/story/durable-goods-orders-climb-40-in-july-2011-08-24

 

Home Prices Decline 5.9% in Second Quarter

 

"Home prices in the U.S. fell 5.9 percent in the second quarter from a year earlier, the biggest decline since 2009, as foreclosures added to the inventory of properties for sale."

http://www.bloomberg.com/news/2011-08-24/u-s-home-prices-fell-5-9-in-second-quarter-as-foreclosures-depress-value.html

 

European Bank Job Cuts Exceed 40,000 as UBS Eliminates 5% of Its Workforce

 

"UBS, Switzerland’s biggest bank, said yesterday it will eliminate 3,500 jobs, mainly from its investment bank. It follows HSBC Holdings Plc (HSBA), which announced 30,000 cuts on Aug. 1, Barclays Plc (BARC), which is cutting headcount by 3,000, and Royal Bank of Scotland Group Plc (RBS), which is eliminating 2,000 posts. Credit Suisse Group AG (CSGN) announced 2,000 reductions on July 28."

 

“It’s a bloodbath, and I expect things to get worse before they get better,” said Jonathan Evans, chairman of executive- search firm Sammons Associates in London. “I cannot see a lot of those who have lost their jobs getting re-employed. Regardless of how good someone is, no one wants to talk about hiring. Life will be very difficult for two or three years.”

http://www.bloomberg.com/news/2011-08-23/european-bank-job-bloodbath-surpasses-40-000-as-ubs-cuts-workforce-by-5-.html

 

We shall see. There has been a lot of talk about BoA basically being insolvent. Would they really create a MONSTER bank like this? I guess when you get desperate you do desperate things. One thing is for sure, if Charlotte felt the sting of Wachovia being lost, the lose of BoA would be a HUGE blow to that city and its place in the financial kingdom.

 

JP Morgan May Take Over Bank Of America

By 24/7 Wall St.

 

"There is a rumor circulated on Wall St. that JP Morgan (NYSE: JPM) will takeover Bank of America (NYSE: BAC) within the week. The government will support the deal with a $100 billion investment in preferred shares issued by the combined entity. Alternatively, the government may guarantee the value of a large pool of Bank of America assets. The word is that Treasury Secretary Geithner has discussed the transaction with JP Morgan CEO Jamie Dimon.The "merger" would completely destroy the value of BAC's common shares.

 

Under federal law, JP Morgan and Bank of America could not combine because together they would have too large a share of several financial markets in the US. Treasury would apparently work with other government agencies to have those rules suspended and then the new combined bank would sell assets to get back into compliance later.

 

The government's preference for a deal with JP Morgan rather than a federal takeover may be because it does not want to set the precedent of Washington owning one of the world's largest banks "paid for" with taxpayer money."

http://www.marketwatch.com/story/jp-morgan-may-take-over-bank-of-america-2011-08-23

^ Isn't that like someone taking over walmart? Honestly there should never be companies that large. If they fail It will bring down WAY WAY too many things with them.

First, I hope that that story is completely untrue.

 

Second, to the extent that there's any substance to it, I really hope that we don't invest $100 billion in taxpayer money in preferred shares of this new bank.  If the deal isn't sweet enough for JP Morgan without a heaping helping of taxpayer cash, then JP Morgan should walk and leave BoA to whatever fate awaits it.  The FDIC will insure the deposits of the people the government actually needs to care about.  The FDIC can also be appointed receiver, break up the bank, and sell it piecemeal to other banks (regional banks, even community banks) if it's too large for any one potential buyer to absorb whole.

^ I like.

Even if it happens (which I'm also voting 'nay' to), the combined entity would have to sell off a huge amount of its retail deposit base, as no one bank can exceed 10% (I think) of deposits on a national level. I'm pretty sure BofA is already there, as it's the number 1 bank in the country based on that threshold. JPM is number 3 I think behind Citi. JPM would have to divest a ton of branches / shed a bunch of deposits before they could even begin discussing the other antitrust issues that they would face.

 

And as I typed this, I just found this article. It's sounding like it's a dead deal

 

http://www.csmonitor.com/Business/Latest-News-Wires/2011/0825/Bank-of-America-quashes-merger-talk-in-memo

 

Edit: Also I just came across this

 

http://dealbook.nytimes.com/2011/08/25/buffett-to-invest-5-billion-in-bank-of-america/

Now this is shocking news, people usually need steady employment to pay the mortgage payment. I guess adding 400,000 to the unemployment list each week does have it repercussions. I think another factor in this is, last year with the $8,000 assistance program, home sales increased and prices stabilized, leading many to 'think/hope' that the bottom had been reached and a turnaround was in sight. Now that this summers selling season is over and prices are now in noticable decline and sales are down significantly that hope is starting to fade.

 

The top 7 in loans in foreclosures:

- Florida

- Nevada

- New Jersey

- Illinois

- Maine

- New York

- Ohio 

 

After months of decline, late mortgage payments rise again in Ohio, U.S.

 

"After improving since last fall, mortgage delinquencies are on the rise again in Ohio and nationwide.

 

In Ohio, 9.1 percent of all home loans are behind but not yet in foreclosure, up from 8.3 percent three months ago, according to a report Monday from the Mortgage Bankers Association in Washington, D.C.

 

Ohio delinquencies, not counting foreclosures, peaked at 10.3 percent last fall.

 

More disturbing: Loans in Ohio that are newly delinquent - 30 days' behind - jumped by 20 percent from the first quarter to the second. About 4.1 percent of homeowners with loans are one month behind on payments. The same uptick occurred nationally. The survey includes 88 percent of all loans nationwide.

 

"The signs of improvement that we had been seeing . . . that has clearly now stopped," Jay Brinkmann, the association's chief economist, said in a conference call.

 

Missing one payment is a problem that increases with unemployment, Brinkmann said. "The increase in these delinquencies clearly reflects the deterioration we saw in the labor market during the second quarter," he said."

http://www.cleveland.com/business/index.ssf/2011/08/after_months_of_decline_late_m.html

I guess this might be a good deal, if you are still employed and the lower interest rate can bring down you price enough that you might be able to afford the monthly bill. But, if you don't have a government backed mortgage, already lost your home, etc. I guess you are out of luck. It's a shame the concept of risk and responsibility has become so distorted in the US. From Wall Street on down the concept that if you can't pay the bill or made a bad business decision, don't worry the government will bail you out/change the rules and all will be well, has become very prevelent in our society. Something tells me changing the rules of the game and/or trying to artifically manipulate the markets (rental program) as we go along will only create more problems down the road. Here is a thought, why not let the market itself current the issues and let price discovery actually take place on Wall Street and Main Street?

 

U.S. May Back Refinance Plan for Mortgages

 

"The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

 

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

 

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds."

 

"Administration officials said on Wednesday that they were weighing a range of proposals, including changes to its previous refinancing programs to increase the number of homeowners taking part. They are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market. That program is further along — the administration requested ideas for execution from the private sector earlier this month."

http://www.nytimes.com/2011/08/25/business/economy/us-may-back-mortgage-refinancing-for-millions.html?_r=1&pagewanted=all

More disturbing: Loans in Ohio that are newly delinquent - 30 days' behind - jumped by 20 percent from the first quarter to the second. About 4.1 percent of homeowners with loans are one month behind on payments. The same uptick occurred nationally. The survey includes 88 percent of all loans nationwide.

 

Maybe we are seeing the ongoing impact of high unemployment, low wages, and rising prices in other areas like gas and food.

 

Folks kept paying as long as they could and are now out of options and the wolf is at the door. 

 

Was anyone suprised to see Maine on that list of high foreclosure states?

 

 

The unemployed are finally showing up on the street...in their cars

 

The New Homeless..Laid Off and Middle Aged

 

A disturbing trend in laid-off middle-aged workers is growing on Palo Alto's streets, homeless advocates said.

 

Among the city's vehicle dwellers, most are in their late 40s, 50s and 60s, said Rev. Andrew Burnham, recovery pastor at Peninsula Bible Church on Middlefield Road.

 

Estimates of how many people live in their cars are based on contacts with homeless advocates and the police. City officials estimate there are one to two dozen vehicle dwellers in Palo Alto; the dwellers themselves said there could be as many as 50.

 

...and the changing demographics:

 

College Educated, Laid-Off, and Homeless

 

"We're seeing many more of the newly-homeless or people on the edge of being homeless," said Brian Spicker, Valley of the Sun United Way senior vice president for community impact.

 

"The face of poverty is changing, as they say. We're seeing more and more people with four-year (college) degrees. We aren't talking about only people who dropped out of school

 

...and I guess we havn't talked about the recent graduates who have not left home yet due to being unemployed or not being able to find jobs that pay  enought to move out on their own.

 

 

 

The unemployed are finally showing up on the street...in their cars

 

The New Homeless..Laid Off and Middle Aged

 

A disturbing trend in laid-off middle-aged workers is growing on Palo Alto's streets, homeless advocates said.

 

Among the city's vehicle dwellers, most are in their late 40s, 50s and 60s, said Rev. Andrew Burnham, recovery pastor at Peninsula Bible Church on Middlefield Road.

 

Estimates of how many people live in their cars are based on contacts with homeless advocates and the police. City officials estimate there are one to two dozen vehicle dwellers in Palo Alto; the dwellers themselves said there could be as many as 50.

 

...and the changing demographics:

 

College Educated, Laid-Off, and Homeless

 

"We're seeing many more of the newly-homeless or people on the edge of being homeless," said Brian Spicker, Valley of the Sun United Way senior vice president for community impact.

 

"The face of poverty is changing, as they say. We're seeing more and more people with four-year (college) degrees. We aren't talking about only people who dropped out of school

 

...and I guess we havn't talked about the recent graduates who have not left home yet due to being unemployed or not being able to find jobs that pay  enought to move out on their own.

 

 

 

 

 

I have three words, for the above!

 

Google

Apple

Hewlett-Packard

 

The irony that these three - fortune 500 - company's are within 15 miles of Palo Alto.

 

Just goes to show, just because you have a concentration of big companys - keep in mind these are very popular company's from a social and financial standpoint - doesn't mean your local economy can be in the crapper!

 

 

The irony that these three - fortune 500 - company's are within 15 miles of Palo Alto.

 

Just goes to show, just because you have a concentration of big companys - keep in mind these are very popular company's from a social and financial standpoint - doesn't mean your local economy can be in the crapper!

 

I really hate to be the grammar police, but three strikes and you're out! :)  The plural of company is companies.

The irony that these three - fortune 500 - company's are within 15 miles of Palo Alto.

 

Just goes to show, just because you have a concentration of big companys - keep in mind these are very popular company's from a social and financial standpoint - doesn't mean your local economy can be in the crapper!

 

I really hate to be the grammar police, but three strikes and you're out! :)  The plural of company is companies.

 

I didn't feel like it, RnR lite!  :P :P :P :P :P

U.S. growth revised lower to 1% for second quarter

Economy grew at tepid 1.0% pace as exports, inventory slow

 

"The Commerce Department said gross domestic product rose at a 1.0% annual rate, down from an original reading of 1.3%, seasonally adjusted. That matched the forecast of economists surveyed by MarketWatch."

http://www.marketwatch.com/story/us-growth-revised-lower-in-second-quarter-2011-08-26

 

Bernanke: Fed will decide next month on new policy

No signals emerge; central bank chief takes shot at Congress

 

"JACKSON HOLE, Wyo. (MarketWatch) — Federal Reserve Chairman Ben Bernanke on Friday put off a lengthy discussion of the easing options available to the central bank until the next Federal Open Market Committee meeting late next month."

 

"Bernanke also criticized Congress, saying the recent debate over the debt ceiling had hurt the economy.

 

He called on Congress to not overlook the “fragility” of the economy in their efforts to bring the deficit under control."

http://www.marketwatch.com/story/bernanke-puts-off-easing-talk-until-sept-fomc-2011-08-26-103440