For anyone who has ever seen pictures or watch videos of the MASSIVE amounts of empty residential and retail space in China, know it will be hard for them not to crash land. They make Florida, Arizona and Nevada overbuilding look like childs play.

 

Documentary by SBS Dateline (Australian TV) about the Chinese real estate market. -

 

China's epic hangover begins

"China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud.

 

It is hard to obtain good data in China, but something is wrong when the country's Homelink property website can report that new home prices in Beijing fell 35pc in November from the month before. If this is remotely true, the calibrated soft-landing intended by Chinese authorities has gone badly wrong and risks spinning out of control.

 

The growth of the M2 money supply slumped to 12.7pc in November, the lowest in 10 years. New lending fell 5pc on a month-to-month basis. The central bank has begun to reverse its tightening policy as inflation subsides, cutting the reserve requirement for lenders for the first time since 2008 to ease liquidity strains."

 

"There is so much spare capacity that they will start dumping goods, risking a deflation shock for the rest of the world. It no surpise that China has just imposed tariffs on imports of GM cars. I think it is highly likely that China will devalue the yuan next year, risking a trade war," he said."

 

China's $3.2 trillion foreign reserves have been falling for three months despite the trade surplus. Hot money is flowing out of the country. "One-way capital inflow or one-way bets on a yuan rise have become history. Our foreign reserves are basically falling every day," said Li Yang, a former central bank rate-setter."

 

"The economy is badly out of kilter. Consumption has fallen from 48pc to 36pc of GDP since the late 1990s. Investment has risen to 50pc of GDP. This is off the charts, even by the standards of Japan, Korea or Tawian during their catch-up spurts. Nothing like it has been seen before in modern times."

http://www.telegraph.co.uk/finance/china-business/8957289/Chinas-epic-hangover-begins.html

There are going to be some juicy New Year sales! :clap:

 

This is a HUGE revision. Their stats were off by about 750,000 homes per year. Its nice to see the MSM using the NAR data less and less since it becoming pretty clear its not that trustworthy.

 

Existing-home sales revised down 14%

November sales up 4% from October; median price falls to $164,200

 

"WASHINGTON (MarketWatch) — An average of 14% fewer existing homes were sold annually between 2007 and 2010, according to revisions reported Wednesday by the National Association of Realtors, pointing to a housing market that was even weaker than previously believed."

 

"During the revision’s time period, there were average annual sales of about 4.42 million existing homes, compared with prior estimates of about 5.16 million. NAR revised the data to correct for some sampling and data-reporting problems."

 

"Analysts said the downward revisions reflect the depth of weakness that the economy had already been feeling."

http://www.marketwatch.com/story/existing-home-sales-revised-down-14-2011-12-21

Looks like we have another trustworthy financial institution?

 

Internal BNY Mellon Documents Show Panic

 

"An informant in a state fraud case against Bank of New York Mellon Corp. has provided prosecutors a rare inside peek into how the bank allegedly scrambled to contain the fallout from a fast-growing government investigation, according to hundreds of pages of confidential documents."

 

"As investigators sought to determine whether the bank overcharged clients to execute their currency trades, a senior BNY Mellon executive nicknamed "Rambo" urged traders not to tell clients how much money they made on trading, according to the informant. Bank officials worried clients would switch to negotiating their own foreign-exchange trades..."

http://online.wsj.com/article/SB10001424052970204879004577108630218485566.html?mod=WSJ_hp_LEFTTopStories

I am not sure where the positive data is coming from, but more declines are definitely coming in 2012. (Unless the FEDs try to juice the system again.)

 

RBC: HOUSE PRICES TO DROP UP TO 30% IN 2012

 

“Tom Porcelli, chief US economist at RBC Capital Markets, says he is not buying the recent positive data on US housing. He sees US home prices dropping another 10% – 30% in 2012.”

http://pragcap.com/rbc-house-prices-to-drop-up-to-30-in-2012

Brookings has a demographic wrap-up @ its urban policy page.

 

Relevant to this discussion:

 

Americans Lost Ground on Income and Poverty in the 2000s

 

The 2000s marked the first census decade on record in which real median household income declined. The typical household earned $50,046 in 2010, down 8.9 percent from 2000. And the share of people living in poverty hit 15.3 percent, the highest level since 1993. The negative trends surely reflect the deep recession affecting the country in the late 2000s, but also the limited progress experienced by average households and the poor during the years in which the overall economy grew.

 

and

 

The United States i Growing  More Slowly

 

The 2000s marked the slowest decade of population growth in the United States in 70 years, slightly under the rate from the 1980s. The country grew by 9.7 percent, adding 27.3 million people from 2000 to 2010. The pullback from rapid 13.2 percent growth in the 1990s reflects slower U.S. economic growth across the decade, reduced immigration, and the aging of baby boomers out of their prime child-bearing years.

 

 

 

 

Also from Brookings, the nine deficiencies in the housing market/industry....

 

 

1.The biggest deficiency is the lack of households willing and able to buy homes

 

2.A combination of falling home prices, losses of jobs by millions of Americans, and low-quality home mortgages sold to home buyers led many home owning households to default on their mortgage payments.

 

3.The federal government has tried several times to enable foreclosed home owners to remain in their homes, but its efforts have been limited because both banks and other mortgage lenders have fought taking any “haircuts” in their loan amounts to make that possible.

 

4.The deduction of mortgage interest payments from the taxable incomes of home owners is a large government subsidy that provides most of its benefits to the wealthy owners of costly homes.

 

5.Control over what types of homes are permitted within each community is completely exercised by that community’s local government, but many suburban governments are pressured by homeowners to exclude housing affordable to lower-income households.

 

6.In each year, homebuilders construct as many new units as they can sell during that year. But doing so in prosperous periods requires selling into housing demands oriented towards the future.

 

7.Many thousands of individuals and low-income households are essentially homeless.

 

8.The measures of home prices used by the housing industry and major media distort what really happens to home prices. (this one is for you, RR)

 

9.Bankers and other parties who normally provide loans to potential homebuyers have adopted stringent requirements for persons trying to qualify for home loans.

 

 

I am not sure where the positive data is coming from, but more declines are definitely coming in 2012. (Unless the FEDs try to juice the system again.)

 

RBC: HOUSE PRICES TO DROP UP TO 30% IN 2012

 

Tom Porcelli, chief US economist at RBC Capital Markets, says he is not buying the recent positive data on US housing. He sees US home prices dropping another 10% 30% in 2012.

http://pragcap.com/rbc-house-prices-to-drop-up-to-30-in-2012

 

The FED will only try to slow down the process as it should so that the system does not go into 'shock'.  These drops in price points are inevitable unless Americans start making a whole lot more money.  The scale of median sales prices vs. median salary needs to be balanced.  Something along the lines of 3x median salary sounds about right.

I am not sure where the positive data is coming from, but more declines are definitely coming in 2012. (Unless the FEDs try to juice the system again.)

 

RBC: HOUSE PRICES TO DROP UP TO 30% IN 2012

 

Tom Porcelli, chief US economist at RBC Capital Markets, says he is not buying the recent positive data on US housing. He sees US home prices dropping another 10% 30% in 2012.

http://pragcap.com/rbc-house-prices-to-drop-up-to-30-in-2012

 

The FED will only try to slow down the process as it should so that the system does not go into 'shock'.  These drops in price points are inevitable unless Americans start making a whole lot more money.  The scale of median sales prices vs. median salary needs to be balanced.  Something along the lines of 3x median salary sounds about right.

 

At the rate we are going the US housing market might just meet the salary market around 2013-2014. It will then probably over shoot to the downside and potentially hit a bottom after that.

The Federal Reserve's Covert Bailout of Europe

When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap.

 

"America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

 

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate."

http://online.wsj.com/article/SB10001424052970204464404577118682763082876.html?mod=wsj_share_tweet

 

Here is a little more info on this from zero hedge.

 

Did The Fed Quietly Bail Out A Bank On Tuesday?

 

"We know two things with certainty: In the week ended December 13 (14th excluded) one or more banks, most likely European, borrowed up to $2.5 billion from the Fed's Primary Credit Discount Window. And since US banks are drowning in dollar-based liquidity, any need to approach the Discount Window now, in the context of trillions of Excess Reserves, carries with its exponentially greater stigmata than it ever did during Lehman days. Also, in the week ended December 14, the Fed did a mid-month settlement of $31 billion in MBS purchases - a transaction which allowed a Primary Dealer to source critical liquidity, based on $30 billion in buyback authorization granted for the period beginning December 13."

http://www.zerohedge.com/news/did-fed-quietly-bail-out-bank-tuesday

I am not sure where the positive data is coming from, but more declines are definitely coming in 2012. (Unless the FEDs try to juice the system again.)

 

RBC: HOUSE PRICES TO DROP UP TO 30% IN 2012

 

Tom Porcelli, chief US economist at RBC Capital Markets, says he is not buying the recent positive data on US housing. He sees US home prices dropping another 10% 30% in 2012.

http://pragcap.com/rbc-house-prices-to-drop-up-to-30-in-2012

 

The FED will only try to slow down the process as it should so that the system does not go into 'shock'.  These drops in price points are inevitable unless Americans start making a whole lot more money.  The scale of median sales prices vs. median salary needs to be balanced.  Something along the lines of 3x median salary sounds about right.

 

At the rate we are going the US housing market might just meet the salary market around 2013-2014. It will then probably over shoot to the downside and potentially hit a bottom after that.

 

Good.  Then it will have some room to grow ;)

Well another year is over. I thought it might be interesting to look at some charts that show trends over the last decade or so. These charts and more can be found at zerohedge.com - http://www.zerohedge.com/news/11-ends-11-charts-11-disturbing-11-year-trends

 

Have a safe New Year.

 

 

Someone seems to be struggling more and more at releasing good GDP data on the first release.

 

 

 

 

 

Intersting how this revision and most of the others all go in one direction.

I wonder how 2008 will be compared to 1929 when it is all said and done.  That was an awful year for our economy.  Or, better put, a terrible last 4-6 months of a year.  We had the bottom of our sand castle kicked out.

What is amazing to me is how most of these trends are really not improving (most are continuing to get worse). I think the GDP growth chart is directly related to the Federal Debt Trend Chart. If we had kept at our normal debt growth from 2007 forward that we had between 2000 and 2007 we would still have negative GDP. We are simply trying to print our way to a positive GDP.

Americans’ Incomes Have Dropped 6.7 Percent During the ‘Recovery’

 

"New evidence suggests there’s a reason why this economic “recovery” hasn’t felt much like a recovery. Figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the “recovery” has actually been harder on most Americans than the recession from which they’ve allegedly been recovering."

 

"According to the report — which has been referenced by both the Wall Street Journal and the New York Times — in early 2000, Americans’ median annual household income was $55,836, in real (inflation-adjusted, June 2011) dollars. By the start of the recession (in December 2007), Americans’ real incomes had fallen 0.9 percent, to $55,309 — a decline of $527. During the recession (which ended in June 2009), their incomes fell an additional 3.2 percent, to $53,518 — a decline of another $1,791. During the first two years of the “recovery” (from June 2009 to June 2011), they fell an additional 6.7 percent, to $49,909 — a decline of another $3,609."

 

"In fact, the anemic economy has meant that Americans’ incomes have declined during the “recovery” even without adjusting for inflation. According to Green, in actual (non-inflation-adjusted) dollars, the median American household income was $51,140 at the start of the “recovery,” but it fell to $49,909 two years later."

http://www.weeklystandard.com/blogs/americans-incomes-have-dropped-67-percent-during-recovery_607640.html

Another reason GDP is staying positive. This is a very good article and is worth the read.

 

David Rosenberg On The Coming Gunfight At The OK Corral Between Mr Market And Mr Data

 

"Let's do some arithmetic to help explain what has happened on the spending side.

 

First, since mid-2011, gasoline prices have plunged 60-cents, which is in effect an $80 billion tax cut for the household sector. The problem is that this windfall is behind us, sadly enough. Eighty billion dollars at an annual rate is akin to a 4% pay raise for the average worker in real terms. That's hardly trivial for the likes of Bob Cratchit, we can assure you.

 

Second, since June, the personal savings rate has plunged from 5% to 3.5%. This sort of decline over such a short time span has occurred but five times in the past 12 years. This in turn freed up $150 billion at an annual rate in real terms yet again for spending purposes.

 

So we have a total of $230 billion of support that temporarily bolster the consumer since the mid part of 2011.

 

Yet real consumer spending since June has only risen by $105 billion at an annual rate in real terms.

 

That means that in the absence of these dual effects — lower gas prices AND lower savings rates — we would have seen real PCE contract $125 billion or at a 3% annual rate since mid-2011 (looking at the monthly GDP estimates, there would have also been zero growth in the overall economy). Instead, real PCE managed to eke out a 2.7% annualized gain — but aided and abated by non-recurring items. Yes, employment growth has held up, but from an income standpoint, the advances in low paying retail and accommodation jobs have not compensated the losses in high paying financial sector and government employment."

http://www.zerohedge.com/news/david-rosenberg-coming-gunfight-ok-corral-between-mr-market-and-mr-data

 

 

 

U.S. private payrolls swell in December, ADP says

 

"According to ADP, private payrolls gained 325,000, far outpacing growth in prior months. However, analysts warn that seasonal-adjustment issues have led to past ADP estimates for December substantially missing key employment data produced by the U.S. Labor Department.

 

ADP reported that employment rose 273,000 for the service-providing sector, and 52,000 for the goods-producing sector. By firm size, employment rose 148,000 at small businesses, 140,000 at medium businesses and 37,000 at large businesses."

http://www.marketwatch.com/story/us-private-payrolls-swell-in-december-2012-01-05

 

U.S. jobless claims fall 15,000 to 372,000

Data suggests gradual improvement in weak labor market

 

"New requests for unemployment benefits fell by 15,000 last week to a seasonally adjusted 372,000, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 387,000 from 381,000, based on more complete state data."

http://www.marketwatch.com/story/us-jobless-claims-fall-15000-to-372000-2012-01-05

 

Here is quick look at some larger job cut announcements over the last week or so.

 

Pepsi mulls 4,000 job cuts: report

http://finance.yahoo.com/news/pepsi-mulls-4-000-job-100503600.html;_ylt=ApuMyl0RpHMxWBuvEPOokC6iuYdG;_ylu=X3oDMTNyYmJxNTIyBG1pdANGUCBUb3AgU3RvcnkgTGVm

 

RBS may cut as many as 10,000 jobs: report

http://www.urbanohio.com/forum2/index.php?action=post;topic=17905.3300;last_msg=595903

 

Boeing to close Wichita facility by end of 2013

Boeing to close Wichita facility by end of 2013, move tanker work to Texas, Okla., Wash.

 

"Wednesday's announcement means the loss of 2,100 well-paying jobs at its Kansas facility, which was once considered the centerpiece of Wichita's claim as the air capital of the world.

 

It also dashes hopes for an additional 7,500 direct and indirect jobs that the company once promised to bring to Wichita with the Air Force air refueling tanker contract."

http://finance.yahoo.com/news/boeing-close-wichita-facility-end-164854935.html

 

Philly Schools Send Layoff Notices to 1,400

http://www.nbcphiladelphia.com/news/local/Philly-Schools-Send-Layoff-Notices-to-1400-136582568.html

Americans’ Incomes Have Dropped 6.7 Percent During the ‘Recovery’

 

"New evidence suggests there’s a reason why this economic “recovery” hasn’t felt much like a recovery. Figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the “recovery” has actually been harder on most Americans than the recession from which they’ve allegedly been recovering."

 

"According to the report — which has been referenced by both the Wall Street Journal and the New York Times — in early 2000, Americans’ median annual household income was $55,836, in real (inflation-adjusted, June 2011) dollars. By the start of the recession (in December 2007), Americans’ real incomes had fallen 0.9 percent, to $55,309 — a decline of $527. During the recession (which ended in June 2009), their incomes fell an additional 3.2 percent, to $53,518 — a decline of another $1,791. During the first two years of the “recovery” (from June 2009 to June 2011), they fell an additional 6.7 percent, to $49,909 — a decline of another $3,609."

 

"In fact, the anemic economy has meant that Americans’ incomes have declined during the “recovery” even without adjusting for inflation. According to Green, in actual (non-inflation-adjusted) dollars, the median American household income was $51,140 at the start of the “recovery,” but it fell to $49,909 two years later."

http://www.weeklystandard.com/blogs/americans-incomes-have-dropped-67-percent-during-recovery_607640.html

 

I think all this was pretty obvious to people on Main Street, but the mainstream media attention on it has been incredibly weak. It seemed after the recession "ended," new reports became fluffier and ignored the fact that standards of living have been declining much more after the recession than during the recession. It sort of goes along with the fact that unemployment rates make headlines while labor participation rates are ignored. There is no recovery except for those who were bailed out. Labor participation is still declining at a rapid rate and shows no signs of stopping. We are heading towards the 50% crushing point.

^ I bet you've got a pretty good idea why the MSM avoids stories like that.

I dont' think declining incomes has been underreported at all.  Quite the contrary, there are plenty of news stories of people who are underemployed, working part time, or who have taken pay cuts, or at the least are paying much more for benefits, than they were prior to 2008.

Will we see another push to goose up the housing market in 2012? In an election year everyone on both sides of the isle get nervous. Some how some way, they have got to get the housing party going again. No matter how unsustainable it may be, long term or even more short term. Even if its mean using taxypayer supported Fannie and Freddie to take on all the risk. I think we are in a place where all we can do is prolong the day of reckoning as long as possible. Extend and pretend.

 

Fed Urges Action on Housing

Bank Warns Congress That Tight Lending Standards Threaten Wider Economy.

 

"The Federal Reserve, in an unusual foray into housing policy, expressed alarm over the battered home market and called for more aggressive action from Congress and other policy makers.

 

Housing policy is outside the traditional purview of the central bank, but Fed Chairman Ben Bernanke and others are clearly worried that housing has stymied the effect of the bank's low-interest-rate policies.

 

In a 26-page paper sent to top lawmakers on congressional banking committees, the Fed warned that tight mortgage- lending standards threaten to hold back the economy.

 

The Fed also signaled support for more aggressive use of Fannie Mae and Freddie...."

http://online.wsj.com/article/SB10001424052970203471004577140882700118076.html

 

What's a few 'tens of billions' of dollars among friends.

 

Bailout concerns mounting for federal housing agency

 

"NEW YORK (CNNMoney) -- Concerns are growing that the Federal Housing Administration will need to be bailed out by taxpayers.

 

The agency's latest monthly outlook report revealed a spike in serious delinquencies for FHA-insured loans, posing a further threat to the agency's already depleted cash reserves.

 

According to the report, the percentage of loans in the FHA's portfolio with three missed payments or more rose to 9.3% in November, up from 8.4% in August.

 

"It's highly likely that the FHA will need a taxpayer bailout over the next three to five years," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School and author of a report entitled "Is FHA the Next Big Housing Bailout?."

http://money.cnn.com/2011/12/30/real_estate/federal_housing_bailout/index.htm

8.5

Useless number. Just because people fall of the unemployment rolls doesn't mean they are now employed. A better number is the percentage of employed and U6. Both have shown some minor improvements, but at this rate we are talking years to return to our peak employment levels before the great recession.

 

As I posted before, I can get the unemployed number to 3% or 4% by just removing several million more Americans from the unemployment rolls (those that run out of unemployment benefits, stop looking for a job and give a few more some minimum wage jobs that make $20,000 compared to their previous job of $40,000 a year). But in the end it doesn't make our economy better or our population more financial stable.

It is useless in the sense that it completely ignores the labor participation rate. U-3 has been meaningless for over two years now.

 

But I see some silver lining in weekly unemployment applications falling below the 400,000 mark. And those private sector job numbers are high enough to probably hold some water after revisions. Although at this point in the job market, it is too little too late. It is going to take a decade or more until things start feeling less stressful, if ever. I think the "solution" to the labor problem won't be job creation, but continued drops in baby-making. Birth rates are still falling fast. Once this current generation gets through school, the labor pool will start shrinking. The kids being born over the next decade might be very lucky. They will not have much competition coming out of school.

The birth rate is falling, but it is exacerbated by the tail end of the '70s era baby bust moving through their peak fertility years and with the delaying of fertility across the middle class (mostly by choice) you've got quite the perfect storm. The boom of the mid-'00s probably pulled forward some fertility for some who might have waited longer in a tight economy.

Worthless number or not,  I can just imagine the howls on this board if the number were going up. And since it's going the opposite direction, I choose to be optimistic, especially when taking into account increases in private employment, wall street stability, etc

 

 

 

8.5%

Useless number. ...

As I posted before, I can get the unemployed number to 3% or 4% by just removing several million more Americans from the unemployment rolls ...

It is good news despite your spin.

The uproar over the jobs report was comical.  I was fiercly against the Iraq war..... but I couldn't imagine waking up in the morning during those Bush years and getting joy out of the news that more US soldiers had been lost.  I swear, no matter how much they won't admit it, these people can't hide their disdain for ANY potential good news for the economy.  Bad news comes out and they gloat about it 24/7 without any effort to clarify why the news might not be as bad as it seems.  Good news comes out and, after drinking away their depression, the talking heads throw a fit and try and twist, spin, and distort the facts until the public is sufficiently confused as to whether the sun came up this morning.

If it's such good news, why don't they report labor participation rates? That's what really matters today, 50 years ago, and in the future. Also, labor participation rates vary much more widely between cities than unemployment rates (Take a look at the labor participation rates in Detroit, Toledo, and Cleveland if you dare). They give a much better picture of job competition and opportunity in each city. If a higher share of a city is working, that's a better place to find work. You can't go by U-3 numbers.

 

With all this said, I agree the unemployment applications falling below 400,000 is notable and that some of these gains in December will remain after revisions. It's private sector growth, which is always a good thing. It does seem like private sector companies are hiring more now that Washington and state governments are getting serious about cutting public sector jobs. That's the push-pull in this recovery. 2011 saw private sector gains and public sector losses.

If I can "take a look" as you suggest, how is it not being reported?

 

One underestimated component of the economy is public confidence and the glass half empty, someone pissed in my wheaties, woe-is-me crowd is doing their best to keep that down..... at least for the next 11 months (which to them may be the most critical in the history of Amurica you morans).

C-Dawg, it's good news because it isn't bad news. Simple as that

 

And there's nothing new with these distortions, which are probably necessary at some level. Inflation is a bull$hit number as opposed to cost of living, but it's still reported and we're relieved when reading it isn't escalating. The terms recession and depression are completely outdated and horribly defined/qualified, but there is value in reports that we're in neither.

 

A lot of times the truth causes too much damage to morale and growth. Imagine if the Normandy troops were told that one out of every three would die (I believe those were the estimates prior; obviously, fatalities were far less than estimates). You can bet that would jeopardize the mission.

 

 

If I can "take a look" as you suggest, how is it not being reported?

 

One underestimated component of the economy is public confidence and the glass half empty, someone pissed in my wheaties, woe-is-me crowd is doing their best to keep that down..... at least for the next 11 months (which to them may be the most critical in the history of Amurica you morans).

 

It is being reported by the BLS. It's just frustrating when media outlets do copy and pasting, but don't copy and paste the labor participation numbers.

 

The jobs numbers have become too politicized during presidential campaigns. I don't think the president has much control over them, or should be blamed for them when they're bad (especially when the situation was already dismal before being elected). The House of Representatives controls the money and is the group being lobbied the hardest. I think the general public should be far more critical of House members than the president (I bet a lot of people don't even know who their House member is). Instead, we have this ridiculous media circus every presidential season that probably dumbs people down more than anything else.

 

But lack of consumer confidence has much bigger reasons than the election cycle. The lack of consumer confidence is due to debt, housing market projections, etc. I don't think politics are playing into that. Generation Debt is what's keeping things down.

C-Dawg, it's good news because it isn't bad news. Simple as that

 

And there's nothing new with these distortions, which are probably necessary at some level. Inflation is a bull$hit number as opposed to cost of living, but it's still reported and we're relieved when reading it isn't escalating. The terms recession and depression are completely outdated and horribly defined/qualified, but there is value in reports that we're in neither.

 

A lot of times the truth causes too much damage to morale and growth. Imagine if the Normandy troops were told that one out of every three would die (I believe those were the estimates prior; obviously, fatalities were far less than estimates). You can bet that would jeopardize the mission.

 

No distortions are needed. People deserve the truth. This isn't war. Theses numbers have become much more distorted in the last 20 years. Inflation figures didn't used to exclude food and fuel prices. The whole truth used to be reported. It didn't kill morale. If anything, it probably helped people make more informed decisions.

 

I don't think Normandy can be compared to the economy. Capitalism is not really a group mission. If you want to use the Normandy example, it'd be more along the lines of:

 

"Rick, you're laid off, we merged with the French resistance and are reducing redundancy."

"Scott, we just bought out the Royal Air Force. Their pilots are cheaper than you. Go back to Ohio."

"Brian, I'm sorry, but we just got an H-1B visa for a new radio operator from overseas. He's working for half your pay."

"Jim, your sniper performance has been excellent, but we've got a new recruit working as an unpaid intern. He might take a while to get up to speed, and could get killed, but he's got a lot of passion. He studied deep sea rifle cleaning in college."

From what I see labor participation rates are stabilizing (read as still decreasing slightly but you'd be hard pressed to tell compared to '08-'10) and unemployment is trending down.  Some very biased sources tell me that the private sector has posted net job gains for the better part of the last two years, and logic tells me that as long as we don't completely collapse as a society the public sector will eventually stop laying people off.  If a lot of these numbers stay the same and we have just a bit more improvement in some we're obviously moving in the right direction.  It's a glass half full kind of day.

 

 

I have always said I welcome different opinions and stats. Please post them.

 

I think there is no doubt things have clearly improved from 08/09 and have said this many times. But to me the real issue is what is causing the slow but gradual uptick. If its the drop in gas prices, the US consumer depleting its small saving/increasing credit card debt and the printing press, than it not true sustainable growth (which I have posted plenty of data to support this issue). Gas prices are going up and will continue to go up over the long term and if we keep doing QE etc. than the US will see more downgrades and an unsustainable 'recovery'. This has been the focus of this thread more than anything else. Despite Massive infusions of funds, support programs like we have never seen since the great depression and clear manipulation of data (at least in its first release) the return on these efforts have been quite small. We don't have the ability to continue this type of printing and kicking the can for another decade.

 

I have also heard the 'negative' comments for a long time now. I heard it in 2006 when there was no way a recession could happen. Then there was no way home prices could fall, then it was only going to be a short drop before things shot back to the moon. Then the recession would only be very mild and shorted lived, ETC. Well we have been at this for half a decade and food stamps participation continues to grow, household income continues to fall across the US, we are preparing for QE?, the European economy has fall back into a recession, home prices continue to fall and U6 is still around 15%. So I don't see this wonderful recovery, has some economics in the US improved, yes, but that small gradual improvement has come at a very high/unsustainable cost.

 

Its not that difficult to realize for every dollar the US prints the return on that investment continues to drop. That is not a long term strategy for a health economy.

 

If you think this is a positive economic strategy then I would be very happy to hear why and how its going to lead to a full recovery and when? I have layed my case out that this is not a productive approach that will lead to a health economy. I have supported this opinion with plenty of data, charts, articles and history. So just saying this thread is doom and gloom or look unemployment is at 8.5 doesn't get at the real issue or what is going to happen long term.

U-3 has been useless ever since other countries starting using a rate that resembles U-6. I don't know when we started using U-3 ('80s? '90s?) or when they started using U-6.

Birth rates are still falling fast. Once this current generation gets through school, the labor pool will start shrinking. The kids being born over the next decade might be very lucky. They will not have much competition coming out of school.

 

...here's your book:

 

Fewer

 

 

 

 

 

right on the money, ragerunner.

Birth rates are still falling fast. Once this current generation gets through school, the labor pool will start shrinking. The kids being born over the next decade might be very lucky. They will not have much competition coming out of school.

 

...here's your book:

 

Fewer

 

The book is from 2005, and there were already plenty of signs that economics were pushing down birth rates. The recession took that trend and made it much worse. Ohio's birth rates really tanked. In some ways, that says more than jobs data, more than median income, more than home prices, more than consumer confidence, or more than anything else. Why birth rates are so important to look at is for one simple reason: Do people see a bright future with the resources needed to raise kids? You can put off college, you can put off a new car, and you can put off buying a house. Babies have deadlines, and couples are cutting back in record numbers.

I get so confused as to whether the economy is collapsing because the government is doing too much or too little..... is trying to falsely inspire confidence or is not making any effort to inspire confidence..... is taking things too fast or too slow..... blah, blah, blah.  Anyone hoping for the government to pull out the silver bullet and save them from their own despair needs to pull their outstretched hands back and place them firmly on their own bootstraps.  IMHO, government's core function (at least economically) is to provide a social safety net for those who GENUINELY NEED it.  It is not the job of government to pull us out of a recession, but rather to make sure an utter collapse does not occur.  It is not the job of government to find you the job mommy and daddy promised you would have if you at all of your vegetables and went to bed on time, but it can and will make sure you do not starve or freeze to death.  I just think expectations are too high and too many people are waiting around for something that is not going to come, regarldess of who wins in 2012.  The sense of entitlement among young people (especially those with a 4 year degrees) is astonishing to me, especially considering that my 4 year degree landed me as an office gopher in my first job with diploma in hand.  And that was during the glory days!

That sense of entitlement comes from a lifetime of parents and teachers pushing education, and with it all its colossal bills, as the only way to achieve a middle class job or even propserity. You have many millions of American teens and young(ish) adults following these instructions, making the obscene time and financial sacrifices, only to find an economic climate devoid of jobs, certainly the ones that let us afford independence.

 

It's not a sense of entitlement in as much as a sense of betrayal. Our country, our parents, corporate America, and especially our colleges and graduate institutions have completely lied to us about the value of these sacrifices, that they are generally a one way street, that we have no right to complain, that we had no right to expect renumeration for our struggles, despite our having paid out the a$$ for all these years.

 

 

^Pretty well said TBideon. The entitlement mentality is most highly linked with the education mentality.

The sense of entitlement among young people (especially those with a 4 year degrees) is astonishing to me, especially considering that my 4 year degree landed me as an office gopher in my first job with diploma in hand.  And that was during the glory days!

 

You're underestimating what has happened to the entry-level market. Some industries completely wiped out office gopher positions (I know mine did), and kids usually are thrilled to land those kinds of jobs. Unfortunately, "entry-level" typically has a very different meaning today compared to just five years ago, and it's not office gopher. Kids with degrees that aren't in engineering, accounting, finance, education, or nursing are lucky to get jobs at Starbucks, not an entry-level position as a company gopher. There is a huge population of degreed kids deep in debt who can't even land the retail and food service jobs they left behind in order to go to college.

 

Sure, it's their fault for not picking an engineering, nursing major, etc., but guess what would happen to the pay at those jobs if everyone picked those majors? The bottom line is we're pumping out way too much supply for way too little demand. And the erosion of the entry-level position is not helping matters at all. Within the next decade, everything could turn into Hollywood. The office gopher is the three-year unpaid intern who pays full tuition back at university.

^ Nursing is getting crowded already with men who were working construction during that last round of sprawl and went back to school for something that's in higher demand. And many types of engineering majors (including mechanical) have a hard time finding work as well.

>The office gopher is the three-year unpaid intern who pays full tuition back at university.

 

Yeah, all the old people don't understand what's going on.  They can't understand how their grandkids are all still working part-time jobs after college in addition to their $12/hr full-time jobs and so don't have any time to visit them.  They should be giving those kids their inheritances now -- no matter how small -- so that they can climb out of debt and get ahead in the workplace.  Instead they think it'll all turn around when Obama is booted this November, except none of this is Obama's fault and he's going to be reelected unless something really weird happens.  And that weird thing would unfortunately swing the country toward right wing extremism, which would only deepen the problem. 

 

 

 

 

...  Anyone hoping for the government to pull out the silver bullet and save them from their own despair needs to pull their outstretched hands back and place them firmly on their own bootstraps.  IMHO, government's core function (at least economically) is to provide a social safety net for those who GENUINELY NEED it.  It is not the job of government to pull us out of a recession, but rather to make sure an utter collapse does not occur.  It is not the job of government to find you the job mommy and daddy promised ...

Fiscal policy and industrial policy will make a difference in the strength of the economy.  The last "president" stole a campaign issue from rival Steve Forbes, lowered taxes and created trillions of dollars of deficit.

 

We saw the results: Scant job creation.

 

The last president(s) sponsored an energy policy that caused gasoline prices to climb to $4/gallon

and that wrecked the consumer economy , burst the financial bubble and caused the recession.  For that matter, those clowns relaxed bank regulation and allowed the financial bubble.

 

And what about that unfunded war in Iraq?  That took value out of the economy and blew it up.

Earning reports tonight, folks. Should be interesting, especially with amazon, apple and netflix

 

 

 

Yeah, all the old people don't understand what's going on.

 

I think we do. 

 

 

We understand that if we are in our 50s and laid off we are most-likely unemployable and will be competing with our grandkids for those starbucks jobs, except it wont be starbucks (since they hire younger people) but maybe competing with our grandkids for jobs clerking at Home Depot.

 

 

 

 

It's not a sense of entitlement in as much as a sense of betrayal.

 

bingo.

 

The use of the term entitlement just gives a snarky moralist spin for the "Ive got mine, Jack" fingerpointers.  Its just a rationalization