With the US trapped in depression, this really is starting to feel like 1932 The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation.
By Ambrose Evans-Pritchard Published: 9:33PM BST 04 Jul 2010
"The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. "All the booster rockets for getting us beyond it are failing."
"Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said.
California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit.
Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene."
Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.
Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.
The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.
"Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m."
Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Nevada called them "hobos". This really is starting to feel like 1932.
Washington's fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s.
The housing market is already crumbling as government props are pulled away. The expiry of homebuyers' tax credit led to a 30pc fall in the number of buyers signing contracts in May. "It is cataclysmic," said David Bloom from HSBC.
Federal tax rises are automatically baked into the pie. The Congressional Budget Office said fiscal policy will swing from a net +2pc of GDP to -2pc by late 2011. The states and counties may have to cut as much as $180bn. ..............................>>>>.....................>>>>....................................................http://www.telegraph.co.uk/fin.....-feel-like-1932.html
Dow Repeats Great Depression Pattern: Charts Published: Monday, 5 Jul 2010 | 5:31 AM ET
The Dow Jones Industrial Average is repeating a pattern that appeared just before markets fell during the Great Depression, Daryl Guppy, CEO at Guppytraders.com, told CNBC Monday.
“Those who don’t remember history are doomed to repeat it…there was a head and shoulders pattern that developed before the Depression in 1929, then with the recovery in 1930 we had another head and shoulders pattern that preceded a fall in the market, and in the current Dow situation we see an exact repeat of that environment,” Guppy said.
The Dow retreated 457.33 points, or 4.5 percent last week, to close at 9,686 Friday. Guppy said a Dow fall below 9,800 confirmed the head and shoulders pattern.
The Shanghai Composite is seeing a very rapid collapse, falling below 2,500, which suggests the major fall in the Dow, he added.
In the European markets, Guppy says Frankfurt's Dax is witnessing a different pattern to London's FTSE.
Guppy uses the broad trading band as measurement- giving the Dax a downsize target of 1,500. The same head and shoulders pattern seen in the Dow can also being seen in the FTSE, he added.
We've IN a great depression. You can say it started in 2005-2007, but definitely by mid 2007 with the housing foreclosure and bank crisis that lead to the Bush Economic Meltdown.
The term "crisis" is defined as: ~"a stage in a sequence of events at which the trend of all future events, esp. for better or for worse, is determined; turning point. ~
Bush recognized the crisis and responded with several stimulus plans but all were too little too late. Bush stimulus: ~March 2008: Bush stimulus $29 billion for Bear Stearns/JP Morgan Chase deal ~May 2008: Bush stimulus $178 billion in tax rebate checks ~July 2008: Bush stimulus $300 billion for distressed homeowners ~July 2008: Bush stimulus $200 billion for Fannie Mae and Freddie Mac ~September 2008: Bush stimulus $50 billion to guarantee money market funds ~September 2008: Bush stimulus $25 billion to Big 3 automakers ~September-November 2008: Bush stimulus $150 billion to AIG ~October 2008: Bush stimulus $700 billion to banks (TARP)
Obama also responded with several stimulus packages. Combined with the Bush plans, they have had the effect of turning the corner, but recovery is by no means certain. ~February 2009: Obama stimulus $787 billion in broad stimulus package ~February 2009: Obama stimulus $75 billion for distressed homeowners ~February 2009: Obama stimulus $200 billion for Fannie Mae and Freddie Mac ~March 2009: Obama stimulus $30 billion for AIG ~March 2009: Obama stimulus $15 billion for Small Business lending ~March 2009: Obama stimulus $1 trillion for banks to remove "toxic assets" from their books ~March 2009: Obama stimulus $22 billion for Big 3 automakers Chrysler and GM ~April 2009: Global stimulus $1 trillion commitment from G-20 countries ~June 2009: Obama stimulus $30 billion to help General Motors file bankruptcy
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
I said it before and I'll say it again.............our government, both dems and reps have failed us miserably! This has been going on for decades. It didn't matter what party was in office. They ponder to the special interest groups, other countries and themselves.
The point now is.....where do we go from here? While our government is spending money like drunken sailors, jobs continue to be lost, businesses closing, unemployment benefits running out, banks still foreclosing, new taxes and fees being added and wages continuing to drop.
suggestions?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Bumble... I agree with much of what you just posted... But without both the Bush & Obama stimulus packages there would BE no US Economy.
Picture the jobs mess now PLUS add GM & Chrysler, bankrupt, bank failures, stock market closing, IRA's frozen, retirement funds frozen, US dollar devalued, cities and towns bankrupt, NY state in a much worse (if possible) financial situation. Things are Terrible now... and may get worse if Jobs don't turn around, but it could have been much worse.
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
They should have let it fall! If bush let it fall during his administration, we would be well on our way to recovery WITHOUT the debt. Listen, businesses fail. They have what is called a profit and loss statement. Everyone is always looking and expecting a profit and yet forget that there is the world LOSS right next to it.
They should have let it fall and let the market correct itself. There would be hard times for sure. But have we become so fat and lazy that we can't pull ourselves back up again and start over? And what about the next generation? What will we be saying to them? IMHO
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
IMO If Bush/Obama did nothing... there would BE no US Economy... NO jobs... NO banking system... NO Financial system... NO unemployment insurance... NO government... NO RECOVERY!
A perception of a US Economic collapse would have triggered an even larger global economic failure.
Again, IMO, this wasn't just a bump in the economic road, not just a normal down turn with a correction... it was the beginning of a total meltdown, like nothing the US has ever seen before, including the Great Depression.
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
If we did nothing, the markets would have adjusted to it's proper levels. The over pricing of everything would have deflated. Why? Because so much of what is purchased is on credit and not real money. Creditors were allowing money to be leveraged at a 30 to 1 ratio. Stuffing the banks by printing money and strapping future generations with debt isn't the answer. People that were making $50K $60K and $70K by writing mortgages for people that didn't have the means to pay for it is over. The days of the 21 year old cashiers making $9 per hour financing $25K cars is over. People need to start living within their means. These politicians continue claim that funding this ponzi scheme by printing money and spending money we don't have in hopes of opening the credit markets is our way out. It has become apparent, Americans cannot manage their credit. Credit markets should freeze; it's the only logical solution.
I would rather live relatively free like a pauper, than enslaved by the government and creditors.
"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
Our present course is not sustainable. In order to meet our long term goals entitlement obligations we would probably need double digit growth rates for 75 consecutive years. When was the last time we had a double digit growth for any year?Our spendthrift ways are going to come to an end one way or another.Politicians won't mention it or face up to it. The collapse is likely to occur sometime beyond their tow to four year term. They are banking on and hoping that the american people are either too stupid or uninformed to be concerned. The government will continue to smooze us with pleasant campaign slogans and their usual empty promises.
The budgets of every federal cabinet dept should be immediately frozen. Everyone should be forced to live within their means. We need to stop the washington bureaucrats from growing fat with wealth and power and saying it is all in the name of common good. bullsh!t!
Get rid of the Fed.Dept of education. What a joke. Each state has their own dept of education, but the taxpayers are strapped to pay for yet another additional national education bureaucracy. I believe that the federal government is overstepping it's constitutional powers, that are costing us, the taxpayers a bundle.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
"Obama believes that a critical step in restoring fiscal discipline is enforcing pay-as-you-go (PAYGO) budgeting rules which require new spending commitments or tax changes to be paid for by cuts to other programs or new revenue."
Barack Obama, 1998
Quoted Text
President Barack Obama talks a good game on pay-as-you-go budget rules. He says he wants to enforce the PAYGO rules, which require that new spending commitments or tax cuts be offset by other program cuts or new tax revenue. He's also said he wants Congress to go beyond its current PAYGO rules by passing a law that would presumably be tougher and more binding.
But as we've seen with PAYGO discussions of the last 20 years, lawmakers pay lip service but little else. Year after year, they have found creative new ways to sidestep it.
In the Obama presidency, there have only been two significant bills that would be subject to PAYGO — the gargantuan economic stimulus bill, which spent $787 billion in federal money to revive the economy, and the children's health insurance bill that passed in early February.
People are nuts and sometimes get what they deserve....really! For example....... I was listening to talk 1300 the other day and they were blasting the city of troy's mayor for not having the 'pools' open in time for the kids in this hot weather! First of all....when did it become the government's responsibility to provide 'swimming pools'? I mean really? How about the 'Y' or other non profits?
So the taxpayers are screaming that taxes are too high, BUT YET they expect their government to provide a swimming pool for them. And who's paying??? This is the most ridiculous idea ever!!! Shut the friggin pools down!!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
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