A few short articles from Reuters this morning touch upon the current health of the economy, and it's not great news.
BERLIN (Reuters) - The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday.
Buffet said that the US may not be in a recession according to the default definition of two consecutive quarters of negative growth, but the people are already feeling the effects.
Side Note: Given this White House's propensity for changing the facts to fit the policy (and propaganda), it would be interesting to see what the ~actual~ growth and performance indicators are before saying we don't yet meet the formal definition of a recession.
SINGAPORE (Reuters) - The U.S. economy is in a recession and stimulus from a government tax rebate later this quarter will only temporarily stem a fall in consumer spending, a Merrill Lynch economist said on Wednesday.
NEW YORK (Reuters) - Technology executives around the world are preparing for economic troubles to deepen.
Many hope that their products will prove indispensable for customers and see emerging economies as sure-growth markets.
But low- and middle-income U.S. consumers are struggling, and the relative strength of U.S. corporations may not last, executives said at the Reuters Global Technology, Media and Telecoms Summit in Tokyo, Paris and New York this week.
The news isn't as cheery as some would like.
This is an Open Thread.
The title of James Howard Kunstler's Sunday piece in the Washington Post is an eye-opening attention-grabber: Wake Up, America. We're Driving Toward Disaster. He starts off with a major kick to the pants:
Everywhere I go these days, talking about the global energy predicament on the college lecture circuit or at environmental conferences, I hear an increasingly shrill cry for "solutions." This is just another symptom of the delusional thinking that now grips the nation, especially among the educated and well-intentioned.
I say this because I detect in this strident plea the desperate wish to keep our "Happy Motoring" utopia running by means other than oil and its byproducts. But the truth is that no combination of solar, wind and nuclear power, ethanol, biodiesel, tar sands and used French-fry oil will allow us to power Wal-Mart, Disney World and the interstate highway system -- or even a fraction of these things -- in the future. We have to make other arrangements.
What's he getting at? Read the article. It's two pages -- you can get a really good idea of the concept, however, if you take a look at rba's morning blurb called Bring 'em on down the road.
Here's a hint: there's a degree of psychological greenwashing going on around here. We need to truly revamp our systems if we are to achieve true advancement, understanding and mastery of our fate, which is ultimately tied to how we live, conduct business, treat our environment and each other.
It's a cradle-to-cradle sort of thinking.
Mishima's Saturday World News is up.
This is an Open Thread.
I don't know enough about economics to recognize these folks, but the implications aren't very encouraging:
Megabubble waiting for new president in 2009[...snip...]
'Numbers racket' exposes potential disaster for economy, markets
by Paul Farrel of MarketWatch
How bad is it? "The real numbers ... would be a face full of cold water," says Phillips. "Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9% and 12%; the inflation rate is as high as 7% or even 10%; economics growth since the recession of 2001 has been mediocre, despite the surge in wealth and incomes of the superrich, and we are falling back into recession."
Compare that to the phony stats Washington feeds the press and public: Unemployment 5%, inflation 2% and long-term growth at 3%-4% (actually more like 1%). For example, just last week the L.A. Times reported that while "gasoline prices are up more than 20% from a year ago and food prices have risen 5%," Washington says "inflation was fairly mild last month." A Wells Fargo economist shook his head in disbelief: That report isn't "worth the paper it was printed on." Most economists are quiet, working for the conspiracy.
[...more at link in title...]
My primary urge is to take the way it's written, combined with the generous use of the word "conspiracy" from within, and presume that it's all hogwash.
Unfortunately, I'm also certain several of the numbers are pretty close to correct, and I've already reported -- using mainstream sources -- that the numbers used by the WH reports for many economic, social and employment indicators are known to be questionable at best.
So, is this another piece of Conspiracy theory contraband, or is there something of value within it? Anybody know either writer -- the writer of the article, or the writer he interviews? -- and whether they have any oars still in the water?
Please keep in mind that this is particularly worrisome when there are some heavy murmurs from George Soros about the looming string of recessions coming our way (in terms of global economy) after we've finished passing through the "acute" phase.
From the poster Becca in the Delphi Forum Pulling to the Left there's this bit of glum news:
If you go to the Financial Forecast Center, you'll find the current 6-month T-bill yield from the US Treasury. There are links to other forecasts on the page, so you can see how truly spectacularly (yes, that's sarcasm) this economy is chugging along.
What does the Financial Forecast Center show? A rather depressing graph:
It's a good thing that the GOP, the Bush Administration and George W. Bush himself are telling us we're not in a recession -- acknowledging it might actually mean they'd have to take some responsibility for doing something about it, instead of leaving it (and the myriad of other disasters they've spawned) for the next Administration to clean up.
No wonder the Republican brand is in trouble -- it's true value is now plainly evident, and it's worth far less than the junk bonds it is printed upon.
If you listen to George W. Bush, we're not in any kind of economic recession. We're in a slowdown. Rising oil prices, rising energy costs, the arrival of peak oil, the reality of global warming, the GOP denial of economic and social reality -- it's all in your head.
And, apparently, it's also on the minds of those silly folks who are in charge over at WalMart Stores' Sam's Club warehouses:
UPDATE 3-Wal-Mart's Sam's Club limits rice purchases, By Nicole Maestri
NEW YORK, April 23 (Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research) Sam's Club warehouse division said on Wednesday it is limiting sales of several types of rice, the latest sign that fears of a rice shortage are rippling around the world.
Food costs have soared worldwide, spurred by increased demand in emerging markets like China and India; competition with biofuels; high oil prices and market speculation.
The situation has sparked food riots in several African countries, Indonesia, and Haiti. United Nations Secretary-General Ban Ki-moon has warned that higher food prices could hurt global growth and security.
People are beginning to get worried. Nobody wants a loved one or an entire family to go hungry; add to the rising costs of gasoline the increased cost of transporting food to market, and people are finding that their relatively stagnant incomes are no longer stretching as far or buying as much at the local store.
It might be a good idea to invest in a small greenhouse or community-run garden project, folks. Not only would that provide a unique and interesting hobby, it could help offset potential shortages in staples as both the costs to purchase and the cost to bring them to market rise.
More on the rising costs of food and ways to address it tomorrow.
On Thursday, April 24th, Reuters carried a headline Jobless claims fall unexpectedly that provided an interesting contrast to the story from Friday April 18th entitled Wall St. braces for thousands of pink slips.
From the first article cited above, we get this lede:
WASHINGTON (Reuters) - The number of U.S. workers filing initial claims for unemployment benefits unexpectedly fell by 33,000 last week, the Labor Department said on Thursday, though the number of workers remaining on jobless benefits continued at a high level.
Yet, the article from Friday April 18th was quite a bit more forboding:
NEW YORK (Reuters) - Citigroup Inc, Merrill Lynch & Co and Wachovia Corp this week announced 12,400 job cuts, and the number of pink slips is likely to rise as losses mount and the economy works its way out of its malaise.
Job losses will surge well beyond the current level, given that the latest data does not account for widely expected cuts among the 14,000 employees at Bear Stearns Cos following the investment bank's pending takeover by JPMorgan Chase & Co.
Global financial institutions have so far sustained well over $200 billion of write-downs and credit-related losses, with the ailing U.S. housing market a central catalyst.
Already, Marenzi expects at least 100,000 job losses at U.S. commercial banks, or companies that lend or collect deposits. That figure could rise to between 150,000 and 200,000 in the next 12 to 18 months, he said.
Without even having to look too closely, however, it's not difficult to determine why the recent report appears to clash with the earlier one: timing.
The article from 18 April talks about the future of the job market as the economy continues to spiral down and institutions post record losses; the article from today discusses the expectations that analysts had leading into the week of April 12 -- the week preceding the April 18 piece.
If these articles were to be placed in reverse order, they would paint an ever-darkening picture of our short and medium term economic and employment outlook.
An Aside to the Bush Administration and Bush Republicans: Yes, Mr. Bush, we are in a slowdown: a severe one. There's a term for it -- it's recession. If it gets much worse before it is addressed responsibly, it could become a worldwide depression. And because of your inability to properly comprehend it and the habit of denial and band-aid approaches that your Administration and the Congressional Republicans have taken in hopes of leaving the burgeoning mess in lap of the next (presumably Democratic) Administration, the problem is likely to get a whole lot worse before anything is done to address it intelligently.
Just like all the other problems that have been exacerbated by your criminal neglect and malfeasance.
For further reference, you may want to check out Tony Wikrent's Euthanize Wall Street to save the economy and GreyHawk's Gouged Out: The Consumer and the Gas Station Operator.
promoted by roxy. Originally posted 2008-04-23 18:57:05 -1000
The “bail out” of Bear Stearns five weeks ago did nothing to solve the underlying causes of the unfolding financial meltdown, so another major crisis is unavoidable. The “bail out” of Bear Stearns has merely bought more time for the big players on Wall Street to try and drag this out past the November election, because what they fear above all else is the rise of a progressive political movement strong enough to pry loose their grasp on the credit mechanism -- the financial system -- of our economy.
The fundamental problem is the big players on Wall Street have misused the credit mechanism for their own private gains through the bloating of debt and speculation, at the expense of actually allocating and supplying capital to the real economy. This is what has caused the 30-year decline of the American industrial economy that Barack Obama observes has made many Americans bitter- a comment that was, all too typically, taken out of context by Obama’s opponents. So this diary will look at the underlying truth of Obama’s remarks, and offer some radical observations on the role of Wall Street, and what needs to be done. Make the jump»
definitely intriguing! -- bumped, promoted cho
The Most Powerful People in America
Joel S. Hirschhorn
They are not the rich and superrich, nor the politically powerful running the two-party plutocracy, nor the greedy heads of banking and finance companies, and certainly not the media moguls and bloviating pundits.
The most powerful people are US, American consumers that account for over 70 percent of the economy. It is exactly now, when the economy is in the toilet, that consumers hold the maximum power. So why are we the people still deluding ourselves that the path to a better future rests on electing a new president? Make the jump»
ONB COLUMBUS: In the latest monthly economic health profile issued Thursday by the Ohio Department of Budget and Management, the grim impact a decaying national economy is having on Ohio was evidenced by job losses in February and a turn down in personal income, consumer spending and consumer confidence. Make the jump»
intriguing stuff --cho
Several apparently diverse elements from the news this morning all point to an agenda on the part of Bush Administration, but getting a clear picture of just what that overall agenda is, and what the goals might indicate, can be mind boggling.
Anyone want to see if there are some common threads here...?
The planned capital increase would come on top of a $13 billion infusion UBS received from the Government of Singapore Investment Corporation and an unidentified Middle Eastern investor this year.
UBS’s problems of the last year are a stunning reversal for an institution long known for its staid, conservative style. Beginning in 2005, UBS made a huge bet on mortgage securities, seeking the higher yields they offered and trusting that the AAA ratings they bore would protect the bank from outsize losses.
Eventually, UBS’s mortgage portfolio topped $100 billion.
“The losses at UBS are staggering,” Ms. Whitney of Oppenheimer said. “It’s hard to fathom another quarter of $18 billion or $19 billion write-downs, but this isn’t the end of their problems.”
That bit about the unidentified Middle Eastern investor (emphasis mine) caught my eye.
ONB COLUMBUS: What do Ohioans facing home foreclosure and Shakespeare’s legendary Prince of Denmark have in common? Both hope a dream can help them escape “the slings and arrows of outrageous fortune.”
For the growing tide of Ohioans facing home foreclosure “to sleep: perchance to dream: ay, there’s the rub” could be one way to keep their American Dream of owning a home alive long enough for circumstances to change sufficiently to allow them to tell the wolf of foreclosure that prowls outside their door today to go away. Make the jump»
BBC: EADS wins $40bn US aircraft deal
Franco-German company EADS, owner of Airbus, has won a contract to build refuelling aircraft for the US Air Force, worth up to $40bn (£20bn). .. The deal is a huge blow to Boeing, which had been widely expected to win.
ONB COLUMBUS: The story ONB broke last week about the sudden and strange disappearance of Linda O’Connor from her high-profile, high-paying perch atop policy program at the Ohio Department of Jobs and Family Services (ODJFS)only grows more intriguing and mysterious with time. Make the jump»