I posted that earlier, a study which showed poverty is moving to the suburbs and Oregon unemployment is one of the highest, of course state Government will probably be more concerned about making sure illegal immigrants have social services, jobs as they did in 2002.
Lest I run afoul of the editor again, I'll save the other half of this for my other blog Outside The Autistic Asylum, as it's more about theology and philosophy from a Catholic-Autistic point of view than it is about economics.
Having said that, I blame mostly a combination of #1 and #3- but you missed the main reason. Our politicians, thanks to current campaign financing, have been bought and paid for by Wall Street. The regulations, such as they are, since the mid 1970s have been slowly building to this, as greed on Wall Street leads to a centralization of capital, and big piles of capital lead naturally to lobbyists and "campaign financing" (bribery to anybody else) of politicians, which leads to more favorable regulation for big corporations, fewer smaller corporations, less competition, and of course, more centralization of capital. It's a negative feedback loop that was bound to blow up eventually.
The progression from free market capitalism to oligarchial corporatism is inevitable, and will happen over and over cyclically. The cycles will just get longer until we finally realize that what the ancient religions taught is right: materialism corrupts.
The final proof to me (more of this at my blog later today) was the Black Friday trampling of a Wal*Mart employee in a relatively rich section of New York. At that point, it became obvious: In the American Value system, material wealth is more important than human life, even if all the individual in the mob saved was a few dollars on a piece of consumer electronics or a DVD, that was more important than human life.
And that's where I'll stop. If you want the philosophy and theology- hit my blog. But that doesn't really belong here.
Well, these are predictions based on macro economic data and there are others who believe the dollar will remain strong, safe haven. Considering the UN just said the dollar potentially could collapse it might be wise to get a multi-currency interest savings account, where a percentage of your money is in multi-foreign currencies, a basket of currencies the stronger currencies, like the Euro, the Yen, etc.
Then on mortgages, the problem is devaluation of the price of the house to refinance so that's up to you to go refinance shopping and figure out what is your best option.
One thing I think everyone on this blog can agree with, don't sign anything until you've read all of the fine print and understand what it says.
I like some of your list (I'm not sure about the fairness doctrine with so many media outlets. i.e. do the blogs have to use the fairness doctrine on the Internet? as an ex. also Sen. Feinstein started this over the stopping of their corporate written comprehensive immigration bill and since that bill was horrific, I'm not so sure I want to put a muzzle on the conservatives. If conservative talk radio stopped Congress from passing something written by and for the US Chamber of Commerce, Bill Gates and NASSCOM frankly ;))
(I also think their influence is overestimated. On CIR bill only 23% of America wanted that bill so it obviously was not just conservative talk radio/FAUX. Look at how well they did this election!)
I especially like the observation these people cannot think past 1 quarter. They really can't. I wonder if any business school has planning past 5 years as a concept and even that is obviously a concept. It's all this immature, right now thinking. One would think, with Citigroup/Goldman Sachs dictating so many bad trade treaties just as an example, they would be filthy rich, rule the world, instead they just got three times more money than they are even worth.
So, they failed, even in outright greed, dominance, global sociopathic anything goes business, get whatever they want, they still failed.
...in this case, the 1920s and the Great Depression, because they didn't live through it, are doomed to repeat the same mistakes. I am convinced this is why the Kondratieff cycle has merit.
Agree thoroughly with 1, 2, & 4. As to the others, in the words of Napoleon Bonaparte (?) "Never presume malice when negligence will do."
When Leamer gave his speech on business cycles to the Jackson Hole conference in 2007, he cited reams of data, which I summarized in my original post (follow the link). Problem is, he didn't follow his own data to its natural conclusion -- instead he said, in effect, "It's different this time." He thought that because the Bush expansion hadn't created many new manufacturing jobs, the decline of housing wouldn't lead to a decline in manufacturing/durable goods purchases.
So I disagree. Leamer's research is invaluable, and in fact this recession is following the pattern his data predicts.
On top of it, Congress right now could put out there almost any condition, including tying the money to hiring US workers, not offshore, and frankly if they fixed some of the bad trade problems, that alone would make these companies highly competitive.
This is pure bullshit and we have FAUX news and all of the media poo pooing the auto bailout while they all pimped for the financial sector bail out!
Edward Leamer stated in Dec of 2007 that we would avoid a recession. Regardless of his PHD, he is more of a trend observer, not an expert. Peter Schiff has been much more accurate and understands the REAL world economics better.
""Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product _ the standard used to define a recession.""
Washington passes a $700 billion bailout for Wall Street inside of a week without almost no debate, but can't pass a $30 billion bailout for Detroit.
To put it another way: we can't bail out auto workers making $40 a hour, but CAN bail out banksters making $40,000 an hour.
America's values are on display right now, and they are ugly.
Advice and opinions please - If we have some cash, is it better to pay off as much of our mortgage as possible or hold on to the cash? What good will cash do us if the dollar collapses? We are afraid we will both be unemployed and unable to pay our mortgage unless we get the principal as low as possible now and refi for a low monthly payment. Any advice is appreciated!
And yes, PMI is indeed declining- already down to 1982 levels. But I'd call the price of factory equipment/raw materials a precondition as well- we'll see real deflation hit the retail market in January after the Christmas shopping season, a time that we normally see mild deflation in consumer prices due to cutting stock before taking inventory. But this year, nobody's buying- so the price will have to be cut more. Which will mean even more drop in factory orders than has occurred. Which will mean a real deflationary cycle beginning to set in.
The Obama Admin could combat this with real M1 stimulus- government spending and outright printing of money to get America out of debt and spending again.
I think the GM CEO is right (and this is a rarity for me) that the minute they would enter bankruptcy no one would buy their cars for all sorts of after market, service, warranty fears.
So, if they create a pre-arranged bankruptcy, they sure better not call it that.
What's next? Shall all GM dealerships be replaced with auctions on ebay?
Some very prominent people have started screaming about deflation. But my sense is that we're not at that point yet.
I think what we've seen so far is merely the deflating of the commodity price bubble that occurred when all the hot money rushed out of various derivatives markets after summer 2007.
What I'm wondering is where all the hot money has gone now that it's rushed out of commodities. I think the answer is Treasuries, because I've seen articles reporting that lost of Treasuries are being sold even though they now have a negative real interest rate, because the buyers just want to make sure that they at least get their effing principal back.
Obviously, if that's what's happening, then money is not going into buying assets, which sets up the pre-condition for deflation. Are the experts screaming about the pre-condition having been set up, or about the bust of the short-lived commodities bubble?
An obvious thing to look at would be what commodity prices are now, compared to the past (at least)ten years.
Also, what is happening to capital expenditures? That would be the really important thing to watch, in my opinion. When we see prices of factory equipment starting to decline - that's my definition of deflation.
on the producer side of food- due to subsidies to US/European Agribusiness undercutting local farming, food production is already *far below cost* and has no more room to move in that direction.
Having said that, *retail* margin on food still has some room to move, thus I suspect you're right on a retail level, but wholesale, has no place to go but up.
I just get the feeling this is abby normal in terms of cycles.
I sure hope food retail does what you say because people plain need to eat and eat cheaply. I believe that the food industry has been taken over almost by a cartel like group of MNCs, from factory farms to retail brands, esp. in Processed foods so it might be a tougher nut to crack.
I was just looking at the auto bail out, about to write a short update piece for when I saw those numbers yesterday the very first thing that pops in my head was in 1930, Ford shutting down.
I don't buy the argument re food. If consumers are tightening their belts, what do food processors think they are going to do in the face of increasing food costs? Someone(s) on the producer side is going to cut prices and take market share.
Part of why I posted this diary is that, like Prof. Hamilton of Econbrowser, i consider the auto sales downturn (Hamilton says the actual number for November is 40%!) is particularly serious. I was hoping for a "bungee-jump" snapback after September and October (which is happening somewhat with retail sales) and instead the opposite happened. I had a chat with a certain "bonddad" last night in which we touched on how the traditional sentiment indicators (e.g., insider purchases/sales, public vs. trader sentiment) completely failed to telegraph the September-October waterfall decline.
When the traditional indicators fail to signal, you have to revisit everything (which I may possibly do in the next diary or two).
I posted that earlier, a study which showed poverty is moving to the suburbs and Oregon unemployment is one of the highest, of course state Government will probably be more concerned about making sure illegal immigrants have social services, jobs as they did in 2002.
Lest I run afoul of the editor again, I'll save the other half of this for my other blog Outside The Autistic Asylum, as it's more about theology and philosophy from a Catholic-Autistic point of view than it is about economics.
Having said that, I blame mostly a combination of #1 and #3- but you missed the main reason. Our politicians, thanks to current campaign financing, have been bought and paid for by Wall Street. The regulations, such as they are, since the mid 1970s have been slowly building to this, as greed on Wall Street leads to a centralization of capital, and big piles of capital lead naturally to lobbyists and "campaign financing" (bribery to anybody else) of politicians, which leads to more favorable regulation for big corporations, fewer smaller corporations, less competition, and of course, more centralization of capital. It's a negative feedback loop that was bound to blow up eventually.
The progression from free market capitalism to oligarchial corporatism is inevitable, and will happen over and over cyclically. The cycles will just get longer until we finally realize that what the ancient religions taught is right: materialism corrupts.
The final proof to me (more of this at my blog later today) was the Black Friday trampling of a Wal*Mart employee in a relatively rich section of New York. At that point, it became obvious: In the American Value system, material wealth is more important than human life, even if all the individual in the mob saved was a few dollars on a piece of consumer electronics or a DVD, that was more important than human life.
And that's where I'll stop. If you want the philosophy and theology- hit my blog. But that doesn't really belong here.
Well, these are predictions based on macro economic data and there are others who believe the dollar will remain strong, safe haven. Considering the UN just said the dollar potentially could collapse it might be wise to get a multi-currency interest savings account, where a percentage of your money is in multi-foreign currencies, a basket of currencies the stronger currencies, like the Euro, the Yen, etc.
Then on mortgages, the problem is devaluation of the price of the house to refinance so that's up to you to go refinance shopping and figure out what is your best option.
One thing I think everyone on this blog can agree with, don't sign anything until you've read all of the fine print and understand what it says.
I like some of your list (I'm not sure about the fairness doctrine with so many media outlets. i.e. do the blogs have to use the fairness doctrine on the Internet? as an ex. also Sen. Feinstein started this over the stopping of their corporate written comprehensive immigration bill and since that bill was horrific, I'm not so sure I want to put a muzzle on the conservatives. If conservative talk radio stopped Congress from passing something written by and for the US Chamber of Commerce, Bill Gates and NASSCOM frankly ;))
(I also think their influence is overestimated. On CIR bill only 23% of America wanted that bill so it obviously was not just conservative talk radio/FAUX. Look at how well they did this election!)
I especially like the observation these people cannot think past 1 quarter. They really can't. I wonder if any business school has planning past 5 years as a concept and even that is obviously a concept. It's all this immature, right now thinking. One would think, with Citigroup/Goldman Sachs dictating so many bad trade treaties just as an example, they would be filthy rich, rule the world, instead they just got three times more money than they are even worth.
So, they failed, even in outright greed, dominance, global sociopathic anything goes business, get whatever they want, they still failed.
...in this case, the 1920s and the Great Depression, because they didn't live through it, are doomed to repeat the same mistakes. I am convinced this is why the Kondratieff cycle has merit.
Agree thoroughly with 1, 2, & 4. As to the others, in the words of Napoleon Bonaparte (?) "Never presume malice when negligence will do."
When Leamer gave his speech on business cycles to the Jackson Hole conference in 2007, he cited reams of data, which I summarized in my original post (follow the link). Problem is, he didn't follow his own data to its natural conclusion -- instead he said, in effect, "It's different this time." He thought that because the Bush expansion hadn't created many new manufacturing jobs, the decline of housing wouldn't lead to a decline in manufacturing/durable goods purchases.
So I disagree. Leamer's research is invaluable, and in fact this recession is following the pattern his data predicts.
On top of it, Congress right now could put out there almost any condition, including tying the money to hiring US workers, not offshore, and frankly if they fixed some of the bad trade problems, that alone would make these companies highly competitive.
This is pure bullshit and we have FAUX news and all of the media poo pooing the auto bailout while they all pimped for the financial sector bail out!
Edward Leamer stated in Dec of 2007 that we would avoid a recession. Regardless of his PHD, he is more of a trend observer, not an expert. Peter Schiff has been much more accurate and understands the REAL world economics better.
""Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product _ the standard used to define a recession.""
http://www.msnbc.msn.com/id/22116055/#storyContinued
Washington passes a $700 billion bailout for Wall Street inside of a week without almost no debate, but can't pass a $30 billion bailout for Detroit.
To put it another way: we can't bail out auto workers making $40 a hour, but CAN bail out banksters making $40,000 an hour.
America's values are on display right now, and they are ugly.
Advice and opinions please - If we have some cash, is it better to pay off as much of our mortgage as possible or hold on to the cash? What good will cash do us if the dollar collapses? We are afraid we will both be unemployed and unable to pay our mortgage unless we get the principal as low as possible now and refi for a low monthly payment. Any advice is appreciated!
And yes, PMI is indeed declining- already down to 1982 levels. But I'd call the price of factory equipment/raw materials a precondition as well- we'll see real deflation hit the retail market in January after the Christmas shopping season, a time that we normally see mild deflation in consumer prices due to cutting stock before taking inventory. But this year, nobody's buying- so the price will have to be cut more. Which will mean even more drop in factory orders than has occurred. Which will mean a real deflationary cycle beginning to set in.
The Obama Admin could combat this with real M1 stimulus- government spending and outright printing of money to get America out of debt and spending again.
It looks like GM and Chrysler are in deal making for a pre-arranged bankruptcy.
I think the GM CEO is right (and this is a rarity for me) that the minute they would enter bankruptcy no one would buy their cars for all sorts of after market, service, warranty fears.
So, if they create a pre-arranged bankruptcy, they sure better not call it that.
What's next? Shall all GM dealerships be replaced with auctions on ebay?
Some very prominent people have started screaming about deflation. But my sense is that we're not at that point yet.
I think what we've seen so far is merely the deflating of the commodity price bubble that occurred when all the hot money rushed out of various derivatives markets after summer 2007.
What I'm wondering is where all the hot money has gone now that it's rushed out of commodities. I think the answer is Treasuries, because I've seen articles reporting that lost of Treasuries are being sold even though they now have a negative real interest rate, because the buyers just want to make sure that they at least get their effing principal back.
Obviously, if that's what's happening, then money is not going into buying assets, which sets up the pre-condition for deflation. Are the experts screaming about the pre-condition having been set up, or about the bust of the short-lived commodities bubble?
An obvious thing to look at would be what commodity prices are now, compared to the past (at least)ten years.
Also, what is happening to capital expenditures? That would be the really important thing to watch, in my opinion. When we see prices of factory equipment starting to decline - that's my definition of deflation.
Are any of these people in the Obama administration?
I just did a quick check and they look all down right now.
I love the stock symbol for Proshares food and beverage ETF, PBJ
Hopefully we all know that stands for Peanut Butter & Jelly.
article on retail food sector ETFs.
I feel like buying some PBJ just so I could saw I am investing in the stock market, all of my money is in PBJ. ;)
on the producer side of food- due to subsidies to US/European Agribusiness undercutting local farming, food production is already *far below cost* and has no more room to move in that direction.
Having said that, *retail* margin on food still has some room to move, thus I suspect you're right on a retail level, but wholesale, has no place to go but up.
Is if the farm subsidies for agricorps get affected by the recession/depression/whatever we're calling it this week.
If that happens, production of food will return to a for-profit business; and food prices will HAVE to rise to meet production cost at least.
I just get the feeling this is abby normal in terms of cycles.
I sure hope food retail does what you say because people plain need to eat and eat cheaply. I believe that the food industry has been taken over almost by a cartel like group of MNCs, from factory farms to retail brands, esp. in Processed foods so it might be a tougher nut to crack.
I was just looking at the auto bail out, about to write a short update piece for when I saw those numbers yesterday the very first thing that pops in my head was in 1930, Ford shutting down.
I don't buy the argument re food. If consumers are tightening their belts, what do food processors think they are going to do in the face of increasing food costs? Someone(s) on the producer side is going to cut prices and take market share.
Part of why I posted this diary is that, like Prof. Hamilton of Econbrowser, i consider the auto sales downturn (Hamilton says the actual number for November is 40%!) is particularly serious. I was hoping for a "bungee-jump" snapback after September and October (which is happening somewhat with retail sales) and instead the opposite happened. I had a chat with a certain "bonddad" last night in which we touched on how the traditional sentiment indicators (e.g., insider purchases/sales, public vs. trader sentiment) completely failed to telegraph the September-October waterfall decline.
When the traditional indicators fail to signal, you have to revisit everything (which I may possibly do in the next diary or two).
from ThomasNet
JR on Grist
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