In case you managed to miss it, the GDP revision yesterday morning was stunningly bad. The contraction was 2.9%, revised downwards from 1%. This was both the biggest fall since the fourth quarter of 2008, when GDP fell by 8.9%, and the largest revision of the second GDP estimate since the inception of this report, in 1976.
The Washington Post gave a good overview:
But this recovery has a way of moving out of reach just when we think we’re getting close. The International Monetary Fund and the Federal Reserve have already pushed back their forecasts for liftoff from the grinding economy to next year. The new reading of first quarter GDP could move the ball even farther. A 3 percent annual growth rate is starting to seem like the promise made by the White Queen in “Alice in Wonderland”: Jam tomorrow and jam yesterday, but never jam today.
Particularly disturbing in this revision was the downgrade in consumer spending. The American shopper was supposed to be the bright spot in this recovery, reliably trudging to the malls and filling their online shopping carts despite government shutdowns and wintry snowstorms. Consumer spending jumped 3.3 percent at the end of last year, and the data initially showed a similarly strong increase during the first quarter. Wednesday’s release showed the cracks in that pillar.
A significant portion of that revision was due to overestimates of how much Americans spent on health care, which has been tricky to measure since the rollout of the Affordable Care Act. But Eric Green, head of U.S. rates and economic research for TD Securities, said that even if those assumptions had been neutral, GDP still would have fallen at a 2.7 percent annual rate. There were other downward moves, as well. The 8.9 percent decline in exports was larger than previously reported. The buildup in inventories was a slightly bigger drag on growth, subtracting 1.7 percentage points.
“In short, GDP was recession-like in Q1, although most other data clearly signal that the decline is an outlier,” wrote Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Recession-like. It is astounding that we are using any variation of that word five years into the recovery.
Now after getting rattled, Mr. Market shrugged off the report. So what if we opened Schrodinger’s box and found out the cat was dead? That was first quarter’s cat. That cat might as well be dead for all we care now. Plus the weather was bad, so we’ll make all that up, and anyway, the Fed has our back, so if there really is something to worry about here, they’ll fix it, as least as far as security-owners are concerned.
Hedgie Scott was not convinced by various pundits’ efforts to shrug off the sobering news. I’ve omitted names so as to protect the guilty. From Scott’s e-mail:
If Q1 was truly simply seasonal, then we’d make a great deal of that back once the weather improved. That would argue, given the forecasts at the beginning of the year, for Q2 growth of at least 6%, to get us back on that track, but the kneejerk raises of Q2 estimates that we got today—Barcap and Goldie are what I saw—didn’t come close to that.
And the “data” cited showing that yes, we are seeing precisely that comeback, are suspect in many ways, in my opinion. First, the PMI. I can only do this anecdotally, at the moment, but on that basis there’s been a clear divergence between survey data, primarily the PMI and ISM, though the same is emphatically true of the IFO as well, and the harder data from series like GDP, so that the usefulness of those surveys in predicting how the economy actually performs has diminished appreciably. I suspect the surveyed are influenced to a much greater extent today than formerly by the media’s equating of stock market performance with the performance of the economy, and as a result the surveys yield more optimistic views than the later hard data are able to support. We then have the discussion of low jobless claims. Again it seems to me that we may absolutely have fired everybody we’re going to fire, and once all the dead wood has been cut, and you’re operating as lean as you can, jobless claims level off at a relatively low number, as they have. But there’s a big difference between that and the kind of economy that produces lots of well-paying jobs, which we clearly do not have, and don’t seem to be getting a lot closer to. Moreover, jobless claims have been in a range for longer than simply Q1, and Q2 hasn’t seen a “big comeback” in them. I don’t really know much about the rail gains, so I’ll leave that one alone. As to the housing data, as simply one example, the white hot May new home sales were mostly driven by the southern region—266K homes in the south. Unfortunately for the bullish spin on this, that data did not reach the level of statistical significance, plus 14.2% with a 90% confidence interval of +/-27%–meaningless, in other words, pending better numbers.
And yes, markets are forward looking, but at some point that argument loses force, does it not? Contracting economic growth, aka recessions, are horrible for corporate profits (as Q1 profit data showed), and continually rising stock prices in the face of falling earnings catches up to you eventually.
Before this morning’s data, GDP growth from 2007 until today was 0.7% annually; that number gets revised lower after this morning’s data. Can we postulate that the trend rate of growth has slowed, and that thinking about a 2.5% trend rate can not be justified any longer, that even 1.5% as a trend growth rate is certainly not pessimistic? And given the rate of capital investment in the country, there’s little reason to forecast that to change, as far as I can tell. Pimco’s new normal description seems pretty accurate to me.
As to the assertion that it would be a mistake for the Fed to tighten, well, the only issue I have with that is that there’s no evidence I can see that its current policy has helped the economy one iota, except on the shortest of time frames, and, the problem with arguing counterfactuals aside, I can see lots of ways in which it has hurt, if the goal was to put the economy on a sounder footing for the long term.
The problem that realists like Scott have had for some time is that it has been an objective of Fed policy to elevate asset prices irrespective of the state of the economy in the hope that they would lead a recovery. We can see how well that has worked: splendidly for the 1% and not at all for everyone else. But as Scott indicates, presumably at some point investors will want to be owning eating sardines rather than trading sardines*, but when that happens is anyone’s guess.
But I though this contrast between the sobering data and the insistence by most investors and analysts that this GDP report was a one-off and didn’t dent the outlook would serve as a basis for a reader sanity check. What do you see in your economy? Do conditions seem to be better, worse, or mixed? And what data points do you have to support your views?
Manhattan is so appearance-obsessed that it is hard to tell what is going on except when conditions are extreme. On the one hand, real estate prices continue to march upwards, but foreign investment has become such a large factor that it is impossible to judge what trend would be like absent that. On the negative side, I haven’t seen so many vacant retail stores since the very worst of the downturn. One sad example was a terrific Persian restaurant (best lamb I’ve ever had and at reasonable prices) that didn’t make it. The explanation I’ve heard is that commercial landlords held off on rent increases after the crisis and finally started putting them through. But if conditions aren’t so hot, why should landlords assume they can actually come out ahead by putting through a rent increase? There are storefronts that have been empty for more than four months, with no sign that anyone has signed a lease and is doing pre-move-in fitting out.
Similarly, the vibe I get at my moderately upscale hair salon is that conditions there are flattish, and that the hairdressers are not hearing a much in the way of economic confidence from their customers. A lot of women professional went to a less frequent hair cutting or coloring schedule during the downturn, and there don’t seem to be many that have gone back to a more frequent maintenance schedule.
Again: how is your economy doing?
____
* From a classic Wall Street joke. On a slow day, some market-makers decide to start trading a can of sardines. Trader A starts the bidding at $1, B quickly bids $2, and several transactions later, E is the proud owner of the tin for $5.
E opens his new purchase and discovers the sardines have gone bad. He goes back to A and says, “You were selling rotten sardines!”
A smiles broadly and says, “Son, those aren’t eating sardines. They are trading sardines.”
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Had a nice walk through the poshest shopping district in TST, Hong Kong. It was nice this time because there were no shoving mainland Chinese rushing around madly buying anything not tied down. The doormen of the shops all looked very, very gloomy – as if visions of pink slips danced before their eyes. I hear things are not much better on the other side of the border. I suspect China won’t be around to bail out the hard business of making & selling real things made in the West, so that just leave hot air — ie: the Fed printing press.
I know next to nothing about China, but I read an article recently in some newspaper (forget which) written about someone taking a train journey through parts of that nation. Article described lots and lots of big construction projects happening but resulting in what was characterized as ghost towns. Construction projects allegedly sponsored by the govt with perhaps “dodgy” money to keep citizens occupied and earning income. IOW, not really needed. Just construction for the sake of construction.
Article didn’t speculate on what would happen when “money” ran out. Seems like our Chinese Overlords may not be in a position to rescue the “first” world anymore.
Probably better off paying people over there, not to build ghost towns, but to study Mao’s Little Red Book.
They can call that the New Long-March Deal.
The budget deficit for 2014 is set to equal the U.S. current account deficit, which means that unless consumers start taking on a whole lot of debt we’re looking at zero growth or recession. This was entirely predictable, which is why everyone in D.C. was caught flat-footed.
It seems (zero hedge) that one of the reasons the GDP was revised to sub-zero was because they put private expenditures for Obamacare payments in the wrong column. I wonder if that was intended and if so why didn’t they just leave it there? There must be somebody threatening to expose their accounting. What a farce. Let’s just keep sucking the life out of the American corpse and pretend that all is well.
$250 billion in free money in the quarter bought us negative $75 billion in GDP, but hey, at least the cost of goods is going up. Just precisely when will the Keynesian priesthood admit that just maybe the Earth may not be the center of the universe?
Unfair complaint. The money never moved. The velocity of money is about as low as it’s ever been measured. Keynes never said: print money and give it to bankers so they could horde it or use it to buy stocks. He said get the money into the hands of people who will spend it (remember his joke about hiring a lot of people to dig a pit to bury money, then hire more people to dig it up so they could spend it). The money is being printed but it isn’t stimulating anything but the bottom line of the top few percent. It is not going into salaries, research and development, inventories, or new plant and equipment. If it were, and the economy continued to contract, you’d have a solid argument. As for now, not so much.
This was commented on widely in the business/financial press. It simply was not that big a culprit overall. See this in from the post:
But Eric Green, head of U.S. rates and economic research for TD Securities, said that even if those assumptions had been neutral, GDP still would have fallen at a 2.7 percent annual rate.
The problem with taking on consumer debt is paying it back afterward. The successful War on Payroll has made this pretty much impossible. 1-1=1 and all that.
Lewis Carroll wrote a novel Sylvie and Bruno. He thought it was his best, but it wasn’t, just his most conventionally Victorian. It has brilliant moments, nonetheless. There’s a Professor who has a technique for dealing with his tailor’s bill. He had gone in and agreed with the tailor not to pay then, but to pay double in a year. No businessman will turn down a loan at 100% return. Since then, the Professor has been going in every year and doing the same thing over again. It clearly will work, and it clearly ain’t no ZIRP.
when i wrote about the 2nd revision a month ago i headlined it with 1st Quarter GDP Falls at a 1.0% Rate on Worst Investment Slowdown since Early 2009 ; none of that has changed; lower investment still accounts for nearly 2% of the 2.9% hit…this revision just showed exports and consumers contributed less than previously estimated..
Here down South things haven’t really even tried to get better since ’08. There are still tons of empty strip malls and store fronts. Phyllis and I have been travelling around Louisiana, Mississippi, Alabama and Georgia looking at smallish towns, hoping to find the modern Mayberry. Sorry to say, all we have been seeing are small town Main Streets with 80 or 90 percent of the old storefronts empty, and in many cases, literally falling into ruin. One little town in Alabama had a For Lease sign in the window of a building which had no roof! Drive through the residential areas of the small towns and you see pockets of affluence surrounded by seas of decay of both property and humanity. It bodes ill when you enter a town and the first thing you notice is all the people, of all races, hanging out on the porch doing nothing in the middle of the day. All that wasted energy, betrayed promise. As far as the outskirts of these Southern towns, and small cities too, goes, the ubiquity of unused recently built strip malls tells the same sad tale as the old Main Streets. Construction of retail space has ground to a halt. I fear for the results when all these unleased retail spaces finally have to be written off. I can foresee a giant shake out in the banking sector resulting from bad Commercial Construction loans soon. Anecdotally, a woman we know who has a Health Food store in one of the newer strip malls outside of Hattiesburg Mississippi told us recently that she had to cut back on her inventory because the out of town landlord raised the store rents in the entire strip. “I would move to a cheaper location, but people get to remember you by your location. Besides, I haven’t found a comparable spot at a significantly lower rent yet. All of these out of town management companies don’t seem to give a D— about the economic health of their tenants. If I had some serious money, I’d do as Mz X (her main competition,) did, and buy a spot in a small strip mall, you know, that bankrupt Gym behind the big Mall, out of foreclosure.”
I’ve noticed lots of mom-and-pops spring up, over the past few years. Many of them have apparently depleted whatever capital they had on hand, and are closing shop. Those involved in the service industries in my comfortable, middle-class neighborhood have begun to relocate (both renters and “owners”).
Happy days are just around the corner (the one we turned a few years back).
Try Georgetown, SC if you can extend your search a little. We stopped there last fall. Not totally prosperous but more ups than downs. Really a very nice place.
Admiral Yamamoto feared the industrial might of America.
He hardly celebrated after Pearl Harbor.
What would he think today, touring America? Fear the shopping might of America? Not even that!
I hear you, an economy that already stinks, in which everyone with a job is overworked and noone gets raises while meanwhile masses of people are unemployed and falling into poverty is going to get even worse, oh happy happy joy joy.
It looks to me like the link from Testoterone Pit was exactly right: what growth there is, is a result of asset inflation and the wealth effect. I haven’t seen so much construction in Manhattan since the early 90s; 3rd Avenue in Midtown is a flock of construction cranes, and downtown is similar. Let alone billionaires’ row. In SF, there are gut renovations of Edwardians and huge new condo projects everywhere you look. Of course: these two cities are wealth magnets, wealth meccas, and enjoy the the fellacious Fed’s servile solicitude.
I also spend time in upstate NY, and there I can tell you it’s zip, zilch, nada, more like the recession never ended. Not so many million dollar stock portfolios up there.
For the last few decades, every boom has depended on housing, Same strategy today. The problem is that boomers will not start upgrading now in their 60s. And the young ones expected to pick up the baton are full of debt.
Not to mention that the current housing stock does not reflect the coming cost of externalities that will finally get tacked on because most zirp dependent development today is still based on the old paradigm.
Most of this new high-end housing is being bought by rich Chinese, Russians, Arabs, etc. This has been happening in London for about 20 years and is now spreading to some of the key US cities (and to other major cities in Europe). These properties are the new T-Bill; rich people are using them as a place to safely store money. So they are quite independent of the “real” economy although this phenomenon does give architects something to do.
I think you’re right, Nero. I like the identification of trophy-city RE as the new T-bills, feels right to me.
China may have to deal with poor, illegal American immigrants soon.
As bad as Europe is now, they too might start seeing more poor, illegal American immigrants as well.
At that time, we might say, maybe they are right. Letting in more Americans is not the solution. The solution is to stop neoliberalism in America, to make America a better country, less wealth inequality.
Refusing illegal American immigrants would not be racist, if we focus on the real problem back in America.
I once spent a year with a job in a wealthy Central European capital renowned for its culture where I taught English. I was in an ambiguous situation–without a work permit, but employed regularly by an “Institute” which supplied enough teaching hours to avoid starvation and pay rent, but little else. (I was, I hasten to add, given verbal assurances at the start that the number of my teaching hours would be greater than that which it proved to be in the end.) My employer was breaking the law, and may have confiscated the money it took from my wages which was supposed to have been used to pay taxes. On paper, I was “free lance”; in reality I had an employer who did not recognize me as an employee and did not pay social insurance. Certainly I did contribute to the profits of my employer, and my students may even have gotten some benefits from associating with me, as I have had more than the average by way of formal schooling. But I never really thought of myself as poor. Perhaps that was my mistake.
Yes it does. An article a few days ago (stg like a realty site, not sure which one) asked why rich people buy real estate and the answer was that they could expense it. So maybe better than a T bill.
Jim Grant makes an important distinction, he says the textbook definition of inflation “too much money chasing good and services” is too long. He says it should just be “too much money”. Stating it this way would account for “assets” being run up the way they have. Nobody blinks at a Mayfair house selling for $100 million…um, really, people? $100 million for a house? Let alone the Russell 2000 at 85x trailing earnings, CCC-rated debt from an Indian company yielding 4.29%. THAT’s inflation.
That’s it. The name of this movie is “The Student Loan Strikes Back”.
Or the Neoliberal Death Star is on a World Cup Weekend at Bernies
Plus completely unaffordable relative to income home prices strike back
Same story in blue-collar suburbs of Philly. The only growth industries are nail parlors and pizza places.
There is no point in looking at GDP numbers at the moment: measurement problems and the skewed allocation of gains make it unrepresentative. The only numbers that matter relate to wages and salaries: are they rising or falling in aggregate? If rising, fine for the economy irrespective of GDP. Ideally, the numbers to look at (and I’m sure there are many sets of data to look at, measuring different things) are related to spending power in nominal terms ie after taxes, contributions etc. At the moment, everything else is noise.
Even then wage numbers are of limited value… what good is a 7% wage increase if a household is losing 50% of its income?
“. . . the skewed allocation of gains . . .”
_____________
“. . .the skewed ALLOCATION of gains.”
Bingo.
Given the gaming of the numbers, and the outright lying in some cases, in addition to the huge revisions, how can anyone take this so-called “data” seriously?
Have the vast majority of Americans really gotten out of the last “recession?”
Is the future blue sky or fog?
The last “recession” was equivalent of angina. Our cure was more junk food.
“This might be the Big One, Elizabeth . . .”
heh.
The first line of the WaPo article does describe a mirage…
“But this recovery has a way of moving out of reach just when we think we’re getting close.”
I sell ball bearings to OEM’s in the industrial market… My business is doing OK… But I’m a specialty niche player… In the past year I have taken my inventory up to where I hold about one year in stock.. (was 3-4 turns/yr)… Why? Because I’d rather put my $$$$ in tangible goods that have a guarenteed return over time, than in stock and bonds that are manipulated….. But my warehouse is full and now I will only order in line with sales…
My thinking on this whole experiment by the FED is: When the cost of money is zero… They are implying: Money has no value…
Take your money and trade for things that HAVE value…. in my case Bearings,,,….
I think that is a very smart move.
Interesting. For the last few decades we have witnessed the growth of just-in-time inventory… my theory has been that, for many reasons, this phenomenon would not last and when the trend turned… watch out!
Thanks for the heads up!
JIT inventory is such a pain – especially when it’s coming from Taiwan. And it’s a real pain for us (small computer networking company) to predict sales because we are so small, and orders are so herky-jerky.
Now we have enough inventory that I want to start being more aggressive on price.
Steve, that was the very smart tack that may well win you the race. No pun intended.
Or STEAL things of value – like peoples homes.
Indeed. Not just lucrative but sanctioned.
We can see how well that has worked: splendidly for the 1% and not at all for everyone else. But as Scott indicates, presumably at some point investors will want to be owning eating sardines rather than trading sardines*, but when that happens is anyone’s guess.
————-
If asset values had not been propped up, pension plans would be in worse shape and benefits would have been cut even faster. This means that right now the top 10-20% is still benefiting from asset inflation.
Historically, many revolutions were started by the top 10-20% when the rug was pulled from under their feet…
NYC RE is booming. Brooklyn is going crazy, even Queens is seeing a demand for property. Buildings are going up all over the place.
So you would think that the Burbs would be seeing some signs of life. Not the case at all. This spring has been a very bad selling season. There is very little traffic, there are no sales, and pretty soon we will have to see some prices fall.
I wonder if it is the economy or demographics. My guess is it’s more demographics than anything else. All the houses I know that are for sale are owned by empty nesters looking to move south.
My home, bought in a middle to upper middle class suburban Philadelphia area ( Montgomery County) in the Fall of 2007 for what we considered a reasonable sum ( not our first rodeo by many) has lost nearly 150k of value in a steady decline. We have big pharma, many many large medical centers etc. nearby. This erosion affects EVERYTHING we do and do not do now. Food prices here are skyrocketing. We have multiple fairly new shopping centers that are almost completely abandoned while new ‘town centers ‘ are being built. Yet they seem lightly trafficked except on weekends around the grocery store and the Home Goods( read cheap junk from China!). Small mom and pop stores and eateries open and close again within just a few months. The owners we have talked to either say the rents were raised or traffic was slow, advertising too expensive etc.. Each year we have to find a new company to open and close our pool. They all say they people are filling in their pools or doing it all themselves because of costs many of these pools companies were family businesses started many years ago not fly by night guys. Meanwhile the huge 8,000+ sq ft homes ( as opposed to our 3,000) are jumping UP in price monthly even during 2008. I have family and friends in these homes so I have followed it closely. Something is seriously rotten among the middle class – that is NOT just some doom and gloom attitude. We are working furiously to improve our already nice home but are worried we will never ever be able to come close to making up the decline on improvements alone especially with the prices at Lowes and lumber suppliers. We are scrounging freebies on Craigslist and freecycle instead. We and many of our neighbors and friends with similar houses and state in life( kids in college/ or our kids just getting married) are seeing really serious trouble both in our futures and in that of our nearly fledged offspring……
Does no one care about the index of leading economic indicators anymore? That’s what it’s supposed to do, you know: forecast recessions. It has a decent, though not perfect, record of turning down before recessions start.
As Doug Short’s chart shows, the LEI is still blasting ahead, setting fresh highs for this expansion cycle:
http://www.advisorperspectives.com/dshort/updates/Conference-Board-Leading-Economic-Index.php
Stock prices constitute one of the LEI’s components, so that’s obviously positive. The yield curve (10 yr T-note yield minus Fed funds rate) is another component, currently set at ‘max stimulus’ thanks to J-Yel and the Yeltones.
Can the economy slip into recession with the Fed funds rate flat on the floor at zero? It’s never happened. But then, living in the Bizarro World of QE is new to all of us.
It will be interesting to see how it will capture the next slowdown…
-It is based on employment (which is skewed because of the boomers retiring en masse and masking true unemployment numbers)
-It is based on inventories… and Steve has reported that he is storing way more nuts than he has in the past… chances are he is not the only one… so this would have been boosting demand and production.
-It’s based on the S&P… skewed by QE
-Based on spread skewed by zirp.
You might be speaking about another set of leading indicators. The Conference Board’s 10-component LEI uses three different ‘new orders’ series, but inventories aren’t a component:
http://www.conference-board.org/data/bcicountry.cfm?cid=1
The two labor components, weekly hours in manufacturing and weekly initial unemployment claims, ought to sidestep the issue of early retirees affecting indicators such as the unemployment rate.
Both average duration of unemployment and inventory-to-sales ratio are used in the lagging index, though. When recession strikes, businesses invariably get caught with excessive inventory as sales unexpectedly decline.
When you are building inventories, you are impacting:
-Average weekly hours, manufacturing
-Average weekly initial claims for unemployment insurance
-Manufacturers’ new orders, consumer goods and materials
-ISM® Index of New Orders
-Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
-Stock prices, 500 common stocks (since you are boosting earnings with your purchases)
-Leading Credit Index™
-Average consumer expectations for business conditions
I forgot to add info about our consumer spending. We and friends were accustomed to eating out several nights a week at mid to upper priced restaurants. We now go out maybe once a month.its pot lucks in each other’s homes now. We are not poor and have professional jobs that are seeming secure and decently paid. We have several degrees between us. We take vacations abroad. But we have been progressively reining in all the drip drip expenses that drain finances more than some of the big ticket items. So have our friends. We are all steering clear of bookstores AND Kindle and going to the library, no stopping for coffee or tea or a snack – we bring our own. No impulse buys. No travel souvenirs. We use our air only on the hottest of days and have done the Jimmy Carter sweater thing for the last few winters. Why do this? Because it certainly looks to all of us that most of our adult children are going to be needing help in just the basics. I will stop working ( they keep piling on more jobs on those of us remaining as they are still eliminating people in my field( biological sciences) so I will be happy to finally get off the hamster wheel. BTW – I have a masters in Biology and have not had more than a 2%’salary increase in 6 years while my company makes record profits each and every year) when my daughter has a child because of the cost and more importantly the quality of affordable daycare. She is a professor and we know what THAT pays. Rents are through the roof for her but with student loans of her spouse they will never be able to put up a down payment for a very modest home here. ( he is a teacher as well!) It makes me sick what a sham the American dream is now….
My friends and I are mostly in similar positions, plus I keep having friends get laid off jobs to this very day with more to come, I’m sure. We are all prof. with at least one advanced degree and many years on our jobs with good experience. Doesn’t matter. Most of us are planning to work for as long as we can hang in there, due to the feeling that we’ll need to either help out our kids or nieces & nephews, which is already happening.
Everyone has been cutting back, esp on the “luxury” items. Like you, I use air con sparingly, if at all, even tho it can get really hot where I live. I am getting used to it! I also use heat sparingly for similar reasons. Well, it’s probably good for the environment, too.
I rarely eat out anymore, except on bus. trips where some of my expenses are covered. I feel very fortunate to be working and making decent money. I have gotten COLAs every year I’ve been in my current job (10 years), but the past 5+ years, the COLAs have been 1.5% or less (still better than nothing).
Everyone I know is economizing where possible, in order to afford some of those things we like, such as foreign vacations or trips to Hawaii. Yes, I am still better off than most, and I’m grateful and not complaining on my behalf. Just stating how the economizing has worked out. I also gave up my TV (highly recommended!!!) and have no devices at home, except for a very ancient SmartPhone. While I am still working, I use a PC & Internet at work only (much better security on it, fwiw, plus it’s not that far from where I live, if I absolutely need to do something on the weekend). Another way to economize: no ridiculously expensive Cable/Internet bills (for absolute crap on tv + the ability of the NSA & BigBus to spy on me; yes, I wear my tinfoil hat proudly).
I might add that I find my grocery bills to be shockingly high. I keep an eye on my spending, and I really see a big increase in grocery costs. Mind you, I’m single; no kids; decent income. So I’m not as frugal at the grocery store as I could be, but I clip coupons & look for deals, etc., plus go to the farmers’ markets. I simply don’t know how poor families get by, even going to the really crap grocery stores with GMO fake foodz & pesticides. Horrible. Food prices are, to me, shockingly high anymore all over CA (from what I can see). It’s only going to get worse with the current drought in CA, which doesn’t look like it’ll improve (get rain) anytime soon.
Things in my neck of the woods are varied–some areas are booming, some are stagnant or worse.
Whether the economy goes up or down what we do know is that growth as a general trend is over. Parts of the world that are close to people who make money–big corporate headquarters, big banks and so on will see growth in desirable living areas. I think, around the country, what I’ve seen is those that have, get more and those who don’t, get less. There is no way that trend changes–we all know that. The traditional model of economic growth in the U.S. no longer functions–the best we can hope for is general stagnation. Much depends on the banks–will they loosen credit and stimulate the economy by putting people deeper into debt? That’s the only theoretical question, as I see it–this fact is why the government and the Fed are so friendly to the banks–everything depends on them, everything. In the long term, of course, if growth goes up it will be unsustainable so stagnation is the plan.
“Much depends on the banks–will they loosen credit and stimulate the economy by putting people deeper into debt?”
Banger, isn’t the trend pretty clear on going deeper into debt? There is more debt today than a decade ago at the height of the housing bubble. Scroll down to page 10. Total credit market debt was $42.2 trillion in 2005. It was $58.9 in 2013. That’s an increase of over 16 trillion dollars in 8 years in the midst of the greatest financial crash in the history of sensationalism.
http://www.federalreserve.gov/Releases/z1/Current/annuals/a2005-2013.pdf
And if the economy doesn’t grow slightly faster the what people pay in interest then we see the end of the road within the decade which no smoke and mirrors will be able to hide. And the only way for the economy to grow is to increase debt so….
This does make sense. Why else? Maybe just keeping it alive long enough to invent an actual economy – the one we’re playing with now at the end of time is dead. I can’t even imagine what an actual, real life, honest-to-god economy will look like. Not a nation of ragged debt slaves, that’s for sure.
In a way, if one day, one can owe (i.e. borrow) more than one can make in one’s lifetime, then, superficially, it would seem to be a better deal than if one sells oneself as a slave outright.
The human hedge fund.
That’s why they call it private equity.
Banks loosening credit?
Let the government guarantee all loans going forward, then they will all lend…to all.
I have wondered if stagnation really is the plan. The gov need not be so friendly to banks though. They could do fiscal stimulus, and the money would be distributed more equitably – but then the economy might really grow, and if there is no plan to change our energy and resource bases, then we’d only be burning up the real assets all the faster. Monetary stimulus (QE) is a mistake, unless it’s all you have. For now, with full “Republican Party” control of all three branches, it’s all we have. And it’s still a mistake.
Yves, i work in the fireworks industry in Michigan. Our company has experienced 30% growth year over year for the last 10 years. In 2012, the drought hit our industry hard. So in 2013, there was a lot of carryover of inventory in the retail part so our sales, as a wholesaler, were slowed up, as growth was only 5%. This year, with the 4th on a friday, sales were predicted to be up 30%. But we are seeing, as a wholesaler, sales are flat. We are hearing some retailers are way up and some are flat.
Where I live, prices are inflating by leaps and bounds. I am completely unshocked that consumer spending is down, as over the last year have been cutting expenses in every aspect of my life but my “nut” is still more than it was before. I imagine many people are in similar circumstances.
All aboard the Austerity Express.
Same Stagnation, Different Day
My own consulting business has been down for tow years in a row, and no end is in sight. Clients are putting off and canceling projects; and payments are a problem again. Locally, I still see lots of folks trying to their houses and motorized toys (motorcycles, ATVs, boats, sports cars), without much apparent success. In nearby Dover, NH (pop. ca. 30,000), there are plenty of empty store fronts.
One ominous note comes from a long-time friend, client, and business partner; someone who has been very successful the past 20+ years. Whereas in the past when I’ve complained about client payments and sudden changes in work, he’s always stuck to the position that the problems are not with the availability of money but the inexperience and lack of discipline of start-ups. Now he too agrees that investment money is drying up.
Economic malaise aside, Dover overbuilt and overinvested without a plan. The city has to compete with Portsmouth which is very nice, Roch, Durham and UNH, and that spot on the map with relatively nice big box stores. Getting there is easier than Dover’s own stores. The downtown area would be nice if there was a grocery, and one could go carless which would attract more people. Two, half the population is snowbirds, and they don’t shop half the year. The population during the winter is students.
The shameless Twitter self-promoter “Hidden Cash” came to Sacramento this week. The local media predictably played along by broadcasting clues to the location of the cash in exchange for being tipped off in advance so they could stake out the “winners” live on TV. Pictures of cute Gen Zers holding fifty dollar bills is newsworthy around here.
What they didn’t show were the hundreds of homeless people that showed up after all the cash had been found, and started tearing up the capitol rose garden overnight. There were still dozens of the desperate searching around 36 hours later, hoping some cash had been missed.
The whole thing was a disgusting spectacle.
Yeah, saw that, too. Disgusting.
Sacramento is made out to be booming, but it’s not so much. There’s a lot of still empty commercial properties that’ve been empty for as long as I’ve lived here, which is close to 10 years now. Last year saw an increase in residential property sales, but it seems to me (based solely on anecdotal observation & discussions with friends in RE) that residential sales have slowed down this year. A lot of properties went up for sale this spring, but some at very high prices (for the neighborhoods they were in). Many homes on the market for weeks/months with prices dropping.
Sacramento has lost a lot of businesses over these years post-crash of ’08. All we got from it is a bought off Mayor with a D beside his name pushing for a new arena for the NBA loser-team the Kings. Allegedly this arena is going to create jobs jobs jobs jobs jobs. Well if it does, that’s great, but I’m pretty cynical. I think the rabble will be paying for this expensive foolishness while the billionaire owners skim off the top. Probably the only good thing about the arena is that it’s located where a very failing & nearly empty mall currently stands. Replacing empty store fronts with an arena may perhaps be better. I don’t know. What I do know, though – from personal discussions with small business owners that I know in that area – is that small businesses are being pushed out by the arena as the local building owners are raising rent and lease rates.
Is the arena “better” for Sacramento’s fading economy? Time will tell, but color me skeptical.
Mayor MJ is clearly in the privatization camp (his wife is Michelle Rhee of anti-public school fame). The city portion of the arena funding will be coming from borrowing against parking fee revenue. The city parking structures already charge more than double the monthly rates some private lots charge, but they need to raise fees by another 50% within 7 years to cover the loan. Since the city controls less than 25% of the downtown parking, there’s limited upside potential.
City taxpayers will paying for the arena for years to come.
Mayor KJ & his Charter Schoolz R Us wife, Michele Rhee, as the new “D” power couple. KJ will be kicked upstairs and hailed as the second or third coming after Corey Booker. KJ & Rhee get financing from the Waltons, and KJ has been pushing and pushing to have a Super WalMart in mid-town Sacramento (for those who have never been here, it would be an awful thing & is not needed & would most def drive all the small businesses out of business).
Mayor KJ has done nothing but close public schools, mainly in the poor parts of Sacramento where he grew up, and get Charter Schools in. Let’s get rid of the horrible Teachers Unions who are ruining everyone’s lives blah blah blah.
Sacramento’s not in horrible shape, but I sure don’t see much in the way of real leadership & creativity coming from either the Sac City or the Sac County govts. Both local govts used have semi-decent pols on the Boards with some creativity & vision & concern for the 99s. That’s all gone, and they’re all bought off either by the Bigs or by local construction & RE. A real shame.
They keep saying that Sac’s about to experience a Renaissance. I hope they’re right, but I’m not seeing it from where I sit. Downtown’s dead at night except for one or two blocks on K St where the youngsters hang out at big bars/clubs, but even those come & go and don’t last.
> KJ has been pushing and pushing to have a Super WalMart in mid-town Sacramento
Oh, you mean the one they’re putting in the south area, complete with it’s own freeway entrance?
GROAN! No I didn’t know about that. How’d that slip by me? And I live somewhat in that vicinity. Well Greenhaven/Pocket areas aren’t doing too badly, although there’s a weird dynamic there. Some of the strip malls in the Pocket have recently jacked up their rents sky-high, and I know quite a few small bus. of varying types having to move elsewhere (if they could afford it) mostly to strip malls closer to the I-5, where, for some reason, the rents are lower. Yet some of the strip malls that raised their rents (that chased out good tenants) also have had empty store fronts for years and years. So now they have even more empty store fronts. I don’t get what gives with that. Is it some kind of tax loophole from hell?
As for the Meadowview area east of I-5, well it’s pretty much a ghetto (for lack of better terminology). I guess a WalMart there will do well, but I’m not sure. Maybe it’ll provide some “food” for the less well off. Perhaps that’s useful?
I cannot stand WalMarts and avoid them at all costs. Mainly loathe the scum-bag lazy owners, but also find their prices not all that low, frankly, and usually products are crap.
Well I guess KJ or someone got their wish fulfilled. I guess this is somewhat better than having it go in mid-town, though, so one must be thankful for small small small “favors.”
Sacramento keeps touting some kind of economic resurgence, and they’re planning to do all that residential building out by Rancho Cordova. I don’t know who’s going to live there, but for some reason, Sac County Board of Supes have been bought off and tout it as the greatest thing evah! All while current RE residential inventory languishes. And so on…
Oh yea the Twitter self-promoter. The ridiculous spectacle of spectacles, the circus when there’s not even any bread left. I mean if anyone looked for the money on a lark, for fun or whatever, like geocaching, I have no real problems with that. But the fact that many are actually reduced to running around looking for pathetic amounts of money from filthy rich people our of real need is pretty disgusting (but remember no matter what we can’t tax the rich!!!). We have to demean ourselves running around chasing after rich people’s cash purely for THEIR amusement because they enjoy seeing us running around like rats in a maze! And I don’t just mean in our jobs! :)
And what makes it even more pathetic is the amounts of cash are ludicrously small. A few 100 here and there. Most people with decent incomes could afford to have people chasing after money if they wanted to (although less often). And the guy is supposedly rich. How demeaning it all is.
Had some friends actually SWOONING about this Twit-nit-wit demeaning thing. I said something similar to what you just wrote, and I got a dirty look. Sad to say, the 99s have been easily manipulated into thinking such debasing spectacles are a good deal for them. I knew one or two younger folks who ran around trying to find these paltry amounts of cash. So sad. Yes, very different thing from geo-caching. I know people who do that, too, but that’s a completely different game and not demeaning.
The guy is trying to become the next Tony Robbins. He’s using all the current buzzwordz (Share!(tm), Pay It Forward!(tm), Yolo!(tm)
I’m sure the book/TV show deal is in the works. Hey, it’s a great strategy: he spent around $10K of his own money, and bought 650K twitter followers and a metric ton of free press. “Coming this fall to ABC: Hidden Cash Special. It could be in your backyard!”
An NYC cannabis dealer I know claims that the ‘informal’ cannabis market is a coincident economic indicator.
He recently cut his prices (which had been flat for five years) by 5%.
Problem with these stats is that reliable sales volume figures aren’t available, and supply has changed with legalization in a couple of western states.
May have a problem with demand as well, since robots are not known to consume cannabis, and it seems, robots are growing faster than humans.
And please do not forget that Humbolt County, California is the pot growing giant of America. And it has very high radioactivity readings. So smokin that stuff might not be so good for you. Need a “where grown” sticker.
I sell homes in Tucson and I am not seeing economic growth here. It seems we are in survival mode and slowly going backwards (no income growth and costs going up). This is not a community that is adding jobs. Price increases have stopped and most of our market is now classified as a buyers market. Homes between $150K and $250K still sell. Above is dead and below is slow. Commercial activity seems to be food related and urgent cares (the new Walgreens, one on every corner). Seeing more strip shops vacant which is the local business owner. We, real estate agents, know that home prices need to retreat to come inline with our local incomes. The Move Up buyer remains absent which is creating a real problem for the Move Up home seller. I do not know what the Boomers will do when there are no buyers for their homes and at the prices they had expected.
Mr. Keefe;
The Deep South region we see is still holding on to prices higher than the traffic will bear. The quality of the surrounding towns aside, a lot of the lower end homes we looked at were being sold by the children of deceased or disabled oldsters or the executors of wills. The amount of foreclosed and pre-foreclosed homes has mushroomed this past year or so. The asking prices for these places has generally followed the outstanding loan balances, not market sentiments. We consistently saw places, especially building lots, that had been on the market for over a year. Another trick we saw was the listing of a property a year or two ago which had been taken off the market after it had become clear the initial price, or a small reduction of the initial price, wouldn’t sell. Then the same property, now with an extra years worth of decay, was reintroduced at close to the initial price. Usually, if the property didn’t sell at close to the initial price, yet again, it was taken off the market, yet again. There were too many cases of sharp practice at work in the real estate game to go into now. This entire house hunting enterprise has been an eye opening experience for Phyllis and myself. Phyllis mentioned several weeks ago about the Ghost Town feel to one of the small towns we visited. I’ll expand on that and say that we are seeing the reality of Ghost Town U.S.A.
I’ll take the false alarm side of the bet.
At some point, the educated technocratic elite will declare another recession. After all, in layman’s speak, we’ve been in a depression since the 1990s. The 2008 crash was just when things got so bad that the comfortable technocratic elite couldn’t ignore how bad things had become anymore.
But as far as calling a recession this year, I’m actually in the Recovery Camp. I think it’s more likely they’ve packed the bad news in this quarter so things look relatively better later in the year. Otherwise, what’s the point of all the hilarious semantic quibbling like noise in inflation and investment in IP? No one outside of universities and government thinks like that. I like this flyer in particular:
http://www.bea.gov/national/pdf/flyer_bea_expands_coverage_of_intellectual.pdf
If BEA starts accounting that way July 31, 2013
http://blog.bea.gov/2013/07/23/gdp_changes/
are you saying BEA is holding back reporting the numbers, or they blew communication with companies which didn’t report, or what? Just not clear to me what you mean.
It irks that it appears this is about financialization gone mad under cover of purported gains for the good of all – slice and dice a process, or each draft of a book, or a song, or take 10% of a talented person. Why not own Middle C and first dibs on all the Grade 3 classes in Denver?
http://www.economica.at/AG%20Welzl%20DB%20Vortrag%20Berlin%20160913.pdf
Personally, I don’t think NBER will have sufficient evidence to declare a recession before the mid-term elections. They didn’t declare the 2007 recession until almost the end of 2008, and that was a much more stark contrast to how things were (supposedly) going.
I don’t think it’s an overt conspiracy of holding back numbers. I just think the political/pundit/intellectual class are doing everything they can think of to smooth out things at the margins and dismiss problems as individual oddities rather than systemic failure. It’s not that any one variable will fudge the numbers; it’s that everything they’re doing seems to be with the desire for things to look just good enough to hold together. And I guess I’ve been more positive than most that, in fact, our system is still strong enough to give that appearance of holding together.
http://mobile.bloomberg.com/news/2014-06-26/world-growth-bouncing-as-employers-take-baton-from-central-banks.html
The article seems cheerful about employment, but I don’t see it in China, nor to a less extent Hong Kong. Whether those global numbers can be trusted or not, I wonder if those numbers from Ford, etc; have sticking power. Easy to hire = easy to fire.
Seeing heavier automobile traffic than has been typical over the past several years despite gasoline prices around 4 bucks/gal. Costco and WalMart parking lots are busy, Home Depot less so. Regional mall is quiet with estimated 15-20 percent of small retail spaces vacant, but (surprisingly to me) all the large anchors are still there.
Employees at family-owned nursery where I bought some plants a couple weeks ago seemed somewhat dispirited, although seasonal traffic seemed to be fairly strong. Customer demographic mix was entirely over 50 years of age. Wondered about the average sales ticket, though.
Drive-by assessment of auto dealers shows lots of iron on the lots… Channel stuffing?
Sir;
The auto dealer inventories are large here Deep South as well. There are many more second tier used dealers as well. Prices are still ridiculous though. Second hand dealers still won’t bargain. I’m sticking with my 15 year old Dodge truck. I know how to fix it, and it runs very well.
I think big corporate enterprises are at an distinct advantage. They can easily direct their investment on things they know customers will want whether it is retail, food or whatever. With an even greater abundance of adverts in our world, people are being conditioned to want only mass-market stuff and businesses have found out how to quickly and expertly taylor their products and their pitches in much the same way people in the entertainment industry do. These enterprises have gotten very clever at both shaping and responding to needs because they can hire the smartest people around and most brilliant young people just want money and why not?
In Mason City IA, seems that there’s two for sale signs every block for residential housing with prices about where they were 10 yrs ago.
Rents are sky-high–at least for this area–$750/month for a tiny 2 bedroom.
Lots of help wanted signs–pay is c. $8-$9/hr. for fast food, retail, service work. Schools are laying folks off, including the local cc.
Doctor and dentist offices are going up all over. Strip malls are barely hanging on. KMart just closed.
City government is using a private/public partnership type entity to lure business using tax money–all done with zero transparency or accountability.
Pretty much the same stuff going on as all over the country I would imagine.
Ditto for everything you said down here. Paradoxically, our rents are close to yours for similar sized units. Even mobile homes are renting at higher prices. We can’t tell whether it’s pure greed or some demographic at work. The medical expansions around here are nearly all related to one or another of the very big hospital chains.
I think it’s greed–makes no sense with tons of housing for sale cheap, but the PTB have decided that few will qualify to buy, so landlords jack up the rent.
I was involuntarily “retired” a couple years ago at age 60. I had some retirement money saved up, but the interest was about a half a percent. I just started drawing SS, and decided to take my depreciating retirement money and buy a small 2 bdr house to rent out. I rented for much of my life and wanted to be a reasonable landlord, so I advertised it at $475/month.
I had over 30 inquiries in the first day on craigslist. Real estate types told me to rent for more because the higher the rent “the better quality tenant”! lol. I’d rather rent cheap and have longterm, loyal folks.
Anyway, that’s my story of trying to make a living nowadays.
Dear sleepy;
I empathize fully. I’m just under 60 and recently gave up trying to satisfy a Big Boxx Stores unreasonable and frankly demeaning work demands. My wife has some family money, so we are in a similar way, housing wise. I don’t know how I would handle having to grovel for a sub standard living, with no freedom in sight. That’s why I seriously fear for this next generation. They’re between the rock and several hard places. How unreasonable, you ask? I did a small plumbing job for an ex coworker today. He related how one of the delivery truck drivers started a fist fight with another of the drivers. Bad enough, but company policy stated that both men had to be fired. The one who started the fight, and the one who defended himself, both gone. No recourse, that’s the insanity running business in America today.
I’m glad you acted on your ethics. That’s what’s meant by integrity.
Orange County CA seems to be booming on the recent return to higher home vaues. Lots of home renovation in the. neighborhood after several years of zilcho. This means more work for the contractors, tradesmen and other craft workers from central and north OC. We finished a renovation ourselves in the past week and several contractors and handymen we called were booked solid for sveral weeks out. Went to eat at one of the nicer outdoor malls and the place was hopping on a Wednesday night. With the return of home equity, so it seems the return of the consumer economy.
I am trying to spend less, but you won’t see me there.
Besides, I am making a conscious effort to know what I eat.
Dining out, you never know the journey your food took to achieve metabolic immolation in your stomach.
Just one small frustrating problem – labels on vegetables and fruits. I don’t care what healthy glue they use, I don’t like them. I don’t like peeling them off and washing afterwards either, so I cut them off. Unfortunately, being absent-minded (you see it in my typing), I miss some of them once in a while. Just the other day, there were pieces of shredded labels in my Gazpacho soup:(
The only way for this post-capitalist economy to create growth is to first crush growth, then let it creep back and when it gets frothy just crush it again. Like Larry Summers said: Bubbles. But it’s so unnatural. There is a way for an economy to thrive. A forest thrives. An ocean that has not been poisoned with massive amounts of radiation thrives. A bee colony thrives if it is left to nature. So where are we going wrong. Could it possible be profiteering?
Actually, I wanted to describe our local economy. It is in a total shambles. It never recovered completely from the 2008 nosedive – even tho’ we had “the best ski seasons ever” in 2012 and 2013. So at least the snow is good. The latest problem is a big battle between 2 corporate giants for the control of the best ski terrain in the Wasatch which in turn is the best ski terrain on the planet. The fight is totally irrational. The townspeople are livid, so are all the merchants at the resort. They are all collateral damage and Vail and Powdr don’t care. Even the mayor got involved. So where there is a valuable enterprise and an opportunity for a hostile takeover it will happen as the river dries up and the piranas start to attach each other. Name your own insane location.
attack
Dear sto;
Attach is so much better. A pun on several levels. Let your unconscious be your guide sometimes. You’ll love the trip!
Went to Museum exhibit last night – it was get in free after five night and very busy. But afterwards we went to a restaurant that a few years ago was impossible to even get into and were the ONLY patrons. We walked around later and saw restaurant after restaurant empty. These places used to bebrimming withyoung bankers awash in cash. The only place that seemed to be doing any business was a pizza by the slice place.
“We walked around later and saw restaurant after restaurant empty.:
Well, eating out is very pricey. I can make filet mignons at home for the same price as a hamburger meal at Red Robin. One trend I am seeing is the rise of “high end” fast food. Places like Chipotle, Noodles & Co, Tokyo Joe’s, etc. They are much cheaper than the casual dining places, plus you don’t pay a tip.
Casinos are a booming business, I’ve never seen the places around here so crowded – all day and night. And expanding very quickly. Many at the casinos look like they’re betting their retirement on a last hope chance. I hope I’m wrong.
I’m a real estate appraiser and sale prices are unrealistically high in many cases. Distressed sales (REO and short sales) are disappearing from many markets but the damage has been done by the banks ridiculous pricing destabilizing markets. They still are a major destabilizing influence. Pockets still do exist where distressed offerings dominate the market. Relocation appraisals have been slow but steady. Home prices realistically should only be going up the equivalent of sellers concessions, about 3% a year, but I’ve seen and read that in some areas sale prices are up 15%. Smells like bubble to me. Right or wrong I’ve reconciled inflation to the price of gold in 2007-08 at $800 and at $1,300 today, so prices going up around 38% from the bottom is reasonable to me but we’re seeing more than that. A simplistic approach, I know that, but has anybody considered it? Inflating asset worth by devaluing the dollar sure gives a grand illusion of gains but it’s really just another tax and transfer of wealth that goes to the 1%. To me, inflation has been exposed as selling out the land from under our feet.
What I’m seeing is a slow decay going on. No new businesses of note are opening and there are more empty storefronts than in recent years. Residential rents are crazy high, I’d say about 38% higher than they should be, maybe more. Site values are dropping so it makes no sense that home pricing would be rising at the same time.
I’ve been seeing 100% LTV loans advertised – just like during the bubble. Home prices are now more controlled by the banks than they were in pre-2007 when the banksters privatized the appraisal profession. So if prices are going up – you know where to look. The original control frauds in 2008 are still in power and more so than ever.
And in my low-end-of-the-high-end nieghborhood houses are selling like hotcakes to dual income banker couples in their mid-thirties. But my realtor friend who has sold most of them says every single one was financed with significant help from parents – with the hopes that if they helped them get a home they would have grandkids.
South Orange County CA: My circle of forty through seventy year olds are apprehensive. Those with jobs, even very good jobs, are concerned about losing them in a coming downturn; some of the laid-off have been unable to restart their careers and are turning to entreprenurial one-person operations or multi-level marketing. Retirees have cut way, way back on discretionary spending because of loss of interest income. Yes, most of the career women are stretching the time between hair jobs. Teens through early thirties, especially Asians, are abundant in trendy expensive venues and seem to be spending freely on food and drinks. Interesting.
Asians, like everyone else, are diverse.
If we haven’t seen enough of Mao-like Asians, I hope we start getting more Asians like him, instead of only those patronizing trendy shopping malls.
We can’t simply say they don’t exist.
We can’t simply say they (Mao-like Asians) simply don’t exist.
(a little clarification).
We shouldn’t assume all Asians are hip and trendy…or with an IQ of 105.
Dear MLTPB;
Comrade, the barrel of the gun will not be televised.
After my marriage went south, bought a house in Oceanside CA (northern SD County near Orange County) with a friend. Bought at absolute bottom of market & great interest rate, plus put a lot down (more than 25%). House has gone up in value. We rent out our Master Suite since I’m not there 100% of the time, which helps with expenses.
Neighborhood is solid middle class (what exists anymore) but mostly elderly ex-officers from USMC or USNavy. They are frugal and getting more so; looking for every little way to stretch their remaining dollars. Haven’t seen much “inventory” for sale in our area. In other parts of SD County – the trendy areas – there is what I believe to be a housing bubble. Some home prices are skyrocketing. Unsure where the money’s coming from bc most of my friends – prof. white collars still with jobs – are having to count their pennies, as well.
But San Diego County, in general, has seen an increase in trendy stores & expensive restaurants opening, and most are, indeed, busy. It’s quite a different story from Sacramento, which isn’t in the pits but definitely doesn’t have the high rollers who live in Southern CA.
An important factor is completely missed in published economic figures.
I don’t have much “hard” data and I don’t know how much hard data is available —
the reason is that the figures are kept by the Dept of Homeland Security
which has been quietly seeding employees into private businesses
under both administrations.
They are first trained under DHS grants, and then sent out as trainees
for a variety of businesses large an small, as management trainees, optician and
pharmacy and banking and supermarket trainees, for just a few examples.
Perhaps half their salaries or more are paid by the US government, making those employees
very desirable to cash strapped employers in a stressed economy.
Also, people without jobs in a bad economy are very glad to have the free
training and the guarantee of jobs.
None of this is speculative, though it is anecdotal.
If that makes it worth ignoring, then consider first its plausibility — at least on these pages,
most people are aware that neither major party is well-intended.
Given the almost unchallenged powers now granted under the Patriot Act and subsequent acts,
what are our leaders entirely capable of doing?
A report now almost ten years old said that a million people were employed by the DHS.
That was just three years after the first passage of the Patriot Act.
For all the meretricious breast beating about reducing government,
DHS has been reportedly “dispensing money like candy”.
First, how are these acts of government “pump-priming” affecting our employment figures.
That depends upon how many people were thus hired. A triumph for Keynesianism?
Of course they are not there merely to do a job. They represent DHS
and have a policing function. A growing population of grateful employers and employees alike
in is being implanted, grateful and loyal to the DHS, not the American way. —
To keep the trains moving, so to speak, without a care for the cargo they move.
Should we regard the ordinary people who were German citizens in the 1930s and 40s
with any measure of arrogance?
Does this merit better research than I have the means to do?
Dallas, Tx is doing well. Many cranes in downtown Dallas. Advancing home prices and a tight market for home buyers. Dallas recently pulled the Toyota HQ from California, so that is probably helping our economy, along with oil/gas/finance. Our home prices never really inflated in the buildup to 2008 crash, thanks to tight regulations on HELOC / home equity loans and plenty of space to spread. In 2014, the regulations are gone and the ability to spread has become more limited to those who have to drive to work.
Whenever I leave Dallas, the contrast of the citywide boom here to the general malaise in the areas I visit are quite noticable.
The Civil Utility
“Join the pack, and someone else will fix it.”
“Know your limits and stay within them.”
Why do you suppose they have emergency credentials and miscellaneous consultants?
What the consumers, from the energy industry on down, lack, is imagination, which should be expected, given their relationships devaluing marriage, fueled by debt to consume surplus on a one-way trip. Status symbols merely reflect the chase to the bottom, all of which depend entirely upon willful ignorance, ponzi participation.
The majority choosing weaponization of jointly held utilities, to the end of commandeering your surplus, has to go somewhere in the circuit, but the consumers kill themselves if uninterrupted. RE occupation doesn’t work because without circulation, from and to the planet, there is no economy.
The laws of gravity follow behavior, not the other way around, unless you choose otherwise. The consumers are led by consumers, to believe that debt as money will buy what they need, but no amount of debt will buy a real marriage, the explicit kernel, which they have been trying and failing to replace for 5000 years.
As soon as you drop the motor in, the status quo cave dwellers begin to weaponize it, because that is all they understand, their perception of the past. Implementation will proceed in both directions initially, but the gravity of History will soon overtake them all, which is why you prototype two bridges ahead, first.
How long the motor lasts depends upon demographic timing, the catapult distilled by the last motor. From the perspective of drive-by Christian consumers, conspicuous consumption is a virtue, faith rests upon central redistribution of production, and Rapture is winning. Family (Common) Law is MADness, regardless of religionism.
Moses presided over divorces for gold. Bet they didn’t give you that little piece of information in Sunday School. California and New York recognize common law in every way, but name. And what sense does it make to award children to one parent and make the other pay, unless you want to dissolve all the assets of marriage? The moment a party seeks adjudication outside the marriage, it’s already dissolved.
Civil Law is a stack of entitlement promises for civil marriage in the middle class, and a hash table for legacy to bypass all the limits. The contract grants legacy the right to print, delaying transparency for generations, and to take advantage of the interest rate arbitrage to dissolve non-conforming marriages.
When Warren Buffet talks about the value of the dollar, he’s talking about playing all sides against the middle, taking advantage of government hubris, discounting its debt and buying the assets it has confiscated with inflation into a pool, but cannot hope to make productive, for pennies on the dollar, growing control over natural resources in the process.
Bank treats housing like talent, and labor and soil like commodities, which wouldn’t be a bad counterweight (echoes folding within and without echoes in micro and macro dimensions), if the general population were sufficiently intelligent to see how stupid that is, and discount into equilibrium, rather than breeding on RE occupation, with public education ion public housing enforced by law to ensure the outcome.
CO2 is a derivative of artificial RE inflation driving transportation, asphalt and concrete jungles in the city sucking the countryside dry to feed artificial global trade. Most of that traffic is nonsense. Without a functioning discount mechanism, dropping developments into the economy can only fuel war.
Net, the big cities are stealing natural resources from the countryside with debt money against the expected resources, based upon majority ‘vote’ in the big cities, and inflating countryside land prices with the paper profit, shrinking the population capable of effectively discounting the loop. If you’re in a shrinking community with resources, the city manager is working for absentee owners up the chain.
Taking your car to the mechanic because you have more profitable extortion to attend is one decision; being a prisoner to technology, a game in which everyone ultimately loses, is another, but the same. Developers choose C, to build something better. Despite the black belts conferred by the best-business-practice wizard, the incremental tweekers on the margin of weaponization are not developers.
Climate variability is no threat to labor; all legacy can do is consolidate, the middle class, collapsing the monopoly structure form the bottom up, evacuating the countryside as it does so. Extortion is self-adjusting over time. This planet has not begun to reach its potential for life. Humanity is simply swamping it with duration mismatches, a conflict humanity will lose, as it always does.
Children are born assuming their parents are heroes. Don’t disappoint them by allowing a doctor, a school superintendent, a city manager, or any other automaton dictator to persuade them otherwise. All you have to do is encourage them to seek their own truth, develop their own talent, and build their own skills. Time is only a perception, you create by observing it as others do. Empire history is not a guide.
You are getting energy from the solar system. What are you going to do with it? How does that relate to spacetimetravel? What is the relative difference in clocking between humans and rocks, and electrical transmission? What is the limit in either direction? If time is not relative to your perspective clock, what is it relative to? What is memory?
Funny, how all of legacy’s transactions are self-financing and the bottom of the middle class is paying 20% interest. It’s all so rocket sciencey isn’t it?
Agreed.
Lmmao… empire is two people agreeing on the same premise over the other guys opinion….
So, Yves, how is my economy?
My very anecdotal report from the heart of Silicon Valley (Mountain View to SFO):
For the tech titans and the VCs, times have never been better. The gold rush at the high end is absolutely intoxicating. Tesla’s for the weekday drive (with an electric car, you can use the carpool lanes with only one person) and a Ferrari for the weekends. High end real estate is gone in a heartbeat. (Hell, if you have $1B+, what EXACTLY do you spend it on?)
For the worker bees, good but not great. If you own a home or bought from 2009 – 2012, you could be sitting on MASSIVE capital gains (prices up anywhere from 40 – 100% in 3 years). And once you’re out of the hyper-affluent areas (University Avenue in Palo Alto) to the just upper-middle class areas, it feels just OK. Infrastructure is mediocre at best (potholes, rough roads, 60+ year old electric and gas transmission, etc), many vacant storefronts (most small businesses can’t support the rents — $2.25 – 3+ sq ft NNN – in plain English that would be $30k/year for a 1000 sq ft. ). Jobs seem to be plentiful, but it’s hard to tell since so many tech companies prefer to import workers. Salaries in the professions are VERY good, but most of the $$ goes to housing ($1mm for a house is not at all atypical) and taxes (CA state income tax hits 10%+ quickly and sales tax — at least 8%+)
As a side note – HUGE (and I mean HUGE) investment in the footprint of the medical-industrial complex – 3 HUGE brand new hospitals under construction in a 10 mile radius.
So solid, but it doesn’t feel like a boom (outside of a handful of areas – or it could just be that I’m a proverbial frog in a warming pot). Now solid may be good, but this is (in theory) one of the most dynamic areas in the US (Manhattan/Wall Street, Washington DC, and San Francisco / Silicon Valley). And the “prosperity” certainly doesn’t trickle down that far.
The irony is that Silicon Valley infrastructure sucks so badly. There was a post/discussion some time ago on Firedoglake about whether the Silicon Valley Kings & Queens were actually “progressive/lefty/whatever you wanna call it.” I just LOL’ed. NO, I said: they’re all selfish “libertarians,” who think taxes are for the small people, just like Leona Helmsley said. They all live in gargantuan mansions & drive wildly expensive cars (a childhood friend is now in the bus. of selling insanely expensive, specially built cars, and they mostly go to Silicon Valley types) with all the trimmings. But they all whine & complain about taxes, as IF it’s the ruination of their oh-so-perfect lives.
Undoubtedly many do work very hard to get ahead, but the concept of the commons and sharing is foreign to these people. Why fix the roads? If they get bad enough, I guess they’ll just buy personal helicopters and fly to work or something.
I go to Silicon Valley periodically, and it’s beyond annoying how crummy the infrastructure is there.
Considering that counterfeiting hundreds of billions of USD, Ponzi debt financing, fraudulent accounting practices throughout the economy, as well as government lying and manipulating can not even create a positive GDP number, imagine what the real GDP must be!
I would believe that if you back-out all of the above non-sense, that the U.S. has had precious few positive GDP quarters since ’71 when the magicians took complete control.
From a personal standpoint, economically we’re doing okay. The spouse and I just finished our mini vacation and family vacation. We’ve paid off our house, car and truck. Our two older kids have a mixed economic bag. My oldest works at a call center for $11 an hour after he decided to leave Panera(he was traveling to train their employees for a bargain basement price of under $8.25 an hour). He qualifies this month for a bonus. He still would like to go to college but he agrees that it would be stupid to put himself into debt without knowing that he’d get a return on the investment. My daughter just bought a used car( after working 2 jobs for a year and a half she had the prerequisite $7000 that I advised having in the bank before buying a car. 20 seems to be the magic age for car ownership in my house.) She paid $1000 for it. Now she’s working on saving for a substantial down payment on a house. She has had some financial setbacks due to dental(impacted wisdom teeth and a root canal) so that has been frustrating to her.
From a town and county standpoint it also seems to be two steps forward one – one step back. The school system has a 3 million dollar shortfall they’re hoping to make up by selling a school property no longer in use. The township it resides in though is balking and wants a say on the development that it will be sold to. We’ve lost some businesses. The small pet store we shopped at closed. A flooring store left. However, we have also gained some businesses the BP has changed to Circle K. We got a Jazzercise. The stores seem to be doing steady if not a ton of business. The lowscale jobs are on a hiring spree. Call me jaded. I suspect they want to hire so they can turn around and blame a wage increase for job losses. I am seeing that items seem to be staying on shelves until they are clearance though. The thrifts seem to have slowed down some. So, that’s where things are in SW Virginia- a very mixed bag that maked things somewhat difficult to read.
The Philadelphia economy within the city has been estimated to be 27% non profit organizations. The educational and medical behemoths, Eds&Meds, include UofPenn, University and Hospital System, financially separated, another 4 medical schools, Temple U and Drexel U both with Meds but both also on the real estate development binge worthy of an ambitious Oil Minister flush with cash. For those not lucky enough to feed off of those booming surrounding areas, smaller non profits do offer some job growth. Comcast looms large, but hey, what else is new. Their 2nd office tower is breaking ground in a few weeks or so, taller than the last one. And the entire downtown area is releasing one new high rise apartment proposal after another. The population loss has turned around on the basis of a decades long march from industrial decline to service sector Shangri La starting immediately after WWII when the Democrats wiped out the Republicans nearly 100 year old iron grip on the city and replaced it with political reform and a good government movement along with rational urban planning and economic development.
Much of the impetus for reform has gone by the wayside but the core of the city has remarkably been rebuilt. The older industrial foundation is all gone. So, the older neighborhoods are housing areas for people with no place to go for the most part, other than the neighborhood avenues with small shops that provide everything from food, to financial services to clothing etc. You can get by with next to nothing in the city and this is a way of life for many even when there were satisfactory wages and jobs within a reasonable bus or train ride away.
The school district is falling apart. The public schools are in full crisis and the once mighty Catholic Archdiocese district has all but shut down. The people who used to send their kids to Catholic schools, including a staggering number of African Americans, can no longer afford or even find a place to send them to. So, everyone is piling into what’s left of the the public schools, forming a charter school or else when their children are entering grade school, stepping over the cover line into the suburban township school districts which still seem to operate without any financial distress or violent mayhem. But the young singles, mostly college educated or the empty nesters, are piling in from the suburbs and leading a life of urban conviviality. The restaurant scene is staggering. From food trucks to BYOBs and higher end fine dining, this is a thriving sector. And the tourism industry which was essentially just invented in the last 20 years is just beginning to see some positive trends with any number of new hotels opening and proposed due to the enormous investment in the convention center was just expanded a few years back, the largest capital investment in the state’s history. And then, there is casino gambling. All over the state gambling is bringing in revenue if not enough jobs to replace de-industrialization. This of course is killing Atlantic City. But in a most telling sign of the times, 2 moves by unions let’s us in on the dire situation of the city that has cheated death and managed to reinvent itself one more time, only to watch capitalism again drive a blade into its heart in the 2008.
The IBEW, lead by the shrewdest operator the city has seen in decades, agreed to work rule concessions at the massive convention center, to allow for more friendly and less costly conventions to run their shows without having to deal with 6 different guys all billing at over $100/hr by the show management corporations which then paid the union workers out of the outrageous fee. The Teamster local and the Carpenter local refused to sign the new labor agreement and were left out in the cold by the 4 unions that went along with the reductions in fees. However, you only get a fee if someone shows up with a convention which was not happening at the rate it should have. The conventioneers should not have to be intimidated by the workmen or feel like they have just been looted because they wanted to plug in a laptop. The head of he Electrical Workers union marched in with his people through the pickets of the Teamsters and Carpenters to work under the newly signed contract. The idea was you would earn less per hour, but would work more hours with newly signed up shows finally returning due to the work changes.
The second telling signal by the building trades union is also based on taking a reduced fee, 20% less, to do the work on building the public housing out the federally funded municipal housing agency. More units of housing can be delivered and there will more work and the unions get an exclusive lock on the construction work. The housing agency does not have to use union, though it always uses some, now, in exchange for a better labor cost, they will only use the unions.
These compromises by union leaders will lead to more work for the rank and file. And, they will help the whole economy of the city by their willingness to take less. Tourism, is not the only bright spot for the city, but it is certainly one where you don’t need to be a professional with a masters degree. It won’t be enough in the long run without the macro features of the global contraction being radically overhauled. But it shows the willingness of the most organized group of people in the city to make an adaptive move, to change for what they believe is in their best interests and at the same time contribute to the larger effort to grow the economy for everyone.
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“A relatively small Philadelphia union has become the biggest independent source of campaign money in the state.
Local 98 of the International Brotherhood of Electrical Workers has poured $25.6 million into political races since 2000, an Inquirer analysis of campaign records found – more than statewide powerhouses such as the trial lawyers, teachers’ unions, or Marcellus Shale gas drillers.
The donations, financed by members’ paycheck deductions, have helped turn the local and its business manager, John J. Dougherty Jr., into a potent and even feared political force.
“Fear is not a bad thing to have on your side,” Dougherty told a reporter in 2001, when the union was just beginning to ramp up its political spending.”
http://articles.philly.com/2014-05-19/news/49928243_1_electrical-workers-union-pennsylvania-politics
When I was a kid, the story about canned fish was set in post-war Europe, where canned fish was an alternative currency. It came in two flavors, ala Gresham, the kind that was good enough to eat and the kind that was suited only for use as a currency. Being that it was sealed in steel, it was quite difficult to tell the difference, although date and brand would provide some guidance.
Western PA here. I think people are more likely to chime in if they see something bad, so I’ll just say I don’t see anything. No one I know is getting promoted, but no one is getting laid off either. Applying to jobs online is pointless, but that’s no different from a year or 2 or 3 years ago. The businesses I go to are as busy as normal. A person I know who has always rented a house is looking to buy.
I live in Colorado Springs, a mid-size city with a Denver inferiority complex. This anti-government city depends heavily on government spending via the various military bases and the Air Force Academy. Without defense spending, the town would look like Pueblo to the south.
Anyway, aside from the 30-year old, semi-vacant strip malls whose only tenants are tattoo parlors and pay day loans and pawn shops, there is a lot of apartment building construction. Sorry, I can’t really quantify that further. Versus 2000- 2007, when there was mainly new home construction sprawling to the east and northeast – the city gave developer carte blanche – with McMansions crammed onto small lots. Some major avenues are being widened and upgraded, while other city streets need potholes fixed and new paint stripes. All in all, the city seems to just be muddling through.
Quite simply growth is impossible without cheap energy and in particular cheap oil ,which is gone forever when conventional oil peaked in 2007. All current economical theories are worthless in an era of diminishing returns and less energy per person. Someone is trying to explain it without a lot of success, like professor emeritus Charles Hall. It’s not only because the people at the top have a lot to loose, it’s because almost 100% of the world population live on expectations than cannot be realized. When oil production or better oil available for export will start to decline, the world we know will end because this financial system will collapse and the international payment system with it. Almost surely within the next 5 maximum 10 years.
Only sustained application of utterly self-defeating US policies in the Persian Gulf and Middle East has prevented huge reserves from being developed in Iraq, Iran, Libya – oil far less expensive and of far higher quality than the unconventional energy/water-intensive goop proposed to replace it.
With slack global demand, US/Saudi policy appears to be to keep Iraqi, Iranian and Libyan oil in the ground and the price nicely higher rather than seek a regional security agreement to address the obvious outstanding causes for conflict: resolution of Israeli/Palestinian dispute genuinely acceptable to Palestinians; and an end to the now-absurd-because-deliberately-stoked, overblown sectarian rift between Sunnis and Shia, when it is the leaderships of Saudi Arabia and other Gulf Council members who have been central to several of these regime change operations, with Iran and its allies playing the part of the demonized, as has been scripted long since by the neocons.
With potential business with these major oil producers in the potential tens of trillions of dollars, one would think someone might try a serious effort at peace-making. Some real justice right now would go a long, long, way.
I’m in silly con valley where things are booming
It’s hard to get into a good restaurant , high end shops are busy, Sharon heights Starbucks always has three startups pitching to VCs
I’ve been trying to find 1000 SF office space and everything available rents in days at $7-$10/SF/month
Down the street, a 1500 SF condo sold in one day for $1.45M. Another is going on the market this weekend
Yet visiting monterey or San Luis obispo, it’s ok but no boom. And visiting my aunt in modesto, well, that’s really depressing. Lots of vacant retail.
It’s third world. We in the 1% have to compete with each other for hotel rooms at the ritz Carlton while avoiding the working poor or! gasp! the homeless.
D
Lot’s of comments, but I didn’t see todays May inflation adjusted consumer spending mentioned. It was negative vs. April, and April was negative vs. (a robust) March. This means annualized real consumption unlikely to exceed 1.5 to 2% in Q2. And at 70% of GDP, the close to 4% estimates for GDP in Q2? Furgetaboutit! Back to the 2% mas o menos level. The solution according to (the oh so sage and clean cut)
Rob Portman today on CNBC, “cut corporate tax rates to 25% statutory”. With no evidence to support this type of measure, how does this idiocy persist? Why not work with serious countries around the world to conform tax rates and also place severe economic sanctions on the tax haven countries. OMG!! That is sooooo, not Ayn Rand.
Hello Occupy Movement!
Do you realize the Supreme Court just gave you the most valuable gift you could have imagined?
They allowed “free speech” at abortion clinics without any zone protection!
Nothing can stop a small group of you gathering at entrances of banks, stock exchanges and brokerages, and the multi million dollar condo and apartment owners with door men – to talk to all the people going in and coming out of such buildings, to spread your message about taxes, wages, jobs, income inequality, etc. on a one on one basis.
A couple of thousand of you in groups of 4-8 in a few large cities in 4 hour shifts will suffice. Now, will you use free speech against those who are now getting free money from the Federal Reserve and rigged laws by the government (not yet protected specifically by SCOTUS) and exercise your rights to bring your message which they can’t ignore or call the cops on to shut you up?
There is no freedom without free speech, and no free speech without freedom.
“Nothing can stop a…gathering at entrances of banks, stock exchanges and brokerages…”
I’ll bet the Supreme Court will manage to find some legal distinction between those places and abortion clinics.
Absolutely they can find a distinction. Anti abortion grand mom is not a protester, but just someone who wants to talk with those pregnant women about what they are about to do and what alternatives there may be for them instead of having an abortion. It’s just free speech between to women! You, know, girl talk. OMG! But, in front of a military contractor, bank, or other corporate miscreant, you would be a protester and yelling into a bullhorn protesting is not speech but an something that will get you thrown into jail. It was observed by at least one reporter at the scene of the US SUpreme Court steps, that it has its own no protest, no standing around, no nothing area which was completely clear of any people at all. Double standard, hypocrisy and protection of bible thumping busy bodies anyone?
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http://www.cnn.com/2014/06/26/us/supreme-court-free-speech-protests/
“(CNN) — The Supreme Court says a 35-foot no-protest zone around clinics that perform abortions is unconstitutional. Left unsaid in the 30-page ruling issued Thursday in a Massachusetts case was that the court itself has tight restrictions on where those seeking to assert their free speech rights can and cannot go.
And like the case they just decided, the rules at the marble-lined high court have also been the subject of lawsuits.
The grounds outside the building — across the street from the U.S. Capitol — have long been a place for assemblies, rallies, and other “expressive events.”
But exactly just what can be said and where the public can assert its First Amendment rights have long been a source of contention.
A year ago, after losing a federal lawsuit filed by a protester, high court officials issued new rule, clarifying a 60-year-old law blocking any demonstrations on court property, including the marbled plaza that serves as the dramatic gateway to the building itself.
“The term demonstration includes demonstrations, picketing, speechmaking, marching, holding vigils or religious services and all other like forms of conduct that involve the communication or expression of views or grievances, engaged in by one or more persons, the conduct of which is reasonably likely to draw a crowd or onlookers,” says the revised Regulation 7, which was effective June 13, 2013.
“The term does not include casual use by visitors or tourists that is not reasonably likely to attract a crowd or onlookers.”
MyLessThanPrimeBeef : “” China may have to deal with poor, illegal American immigrants soon.””
It seems that China would have no problem exterminating illegal immigrants from anywhere if they felt that circumstances warranted such a response .
bkrasting : “” NYC RE is booming. Brooklyn is going crazy, even Queens is seeing a demand for property. Buildings are going up all over the place.””
District of Criminals is booming , North Dakota is booming , Hollywood is booming , state of Texas is booming and all those other locales where the financial rulers ( whom control the money machine levers and money flow pipes valves ) live or where their cronies live — are booming .
I try to avoid predicting what the stock market will do. I am retired and living off my dividends. My primary focus is to maintain a steady stream of dividends that increase on an annual basis. As long as I can accomplish that, I don’t give a damn about the prices of my stocks as long as they continue to pay an increasing stream of dividends. This drastically changes your outlook on stock market moves. Moreover, it is not stock market moves I care about. I care about the market of the individual stocks I own or want to own.
In this overpriced market, there aren’t a lot of choices to buy, but there are still a few. When the prices drop, and the dividend yield goes up, there will be many more choices. The rest is noise.
Mer Webb : “” I have a masters in Biology and have not had more than a 2%’salary increase in 6 years while my company makes record profits each and every year)””
That is because neither you , your colleagues , the remainder of your company , nor practically anyone else knows how to distribute wealth ( profits ) fairly . Please refer to the http://www.wikipedia article on the ” Bell Curve ” which is also known as the ( Universal Law of the Standard Normal Distribution ) of virtually anything and everything — including money. It is completely mathematicly defined and scientificly derived ( ie. based on real world empricism ). It is an approximately 200 year old discovery . How much longer will it be ignored ?
Banger : “” what I’ve seen is those that have, get more and those who don’t, get less.””
The Western World process of the rich getting richer and the poor getting poorer is rooted in the Holy Bible where the end of the documented root ( also the known beginning of that process in this world ) of the process lies in the verse that says “… for those that have not , even that which they have shall be taken …”. The verse is well known to bible scholars . So that the process has been ongoing for at least 2000 years despite Christ not being against the poor . Do the religiously rich use that verse to justify ripping off people of another religion ?
susan the other : “” the one [ economy ] we’re playing with now at the end of time is dead.””
The economy we are playing with is fundamentally ( morally / ethicly ) flawed . Frequent commenter F. Beard has repeatedly explained the flaw in its super simple essence . Fractional reserve lending perhaps “may” be justified if it is done by government-only banks where any profits would go to a public – not private – account . The government cannot continue forever to justify letting a de facto private Federal Reserve Bank make the decisions , based on root immorality , that results in the financial extermination of citizens of the republic .
Banger : “” most brilliant young people just want money and why not?””
Right on . Money is an exchangeable item of wealth . By exchanging your money for other items of wealth you can raise your standard of living which is after all the name of the game . Mankind is the only being that plays the game of rising standards of living ( ie. accumulating wealth ). Games have rules and penalties for foul play .
To LifelongLib:
That’s the beauty of the Supreme Court ruling.
I have had credulity issues with various official and private data releases for some time now – certainly all of this century.
It was a bad winter and there were other factors. But the jobs numbers were not that bad, which does fit the sort of tough-it-out, short term thinking that bad weather would generate in employers. I agree with Washunate that the politics of when to make some big numbers is always a factor, as is the potential for big speculative bets based on insider info when a release is going to surprise. Also BLS’s and others’ seasonality calculations – which help make that political and speculative room possible. Why else keep producing mush?
But I agree with those anticipating a bounce-back, and would not rule out a decent Q2 or Q3 or even Q4. But by Q2 next year, the subject will be whether or not to hang Bernanke.
that stocks and realestate and equities can rise and the economy bust at the same time should be obvious by now! Wallstreet and mainstreet are not the same . banks paying nearly negative rates on savings already . bonds with an exit tax should be a sign of trap. liquidty string pushing .ecb negative rates, fed allows interest rates to rise and the US interest rates increase on foreign debt payments more of gdp will go to interest , capital is getting desperate for return pention funds are going to go into stocks soon whats that some 19 trillion and watch the market rise. the fed QE is not even a drop in the bucket , they have no more bullets , taxing everthing that moves is not helping . manipulating the economic numbers will lead to a confidence crisis that will cost the US dearly later on. The talk of new currency and or an Electronic currency . brics want a basket , The 99 % will degrade even further as search for funding to maintain social programs squeezes , standard of US lifestyle for most will begin to drop precipitiously and yet the equities and Assets continue to rise , the devide of classes widens so to be more obvious ! Just some observations to mention a few!