max
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By any chance, were these the same type of ass clowns who used to laugh at Peter Schiff's forecasts>
http://www.cnbc.com/id/30111906
http://www.cnbc.com/id/30111906
CNBC: Economists say recovery is coming sooner than expected
- Thread starter max
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LittleLightShining
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That's not quite the way I read the article: Fed sees no economic recovery this year
A few things to consider:
1. After slowing down for a few months, the rate of mortgage defaults is accelerating again.
2. There's a tremendous amount of "shadow inventory" of foreclosed, but unsold houses that banks still own.
3. Any progress towards a recovery will be stymied by increasing oil prices, i.e. we're definitely going to see stagflation.
4. There are big looming state government layoffs, most notably teacher layoffs for the next academic year in states like California.
However:
1. Housing rents are down. This puts more money into renters pockets, which will increase consumer demand, but is not good for the housing market in general.
I don't see how anybody can add up a few good stock market rallies and claim there's a recovery going on.
Here's what I calculate:
Investment was 18% of GDP up until last year. That's way too high. As Ron Paul talks about, it's "malinvestment." It should be around 10%. That's a 9% decrease in GDP right off the bat. Say 50% of that's labor, that's about a 5% increase in unemployment right there.
So I think the unemployment rate at the bubble peak was around 5%. We should expect from the decrease in investment a 10% unemployment rate.
It's not over yet, though. I see a definite "austerity" psychology sinking it. It's not just the economy, it's a historic shift in the way we view consumerism. I view that will be responsible for another 10% decrease in GDP. If you apply the same labor formula (which I admit I don't know if it's right or now), that's another 5%, so we're up to 15% unemployment.
BTW, these unemployment rates don't include "shadow unemployment" like underemployed or people who've just given up. Those rates may be as high as 30% once we're finished.
The "stimulus" plan might inject some money, but it won't be very effective IMO. It will mainly stop mass layoffs in government, which ironically if they did actually happen would spur the economy. I'm almost ready to say that stimulus spending, not even considering the damaging debt effect of it, will actually harm the economy by creating more government intrusion and commodity inflation.
Government spurring commodity inflation is a very real effect. Here's an example. The US military is sucking up all the steel in America to send overseas to wipe out Iraqi and Afghani self-determination. The result is that projects in America that might go forward don't happen because steel is so expensive. It happened in my city where several high rise condo complexes didn't get built because steel is too expensive.
It's not just the military, either. The stimulus program for instance is spending money on putting a bridge between Microsoft's campuses in Redmond WA. Think of the resources and commodities that will be effected by projects of that nature, projects that are unnecessary and inefficient.
Some of these projects will actually inhibit economic growth. For instance stimulus money in my county is being used to fund an unprofitable hospital in an outlying town. So the demand for nurses and doctors goes up. Good for labor, right? No, actually not. The demand for nurses and doctors already outstrips supply, mainly because of the monopolistic special interest AMA and nursing lobbies, but that's another story. Building unnecessary hospitals with government money only increases the cost of medical care for everybody because they add inefficiency to the economics of medical care. The result is more money spent on medical care, a low labor contribution field, less on other stuff to help the economy.
OK, this is bit long winded, but I wanted to point out that there are many reasons to believe that the unemployment rate could hit as high as 15% and just STAY THERE, and not get better.
1. After slowing down for a few months, the rate of mortgage defaults is accelerating again.
2. There's a tremendous amount of "shadow inventory" of foreclosed, but unsold houses that banks still own.
3. Any progress towards a recovery will be stymied by increasing oil prices, i.e. we're definitely going to see stagflation.
4. There are big looming state government layoffs, most notably teacher layoffs for the next academic year in states like California.
However:
1. Housing rents are down. This puts more money into renters pockets, which will increase consumer demand, but is not good for the housing market in general.
I don't see how anybody can add up a few good stock market rallies and claim there's a recovery going on.
Here's what I calculate:
Investment was 18% of GDP up until last year. That's way too high. As Ron Paul talks about, it's "malinvestment." It should be around 10%. That's a 9% decrease in GDP right off the bat. Say 50% of that's labor, that's about a 5% increase in unemployment right there.
So I think the unemployment rate at the bubble peak was around 5%. We should expect from the decrease in investment a 10% unemployment rate.
It's not over yet, though. I see a definite "austerity" psychology sinking it. It's not just the economy, it's a historic shift in the way we view consumerism. I view that will be responsible for another 10% decrease in GDP. If you apply the same labor formula (which I admit I don't know if it's right or now), that's another 5%, so we're up to 15% unemployment.
BTW, these unemployment rates don't include "shadow unemployment" like underemployed or people who've just given up. Those rates may be as high as 30% once we're finished.
The "stimulus" plan might inject some money, but it won't be very effective IMO. It will mainly stop mass layoffs in government, which ironically if they did actually happen would spur the economy. I'm almost ready to say that stimulus spending, not even considering the damaging debt effect of it, will actually harm the economy by creating more government intrusion and commodity inflation.
Government spurring commodity inflation is a very real effect. Here's an example. The US military is sucking up all the steel in America to send overseas to wipe out Iraqi and Afghani self-determination. The result is that projects in America that might go forward don't happen because steel is so expensive. It happened in my city where several high rise condo complexes didn't get built because steel is too expensive.
It's not just the military, either. The stimulus program for instance is spending money on putting a bridge between Microsoft's campuses in Redmond WA. Think of the resources and commodities that will be effected by projects of that nature, projects that are unnecessary and inefficient.
Some of these projects will actually inhibit economic growth. For instance stimulus money in my county is being used to fund an unprofitable hospital in an outlying town. So the demand for nurses and doctors goes up. Good for labor, right? No, actually not. The demand for nurses and doctors already outstrips supply, mainly because of the monopolistic special interest AMA and nursing lobbies, but that's another story. Building unnecessary hospitals with government money only increases the cost of medical care for everybody because they add inefficiency to the economics of medical care. The result is more money spent on medical care, a low labor contribution field, less on other stuff to help the economy.
OK, this is bit long winded, but I wanted to point out that there are many reasons to believe that the unemployment rate could hit as high as 15% and just STAY THERE, and not get better.
Last edited:
HOLLYWOOD
Member
- Joined
- Nov 29, 2007
- Messages
- 22,314
These A$$HATS don't get it in history...
The country is not only broke but in massive debt... massive entitlements, massive war machine, massive spending... on & on
They don't understand FRNs are worthless...
They don't understand there's hardly any savings...
They don't understand the inflation of the past 30 years...
They don't understand the size of government growth, expansion, cost...
They don't understand the private producing part of the economy is a tickle compared to the past...
They don't understand the ABYSS of Hidden DEBT by all the banks...
These economic historians are fools and they don't get it!
Bernake et al are the biggest LIARS of all time!
The country is not only broke but in massive debt... massive entitlements, massive war machine, massive spending... on & on
They don't understand FRNs are worthless...
They don't understand there's hardly any savings...
They don't understand the inflation of the past 30 years...
They don't understand the size of government growth, expansion, cost...
They don't understand the private producing part of the economy is a tickle compared to the past...
They don't understand the ABYSS of Hidden DEBT by all the banks...
These economic historians are fools and they don't get it!
Bernake et al are the biggest LIARS of all time!
talent scout
Member
- Joined
- Apr 6, 2009
- Messages
- 92
Cheering Hollywood
The masses do not understand this scam any better than the people who are scammed by the Nigerians.
Things must be going bad in Nigeria these days, I am getting a new scam offer almost daily now.
In fact if I add together all I have won in the lotto's I never entered, I would have all the money in the world, even more than the world has altogether
The masses do not understand this scam any better than the people who are scammed by the Nigerians.
Things must be going bad in Nigeria these days, I am getting a new scam offer almost daily now.
In fact if I add together all I have won in the lotto's I never entered, I would have all the money in the world, even more than the world has altogether
slacker921
Member
- Joined
- Dec 29, 2007
- Messages
- 3,143
oh man, their orgy of back slapping and knob bobbing went on ALL DAY!!!!
Anytime someone mentioned the slightest bit of grey area they fell
back on "BUT HOME SALES ARE UP!!!!" Or "WELLS FARGO MADE MONEY!!!!"...
kudlow was the biggest chearleader!
Shit if geihtner walked in, he would have fallen to his knees and waxed his
helmet right there!
Anytime someone mentioned the slightest bit of grey area they fell
back on "BUT HOME SALES ARE UP!!!!" Or "WELLS FARGO MADE MONEY!!!!"...
kudlow was the biggest chearleader!
Shit if geihtner walked in, he would have fallen to his knees and waxed his
helmet right there!
Arch,
They have lied to us so long I am posting this no matter what,
"The U.S. recession is likely to persist for some time longer and the recovery is likely to be subdued, as a result of ongoing problems in credit markets, Gary Stern, president of the Minneapolis Federal Reserve Bank, said Thursday.
"Given the breadth of the downturn, it is difficult at this stage to identify with conviction the engine, or engines, of expansion that will propel the recovery of the national economy," Stern said in prepared remarks to be delivered to the South Dakota Economic Summit in Sioux Falls, S.D.
Nevertheless, steps taken by the U.S. government and its counterparts around the world suggest a "a resumption of growth should not be too far off" and can be expected from mid-2010 onwards, he said.
Conditions in credit markets have improved but "in general appreciable strains persist," Stern said.
Yet interest rates are low and financial conditions are improving, albeit unevenly, while the increase in government spending should add to demand, he said. Inventories are falling and there are signs that consumer spending is in the process of stabilizing, he said.
With regards to prices, markets seem to be torn between worries about short-term deflation caused by the economic and financial declines, and a medium-term inflationary spike as a result of the vast amounts of money pumped into the system by the Fed.
Stern, who isn't currently a voting member of the interest rate-setting Federal Open Market Committee, downplayed both concerns, saying a resumption of growth should take care of the deflation threat while the Fed will have "ample time to withdraw excess liquidity."
The official, set to retire this summer, also spoke about financial institutions that are considered too big to fail, a theme that he's pursued for a number of years.
Simply making banks smaller, or relying on better oversight, won't be sufficient unless the incentives for bondholders are realigned, Stern said.
In the lead-up to this crisis, creditors of large, complex financial institutions "expected protection if failure threatened" and had little incentive to be concerned, he said. That encouraged banks to take huge risks, he said.
"Policymakers, fearing massive, negative spillover effects to other institutions, financial markets more generally, and the economy itself, validated creditor expectations by providing protection," Stern said.
"I am convinced that just as incentives were at the heart of the (too big to fail) problem, they necessarily must be at the heart of the solution," Stern said. "Proposals which purport to address (too big to fail) but which fail to correct incentives are unlikely to succeed."
I would like a bong of what CNBC is smoking, and I have never smoked a bong. I might have too before this is all over.
They have lied to us so long I am posting this no matter what,
"The U.S. recession is likely to persist for some time longer and the recovery is likely to be subdued, as a result of ongoing problems in credit markets, Gary Stern, president of the Minneapolis Federal Reserve Bank, said Thursday.
"Given the breadth of the downturn, it is difficult at this stage to identify with conviction the engine, or engines, of expansion that will propel the recovery of the national economy," Stern said in prepared remarks to be delivered to the South Dakota Economic Summit in Sioux Falls, S.D.
Nevertheless, steps taken by the U.S. government and its counterparts around the world suggest a "a resumption of growth should not be too far off" and can be expected from mid-2010 onwards, he said.
Conditions in credit markets have improved but "in general appreciable strains persist," Stern said.
Yet interest rates are low and financial conditions are improving, albeit unevenly, while the increase in government spending should add to demand, he said. Inventories are falling and there are signs that consumer spending is in the process of stabilizing, he said.
With regards to prices, markets seem to be torn between worries about short-term deflation caused by the economic and financial declines, and a medium-term inflationary spike as a result of the vast amounts of money pumped into the system by the Fed.
Stern, who isn't currently a voting member of the interest rate-setting Federal Open Market Committee, downplayed both concerns, saying a resumption of growth should take care of the deflation threat while the Fed will have "ample time to withdraw excess liquidity."
The official, set to retire this summer, also spoke about financial institutions that are considered too big to fail, a theme that he's pursued for a number of years.
Simply making banks smaller, or relying on better oversight, won't be sufficient unless the incentives for bondholders are realigned, Stern said.
In the lead-up to this crisis, creditors of large, complex financial institutions "expected protection if failure threatened" and had little incentive to be concerned, he said. That encouraged banks to take huge risks, he said.
"Policymakers, fearing massive, negative spillover effects to other institutions, financial markets more generally, and the economy itself, validated creditor expectations by providing protection," Stern said.
"I am convinced that just as incentives were at the heart of the (too big to fail) problem, they necessarily must be at the heart of the solution," Stern said. "Proposals which purport to address (too big to fail) but which fail to correct incentives are unlikely to succeed."
I would like a bong of what CNBC is smoking, and I have never smoked a bong. I might have too before this is all over.
ya, Sarge, puff puff pass, we'll all be on the pipe trying to figure out what they're thinking!!! LOL
Like this... they mentioned something to the effect of 'customer deposits are up, injecting liquidity into the banks' uhhh, thats not their money, thats a liability. And if they do a multiplier (fractional reserve), then what? Inflate the dollar till it collapses?!
Like this... they mentioned something to the effect of 'customer deposits are up, injecting liquidity into the banks' uhhh, thats not their money, thats a liability. And if they do a multiplier (fractional reserve), then what? Inflate the dollar till it collapses?!
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