What you are about to see is major confirmation that a new economic downturn has already begun. Last Friday, the government released the worst jobs report in six years, and that has a lot of people really freaked out. But when you really start digging into those numbers, you quickly find that things are even worse than most analysts are suggesting. In particular, the number of temporary jobs in the United States has started to decline significantly after peaking last December. Why this is so important is because the number of temporary jobs started to decline precipitously right before the last two recessions as well.
You see, when economic conditions start to change, temporary workers are often affected before anyone else is. Temporary workers are easier to hire than other types of workers, and they are also easier to fire. Continue reading »
Something has just happened that has signaled a recession every single time that it has occurred since World War I. 16 times since 1919 there have been at least 8 month-over-month declines in industrial production during the preceding 12 month period, and in each of those 16 instances the U.S. economy has plunged into recession. Now that it has happened again, will the U.S. economy beat the odds and avoid a major economic downturn? I certainly wouldn’t count on it. As I have written about repeatedly, there are a whole host of other numbers that are screaming that a new recession is here, and global financial markets are crumbling. It would take a miracle of epic proportions to pull us out of this tailspin, and yet there are many people out there that are absolutely convinced that it will happen. Continue reading »
Earlier today, Goldman’s global macro strategist team led by Noah Weisberger released a report titled “Markets do not “Take it Easy” to start the year”, which had one very disturbing slide, i.e., “Exhibit 8.” – disturbing, because it showed that according to Goldman’s Current Activity Indicator, the US was effectively in recession; certainly disturbing enough for us to immediately tweet it with just one comment: “Oops”:
Oops from GS pic.twitter.com/jz0LCculCQ
— zerohedge (@zerohedge) January 20, 2016
In case it is not readily visible, here it is again:
Exhibit 8: Our market-based US growth risk factor is at post GFC lows
This was the accompanying Goldman commentary:
This is the “Greatest Depression”.
– Chart Of The Day: Is The US Already In A Recession? (ZeroHedge, April 2, 2015):
A month ago, when looking at the latest Factory Orders numbers, we noticed something very disturbing: the annual rate of increase, or rather decrease, in factory orders dropped to -2.3%. The last two time this happened was in 2008, just after the failure of Lehman, and in 2001, just as the US was again entering a recession. In fact, if there is one reliable, false-negative proof indicator of key recessionary inflection points in the US economy, it is the annual change in Factory Orders. Continue reading »
– Russia Warns It May Enter Recession As Soon As This Quarter (ZeroHedge, April 21, 2014):
While hardly coming as a surprise to anyone, Russia is getting increasingly more vocal about the near certainty that the country is about to slam headfirst into a technical (at first), and then outright recession.
- RUSSIA MAY ENTER `TECHNICAL RECESSION’ IN 2Q, ORESHKIN SAYS
- RUSSIAN 2014 CAPITAL OUTFLOWS MAY REACH $70B-$80B: ORESHKIN
- RUSSIAN 2014 CURRENT-ACCOUNT SURPLUS MAY EXCEED $50B: ORESHKIN
- RUSSIAN GDP MAY CONTRACT IN 2Q OR 3Q VS YR EARLIER: ORESHKIN
Bloomberg reports that Russia’s economy may halt or contract in 2Q or 3Q, citing Maxim Oreshkin, head of Finance Ministry’s strategic forecasting dept.
“It seems that we’ll get negative growth again in the second quarter compared with the previous quarter.” Oreshkin says
– What If There’s A Recession in 2014? (Gonzalo Lira, Dec 16, 2013):
If policymakers were gunfighters, they’d be out of bullets: They have run out of effective policy tools to improve the economy.
So the question is simple: If there is a recession in 2014, and policymakers are out of bullets, how will it play out across the American economy?
Recently, Deutsche Bank’s Jim Reid very astutely pointed out that the current “expansion” of the U.S. economy is on its fifth year—the seventh longest in history.
We are due for a recession.
Tags: Banking, Barack Obama, Ben Bernanke, Bush administration, Collapse, Fed, Federal Reserve, Global News, Government, Henry Paulson, Inflation, Obama administration, Politics, Quantitative Easing, Recession, Timothy Geithner, U.S.
– UK heads for triple dip as GDP contracts 0.3pc (Telegraph, Jan 25, 2013):
The UK economy shrank by 0.3pc in the final three months of last year, raising the prospect of a triple dip recession, as Britain’s manufacturers suffered their worst year since the financial crisis.
The official figures were the fourth quarter of negative growth in the last five and mean that the UK flatlined for last year as a whole – posting zero growth.
The economy is smaller than it was in September 2011 and still 3.3pc below its pre-crisis peak.
Making matters worse, there was scant evidence in the data that the economy is rebalancing from consumption to manufacturing. Output by Britain’s factories fell by 1.5pc in the quarter and by 1.8pc for the year as a whole – the first annual decline since 2009.
Howard Archer, economist at IHS Global Insight, described the situation as “dire” and added: “We believe the economy is essentially flat at the moment. We suspect that GDP will not return to the level seen in the first quarter of 2008 until the first half of 2015 – a gap of seven years.”
– Up To 3.5% Of US 2013 GDP Could Evaporate Due To Enacted Tax Hikes (ZeroHedge, Jan 11, 2013):
When it comes to the impact of the just enacted 2013 tax hikes (payroll tax cut expiration affecting everyone together with the tax hike on those making over $400K), economists are in broad agreement on one thing: the first half of 2013 will be impacted by roughly a 1.0%-1.5% drop in GDP. However, a big question emerges when attempting to quantify the adverse impact on US growth as the year progresses past June 30. Most strategists and economists ignore this issue, and instead chose to believe that all shall be well as by July, the US population will be habituated to getting a smaller paycheck and general consuming behavior will no longer be impacted relative to a previous baseline.
– 21 Signs That The Global Economic Crisis Is About To Go To A Whole New Level (Economic Collapse, Oct 14, 2012):
The global debt crisis has reached a dangerous new phase. Unfortunately, most Americans are not taking notice of it yet because most of the action is taking place overseas, and because U.S. financial markets are riding high. But just because the global economic crisis is unfolding at the pace of a “slow-motion train wreck” right now does not mean that it isn’t incredibly dangerous. As I have written about previously, the economic collapse is not going to be a single event. Yes, there will be days when the Dow drops by more than 500 points. Yes, there will be days when the reporters on CNBC appear to be hyperventilating. But mostly there will be days of quiet despair as the global economic system slides even further toward oblivion. And right now things are clearly getting worse. Things in Greece are much worse than they were six months ago. Things in Spain are much worse than they were six months ago. The same thing could be said for Italy, France, Japan, Argentina and a whole bunch of other nations. The entire global economy is slowing down, and we are entering a time period that is going to be incredibly painful for everyone. At the moment, the U.S. is still experiencing a “sugar high” from unprecedented fiscal and monetary stimulus, but when that “sugar high” wears off the hangover will be excruciating. Reckless borrowing, spending and money printing has bought us a brief period of “economic stability”, but our foolish financial decisions will also make our eventual collapse far worse than it might have been. So don’t think for a second that the U.S. will somehow escape the coming global economic crisis. The truth is that before this is all over we will be seen as one of the primary causes of the crisis.
The following are 21 signs that the global economic crisis is about to go to a whole new level…. Continue reading »
Tags: Angela Merkel, Argentina, Banking, Ben Bernanke, Dollar, Economy, EU, Euro, Europe, Fed, Federal Reserve, France, GDP, Germany, Global News, Government, Greece, IMF, JPMorgan, Politics, Quantitative Easing, Recession, Society, Spain, Switzerland, U.S., Unemployment, Wells Fargo
– French Central Bank Admits the Obvious: France Back in Recession (Global Economic Analysis, Aug 8, 2012):
For those who who view matters on a practical basis, France has been in recession the entire year. For those who need to see two quarters of negative growth first, France slides back in recession.
France is headed back into recession for the second time in just over three years, the country’s central bank warned on Wednesday.
This is the ‘Greatest Depression’!
– As Europe Goes (Deep In Recession), So Does Half The World’s Trade (ZeroHedge, Jan. 30, 2012):
Following the Fed’s somewhat downbeat perspective on growth, confidence in investors’ minds that the US can decouple has been temporarily jilted back to reality. It is of course no surprise and as the World Bank points out half of the world’s approximately $15 trillion trade in goods and services involves Europe. So the next time some talking head uses the word decoupling (ignoring 8.5 sigma Dallas Fed prints for the statistical folly that they are), perhaps pointing them to the facts of explicit (US-Europe) and implicit (Europe-Asia-US) trade flow impact of a deepening European recession/depression will reign in their exuberance.
From The World Bank: Golden Growth
An increasingly vigorous flow of goods, services, and finance over the last five decades has fueled European growth. Europe’s economies are the most open in the world. Before the global crisis of 2008–09, half of the world’s approximately $15 trillion trade in goods and services involved Europe (figure 2). Two-thirds of it was among the 45 countries discussed in this report. Financial flows have been equally vigorous. In 2007, for example, annual FDI in Europe exceeded $1 trillion. Big and growing trade and financial links facilitated by the single market form the core of the European convergence machine.
And I am amused that so view people call it a DEPRESSION.
(Not only) Real unemployment numbers are at depression levels.
This is the Greatest Depression.
– US In Recession Right Here, Right Now (Global Economic Analysis, August 29, 2011):
I am amused by those who think a US recession will come within a year. Even more amusing are those who think a recession will not come at all.
The US is in a recession now. I am not the only one who thinks so.
Last Friday, I received an email from Rick Davis at Consumer Metrics, complete with an Excel spreadsheet that shows that had the GDP deflator been based on the consumer price index (CPI) rather than the BEA’s measure of price inflation, the US would already be in the second quarter of contraction.
My friend Tim Wallace noted Davis’ explanation would be consistent with Petroleum Distillates Demand Shows “Definite Economic Downturn Starting April/May 2011”.
Thus Wallace was not surprised at all.
In the meantime, I received a set of emails from Doug Short. He had already charted what I was about to graph. Let’s take a look.
The Deflator Makes Big a Difference
Please consider Will the “Real” GDP Please Stand Up? by Doug Short.
How do you get from Nominal GDP to Real GDP? You subtract inflation. The Bureau of Economic Analysis (BEA) uses its own GDP deflator for this purpose, which is somewhat different from the BEA’s deflator for Personal Consumption Expenditures and quite a bit different from the better-known Bureau of Labor Statistics’ inflation gauge, the Consumer Price Index.
I’ve updated my charts showing quarterly Real GDP since 1960 with the official and three variant adjustment techniques. The first chart is the official series as calculated by the BEA with the GDP deflator. The second starts with nominal GDP and adjusts using the PCE Deflator, which is also a product of the BEA. The third adjusts nominal GDP with the BLS (Bureau of Labor Statistics) Consumer Price Index for Urban Consumers (CPI-U, or as I prefer, just CPI). The forth chart, a recent addition prompted by several requests, adjusts nominal GDP using the Alternate CPI published by economist John Williams at shadowstats.com
The following charts are courtesy of from Doug Short. Continue reading »
- Stone McCarthy: “You Don’t Get Three Months Of Negative Empire Survey Results Unless You Are In A Recession” (ZeroHedge, Aug 15, 2011):
Forgive us while we take another quick and gratuitous look at today’s disastrous Empire Index, but we wanted to bring a very important point highlighted by Stone McCarthy: “You usually don’t get three straight months of negative results unless you are in a recession (Note: NY Fed historical data only started in July 2001).” SMRA continues: “If that’s not bad enough for you, the forward-looking new orders index fell to -7.8 in August, after posting -5.5 in July and -3.6 in June. Not only is the latest reading a new low in the recent string of negative results, it’s also the third straight month of contraction.” In other words when the NBER finally sits down to look at the disaster that the US economy has been over the past several years, the start of the next re-recession will likely be given as June 2011, oddly enough in a year when every sell side bank predicted that the economy would grow by at least 3.5% by Q4. As for what to expect next, look for the Philly Fed to be the next major leading indicator disappointment, which based on the NY Fed result, will miss Wall Street expectations of a +2.0% increase yet once gain, and which SMRA believes will drop from 3.2 in July to -3.4 in August.
– Recessionspotting: “You Are Here” (ZeroHedge, Aug 13, 2011):
Now that even the likes of Joe LaSagna are starting to throw out the R-word about as casually as they did a 4% 2011 GDP target as recently as 2 months ago, it is becoming increasingly clear that the market is pricing in the fact that post a few more historical BEA revisions, the prior two real GDP reads will end up having been, shockingly enough, negative, i.e., your garden variety recession. So where does that put us on a market performance continuum, for those wishing to extrapolate how much further stocks and, yes, bonds (because credit is and always has been a far better indicator of objective market reality) have to drop before we hit the proverbial floor. Well, according to Morgan Stanley, quite a bit lower: “Despite the recent decline in risk assets, we do not believe that recession is in the price. Exhibits 3 and 4 show the typical declines in developed market risk assets in recession. Compared to corrections in past recessions, S&P prices and corporate credit spreads would have more to go, though spreads are starting from a higher level than typically precedes recessions.” What is startling is that should central planners lose all control (and with central bank intervention upon intervention, one can argue that should all artificial props be removed, the market really ought to plunge in a Great Depression-style tailspin), the drop from the April 29 peak to the bottom will be roughly 4 times greater… which means the S&P would hit the proverbial “S&P 400” which is the long-term target of the likes of some more popular skeptics such as Albert Edwards and Russell Napier. As for credit: watch out below.
And completing the pain, again from Morgan Stanley:
This is the ‘Greatest Depression’ and the worst is yet to come!
– 10 signs the double-dip recession has begun (MSNBC July 31, 2011):
Friday’s news on GDP shows the double dip has arrived – an expansion of only 1.3 percent and consumer spending up 0.1 percent in the second quarter. Astonishingly low by any account. The debt ceiling trouble and lack of a longer term resolution to the deficit will make it worse.
The U.S. has entered a second recession. It may not be as bad as the first. Economists say that the Great Recession began in December 2007 and lasted until July 2009. That may be the way that the economy was seen through the eyes of experts, but many Americans do not believe that the 2008-2009 downturn ever ended. A Gallup poll released in April found that 29 percent of those queried thought the economy was in a “depression” and 26 percent said that the original recession had persisted into 2011.
It is any wonder that many Americans believe that the economic downturn is still in progress? Home prices have fallen to 2002 levels. Values have dropped nearly 50 percent in parts of Florida, California, Nevada and Arizona. Property values are also down that much in parts of troubled big cities like Detroit. Estimates are that as many as 11 million homes have underwater mortgages. Banks have inventories of as many as 2 million foreclosed homes which have not even been released to the market. Home prices could fall another 10 percent if current trends persist.
Now there is NOTHING left and all those taxpayer looting bailouts and the useless stimulus package made things much worse.
This is the Greatest Depression and the greatest financial collapse in world history is near.
YouTube Added: 21.01.2008
When a country embarks on deficit financing (Obamanomics) and inflationism (Quantitative easing) you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.
– Ron Paul
“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.”
– Ron Paul
Nouriel Roubini, the economist who correctly predicted the global financial crisis, warned on Thursday that some advanced economies could experience a double dip recession if the price of oil climbs to $140 a barrel.
“It the turmoil in the Middle East becomes much worse and the price of oil reaches $140-150 a barrel then the risk of a double dip recession increases,” Roubini said in a keynote speech here at MIPIM, the world’s annual gathering of real estate professionals.
World oil prices fell back Thursday after spiking sharply higher a day earlier, with New York’s main contract, light sweet crude for delivery in April, dropped 32 cents to $104.06 a barrel. Brent North Sea crude for April shed 51 cents to $115.43.
Several analysts have forecast oil could again reach the record $147 it set July 2008 before the onset of the global financial crisis if unrest spreads through the Middle East.
On Friday, free and efficient market champion Ted Kaufman, previously known for his stern crusade to rid the world of the HFT scourge, and all other market irregularities which unfortunately will stay with us until the next major market crash (and until the disbanding of the SEC following the terminal realization of its corrupt and utter worthlessness), held a hearing on the impact of the TARP on financial stability, no longer in his former position as a senator, but as Chairman of the Congressional TARP oversight panel. Witness included Simon Johnson, Joseph Stiglitz, Allan Meltzer, William Nelson (Deputy Director of Monetary Affairs, Federal Reserve), Damon Silvers (AFL-CIO Associate General Counsel), and others.
In typical Kaufman fashion, this no-nonsense hearing was one of the most informative and expository of all Wall Street evils to ever take place on the Hill. Which of course is why it received almost no coverage in the media. Below we present a full transcript of the entire hearing, together with select highlights.
The insights proffered by the panelists and the witnesses, while nothing new to those who have carefully followed the generational theft that has been occurring for two and a half years in plain view of everyone and shows no signs of stopping, are truly a MUST READ for virtually every citizen of America and the world: this transcript explains in great detail what absolute crime is, and why it will likely forever go unpunished.
Key highlights from the transcript:
Tags: AIG, Bank of America, Bank of England, Barack Obama, Bush administration, Citigroup, Congress, Debt, FDIC, Fed, Federal Reserve, Freddie Mac, George Bush, Global News, Goldman Sachs, Government, Obama administration, Politics, Quantitative Easing, Real Estate, Recession, Society, TARP, Taxpayers, Ted Kaufman, U.S., Unemployment, Warren Buffett, Wells Fargo
Even better off is Greenland:
At least Iceland didn’t bailout the banksters:
Whereas Ireland is completely doomed:
The Anglo Irish Bank losses are the worst in the entire world and the bailout is an unprecedented looting of the Irish taxpayer.
Decision to force bondholders to pay for banking system’s collapse appears to pay off as economy grows 1.2% in third quarter
Iceland’s decision two years ago to force bondholders to pay for the banking system’s collapse appeared to pay off after official figures showed the country exited recession in the third quarter.
The Icelandic economy, which contracted for seven consecutive quarters until the summer, grew by 1.2% in the three months to the end of September.
Iceland famously agreed in a referendum to reject a scheme to repay most of its debts that were once worth 11 times its total national income.
In contrast to Ireland, Iceland’s taxpayers refused to foot the bill for the debts accumulated by the banking sector. Bondholders were told to accept dramatic reductions in the value of repayments on bank debt after the sector borrowed beyond its means to fund ambitious investments abroad.
The return to growth is likely to put pressure on Irish politicians to explain why Dublin rejected a more radical restructuring of its debts and a departure from the eurozone.
Iceland’s currency has fallen by around a quarter, helping its exports.
Just that there never was a defense. This entire financial crisis has been engineered.
This will also not be a double-dip recession, but the Greatest Depression ever.
The United States, Japan and large parts of Europe have exhausted their policy arsenal, leaving them defenceless against a double-dip recession as recovery slows to ‘stall speed’.
Nouriel Roubini said the US growth rate was likely to fall below 1pc in the second half of the year Photo: BLOOMBERG
“The US has run out of bullets,” said Nouriel Roubini, professor at New York University, and one of a caste of luminaries with grim forecasts at the annual Ambrosetti conference on Lake Como.
“More quantitative easing (bond purchases) by the Federal Reserve is not going to make any difference. Treasury yields are already down to 2.5pc yet credit spreads are widening again. Monetary policy can boost liquidity but it can’t deal with solvency problems,” he told Europe’s policy elite.
Dr Roubini said the US growth rate was likely to fall below 1pc in the second half of the year, despite the biggest stimulus in history: a cut in interest rates from 5pc to zero, a budget deficit of 10pc of GDP, and $3 trillion to shore up the financial system.
The anaemic pace compares with rates of 4pc-6pc at this stage of recovery in normal post-war recoveries.
The fake “recovery” was nice while it lasted, says famous apocalyptic forecaster Gerald Celente, founder of the Trends Research Institute. But now the fun’s over, and we’re headed for what Celente describes as the “Greatest Depression.”
Specifically, the always startling Celente says the country is headed for rising unemployment, poverty, and violent class warfare as the government efforts to keep the economy going begin to fail.
The crux of the problem, Celente argues, is that the middle class has been wiped out. America used to be a land of opportunity for all, where hard-working people could build their own small businesses in their own communities and live prosperous and fulfilling lives. But now a collusion of state and corporate interests that Celente describes as “fascism” have conspired to help only the biggest companies and the richest Americans. This has put a shocking amount of the country’s wealth in the hands of a privileged few and left the rest of the country to subsist on chicken-feed wages and low job satisfaction as Wal-Mart “associates” — or worse.
Highly recommended reading.
The Greatest Depression is here.
When Fed Chairman Ben Bernanke admits to seeing an “unusually uncertain” economy ahead, it’s pretty terrifying to imagine what he’s really thinking. What John Williams envisions-and he’s by no means looking to the far horizon-is a systemic collapse, a hyperinflationary great depression and the cessation of normal commerce. Despite that bleak outlook, however, when the economist and editor of ShadowStats.com sat down for this exclusive Energy Report interview, he also had some good news.
The Energy Report: A few months back, John, you said, “if you strangle liquidity you always contract an economy and deliberately or not, liquidity is being strangled, resulting in sharp declines in consumer credit, commercial and industrial loans.” Does this mean it would spur more economic growth if banks actually started lending?
John Williams: It sure wouldn’t hurt. We’re still seeing contractions in liquidity, and that’s adjusted for inflation. In real terms, M3 money supply is down almost 8% year-over-year. It’s the sharpest fall in the post -World War II era. It’s not so much the depth of the decline in the liquidity or the duration, but the fact that the liquidity turns negative year-over-year that signals the economy turning down.
We had the signal in December of 2009 indicating intensification of the downturn, in this case, within six to nine months. We’re in that timeframe now and see softening numbers. People are talking about a weaker economy. Even Mr. Bernanke has described the economy as “unusually uncertain” in terms of its outlook. Wording like that from the Fed is a pretty good indication that something’s afoot. Continue reading »
Tags: Bankruptcy, Barack Obama, Depression, Dollar, Economy, Fed, Federal Reserve, Government, Great Depression, Healthcare, Hyperinflation, Inflation, John Williams, Medicare, Obama administration, Politics, Preparedness, Recession, Social Security, Stock Market, U.S., Unemployment, Weimar Republic
There is no recovery! This is the Greatest Depression.
• American firms shed 131,000 jobs in July
• UK thinktank warns British ‘depression’ will last until 2012
Employers in the US shed twice as many jobs as expected in July, adding to fears that the recovery in the world’s largest economy will not see a revival in employment.
The dismal US job figures came as the National Institute of Economic and Social Research predicted a protracted depression for the UK economy.
Across the Atlantic talk of a double-dip recession was revived when the government revealed 131,000 jobs were lost last month. That dwarfed forecasts for a fall of 65,000. June’s drop was also revised to a far steeper 221,000 from 125,000. Continue reading »
Chris Etherington, chief executive of wholesaler P&H, said: “I think this could be the beginning of the double-dip recession. This is really scary stuff.”
Again: This is the Greatest Depression! Prepare yourself now.
The cost of food is likely to jump by up to 10 per cent before Christmas after dry weather drastically reduced the amount of winter feed that farmers could harvest, experts said.
The price of milk, cheese, chicken, beef and pork and associated products are all expected to rise because the industry has been hit by soaring animal feed prices, a shortage of silage and poor harvests.
Food inflation is closely linked to overall inflation and some in the industry have warned it could push the economy towards a “double-dip” recession.
BOCM Pauls, Britain’s biggest animal feed supplier, has reported a 20 per cent increase in the price of raw material feed on last year
The cost of wheat used as animal feed has also jumped by 30 per cent.
The company warned that the price at which it sells feed to dairy, poultry, beef and pig farmers would have to increase by the same amount over the next three months, trade magazine The Grocer said.
It is possible that such a margin could be passed on to consumers, however, it is unlikely to be passed on in full. Instead, prices are likely to go up while producers’ and retailers’ profit margins are also squeezed.
The National Farmers’ Union said the dry weather had added to its members’ problems by slashing the yields of silage for winter feed by up to 50 per cent.
Food producers are already suffering from the high cost of common ingredients such as palm oil, cocoa and soya oil, which have risen by 39 per cent, 23 per cent and 14 per cent respectively since last year, according to Mintec figures.
Six successive quarters of negative economic growth from spring 2008 until autumn 2009 were the toughest for the economy since the Great Depression of the 1930s
The deepest recession in Britain’s post-war history was even more severe than previously feared, the government said today.
Fresh information collected by the Office for National Statistics showed that the peak to trough decline in output was 6.4% of gross domestic product rather than the original 6.2% estimate.
The new figures confirmed that the six successive quarters of negative growth from spring 2008 until autumn 2009 were the toughest for the economy since the Great Depression of the 1930s, harsher even than the slump of the early 1980s. Continue reading »
This is the Greatest Depression.
The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation.
“The economy is still in the gravitational pull of the Great Recession,” said Robert Reich, former US labour secretary. “All the booster rockets for getting us beyond it are failing.”
“Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing,” he said.
California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit.
Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. “It is getting worse every single day,” said state comptroller Daniel Hynes. “We are not paying bills for absolutely essential services. That is obscene.”
Roughly a million Americans have dropped out of the jobs market altogether over the past two months. That is the only reason why the headline unemployment rate is not exploding to a post-war high.
Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP.
The share of the US working-age population with jobs in June actually fell from 58.7pc to 58.5pc. This is the real stress indicator. The ratio was 63pc three years ago. Eight million jobs have been lost.
The average time needed to find a job has risen to a record 35.2 weeks. Nothing like this has been seen before in the post-war era. Jeff Weninger, of Harris Private Bank, said this compares with a peak of 21.2 weeks in the Volcker recession of the early 1980s.
“Legions of individuals have been left with stale skills, and little prospect of finding meaningful work, and benefits that are being exhausted. By our math the crop of people who are unemployed but not receiving a check amounts to 9.2m.”
Republicans on Capitol Hill are filibustering a bill to extend the dole for up to 1.2m jobless facing an imminent cut-off. Dean Heller from Vermont called them “hobos”. This really is starting to feel like 1932.
Washington’s fiscal stimulus is draining away. It peaked in the first quarter, yet even then the economy eked out a growth rate of just 2.7pc. This compares with 5.1pc, 9.3pc, 8.1pc and 8.5pc in the four quarters coming off recession in the early 1980s.
The housing market is already crumbling as government props are pulled away. The expiry of homebuyers’ tax credit led to a 30pc fall in the number of buyers signing contracts in May. “It is cataclysmic,” said David Bloom from HSBC. Continue reading »
More green shoots and strong recovery signs:
This is the Greatest Depression.
(CNN Money) — The recession killed off 7.9 million jobs. It’s increasingly likely that many will never come back.
The government jobs report issued Friday shows that businesses have slowed their pace of hiring to a relative trickle.
“The job losses during the Great Recession were so off the chart, that even though we’ve gained about 600,000 private sector jobs back, we’ve got nearly 8 million jobs to go,” said Lakshman Achuthan, managing director of Economic Cycle Research Institute.
Excluding temporary Census workers, the economy has added fewer than 100,000 jobs a month this year — a much faster and stronger jobs recovery than occurred following the last two recessions in 2001 and 1991. Continue reading »
Compared to Wall Street the US government and the Fed nuked the economy, the dollar and any bright future that the people in the US might have had. The people will experience the fallout very soon.
The ‘Greatest Depression’.
Cynthia McKinney is spot-on :
(This guest post comes from Tavakoli Structured Finance)
If a high-on-crack driver crashed his speeding rental car into your house and killed your spouse, you would be outraged if law enforcers took bribes and gave the driver a pass on a blood test. If the judge then merely fined the killer and ordered you to pay it, you would appeal, wondering what happened to justice. If the government then handed the crack-driver keys to a bigger rental car and presented you with the rental bill, you would certainly protest.
How is it, then, that you have remained largely silent in the face of the same sort of behavior by Wall Street and Washington? Bonus-seeking bankers careened off the right path and ran Ponzi schemes that nearly ruined our economy. Bureaucrats and elected officials bailed them out without demanding consequences. Bankers are revving their engines again.
Bankers Get Bonuses, the USA Gets the Great Recession
Taxpayers are asked to believe that over-borrowing by U.S. consumers created a global financial crisis. This myth aids and abets Wall Street. The economy was nearly destroyed because banks borrowed massively, and they borrowed many multiples more than they could afford. Wall Street pumped the Fed’s cheap money through financial meth labs, and deceptive financial vehicles ran over securities laws at top speed.
More than 20% of mortgage loans–including originally sound loans–are underwater, meaning the borrower owes more than the home is worth. Official unemployment numbers hover at around 10%. If you include underemployment, it is around 18%. In depressed areas where the nation’s poorest–chiefly minorities–have been hurt the most, unemployment has soared past 30%. For this destitute group, unemployment combined with underemployment exceeds 50%.
As U.S. soldiers fought wars in Iraq and Afghanistan, Wall Street flattened Main Street. Our foreign wars drag on, while the U.S. battles a crippling recession at home.
Global Ponzi Scheme
Fraud by borrowers, fraud on borrowers, and speculation by people who thought home prices would rise forever have all tarnished mortgage lending. Yet this pales compared to the epidemic of predatory lending.
Predatory snipers committed financial murder as deliberately as British soldiers sold smallpox contaminated blankets to Native Americans. Honest homeowners were systematically targeted and actively misled into bad mortgage products. Loans were presented as gifts, but these Trojan horse loans hid destructive risk. “Disclosures” were acts of malice.
When Wall Street packaged these loans and sold deceptive “investments,” documents did not specifically disclose that credit ratings were misleading. If you know or should know a car’s gas tank will blow up, you cannot use a misleading third-party consumer report as an excuse. Yet bonus-seeking bankers used this sort of excuse to get through a few more highly-paid bonus cycles, before it all fell apart. Only the elite crowd of insiders prospered.*
This was the most massive Ponzi scheme in the history of the global capital markets. U.S. taxpayers became unwilling unsophisticated investors when we bailed out the financial system. We must hold Wall Street accountable for its fraud. Continue reading »
“The collapse of the financial system is still in its early stage.”
“The social unrest will illicit cries for the government to exert unusual force to head off a complete breakdown of law and order. The ultimate trap will be set for a system of government claiming to protect a free society.”
“If more power and police authority are not given to the Federal government, it will be argued that only anarchy will result. If more government policing power is given, it will mean a lethal threat to civil liberties.”
“We are rapidly moving toward a dangerous time in our history. Society as we know it is vulnerable to political and social unrest. This impending crisis comes as a consequence of our flawed foreign and domestic economic policies, a silly notion about money, ignorance about central banking, ignoring the onerous power and mischief of out of control intelligence agencies, our unsustainable welfare state and a willingness to sacrifice privacy and civil liberties in an attempt to achieve safety and security from an inept government.”
“Dangerous times indeed.”
“The only way that we can prevent blood from running in the streets is to offer a better idea of the proper role of government in a society that desires, first and foremost, liberty.”
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The Fed and the US government are destroying America:
– America’s Impending Master Class Dictatorship! (MUST-READ!)
– Senate Proposes Increasing US Debt Limit to $14.3 Trillion: “If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,” said Senate Finance Committee Chairman Max Baucus
– Former Dean of Harvard College Harry R. Lewis: Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?
Continue reading »
Tags: Bailout, Barack Obama, Ben Bernanke, Bubble, Central Bank, China, CIA, Civil liberties, Congress, Constitution, Debt, Depression, Detention, Dollar, Economy, Fed, Federal Reserve, Franklin Delano Roosevelt, Freedom, Global News, Government, Habeas Corpus, Herbert Clark Hoover, Hyperinflation, Inflation, Keynesianism, Military, Obama administration, Politics, Poverty, Real Estate, Recession, Society, Taxes, Taxpayers, Terrorism, Terrorists, Treasury, U.S., Unemployment, War
December was the worst month for US unemployment since the Great Recession began.
History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929, pictured Photo: AP
The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.
Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.
The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy — just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody’s Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck’s Grapes of Wrath.
Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor “harsh, repugnant, shocking and repulsive”. We are not far from a de facto moratorium in some areas.
This is how it ended between 1932 and 1934, when half the US states declared moratoria or “Farm Holidays”. Such flexibility innoculated America’s democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process. Continue reading »
Tags: Barack Obama, Ben Bernanke, Depression, Economy, Fed, Federal Reserve, Foreclosures, Global News, Government, Great Depression, Obama administration, Real Estate, Recession, Stock Market, U.S., Unemployment, Wall Street
Atsushi Nakanishi has condensed his possessions to two suitcases, which he stores in lockers at the capsule hotel where he lives.
OKYO — For Atsushi Nakanishi, jobless since Christmas, home is a cubicle barely bigger than a coffin — one of dozens of berths stacked two units high in one of central Tokyo’s decrepit “capsule” hotels.
“It’s just a place to crawl into and sleep,” he said, rolling his neck and stroking his black suit — one of just two he owns after discarding the rest of his wardrobe for lack of space. “You get used to it.”
When Capsule Hotel Shinjuku 510 opened nearly two decades ago, Japan was just beginning to pull back from its bubble economy, and the hotel’s tiny plastic cubicles offered a night’s refuge to salarymen who had missed the last train home.
Now, Hotel Shinjuku 510’s capsules, no larger than 6 1/2 feet long by 5 feet wide, and not tall enough to stand up in, have become an affordable option for some people with nowhere else to go as Japan endures its worst recession since World War II.
Once-booming exporters laid off workers en masse in 2009 as the global economic crisis pushed down demand. Many of the newly unemployed, forced from their company-sponsored housing or unable to make rent, have become homeless.
The country’s woes have led the government to open emergency shelters over the New Year holiday in a nationwide drive to help the homeless. The Democratic Party, which swept to power in September, wants to avoid the fate of the previous pro-business government, which was caught off-guard when unemployed workers pitched tents near public offices last year to call attention to their plight.
“In this bitter-cold New Year’s season, the government intends to do all it can to help those who face hardship,” Prime Minister Yukio Hatoyama said in a video posted Dec. 26 on YouTube. “You are not alone.”
On Friday, he visited a Tokyo shelter housing 700 homeless people, telling reporters that “help can’t wait.”
“Mr. Geithner has been wrong about everything for the last 15 years.”
Added: 12. December 2009
Tags: Barack Obama, Ben Bernanke, Debt, Dollar, Dubai, Economy, Fed, Federal Reserve, Global News, Gold, Government, Greece, Inflation, Ireland, Jim Rogers, Keynesianism, New York, Obama administration, Politics, Recession, Spain, Tiger Woods, Timothy Geithner, Treasury, U.S.
The large-scale government intervention in the economy is going to end badly.
Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.
A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan’s excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
Tags: Alan Greenspan, Bailout, Barack Obama, Bonds, Bubble, Debt, Depression, Dollar, Economy, Fed, Federal Reserve, Franklin Delano Roosevelt, Government, Great Depression, Herbert Clark Hoover, Keynesianism, Obama administration, Politics, Recession, Ron Paul, Taxpayers, Treasury, U.S.
Shock economic figures today stunned the City by revealing that Britain is wallowing in its longest recession since records began.
The official statistics — which showed that the economy contracted by 0.4 per cent — prompted a furious new row about the Government’s handling of the economy.
The figures, from the Office for National Statistics, mean that national output has now fallen for an unprecedented six successive quarters.
Martin Bentham and Joe Murphy
Full article here: London Evening Standard
Sterling gets hammered against the dollar:
… and against the euro:
By Miles Johnson
Oct 23, 2009 09:51
Full article here: Financial Times