Chile Forum

On the LA Times website today, these two stories were next to each at the top of the page....the two headlines:

Calif. jobless rate hits 11.9%; 35,800 jobs lost in July

Bernanke: U.S. on brink of recovery

So...let me see if I understand this....the most populous state in the country has 12% unemployment rate, not counting all the people who quit trying to find work nor all the people who can only find part time work but would really like to work full time....but....bernanke says we are "on the brink of recovery"?

Oh, really? i'd say we're on the brink of SOMETHING....maybe a cliff or a disaster...but a recovery????

it seems to me that the market is doing better because so many businesses have reduced their debt and liabilities, partly by laying off large numbers of employees...that is...thousands and thousands of people who must reduce their spending and consume less.....less consumption leads to less production, which leads to more layoffs....GDP is still down.....meanwhile the national debt is beyond anything we've ever seen before 30 or more state governments are in debt, too.....but we're in recovery.

huh?

You're right that part of what has made an economic indicator (production in terms of efficiency) improve is workforce reduction. But unemployment is a lagging indicator; in this recession, most forecasts are for unemployment to return to normal levels (around 5%) only in 2013-2014. There are many other factors that will point to a recovery (e.g., GDP likely troughed in the third quarter), and unemployment will be one of the last.

Yeah, we're living in an economic Twilight Zone up here where none of the crap you read and hear on the media matches up with what you see in daily life. George Orwell would be amazed at how many of the predictions in his novel 1984 can be found in the statements from guys like Bernanke. In 1984's Newspeak, the word "bad' had been banished. In its place there was "good" (meaning bad), "plusgood" (OK), and "doubleplusgood" (good). A couple of weeks ago they had some wonk from DC saying that since the economy wasn't declining as fast as before, things were actually good! I guess we have to wait for a pronouncement that says doubleplusgood before we can believe it.

All I am interested in is jobless rates. I spit on the talking heads who think that anything else is important.

People need to work.

The older I get, the more left I go.

Skraeling, I second your sentiments!

yeah...that was kinda my point....the "recovery", apparently, means different things to different people....the politicos, the news spinners, the bankers, the big investors have a different perspective than the average man on the street who just needs a fair chance....the same edition of the LA Times showed a picture of a line of men at a job fair....the line went from the counter...down the hall...around the corner....down the stairs....out the front door....down the street....older guys, younger guys, white, black, asian, latin....they all looked beat.

Yea, add in all the people at the University, undocumented, and all the people in prison, to those baseline figures. Don't forget our under employed. All those guys working for nothing, but working at something don't get counted. Real, real, unemployment in CA is easily above 25% (perhaps 35%) or more without even fudging the numbers.

This is a great article on how the super rich are dying and may never return to the U.S.:
http://finance.yahoo.com/banking-budget ... -wall.html

I was just thinking about this yesterday watching bloomberg with all these talking heads that where spinning what was basically terrible news in to the "markets are recovering", the "everything is going to be o.k.". Two years ago the same information would have had them jumping out the window.

There was one guy however they interviewed that tried to say the emperor is very naked. He pointed out that we have nearly a 50% rally in the S&P but a majority of that value is traded in just 5 zombie stocks. Among them AIG, CITI, and other basically bankrupt companies. The other people at the table just slapped him down hard as a fool, and he had to back off. They where brutal with him.

He also tried to bring up the issue of now 1 in 8 Americans with prime-mortgages are delinquent now. 1 in 8! Everyone made such a big deal about the sub-prime mortgages. Well guess what? They are just a very very minor percentages of the total mortages on the market, and most of those guys have been washed out.

Here are some numbers that say by 2011, almost 50% of mortgages will be underwater, and currently 6.2% of prime jumbo mortgages are seriously delinquent:
http://money.cnn.com/2009/08/12/real_es ... r.fortune/


We have the perfect storm forming. From one direction prime mortgage borrowers defaulting is picking up pace, and from the other direction we have commercial real estate imploding. That is class 5 hurricane forming (i.e. 5 trillion dollars) in the American economy.

Someone said it takes a lender approximately a year and $60,000 to foreclose on a property. How many properties are not even worth $60,000 anymore in the U.S.? I know i gave up a condo in Las Vegas last year that I was slated to inherit because it went from over $100,000 value down to $15,000 in just a year. It was not even worth the paperwork to transfer it. The mortgage was $50,000 on it. Basically it would have been cheaper for the bank to just give me the property. I would have been doing them a favor.

They all hailed some not so bad reports from retailers last week, and everyone went crazy. ARE YOU KIDDING ME? The American consumer is not going to return. The American consumer is not going to lead this recovery. It will be the developing countries consumers that lead any recovery. It will be China, India, Latin America, and so on, if it comes at all. Americans both figuratively and literally have had their credit cards canceled, and no one is going to be issuing new ones any time soon.

We have not had the major reset to the American economy that will be required to correct all these problems. Supply and demand graphs are not even intersecting anymore. What economic theory explains that?

Everyone has gone back to buisness as usual. There is no stock market reforms, there is no banking reforms, no one has even made a serious attempt to fix the underlying mortgage problem. The best they have come up with so far is the cash for clunkers program, investing a total of 3 billion directly in to the pocket of American consumers. That is the best you can come up with?

Now it is too late. A year or 6 months ago, the U.S. government could have stepped in with say a half a trillion dollars and started buying up mortgages, and by doing things like putting a freeze on their rates, or a three year moratorium on foreclosures, or converted them to fixed rates, could have put a proper floor under the entire market. They would have saved all those banks that evaporated, and would not have needed to bail out the likes of AIG or Citi bank.

So yes, "Recovery My Arse".

the pros differ with you y'all are saying.
cant see the forest for the trees?
but who is blind?
takes two to make a market

double you double you double dot 321gold dot com/editorials/thomson/thomson082109.html

jon

I'm sure you all know that the US Govt. "cooks" the numbers right? Unemployment, GDP, housing, etc. etc. ad nauseum. You won't get real data from the Govt. or the talking heads on the idiot box, they just parrot what they're told to by the "mini-true." (Gratuitous Orwell ref. )

Anyway, if you want numbers closer to reflecting the actual reality you can get that from http://www.shadowstats.com/. John Williams is an economist who uses the methodology from the late 1980's, in other word he doesn't fudge the numbers. This is the methodology that was previously used by the Govt. but dropped by them. When you use real data and get real answers like Williams does it tends to make the Govt. look bad.

I see on TV news the unemployment rate here in Oregon is supposed to be some low number like 9%, I forget what they say it is. But in my own experience of being on the "front lines" dealing with the public EVERYDAY and seeing all these people just sitting in their houses (houses that probably will soon be foreclosed on them) it is actually MUCH higher. Guesstimate, maybe 25% unemployment in Oregon. Also, Oregon is the poster child for under-employment. It's really sad to see it too.

The US government definitely lies and cooks the books. Just about any society in terminal decline does the same and the US will probably do it- as we do most things- to excess. It's probably best to pretty much go the opposite direction to what the gubmint and the talking heads advise.

But consider the true source of all our supposed "wealth": debt. Debt heaped upon debt, debt leveraged at historically high levels. It's become such a central part of what people think of as money, that the average person has all his savings in the form of other peoples' or governments' debt. It's sort of an historical anomaly and is absurd compared to past practice when people valued and held tangible items.

As this credit cycle contracts it will eventually destroy that debt and therefore the savings of those who hold it. Any media talk of recovery is idle chatter until we get to that point. And that's more than likely a long way off when measured in financial and social pain.

Indeed! What's really scary is what's about to come down the pike......the second wave of forclosures from underwater homeowners that are about to re-adjust in the next 1to2 years. Also...since January the government of the US has been printing massive amounts of money with nothing to back it. Get ready for massive inflation and devaluation of the US dollar if this does not stop. My household thinks we have reached the eye of the hurricane...the 2nd wall is on its way. We live in a neighborhood with home in the $100,00- 2Million dollar range, almost every other home is vacant. Signs on the yards indicate for sale, for rent or a combo. Our own home which was valued at $300,000 a year ago is now valued at -$100,000. My husband was unemployed for two years, just found a job as a courier. The pay does not come close to what he made previously. He was not counted as one of the unemployed because he and the majority of the employees in his field-construction, are independent contractors. Although this group, including my husband pay taxes; they do not qualify for unemployment insurance. They were the first to loose their jobs, and were not counted on the unemployment rolls. There were a massive amount of people employed in this industry. Due to this we feel unemployment is far higher than the official tally. We are lucky. Our mortgage is paid off and we are not upside down on our other bills. We are just watching and waiting.

This is a great editorial / article today discussing how the worst is yet to come because of what is happening with the babyboomers and many other things. I more less agree with all of it.

http://finance.yahoo.com/expert/article ... her/184720

The new money will be in the developing countries with younger generations. The U.S. and Europe are over.