Wow, Can They Beat This Down Any Harder????

[Conan71]

Bernanke is just full of good cheer and tidings today:

http://finance.yahoo.com/news/Fed-downgrades-economic-apf-14402221.html

[guido911]

quote:Originally posted by Conan71

Bernanke is just full of good cheer and tidings today:

http://finance.yahoo.com/news/Fed-downgrades-economic-apf-14402221.html

That article is clearly mistaken con man. []  We just had the stimulus bill pass and "The One" leading the way. Any day now we will start getting our mortgage and gas paid?

[Conan71]

That's the irony here, gwee doe doe (do you ever miss those days?).  Congress and Obama have been touting this as creating jobs and rescuing the economy.  The FED is saying:

"Fed officials anticipated that unemployment would remain "substantially" higher than normal at the end of 2011 "even absent further economic shocks."

The Fed forecast calls for the jobless rate to dip to between 8 and 8.3 percent next year, and to between 7.5 and 6.7 percent in 2011. All those projections are worse than the Fed's previous estimates and would put unemployment higher than the normal range around 5 percent."

This is all counter-intuitive to the bill of goods we were sold for a bill that essentially amounts to re-payment to the November election campaign donors.  You would think if this stimulus was really going to work, that projections out of the FED would be better NOT worse.

Mealy-mouth it all you like, Bush's fault, Obama said it would get worse before it gets better, etc.  This is NOT re-assuring news, and it's aids the notion that government intervention is NOT the answer here.

[Townsend]

My economics professor told the class years ago that no economist understands the economy well enough to tell you what will happen.  Their job is to tell you why it happened.

[rwarn17588]

It's obvious the stimulus package is meant to lessen the pain, not eliminate it altogether.

I've read varying accounts from credible sources that the nation is going to lose about $2 trillion in GNP, which is certainly catastrophic. And it's always the jobs market that recovers last during a recession.

It's insane for a government to do nothing during a catastrophe. Even the Republicans wanted a stimulus plan that wasn't dramatically different in size. In approach, yes. In size, no.

In government right now, there ain't no Herbert Hoovers anywhere.

[guido911]

quote:Originally posted by Conan71

That's the irony here, gwee doe doe (do you ever miss those days?).  Congress and Obama have been touting this as creating jobs and rescuing the economy.  The FED is saying:

"Fed officials anticipated that unemployment would remain "substantially" higher than normal at the end of 2011 "even absent further economic shocks."

The Fed forecast calls for the jobless rate to dip to between 8 and 8.3 percent next year, and to between 7.5 and 6.7 percent in 2011. All those projections are worse than the Fed's previous estimates and would put unemployment higher than the normal range around 5 percent."

This is all counter-intuitive to the bill of goods we were sold for a bill that essentially amounts to re-payment to the November election campaign donors.  You would think if this stimulus was really going to work, that projections out of the FED would be better NOT worse.

Mealy-mouth it all you like, Bush's fault, Obama said it would get worse before it gets better, etc.  This is NOT re-assuring news, and it's aids the notion that government intervention is NOT the answer here.

Ah, the good ol' days. There is still someone that calls me Gweedork or something though, so I have that going for me. Anyway, here's some good news, inflation is starting to kick in:

http://finance.yahoo.com/news/Wholesale-inflation-takes-apf-14410311.html

[nathanm]

quote:Originally posted by guido911


Ah, the good ol' days. There is still someone that calls me Gweedork or something though, so I have that going for me. Anyway, here's some good news, inflation is starting to kick in:

http://finance.yahoo.com/news/Wholesale-inflation-takes-apf-14410311.html

Better than deflation.

[guido911]

quote:Originally posted by nathanm

quote:Originally posted by guido911


Ah, the good ol' days. There is still someone that calls me Gweedork or something though, so I have that going for me. Anyway, here's some good news, inflation is starting to kick in:

http://finance.yahoo.com/news/Wholesale-inflation-takes-apf-14410311.html

Better than deflation.

Better for who? Unemployment is on the rise (and will continue to rise for a while). How can these folks afford higher prices?

[swake]

quote:Originally posted by guido911

quote:Originally posted by nathanm

quote:Originally posted by guido911


Ah, the good ol' days. There is still someone that calls me Gweedork or something though, so I have that going for me. Anyway, here's some good news, inflation is starting to kick in:

http://finance.yahoo.com/news/Wholesale-inflation-takes-apf-14410311.html

Better than deflation.

Better for who? Unemployment is on the rise (and will continue to rise for a while). How can these folks afford higher prices?

Taking a lazes-faire attitude to the economy now and letting this crisis run it's course is exactly what the Republican president and congress did in the late 20's and early 30's. It created the depression and led to Republicans not being in control of congress for 60 years. Not coincidentally this period of Democratic control, the 1930s to the 1990s, saw an increase in wealth in the United States nearly unparalleled in the history of the world. Were there recessions, yes, but it's one of, if not the longest period in the history of this nation without a depression.

Deflation is catastrophic for business. Fixed costs like debt service and leases remain in place while revenue to service those costs declines due to falling demand fall. Price increases to overcome these issues are not viable in a deflationary economy like they would be in an inflationary economy. It's a recipe for mass bankruptcies and depression. Mass bankruptcies lead to more instability in the banking system. We have since the time of Roosevelt avoided a depression largely by using Keynesian principals, it's certainly not time to go back and try a Hoover style economic recovery plan.

[swake]

Interestingly, the Federal Reserve Bank doesn't believe that it was easy credit rules or expanding low income home ownership that led to the current crisis.

It was the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" introduced by Sen Grassley R-Iowa and signed by President GW Bush with complete Republican and large Democratic support (including our jack-donkey VP). A law pushed and lobbied for by the very banks that are now melting down into bankruptcy. A law vetoed by President Clinton. The reason is really simple, a person gets into trouble financially before this law could simply declare bankruptcy and lose their unsecured debt but save their home. After the law this wasn't possible. So instead of taking a bath on $15k to $20k of credit card debt from a person, Citibank is taking a bath on their $250k mortgage. Great Plan Citi and BOA, great plan.

http://www.bankruptcylawnetwork.com/2009/01/12/bapcpa-linked-one-of-the-causes-of-the-us-mortgage-meltdown/

http://www.qando.net/details.aspx?Entry=9180

[nathanm]

quote:Originally posted by swake

including our jack-donkey VP

At the time, the senator from MBNA didn't have to be concerned about mortgages, given that the BoA merger hadn't happened yet and MBNA was only into credit cards.

The law in question was great for them. Not so good for mortgage lenders, although at the time the mortgage lenders probably figured that if they had to foreclose, they could get more than the outstanding loan amount at a foreclosure sale, what with home prices increasing at the rate they were.

And guido, inflation is better for everyone than deflation, unless they're interested in a prolonged economic disaster. Deflation has the unfortunate side-effect of causing investment in productive work to cease, given that waiting until next month to build a widget means that the materials to make the widget will certainly be cheaper.

Or wait until next month to file that lawsuit, since the lawyer's billing rate will likely be lower.

Inflation provides an incentive to invest. Deflation provides an incentive to hoard.

Poor and unemployed people are hurt coming or going. One because prices go up, others because they'll have an even harder time finding or keeping a job.

[Conan71]

Clinton is saying Obama should speak more optimistially about the economy, well duh:

http://news.yahoo.com/s/ap/20090220/ap_on_go_pr_wh/clinton_obama_economy

Election's been over since Nov. Much of a recession is psychological.

[dbacks fan]

quote:Originally posted by Conan71

Clinton is saying Obama should speak more optimistially about the economy, well duh:

http://news.yahoo.com/s/ap/20090220/ap_on_go_pr_wh/clinton_obama_economy

Election's been over since Nov. Much of a recession is psychological.

/\ +1

[rwarn17588]

quote:Originally posted by Conan71

Clinton is saying Obama should speak more optimistially about the economy, well duh:

http://news.yahoo.com/s/ap/20090220/ap_on_go_pr_wh/clinton_obama_economy

Election's been over since Nov. Much of a recession is psychological.

It's physical, too. There's a Route 66 businessman in New Mexico who's trying to finish a renovation of his motel, and the bank isn't releasing the money.

He's got a lot of friends in the industry; he says the banks being tight-fisted with lines of credit is absolutely wrecking the economy.

[Conan71]

And why are banks being tight-fisted?  When the FED keeps dumbing it down, banks won't lend to anyone who can't prove they don't need the money in the first place.

Tell people it's going to get bad, they slow down spending, companies take pre-emptive measures including lay-offs and getting rid of inventory, banks are less willing to take risks, etc.

I'm not giving policies of the past a free-ride on this recession by any stretch, but how many people truly believe that looming economic doom wasn't magnified and over-played during the election?  

Once people hear bad news long enough, they start to believe it and act on it.  A lack of definitive measures has the banking industry scared ****-less it's about to be nationalized and that's got everyone running for cover.

It's still early enough in his term that President Obama can blame any bone-headed moves his crew makes at this point on the previous admin.  

What happened to hope??  Wasn't that a central selling point of his campaign along with "change"??