It's The Economy, STUPID!.....

[FOTD]

Across America, economic woes are mounting

http://www.mcclatchydc.com/251/story/46321.html

[FOTD]

This is going to be Obama and the democrats fault.....watch!
And the Fed has no power to raise rates because of the loose oversight during the Bushevik Empire that brought on the housing debacle. Man, some values continue to tumble on America's number one safe investment, the home.
Tulsa has been rooted in the 80's real estate ruin Nation. So here, there is a stable feel to the housing market. But this train seems headed for a deep dark tunnel. What to do?


Bracing for Inflation
Despite the recent softening of oil prices, the U.S. could be looking at double-digit inflation as early as 2009
by John K. Castle

http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080815_021990.htm?chan=top+news_top+news+index_news+%2B+analysis

"Growing evidence suggests American consumers, businesspeople, and political leaders should all be bracing for double-digit inflation, probably as early as 2009.

The relative price stability of the past 15 years is giving way to worsening inflation, despite the recent softening of oil prices. The Consumer Price Index for all items shows the inflation rate averaged 2.6% a year from 1992 through 2007 but has doubled since January, reaching an annual rate of 5.6% in July (BusinessWeek.com, 8/14/08). By next year, the monthly figure could hit double digits, and the inflation rate for 2009 overall could triple 2007's 2.85%.

I say this not only because I have looked at a broad range of statistics that point in this direction. I also run a private equity investment firm that owns companies in a number of industries—including restaurants, the manufacture of gardening tools, oil and gas exploration services, and distribution of entertainment products such as books and videos—that are already being forced to pass price increases on to the consumer.

The skyrocketing price of oil is obviously a central element in the accelerating price spiral. But a sea change in China's role (BusinessWeek, 6/19/08) is beginning to have a huge impact as well.

Increasing Commodities Pricing
Anyone who hasn't been living in a cave for the past year knows that oil prices have soared and pushed up the prices of gasoline, diesel fuel, and heating oil. Largely hidden from view, however, have been steep and continuing price increases across the whole spectrum of commodities.

Oil almost doubled in price, from $78.21 in July 2007 for a barrel of benchmark crude, to $145, where it peaked before dipping below $120. But from a longer perspective, oil sold for about $30 a barrel during 2003 and much of 2004. Thus it has actually quadrupled in five years. Coal, traditionally volatile, sold for about $30 a ton during 2003, peaked briefly at $63 in 2004, and went for $45.25 at the end of July 2007. A year later it hit $139.50 before slipping back a bit. It has tripled in 12 months.

Copper, another basic commodity, went from 82¢ a pound in July 2003 to $1.14 a year later, and to $3.72 by the end of last month. That's an increase of 350% over five years. The price of steel has climbed from under $240 a ton for hot-rolled steel coil throughout most of 2003 to $1,125 a ton last month, quadrupling in five years.

Grains have also soared in price (BusinessWeek.com, 7/18/08). U.S. corn prices jumped from $3.01 a bushel in July 2007 to $5.37 one year later. Wheat doubled from $3.05 a bushel in July 2006 to $6.02 last month. A Midwestern bakery owned by one of our portfolio companies turns out 13 million pies a year. The cost of ingredients of a standard pie jumped 100%, from $1.20 a year ago to $2.40 today.

In every sector, cost increases are so large and pervasive that producers who might once have tried to absorb or work around them are passing them on to customers as fast as they can. Dow Chemical (DOW) recently announced successive price increases of 20% and 25%, plus freight surcharges, saying energy and feedstock costs had risen fourfold in five years.

China's Role
With commodity costs rising for so long, why are we feeling the impact so suddenly?

The answer is that China can no longer bail us out with low-cost manufacturing. For years, American manufacturers and retailers offset rising costs by sourcing more products from China, where they could be made cheaply. That kept prices down for American consumers and also restrained pressures on wages, abetting price stability. But now costs are rising quickly in China, too (BusinessWeek.com, 8/12/08).

The Chinese government, under pressure from the U.S., let its currency float upward by 21% against the dollar since depegging it in July 2005. It also increased its value-added tax by 11%, and removed rebates of the tax for most exporters. New labor laws, coupled with a tightening market for skilled workers, have pushed up labor costs by about 50% over the last three years. Meanwhile, Chinese producer prices rose by 10% in July, the fastest rate of increase since 1996. As a result, Chinese producers are demanding—and getting—price increases of 20% to 25% on goods they make and sell to U.S. customers.

Without the Chinese life preserver, prices at the big-box American retailers are likely to be soaring in the near future, and Chinese manufactured parts and components that go into U.S. cars and appliances are likely to experience similar gains.

Admitting We Have a Problem
Most Americans will have to tighten their belts and accept lower living standards unless this inflationary spiral can be stopped. There will be pain—higher prices and a weaker economy, resulting in fewer jobs. Meanwhile, millions of Americans who are already feeling poorer because of falling home values and a soft economy will be further pinched by higher prices for heating oil, groceries, clothing, autos and appliances. Labor is unlikely to remain so quiescent, particularly as the expectation of inflation becomes clear.

The federal government and the Federal Reserve will be under pressure to take tough and politically painful steps to curb this inflation, including strengthening the dollar, raising interest rates, and tightening credit. But the Fed's ability to raise rates is constrained—it needs to keep rates low to manage the mortgage-backed bond mess.

The first step in solving the problem is to recognize that we have one—and it is serious. No American housewife has any doubts about that. Our policymakers shouldn't, either.

John K. Castle is chairman and chief executive officer of Castle Harlan, a New York private equity firm

[Conan71]

There's gotta be some statistical lag here.  Every day items and goods from the grocery store have gone up far more than 5.2% since the first of this year unless that's a number for the monthly increase.

The models they are using must be flawed.

Good news is, ammo prices at the gun show this weekend were on their way back down. [)]

[FOTD]

"With inflation now running at close to ten percent, we have entered a period of stagflation potentially worse than the 1970s.
And stagflation is nothing less than a weapon of mass destruction aimed at the livelihoods not only of the elderly and those on fixed incomes, but also on students, the unemployed, families, and almost everyone who has a job in the producing economy."

http://dandelionsalad.wordpress.com/2008/08/19/stagflation-is-here-and-it-is-a-weapon-of-mass-destruction-by-richard-c-cook/

[FOTD]

The market has dived on the scenario of Sarah Palin who refuses to meet the press and is causing more no confidence in our shabby and broken government.

Unemployment Rate Rises to 6.1%
           
http://www.nytimes.com/2008/09/06/business/economy/06econ.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1220627377-9jrkL4FhV6a4Jxrg/xjq+g

By MICHAEL M. GRYNBAUM
Published: September 5, 2008
The unemployment rate jumped to 6.1 percent in August, its highest level in five years, as the erosion of the job market accelerated over the summer.
Employers cut 84,000 jobs last month, more than economists had expected, and the Labor Department said that more jobs were lost in June and July than previously thought.

So far, 605,000 jobs have disappeared since January. The unemployment rate, which rose from 5.7 percent in July, is now at its highest level since September 2003.

Jared Bernstein, economist at the Economics Policy Institute in Washington, said eight months of consecutive job losses had historically signaled that the economy was in a recession.

"If anyone is still scratching their head over that one, they can stop," Mr. Bernstein said.

Stocks fell after the release of the report, with the Dow Jones industrials down about 100 points after about 40 minutes of trading.

Layoffs have picked up speed in the last three months, contrary to earlier estimates that they had slowed. The government now says that 100,000 jobs were lost in June, doubling its original estimate.

Raises have not kept up with the rising cost of living, putting more pressure on workers as high gasoline prices and the fastest inflation in decades hurt their spending power.

Hourly wages for rank-and-file workers — those not in supervisory or managerial positions — grew 3.6 percent since August 2007, below the rate of inflation.

The report quickly became bait for the back-and-forth of the presidential campaign. Senator Barack Obama, the Democratic candidate, said his opponent, Senator John McCain, "is intent on continuing the economic policies that just this year have caused the American economy to lose 605,000 jobs."

"Today's jobs report is a reminder of what's at stake in this election," Mr. Obama said in a statement.

The government said last month that the economy grew at a relatively brisk 3.3 percent clip from April to July, with businesses benefiting from foreign demand for American-made goods.

But little of that activity, analysts said, has translated to helping the average American worker.

"Whatever is growing the economy, it's not showing up in the jobs market in any way at all," Mr. Bernstein said.

Officials at the Federal Reserve believe activity will slow sharply for the rest of the year before returning to a faster growth rate in 2009.Manufacturing jobs were hammered again in August, with 61,000 workers losing their jobs. Nearly 60,000 administrative workers, including secretaries and temp workers, were laid off.

Gains came in the education and health care industries, which added a total of 55,000 jobs. But those gains were offset by loses at restaurants, auto dealers and factories that make parts for cars and other transportation equipment.

Friday's report from the Labor Department was eagerly anticipated by investors who have become increasingly skittish about a global slowdown. The jobs data is considered the most reliable snapshot of the nation's economy in any given month.

Stock markets fell sharply on Thursday, with the Dow Jones industrial average shedding 345 points, and the employment report could result in another day of volatile swings in the major indexes."


Now, what did you hear at the mean spirited evangelical party convention this week about helping those losing their jobs, homes , and poisitive feelings for their homeland?

[FOTD]

As another bank folds, the FDIC gets lower on money.

http://www.bloggingstocks.com/2008/09/06/as-another-bank-folds-the-fdic-gets-lower-on-money/

"That fact that John McCain's son served on the board of the Silver State Bank until recently should not matter much to customers. The bank is gone. According to The Wall Street Journal, "The lender, the 11th bank to fail in the U.S. this year, was overexposed to risky real-estate loans, a problem that's vexing many banks amid the worst financial crisis in a generation." Silver State had $1.7 billion in deposits the shut-down will cost the FDIC several hundred million dollars. The FDIC has already indicated that it may need to go to the U.S. Treasury for more capital. Some experts think that dozens of banks will fail. At the pessimistic end of the spectrum economists believe that number could go into the hundreds, if housing prices stay in a free-fall. The problems at FDIC-insured banks raises the question of how much capital Treasury has to spread around. In theory that amount is nearly unlimited. That is, off course, because U.S. tax-payers send the U.S. government so much money every year. Those are the same tax-payers who are losing jobs and can't make their own mortgage payments."


Don't panic......fear terrorists and not this dismal economy:[:O]
http://www.nytimes.com/2008/09/06/business/economy/06econ.html?_r=1&oref=slogin

Is this the Bush economy John McCain wants to continue? 'The unemployment rate jumped to 6.1 percent in August, its highest level in five years, as the erosion of the job market showed no sign of slowing. Employers cut 84,000 jobs last month, more than economists had expected, and the Labor Department said that more jobs were lost in June and July than previously thought. So far, 605,000 jobs have disappeared since January.

[FOTD]

China Suddenly Can't Afford U.S. Debt

Friday, September 5, 2008


http://moneynews.com/streettalk/china_us_treasury_debt/2008/09/05/128072.html

"China's central bank has been on a buying spree for the last seven years, taking home $1 trillion worth of U.S. Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.


Now the bills are coming due, and the bank doesn't have enough money to pay them.


That's because the bank's U.S. investments, which comprise most of China's foreign securities, are worth a lot less when converted from weak U.S. dollars to stronger yuan, reports The New York Times.


Last year, China spent more than one-eighth of its entire economic output on foreign bonds and has bought even more this year. If it stops buying dollar-denominated securities now, the dollar would tank, and U.S. interest rates would skyrocket.


The situation is so serious that the People's Bank of China, which earlier ignored warnings from the International Monetary Fund that its $3.2 billion capital base is too small, has asked the country's Finance Ministry to help it get more capital.


The move may signal a shift in power from the bank to the Finance Ministry, which has long advocated slowing the yuan's appreciation to increase the global competitiveness of Chinese goods.


The U.S., however, wants a stronger yuan, which would reduce Chinese competitiveness and the U.S. trade deficit as well. The yuan has risen 21 percent against the dollar since mid-2005, when China quit pegging its currency to the dollar.


U.S. Treasury Secretary Henry Paulson, long an advocate of a strong yuan, warned in a recent issue of Foreign Affairs that the Chinese juggernaut is headed for the wall, a serious risk for the rest of the world's economies.


"Americans who worry that China might overtake the United States are worrying about the wrong thing," Paulson wrote. "

UH OH.....no reason to panic....just a 5 Trillion dollar disaster. That Freddie and Fannie......modern day couple.... This is only the beginning. Stuff like this last happened in the Great Depression. Remember, these two agencies had general stricter standards than other mortgage purchasers and securitizers. So what does that tell you?

[FOTD]

This is sad and sick:

http://www.youtube.com/watch?v=8kqbnEx5SDw&eurl


Poor economy and this guy's the great deception. He has no new ideas, no economic advisors worth a damn, and would be nothing but more deceit. He would continue republicanizing the government numbers.

[waterboy]

I suppose if Cotton is elected we'll need to expand the bureacracy to include an Explanations Department. Its function will be to explain economics, foreign affairs and energy issues to the prez. Rove will head it up.

[FOTD]

Another lack luster day on Wall Street.

Lest we forget what this election is all about!

Danny Schecter your newz disector!

"Welcome to a growing GLOBAL crisis as the Busheviks turn to socialism to save capitalism while China turns to capitalism to save socialism. "

"As the economy continues its decline, the denial all over the world is not just idiotic, it is dangerous. This crisis ain't over yet."

Behind The Costly Fannie/Freddie Mortgage Bailout: A Silent Dependence On Foreign Money, Not Just Oil
By Danny Schechter.

http://www.mediachannel.org/wordpress/2008/09/08/behind-the-costly-fanniefreddie-mortgage-bailout-a-silent-dependence-on-foreign-money-not-just-oil/

[FOTD]

Top FOUR stories on msnbc.com at 12:39 PM, today:
Retail sales drop
Wholesale prices drop
Beleageured Lehman races to find buyer
Foreclosure filings increase

John McCain talking to reporters on Dec. 18, 2007: "The issue of economics is something that I've really never understood as well as I should."


Timber!!!!!!! (here comes Palin(pale and lyin) with her axe.

[bokworker]

quote:Originally posted by FOTD

Top FOUR stories on msnbc.com at 12:39 PM, today:
Retail sales drop
Wholesale prices drop
Beleageured Lehman races to find buyer
Foreclosure filings increase

John McCain talking to reporters on Dec. 18, 2007: "The issue of economics is something that I've really never understood as well as I should."


Timber!!!!!!! (here comes Palin(pale and lyin) with her axe.

First headline- bad
Second headline- good
Third headline- good
Fourth headline- bad

Net= wash

Moving on....

[waterboy]

quote:Originally posted by bokworker

quote:Originally posted by FOTD

Top FOUR stories on msnbc.com at 12:39 PM, today:
Retail sales drop
Wholesale prices drop
Beleageured Lehman races to find buyer
Foreclosure filings increase

John McCain talking to reporters on Dec. 18, 2007: "The issue of economics is something that I've really never understood as well as I should."


Timber!!!!!!! (here comes Palin(pale and lyin) with her axe.

First headline- bad
Second headline- good
Third headline- good
Fourth headline- bad

Net= wash

Moving on....

[]As long as:
 a. they are all equal in importance (doubtful)
 b. Lehman finds a buyer
 c. You don't own stock in wholesale companies

I heard that all the ships carrying goods to other countries from America are full. No excess capacity there. That's got to be good for some folks... at least the shipping companies.

[bokworker]

quote:Originally posted by waterboy

quote:Originally posted by bokworker

quote:Originally posted by FOTD

Top FOUR stories on msnbc.com at 12:39 PM, today:
Retail sales drop
Wholesale prices drop
Beleageured Lehman races to find buyer
Foreclosure filings increase

John McCain talking to reporters on Dec. 18, 2007: "The issue of economics is something that I've really never understood as well as I should."


Timber!!!!!!! (here comes Palin(pale and lyin) with her axe.

First headline- bad
Second headline- good
Third headline- good
Fourth headline- bad

Net= wash

Moving on....

[]As long as:
 a. they are all equal in importance (doubtful)
 b. Lehman finds a buyer
 c. You don't own stock in wholesale companies

I heard that all the ships carrying goods to other countries from America are full. No excess capacity there. That's got to be good for some folks... at least the shipping companies.

"wholesale companies"? The release this morning on wholesale prices is a measure of inflation... a drop in this number is very good.

No surprise on the foreclosure number and would expect to see even more.

Lehman will find a buyer one way or the other. Currently the Treasury and Fed are reticent about stepping in to help which I think is a positive.

The retail sales number drop is bad but was driven buy lower gasoline prices... so not as bad as first blush.

My overall point was that much of what FOTD posts and blames on the Busheviks is rubbish... if he offered any semblance of understanding just what it is he rants about I might be more understanding.

On another note, sorry to blow the thread up by responding to a string of multiple FOTD only posts....

[FOTD]

The housing collapse needs attention now from the two Senators who will have the legal right to take immediate action right after the November(fix?)election. With a laid out plan, confidence in the banking sector MIGHT be restored. Tulsa's lucky to have a well capitalized bank with owners who can go out and buy distressed banks. And there are too many of those and more to come unless housing bottoms.
Dreadful economy in the meantime.....

And McCrazy does not understand economics....