Recession over?

We hit bottom..... yayyyy!!!!!!!!!

jrh72582 said:

Is gas that high right now? I locked in my winter rate already and it's CHEAP where I live.

And the job market is improving. It will get better every day.

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Anything to back that up?

July jobs lost 247,000

New jobless claims rise unexpectedly to 576K
http://news.yahoo.com/s/ap/20090820/ap_on_bi_go_ec_fi/us_economy

I know everybody I know is on unemployment it wont get better till 2010 at least a little

We've had a couple of layoffs where I'm at right now, but it hasn't been too bad. Tons of houses are being built and sold, but that doesn't mean the people buying them aren't ruining their lives with debt for a tax credit.

Also, it kinda seems like the government is prolonging the recession for a purpose. Maybe we people are too smart for them, which they realize, and in turn create a recession to thin our numbers. Any opinions?

In addition to what's been said already, I'll add this: Housing, historically leads the economy into recession, and leads the economy out of recession as well. Yes, we have seen a few months of increased activity in SOME real estate markets, but there is a national storm brewing on the near horizon.

All of the five-year, adjustable rate mortgages made during the "no qualifying" boom are about to come due. Many of these loans were "interest only" with negative amortization. This means that not only will the loans be coming due soon, at a time when credit is tight, but when they come due, the borrower will owe more on the property that that sum which was borrowed.

In addition to the five-year ARMS coming due, we still have hundreds of thousands of "short pay" situations where the lenders have allowed the borrowers to stay in their homes, while the lenders hold off on foreclosures.


Something else to consider is the commercial real estate market. As you drive around, notice the "For Lease" signs in the windows of vacant businesses. Someone is NOT paying rent and someone is not receiving rent on these vacant businesses. This means the mortgages on commercial properties aren't being paid on time, or at all.


Watch for MILLIONS of additional foreclosures, both residential and commercial, coming on the market within the next year or so. Its a great time to be in a positive cash situation.

Vi

mazpot said:

I know everybody I know is on unemployment it wont get better till 2010 at least a little

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I agree. I've said it numerous times - the official announcement will come in April of 2010. By that time, the situation will clearly have improved. I'm just wondering if the growth we're seeing now is solid enough to think optimistically. I really don't have an opinion on the matter yet.

And it varies greatly by region. Where my parents live, you wouldn't know there was a recession - it's a blue-collar industrial town that produces a LOT of money. It's business as usual there. However, I know many people in Detroit and Toledo and these two towns have simply been ravaged due to the auto collapse.

ViRedd said:

In addition to what's been said already, I'll add this: Housing, historically leads the economy into recession, and leads the economy out of recession as well. Yes, we have seen a few months of increased activity in SOME real estate markets, but there is a national storm brewing on the near horizon.

All of the five-year, adjustable rate mortgages made during the "no qualifying" boom are about to come due. Many of these loans were "interest only" with negative amortization. This means that not only will the loans be coming due soon, at a time when credit is tight, but when they come due, the borrower will owe more on the property that that sum which was borrowed.

In addition to the five-year ARMS coming due, we still have hundreds of thousands of "short pay" situations where the lenders have allowed the borrowers to stay in their homes, while the lenders hold off on foreclosures.


Something else to consider is the commercial real estate market. As you drive around, notice the "For Lease" signs in the windows of vacant businesses. Someone is NOT paying rent and someone is not receiving rent on these vacant businesses. This means the mortgages on commercial properties aren't being paid on time, or at all.


Watch for MILLIONS of additional foreclosures, both residential and commercial, coming on the market within the next year or so. Its a great time to be in a positive cash situation.

Vi

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You can say that again! There are so many safe investments out there for people with some extra coin. The market has simply made a lot of wealth over the last three months. Granted, many people lost a LOT previously, but I was in a fortunate situation. I never invested in the market extensively until four months ago. It's quite crazy when you put it in perspective, but it's basically the same old situation. If you have money, you can make a lot more money. If you have no or little money, then life is hard. Those are the people I feel for.

damn i hate POLITICS................

jrh72582 said:

You can say that again! There are so many safe investments out there for people with some extra coin. The market has simply made a lot of wealth over the last three months. Granted, many people lost a LOT previously, but I was in a fortunate situation. I never invested in the market extensively until four months ago. It's quite crazy when you put it in perspective, but it's basically the same old situation. If you have money, you can make a lot more money. If you have no or little money, then life is hard. Those are the people I feel for.

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Yep. I was watching the Fox business channel yesterday and they gave a perfect example of this. CVS, the drug store chain, was down to the penny stock status a few weeks ago, now its trading at over $1.50.

On the other hand, I have a friend who bought $70,000 worth of American gold coins when gold was $250 an ounce. And, that wasn't that long ago either.

We lost another 575,000 jobs last month.

when we gain one single job in a 30 day period in the entire United States of America...I'll start talking about the recession being over.

And maybe when we do something about losing an additional 4 billion dollars a day to national debt...I'll start to believe that we are working on the overall future health of our nation.

until then I just look at all of them as trying to grab power, money and control over us peons.

ViRedd said:

Yep. I was watching the Fox business channel yesterday and they gave a perfect example of this. CVS, the drug store chain, was down to the penny stock status a few weeks ago, now its trading at over $1.50.

On the other hand, I have a friend who bought $70,000 worth of American gold coins when gold was $250 an ounce. And, that wasn't that long ago either.

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I bought a stock three months for under $2.00 in large quantity and sold it for over $11.00 two weeks ago, making a nice sum of money. But I wish I would've waited. It's still rising....

ViRedd said:

Yep. I was watching the Fox business channel yesterday and they gave a perfect example of this. CVS, the drug store chain, was down to the penny stock status a few weeks ago, now its trading at over $1.50.

On the other hand, I have a friend who bought $70,000 worth of American gold coins when gold was $250 an ounce. And, that wasn't that long ago either.

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Your friend is a smart man, I didn't buy gold, but I bought silver and have been for 30 years now. Great thing about precious metals is: NO TAXES. You just let it sit there and it gets more valuable every day, I have already made averaged out a 800% gain so far, if the dollar loses more value then I will gain even more. Precious metals are no one elses liability, in fact it is true wealth that will never be worth nothing, unlike paper dollars. I don't have a massive amount (less than 7,000 ounces) locked away, but I have enough to live off of for a few years if need be. I don't worry about inflation as much now, and have a much better sense of real economic security.

The recession is just getting started.

"10 Big Companies That Are Veering Toward Bankruptcy

Despite a few green shoots in the economy and a rocketing stock market, many large companies are still struggling to avoid bankruptcy.
A new report by Audit Integrity identifies some high-profile names "that have the highest probability of declaring bankruptcy among publicly traded firms."
Which companies appear the worst off? We took the list and removed any company with a market cap under $3 billion. We then ranked the remaining names by a simple measure of the market's perceived bankruptcy risk - Market Cap (MC) divided by Enterprise Value (EV). The less MC vs. EV, the less residual shareholders' value (above what debt holders can claim) the market is pricing-in for the company. Thus a lower MC/EV means the market thinks the company is more likely to go bankrupt."
See the whole list >

September 20, 2009

Economy improves but concerns remain

Last week we received positive readings for some key economic indicators. But I still see plenty to worry about.

Source: FRED


On Tuesday the Census Bureau announced that U.S. retail and food services sales in August were 2.7% higher than in July on a seasonally adjusted basis. True, 2/3 of the additional $9 billion in spending was attributed to motor vehicles and parts, and September car sales could be much worse than August. Another 1/6 of the new spending came from gasoline stations, and the higher average gasoline prices in August are hardly cause for celebration. But even excluding autos and gasoline, core retail sales were up 0.6% in August. Here's the summary from Stephen Stanley of RBS:
Source: FRED


On Wednesday the Federal Reserve reported that its index of U.S. industrial production grew by 0.8% in August, adding to the 1% gain seen in July, and breaking the steady drop this indicator had been exhibiting since January 2008. Spencer of Angry Bear notes that the increase in industrial production over the last two months is typical for previous economic recoveries. If this does prove to be a typical recovery, given the sharpness of the downturn we would expect to see sharp growth from here.

Source: Angry Bear


These new readings for sales and production were enough to push the Aruoba-Diebold-Scotti Business Conditions Index back into positive territory for the first time since the recession began.

Aruoba-Diebold-Scotti Business Conditions Index.


What's not to like? My key worry about the U.S. economy remains the employment picture. The Conference Board includes initial claims for unemployment insurance and average weekly manufacturing hours in its index of leading economic indicators, the number of workers employed on nonfarm payrolls in its index of coincident economic indicators, and average duration of unemployment in its index of lagging economic indicators. Manufacturing hours have indeed rebounded off their lows.

Source: FRED


But for total private industry jobs, we've been stuck at 33.1 hours/week since March, unless you want to claim victory on the basis of the brief nadir of 33.0 hours/week touched in June.

Source: FRED


New claims for unemployment insurance did fall this spring. But the 4-week average reported Thursday is actually worse than the numbers we were seeing at the end of July.

Seasonally adjusted weekly new claims for unemployment insurance (black line) and 4-week average (blue line) so far this year.


Bill McBride believes that as long as the number of new claims remains above 400,000 per week, the total number of Americans working is going to continue to fall. With the latest 4-week average for new claims at 563,000, we've got a long way to go before the employment situation is actually improving.

Source: FRED


And even once the number of Americans working starts to grow, unless it grows faster than the number looking for work as a consequence of population growth, the unemployment rate will continue to climb.

Source: FRED


I see this as more than the conventional hand-wringing about a "jobless recovery." That phrase might suggest that we're just talking about a replay of the anemic recovery that followed the 2001 recession. In the first 6 months of 2002, nonfarm payrolls fell by 350,000, or 58,000 per month. In July and August of 2009, payrolls fell by 492,000. If the recession really ended in June, as some claim, this is a much more serious problem than we saw in 2002-2003.


And it is a more serious problem not just because of the ongoing human cost. It also undermines the prospects for continued improvement in the other indicators. As long as large numbers of people are still losing their jobs, that can set in motion a number of undesirable feedbacks such as increasing loan delinquencies that could bring about a replay of some of the concerns many of us had hoped were behind us. Federal Reserve Bank of San Francisco President Janet Yellen was right on target:
So yes, it was a good week for some key economic indicators. But serious concerns remain.








From http://www.econbrowser.com/archives/2009/09/economy_improve.html




A lot of good info for the people that would like a better grasp of the situation we are in.

So, now all we need is a sharp increase in the minimum wage, limit wages of executives, and for the Democrats to turn over our entire health care system to the federal government to run. That will put us into the tank for a long time to come.

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Its a good thing that they are not raising the min. wage to the equilibrium of the low end wages, and the wage limit for execs has to do with when they make bonuses even though they are losing the company they work for money, and they are not even coming close, not even in the same universe of taking over the entire health care system.

jrh72582 said:

I bought a stock three months for under $2.00 in large quantity and sold it for over $11.00 two weeks ago, making a nice sum of money. But I wish I would've waited. It's still rising....

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Well as my Daddy says pig get fat and hogs get slaughtered..Be glad you got to the trough

The question is , is the recession over
FUCK NO 10% unemployment....This market has been proped up by Obama bailouts and won't last. DJ will go down to 8500-9000 by the end of the first quater of 2010. All we are seeing is consolidation, plus the commerical real estate market has yet to devastate the market however, lots of those loans will be coming due by years end, watch out, this commerical real estate thing is going to be as bad if not a bit worse than the residental was..




He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would surely suffice.

Well isn't it good that some of us do MARCH IN RANK AND FILE. If not you would be speaking German or Japanesse. Good thing that some of us do have a SPINE. Cause most of the Libs don't. They think they have a big brain but its really just gray shit that looks like a brain. Since they don't know what it means to serve anything but themselves. Oh and they seems to hate America and all she stands for. If you don't like it here go to Europe and learn what REAL CLASS seperation is.

Sorry for the flame just kept staring at that sig and had to respond

Not that anyone is going to care, but Ben Barnanke says the recession is "very likely over", even though we may still feel the effects for a while.

I believe the global capital markets are a measure of mass psychology .... nothing more. It used to be that fundamentals were important .... but none of that matters anymore. Reality doesn't even matter. Its all about whatever the lawyers and bankers and senior executive can get away with so that some bottom line is a measure of goodness, regardless of the impact on the nature or functioning of the world around it.

The past couple of years is a prelude to the changing global structure and functioning. It is during times of massive shifts in energy that change does come about. And that change isn't necessarily pleasant for all parties. The ebb and flo of energy in the world, will continue to ebb and flo as it has since time immemorial ...... in the early ninteen hundreds, no one predicted the fall of Germany and Britian as centers of power and politics. The rise of the US in global dominance might be waning, but at present it does not seem like a likely successor is prepared. Or does having over 2 TRILLION US $ in your piggy bank really make any difference? I guess we can all sit by and watch as thing unfold .... my hope is that I can keep my peace and tranquility ..... my own space .... so that I can keep growing my weed

hom36rown said:

NoDrama is right, Stock market movements are not predictive of economic conditions. According to the gov't the recession started in december 2007, 2 months earlier the Dow and S&P 500 had hit record highs. Throughout 2008, even as the economy was contracting, many stock market strategists thought the recession could be avoided.

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