The Recession may be over (post #326)- part X

[classicman2]

Anyone getting a Social Security benefit receives the $250.00.

[Sean O'Hara]

A new poll has shown why people are so accepting of the Bush-Obama Super Massive Child Screwing Stimulus Bailout Acronym Thingie -- they don't know how much a trillion dollars is.

Q: How many times larger is a trillion than a million? Would you say…

* One Thousand Times- 18%
* Ten Thousand Times- 12%
* One Hundred Thousand Times- 21%
* One Million Times- 21%
* Ten Million Times- 17%
* Don’t Know- 12%

Of course, I'm sure most people here know the correct answer without googling.

[Nausicaa]

The correct answer is *.

[Ocelot]

Originally Posted by Dr Mabuse

Unemployment hasn't even settled in.

The credit card storm has not hit yet, but it's coming. Their defaults are just not being discussed for some reason, but the are huge and going to get worse as the real unemployment that is still staggering settles in on the economy.

I still think the spending has not really settled in on this economy. Some of that is due to 'credit card living' that will be a part of with storm in the credit card industry when the chickens come home to roost. When the card are maxed and the unemployment remains and people default at unprecedented rates. Understand, the CC companies' predatory lending practices are about to bite them in the ass.

The promise to forgive defaults in the auto industry has sparked sales. Think about that, really think about it. An open advertising campaign saying "Good chance you're not gonna be able to pay, we know that, just buy something anyway" and people are trying to call that a return to car buying on the 'financial expert' networks. I saw the 'experts' on CNBC saying the auto industry was becoming confident they had realized the bottom and were starting back up.

It's hilarious, some of this stuff from the morons, I mean 'experts', that is being pushed out.

I have the same concern... the stock market is doing good, people are spending (consumer confident is up), unemployment benefit claims are down etc. Well, the picture looks good doesn't it? So, why aren't companies hiring? The way i see it, if i'm getting a bonus or raise this year, then i know things are getting better. However, bonuses and raises are still pretty much taboo over here, so are we really out of the woods or another storm is in the making?

[fujishig]

Unemployment benefit claims are really down? I thought the growth of unemployment benefit claims is down a little.

Also, didn't the moratorium on foreclosures finally end last week?

[Ocelot]

Here's an article on rental evictions in NYC:

http://www.nytimes.com/2009/05/05/ny..._r=1&th&emc=th

[Ocelot]

Originally Posted by fujishig

Unemployment benefit claims are really down? I thought the growth of unemployment benefit claims is down a little.

Also, didn't the moratorium on foreclosures finally end last week?

errr, maybe you're right... i'm not sure now

[Ranger]

I read that the bls friday report is expected to say there was yet another increase in unemployment from 8.5% to 8.9% for April.

We'll see.

[slop101]

Based on my own little microcosm, while we have started getting much more work this month compared to the last few, we are able to get everything done without reverting to the same man-hours we had the last time we had this much work. So why re-hire, or in our case, implement over-time?

[Autotelik]

I'll chime in and say I'm also in the camp that believes there might be more bad news to come. I know people brushed the -6.1% GDP aside, saying that consumer spending was actually up..... but noone really addressed the fact that spending was up in January, was flat in February, and actually DOWN in March. With unemployment climbing, I just don't see where all the spending is coming from.... or that it can be sustained. My theory is that there will be small spurts in spending by people who can't hold on to their wallet any longer, but sustained growth in spending will not happen. Add on top of that credit defaults, and a very possible commercial real estate implosion (have you noticed that malls are empty?)..... I just don't see the "green shoots" that people are talking about on CNBC. I think there are a lot of danger signals being ignored here. Sure, earnings beat expectations for a lot of companies, but damn, when expectations are rock bottom, it ain't so hard to beat them, right?

Anyway, I just don't agree with the irrational exuberance in the market rally recently.... I'm waiting for a pullback some time in the summer.

[kvrdave]

I heard a theory that companies aren't hiring in part because it has gotten more expensive to do so. Unemployment benefits now last for 72 weeks, or so, don't they? I have no idea what unemployment pays, but if I had a paycheck I could live on for 72 weeks, I don't think I would bother doing anything for the first 40 weeks. I could use a vacation.

But I do still agree that we are just in a minor bull in the middle of a bear. I expect unemployment to go up a lot with the new state budgets around the nation.

[Sean O'Hara]

Originally Posted by fujishig

Unemployment benefit claims are really down? I thought the growth of unemployment benefit claims is down a little.

Even if claims are down, that doesn't mean actual unemployment is down. This is one of those things like the deficit where the government points our attention to a number that has no connection to reality to distract us from the truth.

[kvrdave]

Even though that is true, it is always true. There are always people that go off the search for a job. So it is at least a number that we can use for a basis of comparison.

[Sean O'Hara]

Originally Posted by kvrdave

Even though that is true, it is always true. There are always people that go off the search for a job. So it is at least a number that we can use for a basis of comparison.

Only if we assume that the number of people who stop looking is constant, and hasn't increased significantly during the crisis. But I see no basis for such an assumption.

It would make a lot more sense for the government to use payroll taxes to calculate how many people are working and what the average wage is.

[kvrdave]

Originally Posted by Sean O'Hara

Only if we assume that the number of people who stop looking is constant, and hasn't increased significantly during the crisis. But I see no basis for such an assumption.

It would make a lot more sense for the government to use payroll taxes to calculate how many people are working and what the average wage is.

What basis do you have to believe anything else? Because things "feel worse?" Using payroll taxes, etc. would end up including those people who retire early, don't want a job, etc. And somewhere you would start to get those things manipulated. At least as this is, it is the same as it has always been. Do you think there were fewer discouraged people in 1982?

[Ocelot]

Originally Posted by slop101

Based on my own little microcosm, while we have started getting much more work this month compared to the last few, we are able to get everything done without reverting to the same man-hours we had the last time we had this much work. So why re-hire, or in our case, implement over-time?

quite true... even after a 20% reduction of work force, errr, we're still pretty much working at the same pace as before (maybe a little more work, but not too stressful yet).

[Ocelot]

Originally Posted by Autotelik

I'll chime in and say I'm also in the camp that believes there might be more bad news to come. I know people brushed the -6.1% GDP aside, saying that consumer spending was actually up..... but noone really addressed the fact that spending was up in January, was flat in February, and actually DOWN in March. With unemployment climbing, I just don't see where all the spending is coming from.... or that it can be sustained. My theory is that there will be small spurts in spending by people who can't hold on to their wallet any longer, but sustained growth in spending will not happen. Add on top of that credit defaults, and a very possible commercial real estate implosion (have you noticed that malls are empty?)..... I just don't see the "green shoots" that people are talking about on CNBC. I think there are a lot of danger signals being ignored here. Sure, earnings beat expectations for a lot of companies, but damn, when expectations are rock bottom, it ain't so hard to beat them, right?

Anyway, I just don't agree with the irrational exuberance in the market rally recently.... I'm waiting for a pullback some time in the summer.

In BOLD, that's exactly my concern, the part of the picture that's wrong.

[fujishig]

Originally Posted by kvrdave

What basis do you have to believe anything else? Because things "feel worse?" Using payroll taxes, etc. would end up including those people who retire early, don't want a job, etc. And somewhere you would start to get those things manipulated. At least as this is, it is the same as it has always been. Do you think there were fewer discouraged people in 1982?

Anyone know what the unemployment benefits duration was back then? I'm wondering mainly because they recently lengthened it, and I wonder what effect that will now have on the numbers.

But again, I doubt that the claims are down, I think the growth in claims was down, meaning there were still a lot of people becoming unemployed but at a slower rate. Somewhat encouraging, I guess, but at some point companies run out of people to fire, right?

In addition to the rampant unemployment being a concern, the other two issues I'm really worried about are the further popping of the housing bubble (which has been artificially inflated by what the feds are trying to do) and the credit card crisis.

Seems like some states are finding workarounds to the 8000 tax credit for first time home buyers, floating prospective buyers loans on the tax credit so that they can use it as part of a downpayment. This seems like a really bad idea, why do we seem intent on letting people own houses when they don't have any (real) skin in the game?

[Sean O'Hara]

Originally Posted by kvrdave

What basis do you have to believe anything else? Because things "feel worse?"

I don't. But I have no reason to believe it, either. Maybe the reported unemployment numbers are consistently 100,000 less than reality. Or maybe the reported unemployment rate is consistently 1% lower than reality. Or maybe the rate is consistently half as much as reality. Those three possibilities would give us a wide range of real unemployment rates, but we don't know which, if any of these, is the case.

[quote] Using payroll taxes, etc. would end up including those people who retire early, don't want a job, etc. [quote]

Sure. But it'd be a lot more useful to know that 195 million people are employed this month compared to 200 million last July, than to know that there's a group of people that the government has declared to be the "work force" and a certain percentage of them are unemployed right now.

And somewhere you would start to get those things manipulated. At least as this is, it is the same as it has always been. Do you think there were fewer discouraged people in 1982?

Who knows -- it's completely unknowable because the numbers we're given are pure horsehockey.

[Dr Mabuse]

Originally Posted by Sean O'Hara

Who knows -- it's completely unknowable because the numbers we're given are pure horsehockey.

Yep.

And when a politicians needs a slogan for a speech or campaign, they just change the definition of the term.

[kvrdave]

Originally Posted by fujishig

In addition to the rampant unemployment being a concern, the other two issues I'm really worried about are the further popping of the housing bubble (which has been artificially inflated by what the feds are trying to do) and the credit card crisis.

Seems like some states are finding workarounds to the 8000 tax credit for first time home buyers, floating prospective buyers loans on the tax credit so that they can use it as part of a downpayment. This seems like a really bad idea, why do we seem intent on letting people own houses when they don't have any (real) skin in the game?

I agree with an overall distaste of people buying with nothing down. But the actual numbers of FHA, VA, RDA loans that get foreclosed on is pretty low. The big difference right now in what they are doing, is they are really holding to underwriting standards. That is where the world got into trouble before. You now have to verify income again, have a certain credit score again, etc.

I would want to see links to using the tax credit as part of the down. That sounds like something they may want to do, but under the current underwriting, I don't think it happens.

[fujishig]

Originally Posted by kvrdave

I agree with an overall distaste of people buying with nothing down. But the actual numbers of FHA, VA, RDA loans that get foreclosed on is pretty low. The big difference right now in what they are doing, is they are really holding to underwriting standards. That is where the world got into trouble before. You now have to verify income again, have a certain credit score again, etc.

I would want to see links to using the tax credit as part of the down. That sounds like something they may want to do, but under the current underwriting, I don't think it happens.

Basically these are individual states offering bridge loans:
http://www.latimes.com/classified/re...,2098493.story

[Dr Mabuse]

Most of the lawmakers just skipped the 'oversight' meeting for the TARP funds.

[kvrdave]

Originally Posted by fujishig

Basically these are individual states offering bridge loans:
http://www.latimes.com/classified/re...,2098493.story

Wow. That is bad. If they do hold to good underwriting standards, I don't know that I would worry, but if people have good standards, they probably can do it without this.

[DVD Polizei]

This last market rally is for two sets of people. The first, are the ones who will know when to get out as they are deeply embedded in the system and probably have something to do with making the rules, and they will make a few bucks. The second group are just idiots, who will lose their shirts, who are told the "time is right!" and will listen to the morons in the media.