When up means down

By Capt. Fogg

The Mayans were far less pessimistic about 2012 than the people who fill my inbox with prophecies of economic doom every day. Actually doom is too mild a word and so is apocalypse if one is trying to set a mood so terrifyingly descriptive of what is happening now and is about to happen, thanks to that Obama. Of course these people are selling investment strategies which I'm sure include buying things they're desperate to get rid of like the gold they bought at $1900 an ounce, but any way the market wind is blowing, they make money from the seminars and newsletters and from screaming like Chicken Little. There's a lot of money in the doom business.

Most of the people I talk to seem convinced that everything is getting worse and won't get better until we "get rid of" Obama in 2012; replacing him no doubt with someone who thinks managing a worldwide economy is an easy task for someone who once managed to save a pizza business by firing everyone, and yet has the nerve to talk about being able to "create jobs." Not to change the subject, but it's truly stunning to see the seamless segue from "government can't create jobs" to "elect me and I'll create jobs, jobs, jobs."

I guess it's no less stunning than Fox News' and John McCain's embarrassing assertions that the 2008 economy was "robust" as we all marched unwittingly off the cliff like a certain cartoon coyote -- and of course, that because "Liberals" were warning us about the inevitable collapse, they "hated America." Not like those forward thinking optimists that modern conservatives are.

We can expect, now that the next presidential election is a year away, that the howling and wailing and rending of garments will grow louder and angrier and numbers will appear proving that calamity awaits us all, no matter what actually happens. It's far too soon to be sure, but this chronic pessimist and a few others with more credible credentials are noticing that our Gross Domestic Product After adjusting for inflation, climbed to $13.35 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.

I hate to make too much of it, particularly with the Filibustering Vandals doing everything they can to sabotage the economy until November 8th, 2012, but the reality is not quite what the pseudo-conservative chorus is chanting. At least for the moment, things are looking less down. Unemployment is still high, of course -- just a bit above Ronald Reagan levels and we can expect the screamers to keep screaming about that while refusing to do anything about it. We can expect Tea Pissers like Tom "Looney" Rooney (R-Florida) to keep meeting with "Job Creators" and telling us that business owners will hire more employees, irrespective of demand, if we cut their marginal rates even more -- and we can expect that if things do recover steadily and noticeably, he'll find a way to take credit for it because after all, they kept that O-BAH-ma from doing anything for four years while lambasting him for doing nothing. If there is anything these Doomsters are optimistic about it's that they'll always have someone to blame.

US economy continues to collapse

This is no surprise. Bush and company has been pouring the economy into the toilet for years. I think he's about ready to flush. This from Bloomberg.

Employers in the U.S. fired workers in July for a seventh straight month and cut hours for remaining staff to a record low, signaling economic growth weakened at the start of the second half of the year. Americans labored an average 33 hours and 36 minutes per week, six minutes less than in June and matching the shortest workweek since records began in 1964, the Labor Department said yesterday in Washington. The jobless rate jumped to 5.7 percent, the highest level in more than four years.

Once he pushes that handle, it's gonna be a whole lot harder to recover what's been lost. In any case, I think that, even though he is a lame duck and losing some of his power, the worst is yet to come.

Are we there yet?

by Capt. Fogg

So you don't want to call it a recession yet? You say it's too soon to tell? You haven't seen enough evidence? Well how about this: Not only will there not be a new Starbucks across the street from the Starbucks next door to the Starbucks, they're going to close a bunch of them. 12 cafes in my area alone, including one in a Palm Beach mall where there are currently 4. Who said the economic news is all bad?

I'm guessing that the Starbucks planned for a semi rural intersection across the street from a church here won't be built now which means a few more trees will survive and the traffic remain manageable. We may get a Dunkin' Donuts however; in an area that's already commercial and where there would be a waitress instead of a Barista; where you can just order a coffee and receive it without the phony pseudo Italian names or the snotty prices. They make great doughnuts too.

Long live the recession!

Cross posted from Human Voices

Bonfire of the vanities

By Capt. Fogg

Boca Raton Florida, like many American cities, is ten thousand acres of concrete streets, strip malls and parking lots with a few patches of golf course applied like green stamps on a white envelope. It differs in that a careless crosser of its crowded streets is more likely to be run down by a Bentley than in most other places.

It was in his late model Bentley that police found the sleeping Greg Talbot, described by the Palm Beach Post as a "millionaire developer" as though anyone found in a Bentley in Boca needed to be exposed as wealthy. But appearances can be deceptive and in this New Money capitol of the South, they almost always are. Talbot may be the second largest owner of commercial property in the flamboyantly upscale metropolis but like developers everywhere, he's in trouble. Banks and lenders of all sorts are threatening to foreclose and to cut off further credit.

Who can blame him for a bit of alcoholic relief, after which he at least had the sense to park the car and sleep it off? Boca's Finest, if not their brightest, of course. Talbot has a history of fisticuffs, the exercise of which landed him in the lockup three years ago. Perhaps the police who saw fit to interview him in the middle of the night knew what to expect, but when Greg made a phone call and didn't respond fast enough to an officer's request to end it, out came law enforcement's answer to the Game Boy: the Taser. It's not of course, as though the gentleman's behavior was discernible as such. Talbot swore and shouted and strongly resisted being handcuffed for whatever crime is involved in being asleep in a parked car. They had to Taser him repeatedly and that should be a reminder to those who think wealth and social position can place one out of range of the skull cracking, spark snapping enthusiasm of the men in blue. I'd think twice about falling asleep in a Chevrolet.

Of course Talbot's last scuffle back in 2005 resulted in the attempted intervention of his pal, the police Chief. Former Police Chief, I should say, since it didn't sit well with the locals. This time he had to play the rehab card and go straight to Rush Limbaugh's alma mater in Arizona, where for his $40K he will receive such benefits as art therapy. Forty large can be seen as a cheap way to finger paint one's self out of prison although it may not be an option for most people. It still pays to be rich even if you're on the verge of bankruptcy.

Don't feel too smug, Mr. Average. Greg Talbot may have burnt his fingers in this bonfire, but the wind is blowing and it may spread.

Cross posted from Human Voices

Stimulus

By Capt. Fogg

Stimulus package - yeah, that's the ticket. You can almost hear Jon Lovitz deliver the line. A stimulus package will turn around all the years of fiscal misconduct and everything will be fine very soon. Yes, and we're "winning the war" too. Funny that this flies in the face of non-interventionist dogma; funny that if anyone else had suggested it, they'd be screaming epithets at Liberals. Of course you're all too young or were busy watching sports when this tripe was given us a generation ago and of course you want to believe it, so you will.

The The Fed moved today to add as much as $200 billion to the banking system this month to offset the credit crunch so that the borrowing can continue in the private sector so that we can borrow our way out of the mess borrowing got us into. That and of course, the gargantuan Bush administration borrowing to finance spending that is not particularly beneficial to our economy, but just because we're losing jobs, trading good jobs for subsistence jobs; just because the 9 trillion dollars owned by foreigners are being dumped on the market in favor of Yen and Euros and gold; just because so many people in my area who were living well a few years ago are now bagging groceries at Publix and living in trailers; just because nothing really promises to stem the wave of foreclosures or the rise of oil prices, doesn't mean we can use the R word, does it?

"There are indicators suggesting that growth will pick up and pick up quickly. So the question is how quickly will it pick up" said Edward Lazear, chairman of the White House Council of Economic Advisers today. Did those indications come from the same kind of deep thinkers who predicted we'd be greeted with roses in the streets of Baghdad and who assured us that Saddam had stockpiles of chemical weapons and nukes ready to be bolted together like an erector set?

But hey - elect another Republigoon for all I care. I always wanted to live in a third world country anyway.

Cross posted from Human Voices

Does anybody have the paddle?

By Capt. Fogg

No sir, the economy is healthy, "financial markets are strong and solid" and Bush is optimistic. I'm glad the US markets are closed today, because the rest of the world is taking Bush's words to mean the end is nigh. Stocks plunged in Germany, Hong Kong, India and Brazil today and the European Dow Jones Stoxx 600 Index fell the most since Sept. 11, 2001. Commodities are falling on the perception that a recession will reduce demand.

The slide began last week while President Bush was unveiling his inchoate plan to fix everything with a small handout to the peasantry and a cheerful dose of oblivious optimism. The worst week for US stocks in five years followed apace. The rest of the world has caught on that their US investments are only as sound as the withering Dollar and nothing Bush is capable of doing will do anything to postpone or lessen the coming crisis. The Bank of China alone may have to write down 17.5 billion yuan ($2.4 billion) for the fourth quarter of 2007, and another $2.4 billion this year because of the mortgage crisis, says Bloomberg today and the rest of the world seems to be just as far up the creek.

"It's the worst I've ever seen,''

said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm.

"The financial system is in terrible shape, and no one knows where this will end.''

No one knows when either but my guess is that it won't end soon or nicely, nor will I be buying that new boat this year.

"We're confident that the global economy will continue to grow, and that the U.S. economy will return to stronger growth,''

Said White House spokesman Tony Fratto today. If there's anything that typifies the Bush Bunch's reliance on belief rather than competence to change reality, he just expressed it.

Cross posted from Human voices

Down and out in Palm Beach

by Capt. Fogg

I know people who were living the good life in Florida a couple of years ago, many of whom have their homes and yachts on the market in the vain hope of selling out and moving to cheaper pastures in the Carolinas. Foreclosures in Florida are up 53% from the previous quarter and double last year's numbers. Retired people are out lining up for low paying jobs. Affluent Palm Beach County chalked up nearly a billion dollars worth of mortgage defaults in the first 6 months of 2007, up 531% from last year. No, that's not a typo.

Realtors seem to be disappearing and one man, whose business is making For Sale signs for real estate agents reports that he's being stiffed right and left to the tune of $40,000 worth of signs. Community food banks are running out of food as more middle class families find their cupboards bare. Commercial real estate vacancies are sharply up. It's beginning to seem a lot like a recession despite the official assurances that the economy is growing.

The Palm Beach Post reports this morning that "a local bankruptcy lawyer received 250 applications for a $10-an-hour receptionist job in his office. . Many of the applicants were real estate and mortgage brokers used to sky-high salaries."

Sure the test of two consecutive quarters of negative GDP growth has not been met; not nearly, but somehow whatever it is that's trickling down these days isn't prosperity. With chaos apparently growing and more wars looming it's hard to maintain the kind of faith the administration is selling and no "Mission accomplished" moment Bush might manage to stage is going to make me more confident.

Cross posted from Human Voices