Anyway you slice it and dice it, the economy and society is fundamentally broken. Its been broken for a long time, and no reasonable program or policy change is remotely on the horizon to fix this fundamentally broken system. A system where CEO's get paid on the average 300x more then the nine to fiver. A system where the uber rich/wealthy/affluent/arrogant have had all of their shameless losses subsidized and socialized government and the rest of the working class stiffs. No one in Congress and White America talks about this type of Socialism! No one talks about moral hazard's when referencing whats happened to the auto/banking sector. Instead we have stupid ignorant people bust Obama's balls on health care, another broken system, but this broken system doesn't effect the wealthy does it? If there ever was a time where there are two sets of rules, this is the most glaring in history.
We should not be busting Obama's balls on Health Care, we should be busting it till the cows come home over the way he has handled the banking crisis. In America as usual, its all always ass backwards.
While its true that the earthquake is behind us, but now we have to deal with the aftershocks, the collateral damage. How is the system built to stand up against any future shocks? ITS WORSE THEN EVER! They have not rebuilt anything, they have not fixed anything, they have not figured out whats wrong nor the causes of the earthquake. There are serious structural problems with the economy, and the only solution so far is to print $23 Trillion dollars, while still enabling the same fools to do what they do best. Namely:
Consumers please continue to consume and live beyond your means.
Wall Street and banks continue to feed the appetite of the American fool with even more complex financial products that no one understands. Continue to lend to an economy that is running 9.7% unemployment. Please leverage back up these complex derivative products so that the system doesn't go to hell until after the election.
Government will and is doing everything in its power to cushion the blow, delay the day of reckoning. The magnitude of the intervention is dizzying. Without government stimulus the economy would have shrank an additional 6% in the 2ND quarter, instead of the 1% decline. Current quarter forecasts call for 3-3.5% growth, this only because of cash for clunkers, first time home buyers tax credits, and other short term crap programs. Oh, I forgot to mention, the FHA's obsessive effort to single-handily re leverage and reflate the housing bubble.
online.wsj.com/article/SB125211204270688031.html
The FHA is a joke. 40% of the new FHA origination's come from mortgages that have at least 96.5% LTV!!!! Who do you think is on the hook for these mortgages? Who is on the hook for 7% delinquencies on these said mortgages? The morons that make up the tax base.
This cant possibly cant end up well. The residual pain will be worse then what happened the last time. But I guess, they have dulled the pain for the time being. Until after mid term elections.
Obama the magician has been puling rabbits out of his White Sox Cap all through out the year to ponzy up the auto,banking, and housing sector. But Ozzie Guilen the Manager of the White Sox just whispered in Obama's Ear:
"Psst...We are running out of rabbits".
"Can Bugs Bunny help Employment"?
This is the central theme. There is not much that can be done by government to get people back to work. The government can freeze companies from firing, but that's not happening.
The employment figures that came out yesterday were down right disturbing. Only 216K jobs were lost last month. Manufacturing jobs fell 63K last month. This is the lowest level since 1941. This is also happening in the face of all of the inventory rebuild up in the economy. Think about that for one minute, Inventory rebuilding is the main reason for economic growth, yet 63k jobs were lost in that sub sector of the economy.
65% of all companies are still in process of cutting staff
Temp Agency employment is still declining.
Flat work week = flat wages.
Jobless claims going back up = 570K
Until we see real signs of employment picking up, not the garbage that the government is spewing. All bets are off.
Government is trying to keep the peace, trying to dampen the pain of whats truly happening. They lose this battle and its revolution time.
But whats worse, is the real news that is not being reported. We saw non-farm payrolls released yesterday along side the Household Survey. Every one was glued to non farm payroll.
Look at the Household Survey.
This survey had jobs plunging 392K, this number is actually dulled by the fact that self-employed consultants, who don't really make any money. Take this away and you have a stunning 637k jobs gone, POOF! This figure is at this moment, worse then March 2009,when the market was testing lows.
Brace yourself for this next item. The Bureau of Labor Stats also publishes a number from the Household survey that is comparable to the non-farm number. This is called population and payroll adjusted household number. Guess how many jobs were lost here? 1 million jobs! Unheard of.
No one is discussing this.
Bloomberg - Nope
CNBC - Nope
WSJ - Nope
NY Timed - Nope
Did I have to mention the unemployment rate increased to 9.7%? This has nothing to do with a swelling labor force. The ranks of the unemployment surged to 466K last month.
Adult Male unemployment is above 10%
Full time employment cratered 336K
Part Time rose to 298K.
All inclusive U-6 (Total Unemployed) is at 16.8%
# of people not on temporary layoff is at 8.1MM, a new high. This is 53% of all unemployed. This is permanent job loss.
5MM people are unemployed at least 6 months.
Long term unemployed is at 33%
Have the laws of supply and demand changed? Been Repealed like Glass-Steagel?
No Jobs = No Wage growth = No Personal Income Growth + Credit Contraction = No consumption = No Real GDP Growth.
Can the government continue to socialize Wall Street and the credit markets?
Can Uncle Sam keep extending ts generosity to consumers and home owners?
I implore anyone to go to the Fed's website and read the minutes of the FOMC August meeting. Its Prom Night, Halloween, Jaws, and Friday the 13Th all in one. These guys at the Fed are scared shit less over any type of sustained economic recovery.
Why cant the Obama brain trust foster a real plan? A plan that is devised of X's and O's that offers a permanent solution rather then recurring populist short term fiscal candy that only adds to household debt burdens? Currently the Obama brain trust actually believes that the long term multiplier is Nil. They are right. Long term is only till next election.
The problem that is not dawning on DC, is that its the labor market that needs assistance, not cars on the road, homes on the market, dishwashers at Best Buy. We have insufficient number of people in the labor pool.
The Obama Team has got to COWBOY UP soon.
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