Sorry but someone must inject just a spec of economic seriousness into the hilarity that has been playing out on Wall Street and on Capitol Hill. First of all let’s give those goons (or is it the Masters of the Universe) a feel for the seriousness of this global economic collapse.
Income Crisis Not Financial Crisis...
Businesses are slowly liquidating in an attempt to continue to show a profit - that is those that aren't already showing a loss.
NEWS FLASH no income equals no spending equals no revenue...
10/30/2009 - September German retail sales fell 0.5%
10/30/2009 - Canada's real GDP fell 0.1% in August
10/30/2009 - U.S. real consumer spending drops 0.6%
10/30/2009 - U.S. real disposable income drops 0.1%
10/30/2009 - U.S. salary income drops 0.2%
10/30/2009 - U.S. real durable goods spending in September drops 7.2%
11/05/2009 - Retail sales for September in Euro Zone fell 0.7%
11/06/2009 - U.S. unemployment jumped to 10.2%
11/06/2009 - U.S. unemployment including those who've fallen through the system, taken part-time over full time employ, or given up is now a staggering 17.5%
11/06/2009 - U.S. long-term unemployment those unemployed for more than 6 months is now a whopping 35.6%
11/06/2009 - Canada's unemployment increased from 8.4% to 8.6%
11/06/2009 - British Airways cutting an additional 3,000 jobs by year end
Oh, that’s right where in a recovery we don’t need those darn consumers. Somehow some way those millions of unemployed workers and the decimated middle class that hasn’t had decent real wage income for more than 30 years are just going to spend like there’s no tomorrow.
How could we forget, there are no tomorrows on a globe run by incompetents and their lobbyist scum. Of course, President Obama is going to stop the taxpayer spigot to a tiny few of the executives at the super duper mega banks that received TARP (not to mention all the other government freebees complements of the Treasury and the Federal Reserve) – that will surely save the day.
Darn do we really have to take this dose of reality – oh well, here goes just grit your teeth.
Jobs going, going, gone…
Initial job claims rose by 11,000 to 531,000 for the week ended October 17, 2009
Deflation that’s right the big “D” has arrived…
PPI fell 0.6%, core fell 0.1%
August revised lower from 598,000 to 587,000
September at 590,000
Building permits fell 1.2%
Single family permits off 3%
Home prices fall…
FHFA records a 0.3% fall in home prices
National Association of Realtors - 29% of all sales were distressed & foreclosed & short sales, median home price fell 8.5%, first-time homebuyers accounted for 45% of all sales. Could it be the $8,000 from the government given to first time buyers that spurred this 9.4% rise in existing home sales?
New home sales fall...
U.S. Department of Commerce reported that September new home sales dropped 3.6% in September.
Less passengers flying on airplanes…
2% fewer passengers flew on U.S. airlines in September
Companies cutting expenses past the bone…
Most companies are showing a profit only because they’ve cut advertising, R&D, and competent core employees. These actions will significantly reduce any future inflow of new products into their pipeline and degrade the quality of existing products already in the pipeline.
Bank bad loan write-offs are exceptionally high…
The high bank loan loss provisions and higher charge off rates indicate that contrary to the rosy guidance being put forth by most firms at least the banks are acknowledging in their actions that they feel this depression (income crisis) isn’t going to be over anytime soon.
Bank failures now at 120 (Nov 8, 2009) - on the rise to surpass the Savings & Loan debacle in 1992.
Next shoe to drop commercial property losses...
Capmark Financial Group Inc one of the largest commercial real estate finance companies filed for bankruptcy on Monday, October 26, 2009.
11/01/2009 – CIT a lender to small & midsize businesses filed for bankruptcy in what could be the fourth-largest U.S. failure of all time.
Globally no recovery in sight...
UK GDP drops 0.4%
No income, no revenue…
Granted these firms don’t reflect the small percentage of firms that are run by a super competent executive staff that were actually able to increase revenue inflows but we won’t be able to escape the clutches of the collapsing dysfunctional ultra capitalist economy by latching a hold of this single digit percentage of super performers.
None of the below figures are rounded up or down.
**10/29/2009 3rd QRT U.S. GDP rise to 3.5%** Supposedly consumption fueled this increase? Possibly, clunkers & short-term stimulus residual - we need facts - something is wrong, this smells. This figure seems bogus! Investors & citizens beware.
What we need…
Transformative change in the form of an entirely new green industrial base, cross country bullet train system, green energy collection system in the Southwest, smart electric grid, global organization where elected business, labor, & government representatives would work out stabilizing wages across nation-states (also other issues aimed at creating a sustainable global economy), a mandatory government paid K- 16 educational system, low-cost universal healthcare; all of these and many more dramatic changes are needed to create a stable & sustainable global economic system that is not collapsing under a least cost wage model that is driving our global economy towards income & revenue annihilation.
What we need to reign in big banks...
Bring back moral hazard to this industry. Enact powerful resolution authority and bring back Glass-Steagall Act of 1933 breaking financial institution Wall Street investment 'casino' operations away from their real banking operations.
What we got from our worthless federal government…
By some estimates more than a trillion dollars of taxpayer money was wasted on financial institutions (more of that trickle down crap) so they could continue to pay their elite untouchable executives exorbitant compensation packages (regardless of the level of their incompetence), party hardy, and stuff their coffers. This federal money was needed to create the above-mentioned world of good paying jobs but it was flushed down the toilet. We also received a mostly lobbyist pork stuffed short-term stimulus that was not the targeted long-term stimulus geared towards transformative change that we required. We’re not going to transform the U.S. economy into a global green powerhouse by spending only a few billion dollars. Therefore, the $3.4 billion to modernize the power grid (a few other tidbits can be picked from the fat) that is buried deep under a load of short-term stimulus pork is a trivial amount of funding.