wiegie Posted July 2, 2009 Share Posted July 2, 2009 from the BLS we've now lost 6.5 million jobs since the start of the recession Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 I was never a proponent of the Stimulus bill, but since it is a done deal, why are they waiting to spend all of that money when things keep going in tthe toilet? IIRC they've only spent about 10% of the Stimulus funds so far (is that correct?). Let's kick this puppy into gear already. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted July 2, 2009 Share Posted July 2, 2009 Wait, I thought that unemployment was going to hold at 8% or less if they passed the stimulus? Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 (edited) Wait, I thought that unemployment was going to hold at 8% or less if they passed the stimulus? Well "passing" the Stimulus doesn't do much good unless they actually then "spend" the Stimulus. It reminds me of the old Seinfeld episode... you know how to "take" the reservation, you just don't know how to "hold" the reservation. Edited July 2, 2009 by Savage Beatings Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 Speaking off the cuff right now, but in normal situations, the passing of the stimulus should help jump-start the economy even before the government actually starts decreasing taxes or spending more money. This is because firms should increase their investment (i.e. purchases of capital goods such as equipment, etc.) in anticipation of the stimulus going into effect. However, perhaps now this increase in investment isn't forthcoming because of problems in the financial sector that are hindering firms from being able to borrow money. I will note that I have no idea if my above hypothesis is correct or not, but I have mentioned before that if they don't figure out how to fix the financial system it won't matter what sort of stimulus they enact. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted July 2, 2009 Share Posted July 2, 2009 The government needs to deleverage debt and not try stimulus packages that will inflate assets, he said. "What makes me very pessimistic in not seeing any leadership or awareness on parts of government on what has to be done, which is deleverage $40-to-$70 trillion," Taleb said. Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 jesus christ.....If we keep this up, I'm not sure how we can avoid some sort of hyper-inflation... I mean, inflation is good for any ever-expanding economy, but the route we seem to be going down is some sort of a bottomless pit..... and while we won't see any hyper-inflation on Zimbabwe levels, it's looking like it will be extremely bad if we keep this up... Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 jesus christ.....If we keep this up, I'm not sure how we can avoid some sort of hyper-inflation... explain please given this poor job report, I still think the thing to be more worried about right now is deflation Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 explain please given this poor job report, I still think the thing to be more worried about right now is deflation well, I'm assuming we'll see another stimulus package....more unemployment....more money printed....more inflation... our government is printing money and putting it in the wrong places (wall street, banks, automotive companies.........AIG ) I don't know how deflation would occur if we keep this up... unless you know how it won't happen....I'd like to know and I'm not being sarcastic or smart... Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted July 2, 2009 Share Posted July 2, 2009 (edited) people cant afford anything....inflation least of our worries.......for now Edited July 2, 2009 by dmarc117 Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 people cant afford anything....inflation least of our worries.......for now that's the thing I thought would happen....but as I said in another thread that billy balata has derailed... I'm seeing people spending....just as much as they ever have...if not more...at least in Philadelphia... Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 2, 2009 Share Posted July 2, 2009 don't really see anyone trying to spin this as a positive this month, either. "green shoots", we hardly knew ye. Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 I don't know how deflation would occur if we keep this up... unless you know how it won't happen....I'd like to know and I'm not being sarcastic or smart... it is my strong expectation that the Fed will begin buying back dollars (using the assets it has acquired when it issued the dollars) when the economy starts to turn around. This will cause the amount of outstanding currency to decrease and lessen the chance of inflation. Note: if you want a nightmare scenario, there is the possibility that the assets the Fed has acquired will not be worth enough to buy back all of the dollars that it has issued--in this case we could have pretty big inflation--however, this is a VERY worse case scenario and it is not something that I am all that worried about Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 don't really see anyone trying to spin this as a positive this month, either. "green shoots", we hardly knew ye. Funemployment! Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted July 2, 2009 Share Posted July 2, 2009 payroll numbers werent good either Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 don't really see anyone trying to spin this as a positive this month, either. "green shoots", we hardly knew ye. even last month, the signs of green shoots were somewhat misleading as, even though payrolls "only" dropped by 322K, the total number of aggregate hours worked plummeted as bad as it had been plummeting in previous months.** (And hours worked plummented again in June too.) **I can't remember if I made that point here or not, but I did make it at a talk I gave to a local rotary club a few weeks ago Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 it is my strong expectation that the Fed will begin buying back dollars (using the assets it has acquired when it issued the dollars) when the economy starts to turn around. This will cause the amount of outstanding currency to decrease and lessen the chance of inflation. Note: if you want a nightmare scenario, there is the possibility that the assets the Fed has acquired will not be worth enough to buy back all of the dollars that it has issued--in this case we could have pretty big inflation--however, this is a VERY worse case scenario and it is not something that I am all that worried about yeah, I'm not expecting a nightmare scenario either, I personally have been expecting something...somewhere in between what you have said... I mean, I have been more concerned with China deciding not to back us anymore as of late and I previously thought they would never do that due to the fact that our consumption is pretty much at least half of their economy I'd say....(but that's a guesstimate)... but after Tim Geitner went over to China and had a whole room full of college students laugh at him last month when he tried to hype up the dollar...I mean, our economy and the dollar has become somewhat of an inside joke nowadays...I'm even wondering what his purpose was over there to begin with, especially after the "we hate you" comment.....but "they need us".... how much longer will they "need" us?....especially with how much Gold they have purchased in the past couple of years, it seems as if they are trying to hedge some of their losses....I don't have the exact numbers as I have just recently read this, but I can't seem to find the blasted link...but they have been buying a lot more gold than they have in the past.... Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 but after Tim Geitner went over to China and had a whole room full of college students laugh at him last month when he tried to hype up the dollar...I mean, our economy and the dollar has become somewhat of an inside joke nowadays...I'm even wondering what his purpose was over there to begin with, especially after the "we hate you" comment.....but "they need us".... how much longer will they "need" us?....especially with how much Gold they have purchased in the past couple of years, it seems as if they are trying to hedge some of their losses....I don't have the exact numbers as I have just recently read this, but I can't seem to find the blasted link...but they have been buying a lot more gold than they have in the past.... One problem for China is that their economy is export-focused. But the only way for them to have a trade balance is to lend us money. So, their threats of not lending us any more money aren't really all that credible unless we believe that they don't care about running a trade surplus with us anymore. Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 One problem for China is that their economy is export-focused. But the only way for them to have a trade balance is to lend us money. So, their threats of not lending us any more money aren't really all that credible unless we believe that they don't care about running a trade surplus with us anymore. exactly, unless they can find a new trade partner that is in a better economic state.....which I don't see happening.... China abandoning the USD would be all we needed to begin walking down the path of a "worst case scenario"...but I don't see that happening, although their reaction towards us is not promising at all for our economy and the dollar....which is why I'm at least somewhat concerned.... Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted July 2, 2009 Share Posted July 2, 2009 Unemployment at 9.5% in both the US and Europe now. As I stated somewhere else, I heard Japan has had something like 4 stimulus packages already and is running a deficit of 120% of GDP with no inflation. Markets heading south. I've heard a few finance talking heads say expect a bad 3rd quarter in the market with an uptick again in the 4th quarter. Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 Unemployment at 9.5% in both the US and Europe now. As I stated somewhere else, I heard Japan has had something like 4 stimulus packages already and is running a deficit of 120% of GDP with no inflation. Markets heading south. I've heard a few finance talking heads say expect a bad 3rd quarter in the market with an uptick again in the 4th quarter. wow...it's crazy how much Japan has become a non-factor in things.... given that news, they might as well say to not expect an uptick until 2010....hopefully...something can be done to swing the global state of the economy back during Q4.... I say we go back to the gold standard and raise the price of commodities like what we did with gold in the 30's ...but that's just wishful thinking on my part since I have a bit of silver and gold... Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted July 2, 2009 Share Posted July 2, 2009 wow...it's crazy how much Japan has become a non-factor in things.... given that news, they might as well say to not expect an uptick until 2010....hopefully...something can be done to swing the global state of the economy back during Q4.... I say we go back to the gold standard and raise the price of commodities like what we did with gold in the 30's ...but that's just wishful thinking on my part since I have a bit of silver and gold... Watch out. The government will confiscate it. Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 Watch out. The government will confiscate it. 2009 = 1933 Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 2009 = 1933 Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted July 2, 2009 Share Posted July 2, 2009 Speaking off the cuff right now, but in normal situations, the passing of the stimulus should help jump-start the economy even before the government actually starts decreasing taxes or spending more money. This is because firms should increase their investment (i.e. purchases of capital goods such as equipment, etc.) in anticipation of the stimulus going into effect. However, perhaps now this increase in investment isn't forthcoming because of problems in the financial sector that are hindering firms from being able to borrow money. I will note that I have no idea if my above hypothesis is correct or not, but I have mentioned before that if they don't figure out how to fix the financial system it won't matter what sort of stimulus they enact. Just from my perspective as a business owner, I'd have to say you are wrong based on the following reasons: 1) People are scared and don't believe the stimulus package is going to work. I'll give you an example, from my business. I currently have one superintendent out of work, which is actually ideal as it gives me someone to fill in on jobs for other to go on vacation or if someone has an illness, as well as someone to take care of any warranty issues that may arise. I'll have another out of work at the end of August, and another out of work sometime in December. Unless someone in our company really screws the pooch, this year will be very profitable, and we will turn a profit next year just based on our back log. Having said all that, we are looking to pick up some work for these supers, so we aren't just paying them to sit at home or to paint my house. In the last 3 weeks we've turned in three fee proposals and have been creamed. The last one, the low guy had a fee that is less than half of the lowest fee we have on any current contract. I'm preparing another one that the fee is so low that I'd have to increase my 5 year average by 30% just to cover my overhead . Increasing my volume by 30% isn't likely because people are hesitant to jump out there and expand, and even it they were they are having a harder time selling bonds to raise money (thanks BO and Chrysler). Basically I'm going after the work at a low rate because this year and next are made, so even with that low of a rate it is profitable, but also in the hopes that those that don't have my backlog will fail, thus reducing the competition so that 18 months from now with less competition we will see more realistic fees. 2) Taxes - Somebody is going to have to pay for all this spending, and more than likely it will be the business owners that will be doing it. Until we can figure out how big of a hair cut Pelosi, Reid, and Obama actually get passed, we are going to be hesitant to make capital improvements, because we don't know if we are going to be able to afford them. I doubt any of us really know the impact the the Stealfromus Bill will have on our taxes yet, and we have Cap and Tax that just passed the house and is on it's way to the senate. 3) Health Care - Until we know what is going on with health care there are just so many uncertainties, on so many levels. Look at how much of our GDP is health care, it's something around 20% or so right now. So you have to think what changes are going to be made, and how are they going to affect that 20% of our GDP? Will the public option pay the same to health care providers as Medicare currently does? Will it put private insurers out of business eventually? Currently medicare pays doctors and lawyers about 15% to 20% less than private insurance. Right now private insurance picks up a portion of the tab for he government shorting the health systems. If the privates go under because of the public option is subsidized by our tax dollars, and because they pay less than the prevailing rate for health care, then you are looking at a possible decline of 2% to 3% in our GDP. You also have to look at how are these health care subsidies going to be paid for? Right now we don't know. I know I've got a hair cut coming, but I don't know how big it is. It would have been helpful if we had gotten a real stimulus package instead of a funding everyone's pet project package. How much of the stealfromus package was actually stimulative, and how much is just expanding government? How long is the government expansion paid for under the current stimulus package, and when will we either have to cut the new government jobs, or raise additional taxes to keep them? What would have been helpful is if we had gotten a real stimulus package that included real stimulative spending along with a temporary tax cut. Compounding the problem of the stealfromus package not being stimulative you have to add into the turmoil the uncertainty caused by the environmental and health legislation Pelosi, Reid, and Obama are trying to force through. Honestly it doesn't matter where you stand on the issue of increasing the government's role in health care, or where you sit on the environment, Obama and congress should have waited to address these issues until after we started seeing some real recovery in the economy. I'm afraid, by not wanting to waste a crisis the administration has made it significantly worse. More than likely the administration was right, and unemployment would have topped out at 8% even with the crappy stealfromus package that was passed had it been in a vacuum, but when you combine the cost of the stealfromus package, with the uncertainty and potential cost of legislation they are wanting to ram down our throats, then you get a royal mess. Quote Link to comment Share on other sites More sharing options...
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