- Relative to the housing industry, as measured by the Case-Shiller housing price index, even though 12 of 20 metro areas showed housing price gains in March, a good sign for the housing industry, the pricing trends in the other eight metro areas were so bad the overall price index edged down to its lowest level since the housing bubble burst four years ago. Thus, while the housing market might be starting to bottom out, the industry is probably very far away from really contributing to a growing economy.
- According to a report from Bloomberg News on May 23, 2012, Hewlett-Packard recently announced that it will reduce its workforce by 27,000 positions over the next year or so. Not a good sign for the economy when a large U.S. company is reducing its workforce by 8%.
- Economist and fund manager John Hussman says we are entering a recession now, according to an interview he gave to Moneynews on May 14, 2012: "The joint deterioration in the growth of real personal income, real personal consumption, real final sales, and employment, coupled with our inference of leading economic pressures from 'unobserved components' methods, creates not only the concern but the expectation that the U.S. economy is entering a recession — not a quarter or two from today, but most likely at present. Indeed, Europe already appears to be in a broadening recession, which the U.K. has now joined, and the confluence of economic weakness and already strained government debt conditions in Europe is likely to produce disruptive outcomes in the coming quarters."
- In a May 21, 2012 CNBC sponsored article in USA Today, New York University economist Nouriel Roubini stated that the U.S. economy is not growing close to what it should be in a healthy environment, barely hitting the 2% level: "We have positive economic growth, but it's below trend — barely 2 percent."
- We have already covered the following economic story under our recent Political Class Insanity posts but it is worthwhile going through it again. White House Senior Advisor Valerie Jarrett recently spoke at the Student Summit at North Carolina Central University where she hilariously claimed unemployment benefits stimulate the economy: "Let's face it, even though we had a terrible economic crisis three years ago, throughout our country many people were suffering before the last three years, particularly in the black community. And so we need to make sure that we continue to support that important safety net. It not only is good for the family, but it's good for the economy. People who receive that unemployment check go out and spend it and help stimulate the economy, so that's healthy as well."
Valarie Jarrett is one of President Obama's closest and most trusted advisor. Given that, it should come as no surprise that the vast majority of his economic policies and programs have failed if they are based on this type of inane economic theory. If Ms. Jarrett's theory is correct, then we should strive to ensure that every American DOES NOT have a job and is collecting unemployment checks, which they can then spend to create jobs. Stupid logic and theory.
Since we have been sending out record setting numbers of unemployment checks over the past four years, and there are still about 14 million Americans who are unemployed or under employed, this does not look like a good stimulus program if after four years we are in this type of dire situation. Obviously Ms. Jarrett a graduate of the Nancy Pelosi School Of Economics.
- One of the biggest economic time bombs waiting to go off is the mess in Europe and the Euro currency. This should be one of the biggest economic disasters we will see in our lifetime unless someone over there comes up with a plan, the likes of which no one has come close to formulating so far.
For those of you that are not too familiar of what is about to happen, I recommend you read the handful of lead articles in the most recent issue of Business Week for the week of May 28, 2012. The articles go into enough detail of what is pending, from various perspectives, without overwhelming the reader with financial minutiae.
The following facts will give you an idea of what the black clouds in Europe are all about, black clouds that will eventually rain some bad news on our economy:
- UBS has told it customers that the chance of Greece leaving or being kicked out of the Euro currency is about 20% within the next six months while Citigroup has stated their opinion that the likelihood of this happening within the next 18 months is between 50 and 75%.
- If Greece does go back to its drachma and gets out of the Euro, UBS predicts that the new drachma would devalue to about 25% of the Euro's value, making every Greek citizen and business about 75% poorer. Greek citizens have already started to take money out of Greece banks, in case they should fail, with Greek banks showing that their deposits are down about 33% since 2009.
- The bigger concern is that investors might start to believe that Greece is just the first domino and make a rush to withdrawal money from the banks of the other weak economies, Portugal, Spain, Ireland, and Italy. These banks have seen their deposits shrink by 3.2% over the past 15 months.
- France's Societe' Generale forecasts that a Greek exit from the Euro could result in about $1.1 TRILLION worth of currency and loan losses in the U.S. and Europe.
- The value of the Euro vs. the dollar is at it slowest level since five months ago. This means that the hundreds of billions of Euros support the rest of Europe has put forth in the past six months to prop up the Greek economy is not building up investor confidence in the value of the Euro.
- Spain is already in a recession, with unemployment at 24% and the number of bad loans currently on the books in Spain standing at 8.4%, the highest level in eighteen years. Thus, at least in Spain, there is not a dynamic and growing economy that might be able to lift that country out of its economic abyss.
- In Greece, the unemployment rate is about 20% and the unemployment rate for young adults is about 50%. Both figures are causing young Greeks to leave their country for a better life and better chance for employment elsewhere in the world, further weakening the chances for a Greece economic revival anytime soon.
If Germany goes into a recession, the whole Euro zone will fall into a recession and a major market for U.S. imports will dry up, probably forcing the U.S. economy into a recession, if we are not already in one. And if the entire Euro currency should collapse, I do not think anyone has a clue how bad the economic damage would be throughout the world, just not Europe. And history teaches us that when the economic damage is that bad, the political consequences can be bad and lengthy, e.g. the hyperinflation and German economic malaise that led to Hitler and the Nazis.
That is more than enough economic news, views, opinions, and statistics for one month. An imploding currency, ignorant economic advisers, 27,000 more Americans about to lose their jobs in one fell swoop, low economic growth, an impending return to recession, almost $16 TRILLION in debt, and a housing market that is getting worse at a slower pace. Have a good day!
Oh, by the way, Monday I promise we will be done with the bad economic news since a whole raft of new bad news showed up yesterday!
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http://www.unitedstatesofpurple.com/
The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.
The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
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http://www.repealamendment/
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