Where is the US economy headed?

@cicerone imposter,

cicerone imposter wrote:

rjb, Thank you. The conservative think tank, the Hoover Institution (at Stanford), is blaming the DOWs drop on Obama. People like Foxie eats it up hook, line and sinker. They can't see the obvious; the reason the DOW is dropping is because people are losing their jobs by the thousands every day, and there's no sign of any improvement any time soon.

Overall, I disagree with you on this. While Obama hasn't had time to destroy the economy yet, he's had lots of time to cause the drop in the DOW. TARP2, the stimulus plan, health care, and the whole schmear are now his babies. Job losses have to be part of it, but the market isn't looking at the past or present state of the economy, except as in indicator of the future. Obama's various plans and ideas affect the future. The market isn't liking it.

Present and recent job losses certainly influence confidence and future consumer spending. They wouldn't be much of a concern if we all expected to go back to work next week.

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@roger,

PS, it was a Wall Street Journal piece that CI is referencing actually. In today's paper.
http://online.wsj.com/article/SB123629969453946717.html

And it provides a LOT of meat to chew on.

My primary concern is that after the President spent two years campaigning on the economy, he is no longer talking about it. Unless something is done to fix the banks and free up credit, those jobs won't be coming back and he seems to have forgotten all about that and rather points to his big spending plans as the way out. Our Treasury Secretary can't get anybody to work for him and he is at a standstill. It should be a concern for everybody.

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@Foxfyre,

Found it on A15, but haven't read it yet. Always read the funnies first, and they keep hiding Pepper . . . and Salt.

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@roger,

roger, Do you have a crystal ball that tells us how Obama's plan will eventually pan out? If you do, please share this wisdom with us.

What this loss in jobs that been trending for the past quarter is not based on what Obama plans to do; it's based on a) consumer spending is down, b) credit has all but disappeared, c) wealth for most Americans have been trending downwards which includes the equity in the homes and 401ks, and d) most are worried about their own job security.

Nobody can reverse this job loss without taking some kind of action; doing nothing is not an option. Doing nothing will only increase the pain.

No plan will turn this economy around on a dime (or in a few months); it's a world economic crisis.

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@roger,

Quote:

Obama's various plans and ideas affect the future.

His only plan was getting elected. A sort of jape. There were no plans what to do if he did get elected. Getting a couple of ridiculous dogs might have crossed his mind.

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@cicerone imposter,

Why would you think I have a crystal ball? You're looking at the market consensus, not anyone's prediction. The market is not exuding confidence. The market has time to look at his plans. Obviously, you and I are connecting different dots.

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@roger,

I did provide a link but I prefer to read that stuff in print too if I have access to it. For the record, so far as I know, the Hoover Institute hasn't taken a position on this. Smile

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@roger,

How can the market exude confidence in two months? They haven't even approved how and when the money will be spent. The conservatives are blocking the legislation in the senate.

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@cicerone imposter,

They nationalised another bank here tonight. After the markets had closed for the weekend of course.

Iceland have put women in charge. They reckon it's a testosterone problem.

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@spendius,

Let us know how that works out. Maybe we can start a referendum here. Smile

Seriously, the UK market isn't doing any better than ours. Who are the Brits blaming?

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@Foxfyre,

Everybody but themselves. Even the Darwinians are blaming the bankers which is as ridiculous as ridiculous gets.

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@spendius,

I assume, spendius, you are talking about one of the titans in the banking industry: Freedom Bank in rural GA. 4 branches and $17o million in assets. The FDIC did not nationalize it. The assets and liabililities were assumed by a neighboring bank. The FDIC is potentially on the hook for $13 million, but that looks to me to be high.
These things happen on Friday's for a reason. The acquiring bank gets a couple of days to see what they got and figure out how to integrate systems.
You are barking up the wrong tree, dude.

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@roger,

roger, There is no confidence, because people are losing their jobs and homes. More than two million people lost their jobs just within the past four months. That number increases every month. Do you have confidence?

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@cicerone imposter,

Quote:

There is no confidence, because people are losing their jobs and homes. More than two million people lost their jobs just within the past four months. That number increases every month. Do you have confidence?

again you sugar coat the facts CI....1.99 million have been lost in three months, not four. Another fun fact: 1 out of 8 home mortgages is at least a month behind, and that number is getting worse rapidly. A lot of these folks never could afford their mortgage, but a lot more could have until their employment situation changed. And almost all of this debt that is headed for foreclosure and huge write downs is collateralized through out the shadow banking system, there are a lot of firms who tomorrow clearly will not be worth what they claim they are today. But which ones? Nobody knows who is going to survive this economic collapse and who will not, so nobody wants to do any deals. And down we go.....

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You Republicans who are complaining about the market 'getting worse' under Obama do not understand the depth of the problem we face.

The 8 largest American banks are all insolvent.

The largest European banks are as well.

Ford and GM are both on the rocks badly.

Financial trading houses basically no longer exist as independent entities.

NOTHING is going to make this better quick. The view that things would be perking up or not getting worse as fast, if Obama had just done things differently, is a little farcical. The problems with our banks aren't just going to go away without exposing them to daylight, and that's not going to happen without a panic unless it's played right.

Cycloptichorn

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Quote:

Colin Barr, senior writer
Last Updated: March 6, 2009: 3:59 PM ET

NEW YORK (Fortune) -- The government is bracing for a big bank failure.

A bill introduced in Congress would give the FDIC, the agency that stands behind Americans' bank deposits, temporary authority to borrow as much as $500 billion from the government to shore up the deposit insurance fund.

http://money.cnn.com/2009/03/06/news/dodd.fdic.fortune/index.htm?cnn=yes

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@hawkeye10,

That's right, hawkeye, nobody knows who's going to survive this financial crisis. Private citizens as well as many of the big companies will go under, and that includes the big banks and finance companies.

Trying to infuse cash into banks will make no difference when people are losing jobs. When they have no income, they're not in a position to borrow money or buy any big ticket item. Car companies are kaput! Many old companies who have survived the past recessions will not be alive when this crisis is over. This is a completely new ball game, and the rules of the game must be changed in order to minimize as best they can the demise of families and companies.

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@cicerone imposter,

Quote:

This is a completely new ball game, and the rules of the game must be changed in order to minimize as best they can the demise of families and companies.

OMG, are you finally seeing it??...........that the old world order is dead but that almost everyone (including Obama unfortunately) thinks that it is still alive???? That this economic collapse does not get solved until a new global economic system is created?

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@hawkeye10,

It's not dooms day yet.

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@cicerone imposter,

Come on, you are not that stupid CI......You know that life is the endless cycling of birth and death, the death is the prelude to the birth. We are not talking about doom, we are talking about the sickness of holding on to something (or someone) that (who) is dead....no longer with us. If we would stop clinging the dead economic order the birth of the new one would be less painful, and a lot less expensive.

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Where is the US economy headed?

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