Economic snapshot and the Obamanation

The New York Times today reported on how our economy is doing. An excerpt is below.

I quote the Times as it will be the best source to get people to grok what is going on. Not because it is any good, but because some people believe the sermons and put it in their bibles and others know it is the left case scenario. Those who believe that second position know that if the Times reports inconvenient facts then we are in real trouble as even Big Brother can't pull of an illusion.

Of note, the Times says the recession is 18 months old. Huh?

In trying to understand this latest redefinition of reality, I did 30 seconds of research. Here is an article in which the Times said there is no real definition, so people (the Times) accept the findings of a private group from Cambridge, of course, on when a recession or expansion happens. I wasn't aware that the end of a recession is an expansion, but never mind.

The National Bureau of Economic Standards have decided (I like to sometimes use proper grammar) a recession began December 1 of 2007, which everyone, even the democratic politicians, seem to have missed during the election cycle. Anyway, though we all missed it, rest assured Bush caused the recession by being stupid and hid it from discovery by being an evil genius.

This doublespeak is part of the Obomanation. If something is inconvenient, just define the universe differently and refer to smart people in Cambridge or Oxford. Note the article uses the phrase "worst...since the great depression...." Which means, "Bush did it" not the Democratic Congress albeit Congress was in charge of money bills according to the Constitution. It is interesting how you can run a whole nation on five or ten talking point.

For an actual definition of recession: A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters.

See where it says "specifically." Can't have that. That is the mean definition that demonstrated Clinton left office in a recession. Under the new method, a committee report can hold otherwise.
I have no doubt the double-talk coming from Cambridge will take root. It reminds me of the U.N. report on global warming, the accepted religious belief of a ten years ago.

I propose we have a vote by selected economists on when the recession began, said votes interpreted by a committee of politicians, rather than a precise definition or facts. It is better that some mythical people tell us what is fact rather than define it.

Anyway, note the grass-roots disintegration is just starting - forget following the market. That is a casino where players are guessing about the future and how to best position oneself. It is fun and eventually reflects the macro conditions, but do not think a guy in Jersey buying GM last week knows what the hell is going on. (Why were people buying GM? First Prize for figuring out why one buys stock in a pending bankrupt company is one coffee and bagel. I sat around trying to figure out what I was missing.)

Time:

The United States economy lost 345,000 jobs in May, the government reported on Friday, a sharp slowing in the pace of job losses that fueled hopes that the economy was on its way toward stabilizing.

The recession continued to take a toll as the unemployment rate climbed to 9.4 percent, its highest point in a quarter-century. The rate — a measure of jobless people looking for work — rose more than expected, partly because more people were resuming the hunt for a job.

Economists were encouraged that businesses were cutting fewer jobs, but six million jobs have now disappeared since the recession began in December 2007, and 14.5 million people are now unemployed. They warned that job losses were likely to pile up through the rest of the year as the country’s labor market bottomed out. “These are still terrible numbers,” said Ian Shepherdson, chief United States economist at High Frequency Economics. “We’re a million miles away from a recovery.”

Financial markets nonetheless sensed recovery a bit nearer. Futures on the Dow Jones industrial average rose, and the price of oil shot above $70 a barrel for the first time since November, bolstered by hopes that demand would rebound as the global economy recovered.

In normal times, the loss of so many jobs in a single month would have been interpreted as a calamity. But 18 months into the longest recession since the 1930s, economists said the milder pace of job losses indicated that the economy was gradually leveling off as government stimulus money trickled out and businesses reined in their budgets and payrolls.

“Things are still getting worse, but the pace of decline has slowed down,” said David Wyss, chief economist at Standard & Poor’s. “Over all, it’s not quite as dire as it looked in the first quarter.”

The economy lost an average of more than 700,000 jobs per month during the first three months of the year as shocks from the credit crisis surged through the broader economy. But the pace of job losses eased to a revised 504,000 in April, a welcome sign that the decline in the job market would not continue forever.

Still, by nearly any measure, workers endured another brutal stretch of layoffs, furloughs and pink slips in May. Even as the broader economy made some halting steps toward recovery, businesses continued to slash their staffs and cut employee hours. Economists were expecting 520,000 job losses in May, and predicted the unemployment rate would reach 9.2 percent.

“There’s no question that the jobless rate is going to continue to rise,” said Bernard Baumohl, managing director of the Economic Outlook Group. “It’s a dismal job market. It’s going to remain awful easily for the balance of this year.”

Just this week, General Motors announced it was closing or idling 14 plants across the country, including several in Michigan, which has the nation’s highest unemployment rate. The closings will affect as many as 20,000 workers, and are just part of a vast reorganization by the automakers G.M. and Chrysler....

So, the question remains: what do we do where the government will force down interest rates artificially, thereby creating a backlog of pressure upward created by intentional inflation? There are choices to consider: buy precious metal, get fixed loans now, by bonds that are inflation adjusted.

Bob projects Barney the Purple Congressaur will soon succeed in having state bonds secured by the federal government, why not? - the state is self destructing, so buying a California obligation today will lock in 7%. He mentioned it would be tax free, but I am not sure if that works if you are in NY. On the other hand, he knows this stuff.

Such a smart move begs the question, is 7% enough? Or, do we just get out of the American economy.