It's declining and will continue to decline
It's declining, but will rebound
It will be average, then rebound
We don't know yet. We have to wait and see
The data on consumer spending and all of the other econ data will be released on/around the 5th and 6th of Jan.
I use the term "slow bleed." It's a slow bleed economy.
Lots and lots of business, in varieties of different industries closing. About 1 closure in my home town every 4 months or so.
Many people die at twenty five and aren't buried until they are seventy five.
Economic downturn similar to the 1930s. How about the 1870s? And it took that downturn a long time to recover.--
January 2, 2012 4:00 A.M.
The Long, Long Depression.
Better days are ahead — in the 2030s.
By Matthew Lynn
Sketch of the crash of 1873
The markets were on a roll. New companies were being listed every few days. Germany had a new currency, and its mighty exporters were doing business around the world. Greece had merged its currency with that of France and Italy in a bold experiment in monetary union. A massive new continental economy was flooding the world with cheap goods, disrupting old industries. And new technologies were creating global markets, where money and information zipped from bourse to bank virtually instantaneously. Until the crash came, it seemed as if everyone would keep on getting richer and richer forever.
You could be forgiven for thinking that was a description of New York in 2008. Or London in 2000. Or Shanghai right now. But actually it is Vienna in 1873.
AdvertisementIn that year, the Austrian capital was the epicenter of one of the great bubbles of the Victorian era. Money was flooding out of the new, unified German economy, and much of it landed in the lightly regulated Vienna bourse. Over the course of three years, more than a thousand companies joined the market. Preparations for the 1873 World Exhibition in Vienna led to a massive building boom. The Austrian rail network doubled in just five years. Over six months, the Vienna market tripled in value. Then, in May 1873, it all crashed spectacularly. The market plummeted and had to be temporarily closed. The panic quickly spread to Germany, leading to what became known as the Gründerkrach, or “Founders’ Crash,” because it came so soon after the Gründerzeit, or “Founders’ Boom,” that had followed unification.
By November, it had spread to Wall Street, sparking a collapse that started when Jay Cooke & Company, a bank that had been one of the main financiers of the American Civil War and was among the most prominent finance houses on Wall Street, suspended payments on its bonds. “The brokers stood perfectly thunderstruck for a moment, and then there was a general run to notify the different houses of Wall Street of the failure,” reported the New York Times the next day. “The brokers surged out of the Exchange, stumbling pell-mell over one another in general confusion.”
The crash marked the start of what economic historians refer to as the long depression. During Edwardian times, it was actually known as the Great Depression, but rather like the Great War of 1914–18, it had to be renamed once a worse catastrophe came along. Either name would do, however; the slump was both long and great. It lasted from 1873 to 1896, and over that period output crashed, unemployment increased, prices fell, and migration soared. Most of today’s German population in the U.S. is descended from Germans who migrated here during the years after the crash, trying their luck in Cleveland and Milwaukee after they were laid off in the Ruhr.
The long depression was, for many years, of interest only to a small band of economic historians. Right now, however, it seems full of lessons for our own times. The parallels are almost spooky. In the 1870s, Germany had recently reunified, just as it has now. A currency union had been formed in Europe but was struggling to stay together. There was a new form of instant communication, the telegraph, that was more revolutionary than e-mail in the time saved over the technology it replaced. There was a new continental economy, and the U.S. was flooding the world with cheap grain just as China now floods the world with cheap computer chips. There was even a wave of financial innovation. In the years leading up to 1873 crash, new industrial banks such as Deutsche Bank had been formed, and the global bond market was fueling the railway boom. And, of course, there was an epic financial bubble that suddenly blew up. The question is whether we are going to witness another two-decade slump like the one that followed the 1873 crash.
Unfortunately, it is starting to look as if we might. The U.K. is already experiencing its longest depression since records began: The current downturn has lasted longer than the slump of the 1930s. Europe is heading for a deep depression next year as the austerity regime that will be needed for the euro to survive starts to bite. The U.S. will struggle to grow significantly. We are used to short, sharp recessions, because those were what we experienced for most of the 20th century. But it is now more than three years since the crash of 2008, and things are getting worse, not better.
When the markets blew up in 2008, policymakers rushed to make comparisons with the 1930s. True, that was a terrible depression, but one that was over quite quickly. The Great Depression was caused by a sudden collapse of demand and shrinking money supply. Now, as then, policymakers assumed that if the government expanded its deficits and central banks printed lots of money, that would fix the problem. It hasn’t, and it should be clear by now that it isn’t going to.
Why not? Because what we are really dealing with is a structural depression. In reality, the global economy is facing not one crisis, but three.
There is a debt crisis. The developed world has been building up debts on a spectacular scale for three decades. According to McKinsey data, global debt now stands at $158 trillion; that is up from $77 trillion in 2000. Put another way, global debt amounts to 266 percent of global GDP now, compared with 216 percent a decade ago. While economists used to think that debt was largely neutral — on the grounds that once person’s borrowing is another person’s loan — we are now discovering that borrowing on that scale is unsustainable.
Then there is a currency crisis. For most of the post-WWII period, the dollar was the anchor of the global economic system. That worked when the U.S. was the overwhelmingly dominant economy. It doesn’t work anymore. The dollar is now down to 60 percent of reserves, as central banks diversify away from a currency falling in value. At some point we will come up with a new core currency — perhaps the Chinese renminbi, perhaps gold. But until we do, there will be more chaos ahead.
And finally, there is the euro, perhaps the most dysfunctional monetary system ever created. Welding together the currencies of 17 very different economies, without any kind of fiscal union to compensate for the differences between them, was always a high-risk experiment. By now we can surely agree that it has failed. The euro was meant to promote faster growth and greater stability. It has become instead a cause of depression and volatility. Until it is dismembered, there is little chance of the global economy’s returning to stability.
This is a structural depression — just as the long depression of the 19th century was. And it won’t be over until we have fixed the way the economy works.
The trouble is, none of those tasks can be accomplished easily. The euro will take several years to restructure, and if it falls apart chaotically, it will plunge the world into a deep depression. Any replacement for the dollar will take a decade to establish itself. We don’t even have much idea what it might be yet: Historically, the reserve currency has always been either gold or the currency of the world’s dominant economy, but China is not ready to assume that role yet, and the shiny yellow metal has a long way to go to reclaim its place as the ultimate store of value, even if it is taking a far larger share of anxious investors’ portfolios. Only once those things are achieved will we be able to start reducing our debt to manageable levels.
The great 19th-century depression lasted for more than two decades. On the same reckoning, this slump will last until 2031. That may be too long a time scale: The old joke that economists make forecasts only to give the weather guys someone to laugh at should stop anyone from making predictions for decades ahead. But the lesson of the long depression is that a downturn can last a very, very long time — and it’s already clear that this one isn’t going to be over soon.
The recent news by the mainstream media is of the 200,000 jobs created (during the holiday temp hiring season.) Not all jobs created are holiday temp jobs, but what industries were they in? How many jobs will be needed to be created to even keep up with the 125,000 adults who enter the labor pool every month. Article: Jon Talton | Latest jobs news is good, but not yet good enough | Seattle Times Newspaper
Special to The Seattle Times
PREV of NEXT
Is it finally over, this ghastly jobless recovery that has hurt so many Americans? That's the tempting question after Friday's report that the economy added 200,000 jobs in December and the unemployment rate fell to 8.5 percent.
It's too early to tell whether this is the beginning of a trend of significant job growth or another false start. No matter, the American jobs machine will continue to face challenges not seen since the Great Depression.
First, the undeniably good aspects of this report: It is above the minimum of 125,000 jobs necessary to accommodate those naturally entering the workforce each month
.....Finally, the ugly: The Hamilton Project, an economic think tank begun by the Brookings Institution, estimates that if the economy created 208,000 jobs per month, the best rate seen during the 2000s, it would take more than 12 years to close the jobs gap left by the Great Recession.
Bump that up to 321,000 jobs per month, the average monthly rate for the top year of job creation in the 1990s, and it would still take five years for the economy to return to prerecession levels.
This is no different when the same media reported on the "real estate recovery", because home sales were up after Obama stopped foreclosures, and his administration offered an $8,000 cash bonus for new home owners -- completely ignoring that the program created a surplus in demand, by limiting supply of additional foreclosures, and denying that this trend would reverse once the federal stimulus ended.
Which it did.
This is no different - big reporting on 200,000 new jobs 'created' and ignoring that after January 5th, most of those jobs will evaporate, and nothing's changed in the market.
The media is so freaking desperate for a miracle that they keep wanting to create one, but really are just causing the reverse with their bullshit.
Yup....those jobs that were created.....and....
Job Cuts in U.S. Jumped 31% From Prior Year’s Decade Low
By Alex Kowalski - Jan 5, 2012
Job cuts announced by U.S. employers increased in December from the prior year’s decade low.
Planned firings (CHALTOTL) rose 31 percent to 41,785 last month from 32,004 in December 2010, which were the fewest since June 2000, according to Chicago-based Challenger, Gray & Christmas Inc. Job cuts totaled 606,082 for all of 2011, up 14 percent from the previous year, the report showed.
Government and financial services accounted for four of every 10 announcements last year, and the areas will probably struggle this year as federal agencies try to reduce budget deficits and the European debt crisis threatens to cut off credit, the report said. At the same time, the year’s total was less than half the recession peak of 1.29 million firings announced in 2009.
Entire: Job Cuts in U.S. Jumped 31% From Prior Year
^ Gee, what happened to those 200,000 jobs?
Yes, those 200,000 jobs that have been repeated in the MSM for 3 days. Here's the bigger picture:
Here's an article I came across today. Pacific NW | Our American Promise is at a crossroads | Seattle Times Newspaper
Our American Promise is at a crossroads
200,000 jobs added....hooray and thanks, media.....and now....look at this
By Shobhana Chandra - Jan 12, 2012
Jobless Claims in U.S. Increased More Than Forecast
Jan. 12 (Bloomberg) -- Sales at U.S. retailers in December rose 0.1 percent, less than forecast, following a 0.4 percent advance in November that was more than initially reported, Commerce Department figures showed today. Meanwhile, jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, according to the Labor Department.
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls.
Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 375,000. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased.
OK, Harry Dent: you rep is on the line. What you say has been said for a long time - older Americans are and will stop spending. With the already sluggish economy, what will this mean? Dent says, buh-bye to the S & P. A big decline coming? We'll see.
The Decline Of Peak Spenders Is A Terrifying Demographic Headwind
Read more: Demographic Headwinds for Economy and Markets: The Decline of Peak Spenders
Demographer Harry Dent was recently a featured guest on Bloomberg TV in an interview that was promoted with the frightening tease "S&P 500 to Fall 30-50% in 2012." See the video clip below for the complete interview.
The rationale for Dent's grim forecast is primarily based on the demographics of the peak spending years, an age cohort he refers to in the interview as ages 46 to 50. If we use the Census bureau five-year data groupings, the cohort in question is Age 45-49 (which is the range Dent normally refers to in his publications).
This is getting pathetic.
Obama Tells Woman: "Interesting" Unemployed Husband Can't Find Job
During his Google+ hangout Pres. Obama tells a woman that her husband shouldn't be unemployed from the growth he has seen in the economy. Obama said he finds it "interesting" because he is getting "the word" that someone in her husband's job field "should be able to find something right away."
Obama offered to do something if she would just send him her husband's resume.
The woman wants to know why Obama is extending visas for foreigners when there is tons of demand for American jobs by Americans.
"I don't know what your husband's speciality [is], but I can tell you that there is a huge demand around the country for engineers," Obama told the woman.
"I understand that," she responded. "But how am -- given the list that you're getting, I mean we're not getting that. You said in the State of the Union address for business leaders to ask what can they do to bring jobs back to America
During the back and forth between Obama and the wife of an unemployed engineer, Obama asked for his resume.
Obama Tells Woman It Is "Interesting" Her Unemployed Husband Can't Find Job | RealClearPolitics
Jim Rogers, later October 2012. Only 3 months ago. Recession coming in '13 or '14.
Watch and listen to Jim.
A foolish consistency is the hobgoblin of little minds
-Ralph Waldo Emerson