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Post by unlawflcombatnt on Oct 16, 2006 21:56:13 GMT -6
Once again, the financial industry is grasping at straws to remain bullish on the economy. The only positive indicator on Friday, October 13th, was the Michigan Consumer Sentiment. This survey is based information from of 500 phone calls to selected households. Though October's overall "sentiment" of 92.3 was higher than September's 85.4, it is only slightly higher than January's 91.2. The "present conditions" part of the survey also increased to 106.1, but was still lower than April's 109.2, March's 109.1, and January's 110.3. Apparently this was good enough to cause stock prices to rise. This can be seen in the modified chart below from Briefing.com, showing the January--October 2006 period. The Retail Sales numbers were much worse than predicted. The total was predicted to be +0.1%. Instead it came in at -0.4%. Retail Sales excluding autos was predicted to be -0.1%. Instead, it came in at -0.5%. However, the spin version of this is that it was all do to a reduction in gasoline prices, and that without gasoline sales it would be positive. If the fall in gasoline prices had resulted in an equivalent amount of spending on other items, retail sales would not have declined any. But it was not compensated for because consumer spending power is declining. The drop in gasoline prices simply blunted the aggregate decline in other areas, and allowed more money to be spent elsewhere. When all is said and done, total retail sales to consumers declined 0.4%, a full 0.5% more than predicted. Below is a copy of the charts from Briefing.com showing the predicted and actual numbers for Retail Sales. The totals are underlined in red. The previous estimates and previous month's un-revised numbers are in italics and parenthesis next to the current numbers. The trade balance, predicted to be only a -$66.0 billion for August, came in $4 billion worse than expected at -$70.0 billion. That gives an annualized trade deficit of -$840 billion, the worst ever. All of this follows a week where the monthly employment report came in showing just 51,000 payroll jobs created in September. Hourly non-inflation adjusted wages increased 0.2%, which is the same as last month's 0.2% increase in the consumer price index. Also in the during the previous week, Factory Orders for the month of August increased 0.0%, following July's dramatic decline of -1.0% in Factory Orders. The housing bubble has completely burst, with prices declining in almost every market and foreclosures increasing at a rapid rate. Despite the preponderance of negative news, the Dow Jones Industrial average continues to rise. It appears investors have simply ignored documented facts and replaced them with their own alternate reality. Like the housing bubble, it appears the Dow is rising on hot air alone.
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Post by lc on Oct 17, 2006 15:07:45 GMT -6
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Post by unlawflcombatnt on Oct 18, 2006 2:42:25 GMT -6
LC, Yes, there was definitely a little tongue-and-cheek in my comments. The Dow definitely represents (overly-optimistic) investors, not the economy as a whole. But the Corporate media propagandists constantly cite the rise in the DJI as evidence of a good economy. In fact, the current "bull" market in stocks is a perfect match for the "sucker's rally" predicted by Nouriel Roubini. In his most recent article, Roubini points out that the stock market rallied in April and May of 2001, after the recession had already started. The S&P index rallied 18% in April and May of 2001, and only began to decline in June of that year. Also, 95% of economic forecasters predicted in March 2001 that there would be no recession in 2001, despite the fact that the economy had already entered a recession. My point is just how illogical and unrealistic the current stock market optimism is. Today's industrial production and capacity utilization reports provided further evidence of a slowing economy.
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Post by lasher on Oct 18, 2006 8:28:23 GMT -6
It upsets me to hear all the hype about "the tax cuts are working" and "the stock market is booming". Performance of this index of 30 industrial stocks is not an indication of how the stock market is doing, unless it is confirmed by similar gains of other indexes.
The previous DOW high water mark was at 11,723 on January 14, 2000. It was at 10,578 when Bush took office on January 22, 2001.
It didn't reach another all-time high until this month, when it closed at 11,727 on October 4. Even discounting the narrow focus of the DOW, this is pretty sorry performance and certainly no vindication of the economic policies of Bush and his supply-siders.
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Post by lc on Oct 18, 2006 9:24:29 GMT -6
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Post by lasher on Oct 18, 2006 13:50:07 GMT -6
Do you have figures on that for the DOW, S&P, and NASDAQ, lc?
Lasher
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Post by lc on Oct 18, 2006 19:30:17 GMT -6
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Post by lasher on Oct 19, 2006 7:06:40 GMT -6
Very good, lc! I've been looking for an article that examines stock market performance between January 22, 2001 and today. If I can't find any I will write one myself. This needs to be part of an overall picture of this administration's true economic performance, to counter ridiculous claims that the economy is booming and the tax cuts are working. Here is an article that a very wise man wrote last year about supply side economics, and how the philosophy has worked during the current administration - with particular focus on job creation. modernamerica.blogspot.com/2005/06/supply-side-economics.htmlI was thinking about reworking that article to include the stock market since The Decider has been bringing the subject up so often lately.
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Post by lc on Oct 19, 2006 8:29:55 GMT -6
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Post by lasher on Oct 19, 2006 9:44:08 GMT -6
Thanks. I think I'll be able to put something forward in simle terms, fit for consumption by the general population. I'll probably come back here for help. Want to have some fun? There's a good article at this site: jabbs.blogspot.com/2006/10/economists-disagree-with-bush-on.htmlOne of the posters there thinks the DOW's recent performance is significant.
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Post by unlawflcombatnt on Oct 19, 2006 14:46:48 GMT -6
The recent rise in the Dow is a perfect example of how people believe what they want to believe, instead of the documented facts in front of them. It's fairly obvious that wishful thinking will trump logical thinking almost always. The facts are pretty clear. By almost all measures, our economy is circling the drain. The best indicator is probably Leading Indicators. Today's predicted increase Leading Indicators of +0.3% came in at only +0.1%. The 6-month change has been -0.9%. It takes a change of -1.0%, combined with 3 straight monthly declines, to signal a recession warning. Most of the major contributors have been been negative over the last 6 months. Below is a bar graph from Briefing.com showing the overall trend in Leading Indicators. Below that is a modified copy of the Leading Indicator report from Briefing.com. The 6-month change in the Manufacturing Workweek is -0.54%. The 6-month change in Consumer Goods Orders is -0.28%. The 6-month change in Nondefense Capital Goods Orders is -0.13%. The 6-month change in Building Permits -0.58%. The 6-month change in Interest Rate Spread is -0.06%. (Historically, interest rate inversions have signaled recession. Apparently, however, that rule has been changed by the "new" economists.) What are the major positive contributors to Leading Indicators? Stock Market Prices and M2 money supply. So it is only the current "irrational exuberance" of investors, and the "irrational" creation of more money by banks and the Federal Reserve that has put today's reading in positive territory, and kept the 6-month change from being more than a -1.0%. Furthermore, the Philadelphia Manufacturing Index, predicted to rise by 8, actually declined by -0.7%. This follows last month's decline of -0.4%. Below is a graph showing the downward long-term trend of the Philadelphia Index. (The actual Manufacturing Index is the blue line.) It's really hard to put a positive spin on all of this. Yet the Bush camp and the Kudlow nutjobs continue to do so.
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Post by lasher on Oct 20, 2006 7:41:10 GMT -6
It's easy for chronic liars to put a positvie spin on anything they want. See, they get lots of practice creating distortions. How about the deficit, that's currently the fourth lagrest in history if memory serves? But this wonderful news vinidcates Bush economic policies because it's a big improvement. But only when compared to deficits run up in other years by this same failed administration. Yessir, them tax cuts is a-workin! Help me out with some basics in bonehead economiocs 010: Is there a set of measures that is universally respected and used to gauge how the economy is doing? Is that the key economic indicators? If so, what are they? How do they differ from leading indicators? Don't hurt me, keep it basic.
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Post by lc on Oct 20, 2006 8:24:51 GMT -6
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Post by lasher on Oct 20, 2006 10:26:42 GMT -6
Yes, I'm aware of the off-budget borrowing scam that hides the true amount of deficits. Thanks for the heads-up all the same. Interesting, how they incorporate the surplus assets of the trust funds, but none of the liabilities. I believe the practice started well before January 2001, however, so I usually refer to the 'deficit lite' figures so that I can more easily make an apples-to-apples comparison with performance during prior administrations. zfacts.com/p/519.htmlibew.org/legislative/Rev042304-JustFacts.pdfDo you know when this practice first began? If you go back to the '80s it would be academic because there were no surplusses to speak of.
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Post by lc on Oct 20, 2006 11:33:34 GMT -6
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Post by lasher on Oct 20, 2006 12:56:13 GMT -6
Yes, that is their plan to steal the SS trust fund. Just make sure the general fund never pays anything back. And where will it go? It already has, in the form of Junior's 2001 & 2003 tax cuts mostly for the rich, and in other giveaways like the Paris Hilton tax cuts.
While it is true that most SS obligations are down the road, this should be accounted for as future liabilities. Corporations routinely factor in (and out) this type of responsibility. But of course, if you plan all along was to gut SS and leave beneficiaries in the lurch to make the rich richer, then it makes sense to ignore this aspect.
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Post by lc on Oct 20, 2006 13:18:29 GMT -6
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Post by unlawflcombatnt on Oct 20, 2006 15:59:59 GMT -6
I have a site that showes the annual Social Security receipts along with Social Security outlays. Since these numbers come from the government, they may well be distorted. According to these statistics, Social Security receipts for 2005 were $604 billion, while the outlays were $442 billion. So that leaves a Social Security surplus of $162 billion for 2005, which allows the Bush dictatorship to "borrow" this money and use it to pay down the Federal deficit by $162 billion. The link can be found at Social Security Administration.
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huck
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Post by huck on Oct 20, 2006 18:01:19 GMT -6
"The argument that the United States Treasury bonds in which the Social Security trust is held are nothing but a bunch of IOUs—pieces of paper that might or might not be honored, meaning Bush is entertaining the calamitous idea of the United States government defaulting on its debt—is hardly a message that inspires confidence, either here or abroad." www.globalaging.org/pension/us/socialsec/2005/playbook.htmIf we default on our debt, even just the one to the SSA, it is all over for our economy. This is what bush wants, to colapse the usa economy.
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Post by lc on Oct 20, 2006 19:29:54 GMT -6
Hey Huck, I was afraid that that article with your introduction and your reputation was gonna be something scary and new to me. It wasn't.
The scam of private accounts is a twofer. It eliminates the need for the US to ever pay the SS bonds which raises dozens of questions. And more insidiously it forces average Americans to "invest", and that word is used so loosely it falls off a calf, into an investment article that has no intrinsic value except that applied by the forced investment in the "investment".
But saying Bush wants to collapse the USA economy rather than just steal it blind....Am I missing something?
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huck
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Post by huck on Oct 20, 2006 20:13:33 GMT -6
The private accounts is not the problem, it is the implication that the bonds held by the SSA are not valid as a form of capitol for the future. That he feels a debt of the government to its own people is voidable is scary, does he feel it is also right to default on bonds held by any private persons? Is it right to ignore a debt to your family? That he also feels that the other debt he has introduced, (is he up to 14k a head in money he alone has borrowed for us? ) is immaterial shows that he expects either a default(bankruptcy) or huge future inflation that will out pace the interest and principal. any of these results most probably will produce a collapse, as our consumer and foreign confidence in the economy will be destroyed. If you look at his actions thru this viewpoint "lens" more of his actions become understandable and it is clear to me this is his objective. He is spending like a drunken sailor.
I should have dug deeper, i only looked for his quote on the SSA bonds, but more than that one time he has expressed ideas that show he is a president expecting the USA to declare "bankruptcy" soon.
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Post by lc on Oct 20, 2006 20:21:26 GMT -6
Well I buy every bit of it right up to the point of why.
Motive, opportunity, and means. What is the motive. He has opportunity and means. And he is doing it.
It is pretty clear he wants to rob, but collapse? why?
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Post by unlawflcombatnt on Oct 20, 2006 23:47:44 GMT -6
The private accounts is not the problem, No, I have to disagree. The "private accounts" are the entire reason Bush wanted to "reform" Social Security. He has no slightest interest in fixing anything. His goal was to continue stealing Social Security funds to pay for government, while borrowing even more money for private accounts to subsidize Wall Street. His plan was nothing more than attempt to further subsidize Wall Street, this time by borrowing even more money from taxpayers. Social Security privatization was nothing more than attempt to give more handouts to banks and Wall Street at the taxpayer's expense. If he was concerned about "fixing" anything, he would have directed his efforts toward Medicare's deficits which are much worse than Social Security. I don't think he's trying to destroy anything. He's simply trying to transfer as much wealth from average Americans to his rich friends before the whole house of cards collapses. I agree that Bush's implication that we may default on our bond debts is scary. But I think the theft and connivery that will precede such a default is even a bigger problem. No one has any good suggestions as to how to bail out the economy when the full brunt of the bursting housing bubble and auto production recessions take effect.
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huck
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Post by huck on Oct 21, 2006 7:29:41 GMT -6
Well I buy every bit of it right up to the point of why. Motive, opportunity, and means. What is the motive. He has opportunity and means. And he is doing it. It is pretty clear he wants to rob, but collapse? why? After such a collapse there will be quite an advantage given to those that own raw materials or the means to produce from those raw materials. People that have hard assets like gold or real-estate investments should also be able to ride out the problem. But the little people who live day to day on their paycheck will be ruined, selling their assets at fire sale prices to survive. It will further drive apart the classes, probably eliminating the middle class. And it will create a political environment where the upper class can buy their way into power to solidify their control of what is left. It is but an extreme form of robbing us blind.
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huck
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Post by huck on Oct 21, 2006 7:59:14 GMT -6
No, I have to disagree. The "private accounts" are the entire reason Bush wanted to "reform" Social Security. He has no slightest interest in fixing anything. His goal was to continue stealing Social Security funds to pay for government, while borrowing even more money for private accounts to subsidize Wall Street. His plan was nothing more than attempt to further subsidize Wall Street, this time by borrowing even more money from taxpayers. I didn't mean to imply that bush's private accounts idea was a good idea. I do think that private accounts can be a valuable addition to the current program, think 401k style. I agree that but it is my feeling he will not be satisfied with just that and wants to also steal what will be available after the collapse and to do so it has to collapse. Just as like to a dominionist we need to put isreal into the middle east and start a war before the second coming happens, it seems bush feels a need to create situations where the "little man" has nothing left and the fat cats have it all. The housing bubble has begun to price all but the upper class out of homes already. Average people might have been able to buy more cars if their wages had kept pace with those of the CEOs. Maybe he doesn't see his policys as leading to collapse, but to me even the desire to prop up the stock market in the short term with something like HIS private account scam is just a short sighted attempt to make things look normal until the end. Sort of like throwing a lavish party or buying steak on your credit card as you fill out the bankruptcy forms, knowing that said debt will just be excused soon. bush seems determined to continue policies that will only result in destruction, rather than trying to show us how to live within our means.
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Post by lc on Oct 21, 2006 8:50:26 GMT -6
Unlawful said: No one has any good suggestions as to how to bail out the economy when the full brunt of the bursting housing bubble and auto production recessions take effect.
Well I do, I learned a few things from the last great depression.
~~~~~~~`` Huck, I think we all agree more or less, we just have difficulty accepting that Bush really sees the magnitude of his failures. And SS won't fail until 2017. And then it will just offer reduced benefits.
I spose I can assume you believe that Grover Norquist's end game is collapse and he is the architect of the fiscal philosophy of Bush?
All we are debating is intent. It is pretty obvious he is leading the charge toward collapse. That he doesn't seem to have any concerns about the future.
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Post by lasher on Oct 21, 2006 23:31:54 GMT -6
I'm not ready to concede that we're going to default on the treasury bonds that are held by the Social Security trust fund. If this debt is paid as it should be, Social Security will be able to continue is it is without benefit reductions until 2048 or so - and essentially forever with relatively minor adjustments.
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Post by lc on Oct 22, 2006 6:46:15 GMT -6
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huck
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Post by huck on Oct 22, 2006 10:08:22 GMT -6
All we are debating is intent. Just as with the occupation, i find it very hard to think of bush being so stupid he doesn't understand the consequences of his actions and statements. This is why i feel there is intent. How can someone make so many wrong choices without planning to do so.
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Post by lc on Oct 22, 2006 10:33:52 GMT -6
Well Huck, I can't really answer for the Bush.
Lets just say that saying one thing and doing another is probably a life long pattern with im and he probably has a well developed denial mechanism that actually does allow him to believe things that he would otherwise know are not true.
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