Comments on: Enough of the Happy Talk http://myhundred.net/wordpress/?p=345 New Ideas for a Fair Deal Sun, 05 Sep 2010 14:21:16 -0600 http://wordpress.org/?v=2.8.2 hourly 1 By: Stronger-than-expected http://myhundred.net/wordpress/?p=345&cpage=1#comment-271 Stronger-than-expected Sat, 11 Jul 2009 04:41:09 +0000 http://myhundred.net/wordpress/?p=345#comment-271 Do you hear this from time to time? ‘The economy is stronger than expected.’ Do you hear this from time to time? ‘The economy is stronger than expected.’

]]> By: GB http://myhundred.net/wordpress/?p=345&cpage=1#comment-216 GB Thu, 21 May 2009 03:12:58 +0000 http://myhundred.net/wordpress/?p=345#comment-216 You have hit a nerve here. Change begins with transparency and a will to address the real economy. When will this happen? You have hit a nerve here. Change begins with transparency and a will to address the real economy. When will this happen?

]]> By: Genie http://myhundred.net/wordpress/?p=345&cpage=1#comment-215 Genie Wed, 20 May 2009 19:26:19 +0000 http://myhundred.net/wordpress/?p=345#comment-215 And we could take the long view, I suppose, and conclude that the Black Death wasn't really that bad because it spared two-thirds of the population! God's in his Heaven, and all's right with the world--I guess. After all, we've come through the Civil War, WWI, the 1918 flu pandemic, the Great Depression, WW2, etc.; we are doing better as a national economy and as a democracy now than we were before any of those horrific episodes occurred. (I only wish someone could give us the rosy side of these other troubling current issues which are interwoven with those already discussed: state budgets woefully in the red, Medicare and Social Security in danger, health care in crisis, the global rise of militant fundamentalist religious sects, global warming, and over-population.) I know what I see here in my quite prosperous suburb: shuttered businesses, pages of foreclosure notices in the local weekly newspaper, and restaurants that have few patrons. The cup is draining before my very eyes--but, no matter, I guess, for the fit will survive. Let's raise our cups to Wall Street! And we could take the long view, I suppose, and conclude that the Black Death wasn’t really that bad because it spared two-thirds of the population! God’s in his Heaven, and all’s right with the world–I guess. After all, we’ve come through the Civil War, WWI, the 1918 flu pandemic, the Great Depression, WW2, etc.; we are doing better as a national economy and as a democracy now than we were before any of those horrific episodes occurred. (I only wish someone could give us the rosy side of these other troubling current issues which are interwoven with those already discussed: state budgets woefully in the red, Medicare and Social Security in danger, health care in crisis, the global rise of militant fundamentalist religious sects, global warming, and over-population.) I know what I see here in my quite prosperous suburb: shuttered businesses, pages of foreclosure notices in the local weekly newspaper, and restaurants that have few patrons. The cup is draining before my very eyes–but, no matter, I guess, for the fit will survive. Let’s raise our cups to Wall Street!

]]> By: Jim S http://myhundred.net/wordpress/?p=345&cpage=1#comment-211 Jim S Wed, 20 May 2009 14:28:32 +0000 http://myhundred.net/wordpress/?p=345#comment-211 The moderator’s and Genie’s glasses are half empty. Mine is half full. Whether or not “the economy is stronger than expected” depends on whether you compare it to the last few years or to the long term. Over the short term (half empty), it is easy to conclude that the economy is performing very poorly; however, looking over the long term (half full) leads one to conclude that the current financial condition is following the Economic Cycles Theory, which holds that although growth rate is subject to fluctuations over a short term, it remains relatively steady over the long term. Let’s look at my half full glass one point at a time - 1) BANKRUPTCY FILINGS: Bankruptcy filings are projected to reach over 1.3 million in 2009 based on the current rate of 5,300 per business day. From 2002 thru 2008 while the economy was growing, over 9.5 million bankruptcies (97.5% personal and 2.5% business) or an average of slightly over 1.3 million per year, the same number that is projected for 2009, were filed in the US. In five of those nine years, filings were higher than they are projected to be this year. 2) UNEMPLOYMENT: While the unemployment rate is officially at 8.9% and is predicted by some economists to reach 10%, it doesn’t approach the unemployment rate during period from 1930 to 1940. According to the Bureau of Labor Statistics, the lowest unemployment rate during that period was 14.3% in 1937 after peaking at 24.9% in 1933. In more recent years, the rate in 1982 and 1983 was higher than it is today, and that period of unemployment was followed by the greatest sustained period of economic growth in our country’s history. The U-6 unemployment statistic is somewhat misleading because it includes those who say “they want and are available for a job and have looked for work sometime in the recent past” without clearly defining the terms “want” and “recent past.” In addition, it includes “persons employed part time for economic reasons.” That term is defined as “those who want and are available for full-time work but have had to settle for a part-time schedule,” but it is not necessary that they are looking for full time employment to be counted in that group. 3) HOME PRICES: The only ones hurt by the decline of home prices are those who bought after 2003 and have sold it since 2006 or are selling it now. Even those who made their purchase at the peak in 2006 haven’t lost a dime unless they sell. In fact, many homeowners who intend to stay in their homes have benefitted from the falling prices by having their property taxes reduced. Ask anyone who bought their home longer than five years ago if it has lost value since it was purchased. Their home value may not have gone up much in that time frame, but it probably hasn’t dropped either. Those who bought before that have a substantial amount of equity from appreciation. Ask the first-time buyer who purchased a new home in recent months for 10% to 30% less than it would have cost them five years ago if they are upset that the price of housing has decreased over the past four years. You can be sure that the price drops have made home ownership possible for many who previously would not have been able to afford it. Those two groups, ones who have owned their home for more than five years and those who have purchased theirs since the price collapse, undoubtedly constitute an overwhelming majority of homeowners today. 4) HOME FORECLOSURES: The number of U.S. households faced with losing their homes to foreclosure jumped 32% in April compared with the same month last year. The percentage increase of home foreclosures leads one to believe that foreclosures are quite common; however, that isn’t the case. According to the latest statistics from RealtyTrac, there were 342,038 household foreclosures in April. That amounts to only one home in every 374 in the US, just a bit over .25% (that’s one quarter of one percent). Using RealtyTrac’s numbers, there are about 128 million households (342,038 X 374) in the country. It also reports that the current total of foreclosures in the US is 1,874,881. If every foreclosure was a household (It isn’t because the total foreclosures include duplexes, apartments and commercial properties. Also included in the total are second homes and houses that were purchased by speculators who have been unable to sell and have walked away from the house.), there are less than 1.5% of the households currently in foreclosure. The worst case is that three out of 200 households are in foreclosure. That is the bad news; the good news is that 197 out of 200 households aren’t in foreclosure. 5) STOCK MARKET CRASH: The stock market has crashed several times in its history, and it has always come back. Those who invested in the stock market when it crashed and held their investments saw a substantial appreciation after the market recovered. There is no reason to believe that the same thing won’t happen today. While the recent 30% plus gain in the last few months certainly isn’t a recovery, it is a positive sign that investors are optimistic about the future of the economy. Smart investors aren’t complaining about the present condition of the market, they are seeing it as an opportunity to buy shares of good companies at bargain basement prices. 6) NEW UNEMPLOYED PEOPLE: While there were 637,000 first time filers for unemployment benefits earlier this month, never has the economy lost that many jobs in one week. To determine the actual number of jobs lost the number of previously unemployed claimants who obtained jobs during the same week must be deducted from the number of first time filers. On May 8, 2009, the Bureau of Labor Statistics reported that the number of unemployed persons increased by 563,000 or about 141,000 each week in April, the best reading since October 2008. It betters the forecast of economists who predicted the loss of 600,000 jobs in April, and it is an improvement from the 699,000 that were lost in March. The BLS reports that there are now 13.7 million unemployed workers, and 5.7 million jobs have been lost since the recession began in December 2007. That means that there were 8 million already unemployed when the recession began –-- 2.3 million more than have lost their jobs because of the economic slowdown. The moderator asks the question, “Whose economy are we talking about?” The answer is that the economy is good for those of us who haven’t been forced into bankruptcy, still have our jobs and haven’t been forced to sell our homes and our stocks. It’s even better for those who are buying homes and investing in stocks. Those two categories are certain to cover most of the households in the US. References: 1) BANKRUPTCY FILINGS http://www.creditslips.org/creditslips/bankruptcy_data/ http://www.bankruptcyaction.com/USbankstats.htm 2) UNEMPLOYMENT http://www.bls.gov/news.release/empsit.t12.htm http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm http://www.miseryindex.us/urbymonth.asp?StartYear=1982-01&EndYear=2009-03&submit1=Create+Report 3) HOME PRICES http://mysite.verizon.net/vzeqrguz/housingbubble/ 4) HOME FORECLOSURES http://abcnews.go.com/Business/Economy/wireStory?id=7572538 http://www.realtytrac.com/MapSearch/Index.html 5) STOCK MARKET CRASH http://stockcharts.com/charts/historical/djia1900.html 6) NEW UNEMPLOYED PEOPLE http://www.bls.gov/news.release/pdf/empsit.pdf http://www.bls.gov/news.release/empsit.t12.htm The moderator’s and Genie’s glasses are half empty. Mine is half full. Whether or not “the economy is stronger than expected” depends on whether you compare it to the last few years or to the long term.

Over the short term (half empty), it is easy to conclude that the economy is performing very poorly; however, looking over the long term (half full) leads one to conclude that the current financial condition is following the Economic Cycles Theory, which holds that although growth rate is subject to fluctuations over a short term, it remains relatively steady over the long term.

Let’s look at my half full glass one point at a time –

1) BANKRUPTCY FILINGS: Bankruptcy filings are projected to reach over 1.3 million in 2009 based on the current rate of 5,300 per business day. From 2002 thru 2008 while the economy was growing, over 9.5 million bankruptcies (97.5% personal and 2.5% business) or an average of slightly over 1.3 million per year, the same number that is projected for 2009, were filed in the US. In five of those nine years, filings were higher than they are projected to be this year.

2) UNEMPLOYMENT: While the unemployment rate is officially at 8.9% and is predicted by some economists to reach 10%, it doesn’t approach the unemployment rate during period from 1930 to 1940. According to the Bureau of Labor Statistics, the lowest unemployment rate during that period was 14.3% in 1937 after peaking at 24.9% in 1933. In more recent years, the rate in 1982 and 1983 was higher than it is today, and that period of unemployment was followed by the greatest sustained period of economic growth in our country’s history.

The U-6 unemployment statistic is somewhat misleading because it includes those who say “they want and are available for a job and have looked for work sometime in the recent past” without clearly defining the terms “want” and “recent past.” In addition, it includes “persons employed part time for economic reasons.” That term is defined as “those who want and are available for full-time work but have had to settle for a part-time schedule,” but it is not necessary that they are looking for full time employment to be counted in that group.

3) HOME PRICES: The only ones hurt by the decline of home prices are those who bought after 2003 and have sold it since 2006 or are selling it now. Even those who made their purchase at the peak in 2006 haven’t lost a dime unless they sell. In fact, many homeowners who intend to stay in their homes have benefitted from the falling prices by having their property taxes reduced.

Ask anyone who bought their home longer than five years ago if it has lost value since it was purchased. Their home value may not have gone up much in that time frame, but it probably hasn’t dropped either. Those who bought before that have a substantial amount of equity from appreciation.

Ask the first-time buyer who purchased a new home in recent months for 10% to 30% less than it would have cost them five years ago if they are upset that the price of housing has decreased over the past four years. You can be sure that the price drops have made home ownership possible for many who previously would not have been able to afford it.

Those two groups, ones who have owned their home for more than five years and those who have purchased theirs since the price collapse, undoubtedly constitute an overwhelming majority of homeowners today.

4) HOME FORECLOSURES: The number of U.S. households faced with losing their homes to foreclosure jumped 32% in April compared with the same month last year. The percentage increase of home foreclosures leads one to believe that foreclosures are quite common; however, that isn’t the case. According to the latest statistics from RealtyTrac, there were 342,038 household foreclosures in April. That amounts to only one home in every 374 in the US, just a bit over .25% (that’s one quarter of one percent).

Using RealtyTrac’s numbers, there are about 128 million households (342,038 X 374) in the country. It also reports that the current total of foreclosures in the US is 1,874,881. If every foreclosure was a household (It isn’t because the total foreclosures include duplexes, apartments and commercial properties. Also included in the total are second homes and houses that were purchased by speculators who have been unable to sell and have walked away from the house.), there are less than 1.5% of the households currently in foreclosure. The worst case is that three out of 200 households are in foreclosure. That is the bad news; the good news is that 197 out of 200 households aren’t in foreclosure.

5) STOCK MARKET CRASH: The stock market has crashed several times in its history, and it has always come back. Those who invested in the stock market when it crashed and held their investments saw a substantial appreciation after the market recovered. There is no reason to believe that the same thing won’t happen today. While the recent 30% plus gain in the last few months certainly isn’t a recovery, it is a positive sign that investors are optimistic about the future of the economy. Smart investors aren’t complaining about the present condition of the market, they are seeing it as an opportunity to buy shares of good companies at bargain basement prices.

6) NEW UNEMPLOYED PEOPLE: While there were 637,000 first time filers for unemployment benefits earlier this month, never has the economy lost that many jobs in one week. To determine the actual number of jobs lost the number of previously unemployed claimants who obtained jobs during the same week must be deducted from the number of first time filers.

On May 8, 2009, the Bureau of Labor Statistics reported that the number of unemployed persons increased by 563,000 or about 141,000 each week in April, the best reading since October 2008. It betters the forecast of economists who predicted the loss of 600,000 jobs in April, and it is an improvement from the 699,000 that were lost in March.

The BLS reports that there are now 13.7 million unemployed workers, and 5.7 million jobs have been lost since the recession began in December 2007. That means that there were 8 million already unemployed when the recession began –– 2.3 million more than have lost their jobs because of the economic slowdown.

The moderator asks the question, “Whose economy are we talking about?” The answer is that the economy is good for those of us who haven’t been forced into bankruptcy, still have our jobs and haven’t been forced to sell our homes and our stocks. It’s even better for those who are buying homes and investing in stocks. Those two categories are certain to cover most of the households in the US.

References:
1) BANKRUPTCY FILINGS
http://www.creditslips.org/creditslips/bankruptcy_data/
http://www.bankruptcyaction.com/USbankstats.htm
2) UNEMPLOYMENT
http://www.bls.gov/news.release/empsit.t12.htm
http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm
http://www.miseryindex.us/urbymonth.asp?StartYear=1982-01&EndYear=2009-03&submit1=Create+Report
3) HOME PRICES
http://mysite.verizon.net/vzeqrguz/housingbubble/
4) HOME FORECLOSURES
http://abcnews.go.com/Business/Economy/wireStory?id=7572538
http://www.realtytrac.com/MapSearch/Index.html
5) STOCK MARKET CRASH
http://stockcharts.com/charts/historical/djia1900.html
6) NEW UNEMPLOYED PEOPLE
http://www.bls.gov/news.release/pdf/empsit.pdf
http://www.bls.gov/news.release/empsit.t12.htm

]]> By: Zeke http://myhundred.net/wordpress/?p=345&cpage=1#comment-208 Zeke Tue, 19 May 2009 02:19:17 +0000 http://myhundred.net/wordpress/?p=345#comment-208 Well let's look. Baby-Boomers began turning 62 when? 2008 - tell me it ain't so. First attack the largest store of wealth (in most cases) the "primary dwelling" shoved along by the dreaded "mortgage exemption". If IT didn't exist just who'd have one. Ah-ha got'em on that one so now lets turn our attention to IRA-Keogh-401K-403B - you get the picture having watched them tank 30-50% in less that a year and by the way that money is an AFTER tax purchase soooo if you sold on the way down you've got those pesky capital gains taxes to attend to followed-up by adding those gains to personal income. It's a wonder that any wealth can be accumulated. The perfect trap as a legacy of the "greatest generation". I remind folks that those WWII boys were of an average age of 26 and had memories of the "Great Depression" as children. Remember that between 1974/1983 social security payments doubled (the begining of indexing - yet another hoax). Their greatest gift of all: 16 unbroken years of William Jefferson Clinton & George W Bush. I guess we should all be thankful after all. Well let’s look. Baby-Boomers began turning 62 when? 2008 – tell me it ain’t so. First attack the largest store of wealth (in most cases) the “primary dwelling” shoved along by the dreaded “mortgage exemption”. If IT didn’t exist just who’d have one. Ah-ha got’em on that one so now lets turn our attention to IRA-Keogh-401K-403B – you get the picture having watched them tank 30-50% in less that a year and by the way that money is an AFTER tax purchase soooo if you sold on the way down you’ve got those pesky capital gains taxes to attend to followed-up by adding those gains to personal income. It’s a wonder that any wealth can be accumulated. The perfect trap as a legacy of the “greatest generation”. I remind folks that those WWII boys were of an average age of 26 and had memories of the “Great Depression” as children. Remember that between 1974/1983 social security payments doubled (the begining of indexing – yet another hoax). Their greatest gift of all: 16 unbroken years of William Jefferson Clinton & George W Bush. I guess we should all be thankful after all.

]]> By: Genie http://myhundred.net/wordpress/?p=345&cpage=1#comment-206 Genie Sun, 17 May 2009 23:58:45 +0000 http://myhundred.net/wordpress/?p=345#comment-206 Bravo, once again! Yes, I hear the "happy talk" every day on the WBBM noontime business hour show, broadcast from Chicago's AM 78 radio station. I hear it from our Edward Jones investment advisor. I have been of the opinion all along that this optimistic talk reflects a concerted effort by the investment sector and politicians to prevent the public from confronting reality, because public recognition of the real situation would drag the market down horrifically and cause such demoralization and personal stress that domestic violence and suicide rates would skyrocket. Things are bad, very bad. My cousin lost his job in January. My brother-in-law has just lost his. We ate at two local restaurants recently that used to be bustling; this time the dining rooms were not even half full. So sad.... Bravo, once again! Yes, I hear the “happy talk” every day on the WBBM noontime business hour show, broadcast from Chicago’s AM 78 radio station. I hear it from our Edward Jones investment advisor. I have been of the opinion all along that this optimistic talk reflects a concerted effort by the investment sector and politicians to prevent the public from confronting reality, because public recognition of the real situation would drag the market down horrifically and cause such demoralization and personal stress that domestic violence and suicide rates would skyrocket. Things are bad, very bad. My cousin lost his job in January. My brother-in-law has just lost his. We ate at two local restaurants recently that used to be bustling; this time the dining rooms were not even half full. So sad….

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