Posted on 09/26/2009 7:43:38 PM PDT by bruinbirdman
Private credit is contracting on both sides of the Atlantic. The M3 money data is flashing early warning signals of a deflation crisis next year in nearly half the world economy. Emergency schemes that have propped up spending are being withdrawn, gently or otherwise.
Unemployment benefits have masked social hardship unto now but these are starting to expire with cliff-edge effects.The jobless army in Spain will be reduced to €100 a week; in Estonia to €15.
Whoever wins today's elections in Germany will face the reckoning so deftly dodged before. Kurzarbeit, that subsidises firms not to fire workers, is running out. The cash-for-clunkers scheme ended this month. It certainly "worked".
Car sales were up 28pc in August, but only by stealing from the future. The Center for Automotive Research says sales will fall by a million next year: "It will be the largest downturn ever suffered by the German car industry."
Fiat's Sergio Marchionne warns of "disaster" for Italy unless Rome renews its car scrappage subsidies. Chrysler too will see some "harsh reality" following the expiry of America's scheme this month. Some expect US car sales to slump 40pc in September.
Weaker US data is starting to trickle in. Shipments of capital goods fell by 1.9pc in August. New house sales are stuck near 430,000 – down 70pc from their peak – despite an $8,000 tax credit for first-time buyers. It expires in November.
We are moving into a phase when most OECD states must retrench to head off debt-compound traps.
Britain faces the broad sword; Spain has told ministries to slash 8pc of discretionary spending; the IMF says Japan risks a funding crisis.
If you look at the sheer scale of global stimulus this year, what shocks is how little has been achieved. China's exports were down 23pc in
(Excerpt) Read more at telegraph.co.uk ...
Is this the beginning of the “double dip”?
Hey America! How’s that “jobless recovery” thing workin’ out for ya?
The whole notion of a jobless recovery is ridiculous.
And that is exactly why I keep telling people that those ‘green shoots’ are weeds.
The consumer is 70% of our economy. It is simple math. No jobs = no consumer = no recovery
Couple all of that with those of us who simply are not spending, in protest of the dictator in the White House and the corrupt congress....Still doing my part!!
Ticker Guy agrees.
http://market-ticker.denninger.net/
Celente will turn your hair white.
Schiff is only for adults.
I found this interactive link to US figures (jobs, homes) over at CNN tonigt. THe manufacturing jobs trends by month over the last 1.5 years takes your breath away.
http://www.cnn.com/SPECIALS/2009/map.economy/index.html
How do we turn it around at this point?
High taxes = no jobs = no consumer = no recovery
We’ve all known this was coming, didn’t we?
You know, when things are tough, you can live off your credit cards for a while, quite nicely, too. But then the bill comes due, and it’s far worse than you realize. I really wish we could have spent our way out of this, because that was the path the people we elected chose. But I don’t see how that can possibly happen. They still made a god out of FDR, and he did so much of what Obama is doing, and gave us a multiyear depression besides.
By the way, the $8K for first time home borrowers? Here in FL, I have a good friend that does title stuff. As of 2 weeks ago, she told me she hasn’t seen any of it. And my son works with the car dealers around, most of them haven’t gotten their clunker money either.
Don’t go out on a limb for Obama money. It’s a mirage. And maybe it’s in his plan to leave these businesses holding the bag, anyway.
Suppose this means you won’t fall for the Democrat’s ‘business-less economy’ either?
Right in lockstep with "Hope and Change."
I have been saying that we are in the eye of a storm, and while we were here, the storm picked up considerably.
I think we will come full force out of the eye on Black Friday. It could take until next spring, but I am expecting really bad (as in violence, not economic) stuff going down all over the world, including the US. This guy hit the same points I’ve been discussing for a while now. One of the biggest is that when half a million a month are going ON unemployment, it is bad. When half a million a month are seeing their unemployment expire with no job, well, like Gerald Celente says, when people lose everything and have nothing to lose, they lose it.
My biggest concern is that when this DOES hit, it will be virtually overnight. Maybe a half a week.
Stock up, pay off your debts as best you can, have several thousand dollars in cash, gold might be better. Load your weapons just in case. Buy more ammo. Hunker down, pucker your a$$hole, it’s coming.
>>How do we turn it around at this point?<<
We passed the point of no return before the election. That was why I told my republican friends they may not want a republican in the white house this time around. Whoever is there is gonna get this blamed on them. That would be O.
Too easy. Throw the current politicians out, by force if necessary. From local on up. They are who got us here.
More insightful commentary from the UK.
You cannot turn anything around with Hussein and the current Congress. Things may get worse.
The consumer is 70% of the economy as measured by GDP, but is only a third when all intermediate investment is taken into account. Investment is much more important for an economy than consumption. But the idea of a jobless recovery is no less ridiculous either way.
In too much of the world (especially USA and Europe), the high income tax rate has resulted in either too much participation in the cash-only underground economy or too much money being funneled out of the country to offshore financial centers, all in the name of income tax avoidance. The amount lost to the the underground economy and offshoring of assets: probably around US$50 TRILLION just for the USA and Europe alone.
This is economic stupidity, because it results in WAY too much debt financing for economic growth, and historically we all know how disastrous debt financing can be in the long run. Changing our tax laws to encourage personal savings and capital investment staying in the country under better tax conditions would go a LONG way towards real economic recovery in the long run.
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