Barack Obama has made it clear you won’t get it from the President.
First off, as a refresher, there are leading economic indicators and there are lagging economic indicators.
The stock market is a leading economic indicator in that to the degree investors have the data and the visibility, the market tracks the forseable future, barring any unforseen events such as natural disasters, wars or terrorist attacks.
The 21 percent rally in the Standard & Poor’s 500 Index since Nov. 20 reflects speculation the worst of the recession is over, according to Biggs, managing partner at hedge fund Traxis Partners LLC, and Doll, chief investment officer for BlackRock Inc. Equities will probably keep rising, they said yesterday on Bloomberg Television.
“Sometime around the middle of the year there’s going to be pretty conclusive evidence that the economy has stabilized,” Biggs said. “That’s what the stock market is now looking forward and seeing, and that’s why I think that this rally carries further.”
Employment on the other hand, is a lagging indictor. Unemployment usually confirms what we already know, or at least suspect. The fact that we are hearing news of job losses is, at least from a macro standpoint, good news, as long as we are all resigned to the fact that we are in fact in a recession. Job losses usually mark the beginning of the end.
Context is everything. By no means is 7.2% unemployment severe in the context of past recessions. It’s been much higher in modern times, and around 5 1/2% of that is “built in” – represents the unemployable.
My advice is to reject media analysis of the economy, including – I mean especially – Barack Obama. His understanding of basic economics is impaired.
the president elect warned that failure to pass legislation enacting his proposals within the next few weeks risks letting the U.S. fall into a deeper and more prolonged recession.
…his understanding of politics and fear however is quite well developed, which makes him motivated. And dangerous.
I fear that a year or two from now, when housing markets have stabilized and demand for new mortgages is measurable, banks will fall back to more stringent qualifications then we have had since he late 90’s.
This means that poor people will have a harder time getting a mortgage. Since minorities are more likely to be poor than non-minorities, the usual suspects will began their redwhining dance. Since loosening mortgage requirements to put these people in homes has been discredited the only other option will be to lump good & bad credit risks together, so that someone who who has a good credit rating will pay a higher interest rate than they otherwise would have and someone who has a poor credit rating will get a better rate than they otherwise would have.
Reward failure, punish success. More socialism than in the Bush years.
The only way around this would be if the banks went back to strict consideration of the 20% DP rule.
Imagine a young working class married couple with kids looking at coming up with $40k + closing costs to get into their starter home.
Maybe a revitalized FHA is the answer. The FHA actually pays a penalty for making a bad home loan.
I won’t dispute your leading and lagging indicators. They are, for the most part, relativity consistent in their use.
A commonly accepted term for computing unemployment is:
http://www.wisegeek.com/what-is-the-unemployment-rate.htm
“”For the purpose of figuring unemployment rates, the unemployed are generally considered those people who are not working but are actively seeking work and have the desire and availability to work full time. “”
My Point is ‘unemployable’ is not a component and is not party of the 4-6 % deemed a healthy rate to stave off inflation. Those people are workers in transition, etc and others in the list below (from the link above).
Some other factors are computed and broken out like:
* Unemployed for more than 15 weeks
* People who lost jobs or finished temporary jobs
* The group meeting ILO figures
* People who have stopped looking for work
* Those expressing a desire to work but who have stopped looking temporarily
* Part-time workers who can’t find full-time job
Flash
Flush? Excuse me, but you don’t have the standing to dispute the time of day with anyone. Anyway, aren’t you supposed to be polishing something for Al Franken right now? Toddle along little batty.
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IMO, Nobama is setting the table for a two pronged assault on us.
Prong 1: Propose to the people that things are much worse than they are, while downplaying his ability to make them much better.
This way, *anything* he does will look like progress.
Any talk about America’s ability to show our “finest hour” will diminish the spotlight for “the One”, and cannot be countenanced. He’s going to prove, once and for all that we simply cannot fend for ourselves, which segue’s nicely to…
Prong 2: Once we believe that we are standing at the edge of the cliff, no action he takes will look *too* radical.
The Scrub party sees it’s golden opportunity to, at long last, get some real Socialism going. If they can keep the population frozen with fear, they are much more likely to have the ability to keep the steamroller moving at full speed.
Flush? Excuse me, but you don’t have the standing to dispute the time of day with anyone. Anyway, aren’t you supposed to be polishing something for Al Franken right now? Toddle along little batty.
=================
IMO, Nobama is setting the table for a two pronged assault on us.
Prong 1: Propose to the people that things are much worse than they are, while downplaying his ability to make them much better.
This way, *anything* he does will look like progress.
Any talk about America’s ability to show our “finest hour” will diminish the spotlight for “the One”, and cannot be countenanced. He’s going to prove, once and for all that we simply cannot fend for ourselves, which segue’s to…
Prong 2: Once we believe that we are standing at the edge of the cliff, no action he takes will look *too* radical.
The Scrub party sees it’s golden opportunity to, at long last, get some real Socialism going. If they can keep the population frozen with fear, they are much more likely to have the ability to keep the steamroller moving at full speed.
Be careful when discussing unemployment rates. The “core” rate that everyone cites has changed from past recessions. What used to be core in ’82 was unemployed and underemployed-for-a-short-time rather than our present definition. By the definition of the 80s our unemployment now would be closer to 12% than 7%.
And lefties: it was Clinton that changed how unemployment was calculated so that he was closer to ILO standards, not W.