Not-So-Happy Leap Day: Economic News Goes From Bad To Worse

As if investors didn't have enough to worry about, Friday's batch of economic numbers shows more signs of recession as well as its evil twin--inflation.

First, the government reported that U.S. consumer spending rose more than expected in January, but the gain was eaten up by swiftly rising prices.

Then, a Chicago-based business group said U.S. Midwest business activity contracted sharply in February, showing that even areas of the country least affected by the boom-bust housing cycle are feeling ripples from the crisis.

On top of that, U.S. consumer sentiment dropped to a 16-year low in February, hitting levels that usually sound the alarm bells of recession, on worries about declining incomes and rising unemployment, a survey showed.

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Need Further Proof? Look no further than today's headlines:

- Dow slips over 300 points
- Oil hits $103 a barrel
- Consumer spending stalls
- AIG, the country's largest insurer, posts a $5.3 billion loss

Comments

[Sundialsvc4]

Maybe those traders would have known in December what was readily apparent to actual consumers at that time ... instead of waiting for what shows up in the dim beams of a three-months-late flashlight that always points backwards.

No one ever conjures up the images of post-WW1 German citizens burning wheelbarrow-loads of Marks in their stoves because it was cheaper to do that than to try to use them to buy coal or wood. No one talks about "rampant inflation" because our computers do the work -- "borrowing from ourselves" more than $1 million a MINUTE, 24/7/365. The forests of Germany would have quickly been denuded by an attempt to print paper in such quantities, and that paper would have been worth nothing more for the effort.

"Money" is a symbol; a medium of exchange, not of value. Print more of it and you don't have more of anything. Your company balance-sheet looks exactly the same way on-paper whether what that piece of paper makes the slightest bit of actual sense or not. These are the things that are the part-and-parcel of any third-year Accounting course, but I don't really know if those traders are anything more than compulsive gamblers.

You can look at the annual reports of literally hundreds of banking institutions worldwide for many years back and you can see it coming; always could have seen it coming, but people convinced themselves (as people always do) that a day of reckoning would never appear. It is here.

There will be spasms in the market symbols for many months, and a certain number of splattered blue-suited bodies on the sidewalks of lower Manhattan ... but maybe what is needed here most of all is some very simple, basic regulation. The original ideas that were expressed in the enabling legislation that created, say, the original SEC were simple ones; the abuses were obvious, and had been going on for a very long time, yet it took a Great Depression to actually get the thing passed.

We're human. Every one of us. Our primal instincts are for ourselves first; we form communities only out of necessity and even so we prey upon the weak like the born predators that we are. Those same instincts come out in finance, where a platinum-handled knife might be found sticking out of another man's back. If the Great Depression of 2008 plays out as I fear it will, then history will look back at this time versus the late 1920's and say, "Oops! They did it again!"

[ceasenake]

Panic much?

Buck up people, the sky is not falling.

[WIpatriot]

You're right. The ground is shaking, though.

[KRANKY]

The Bizarro world of repukes is utterly astounding. We have the best eonomy in years during the 90's , balanced budgets , rising wages, increased productivi­ty...peace and prosperity. All the Pukes did was bitch.
Now, with their monkey boy and his gang of hoodlums in, the dollar has cratered, wages are stagnant, real inflation is skyrocketing, we are stuck in a pointless occupation, sodiers die daily and these clowns want more.
Your ignorance and denial is stultifyng but your cliched sloganeering no longer works.

[AMERIKA]

Investment in infrastructure. Investment in Green energy. Reduce military spending. Reverse the tax breaks given to the oil industry, and impose a windfall profit tax - reverse the tax breaks given the wealthy, and impose a consumption tax on luxury goods. Give a tax break to those earning under $100K and eliminate the health insurance industry while creating a single payer health care system that actually covers every American. Create a free education system through a bachelors degree. Utopia.

[gcallaghan]

I would add to that list - treat multinational corporations as FOREIGN entities unless they are HQed in the US and subject themselves to our tax laws and regulations. Rescind their government subsidies, tax breaks, etc.. Cut off their access to government contracts and prevent their lobbying the government without a video record available to the public of their every contact.

When they send a job offshore they pay for the social impact of doing so - lost tax revenue at all levels, retraining, prolonged unemployment benefits until equivalent employment is found, relocation assistance. Make it more expensive for them to offshore jobs than to keep Americans employed. Reward businesses that create jobs for Americans with tax credits and other carrots. Let the government and taxpayers support those corporations with a proven allegiance to the US.

[Wulfstan]

How about cutting the Pentagon budget by about half ?

[MajorKong]

I can has bread line?

[gcallaghan]

Got sooop?

[SubparDude]

:
Bush's People are doing

Just Fine, Thank You.......

Take the Money and Run!

///// Hope we can recover somehow....

:

[Veri]

Oh, you will recover. But only at the bottom of the barrel.

[SubparDude]

I am not concerned about myself, although I doubt you'd understand that.

Your selfish, condescending arrogance becomes you.

:

[MrJoyboy]

A country built on the twin pillars of slavery and genocide must eventually pay the karma piper.

[chronic]

Im beginning to believe that the giggling freak in the White House along with the rest of the Bush crime family is a evil wicked curse put on America and the world.

[Veri]

And voters vote for the Republicans. And you vote for the Democrats who refuse to do anything about it. Well, except give us the appearance of doing something. Seeing a pattern in criminality yet?

[Stirner]

Northrop Corporation just got a 35 billion dollar contract to build a bunch of air-tankers! Hey, just what we need! Nothing like a huge and bloated air force with a lot of huge and bloated Generals in the Pentagon to take on the nasties! Good work Uncle Sam! Our children's children will thank you for putting them into debt! (the cost of "freedom", of course). What crap. Can't you guys on Wall Street put an end to this stupidity? It will finally get to you -- and you can already see it happening.

[bushdoescrack]

Northrop Corporation just got a 35 billion dollar contract to build a bunch of air-tankers


where is the $$ coming from?

[WIpatriot]

Not to worry, it's coming out of the budget...LOL.

[joebaggadonuts]

Heh. To listen to the talk on this board, you would think the Dow went down 3 THOUSAND points today. It was just 300. Sheesh, get a grip. We have a ways down to go. Are y'all gonna holler the whole way down? Relax. Might as well get used to it and enjoy the ride. This is what it costs to get regime change in this country. Let's pay up with pleasure recognizing that on the other side of this we WILL get our country back.

This is what shared sacrifice looks like. Just do it.

[mmckinl]

Maybe you didn't hear the rest of the News.

Like oil, the dollar, the latest economic reports, AIGs report, the muni market and more.

[WorkingClass]

"Are y'all gonna holler the whole way down"?

I like your attitude Mr. Donuts. The working people will share the "shared sacrifice". The ruling class will have a different set of problems, like always trying to be where we are not. I discovered the inevitability of the collapse of the American economy back in 2004. I'm a late bloomer. Still it seems like I have been watching for it a long time. Now that its happening I'm sort of relieved. I had been half-heartedly thinking about trying to get my old broke ass to Panama. But I'm gonna stay and fight. And I'm gonna lighten up. And on the other side of this we WILL get our country back.

[weavermiami]

I read all the economic indicators and listen to all the spin; it's all very interesting and I know it is important for policy makers. I don't pretend to understand it all nor do I have the education to critique what is being done right and what is done wrong. But I can tell you this. My rent has gone up. My grocery bill has gone up. I stopped buying non-necessities. I use less gas. I work harder and longer and am afraid that if I don't I could lose my job. I only use my credit card for emergencies, and am trying very hard to pay off the balance. I have a Bachelor's degree and work for a University, but my pay has not kept up with my expenses. I really feel like I'm doing something wrong, but I know that there are a lot of other Americans in the same boat as me. Guess I'm looking for a second job. Thanks W.

.

[jmsent]

George Bush 2/28/09: "I believe in a strong dollar" Me 2/29/09 "I believe in the tooth fairy"

[ExRepublican]

"Nobel laureate economist Joseph Stiglitz told London's Chatham House today that the Iraq war has so far cost the United States $3.3 trillion, and that those costs are the "hidden cause of the current credit crunch" and housing crisis. Stiglitz added that "[t]he money being spent on the war each week would be enough to wipe out illiteracy around the world" and "[j]ust a few days' funding would be enough to provide health insurance for US children who were not covered."

[MrJoyboy]

Bush's crimes stagger the imagination.

[WIpatriot]

Even Karl Rove's imagination.

[Slagfish]

The USS American has run aground. A jabbering chimp was found masturbating in the pilot house.

[almoguy]

Now THATS funny! lol

[WIpatriot]

Bet there was poop on all the walls, too.

[wolf58]

Ha ha Bin laden you ain't sh*t. We here in the USA are once again number one. Our terrorist has done only what you could only dream of. By his actions he has killed almost 4000 Americans while wounding over 30,000 more. He has burned out the army and trashed most of their equipment.He has drove the dollar to new record lows, He has done nothing to stop the rise of energy prices by not having a real energy policy. At almost every level of his government he has replaced people who had knowledge with his good old boys who know nothing. He has taken the very freedoms that make America great and rewrote them to fit his fourth grade level of thinking and last but not least he has put fear into the public like no one ever could. Yes we are number one praise Bin Bush the worlds greatist terrorist.

[davesideas]

what a great comment...lol, man; Bush kicked Osama's ass, right here at home; showed him who was the homey...

[juangault]

Osama was content with $100 a barrel and a U. S. withdraw from Saudi Arabia. Actually, that doesn't sound that unreasonable. Something Obama could agree with?

[FreedomCorpse]

indeed wolf. the damage bushco has done makes 911 pale in comparison, when an intelligent person factors in the statistical probability that this administration at minimum allowed 911 happen...its quite a bit of damage. Who's afraid of arab fundies who hate the US for diverse reasons when we got an administration who hates America more?

[Kungfublood]

This is what happens when you have a couple of moronic greedy fools in the White House helping people that are twice as smart as themselves*, to rob all the money in Americas tax base and then when that runs out, print more and when that runs out, print more and then when that...
* Half whits*

[castlerider]

Interest rates need to be, actually, at 11 percent.
This would bring awesome investment into our economy and infrastructure, but of course, would crush and devastate all homebuyer's chances of coming out of the mess we're in.

So if we freeze rates on all existing homes and businesses for a whole year, or 5 like Hillary said, and give them until a certain day, like June or August 30 of this year to buy and keep that rate before they go up, Money would move in droves to buy while it could and get the rates.
Regulations would have to be in place to guard against greedy speculators, but that could be done easily enough.
Then when interest rates did go up, masses of cash would come from outside the nation and would beef up our economy and massively strengthen the dollar.

Extreme times call for extreme measures, and these are getting extreme times if I've ever seen them, and they sure look like they're going to get worse.

.

[mmckinl]

We need to implement tariffs.

This will bolster American products, raise money to pay down the debt and strengthen the plummeting dollar.

[juangault]

A one billion dollar reward for someone who figures out how to "fix" carbon. That is, take CO2 out of the air, add water and electricity, and turn it into methane or sucrose, with a 30% efficiency. We really really need another source of transportation fuel, that is simple enough for the masses. If we must depend on the farm, the article in Sciam, might point the way.

http://www.sciam.com/article.cfm?id=grass-makes-better-ethanol-than-corn

This will boost hope a long way, I'd rather pay $2 for American renewable fuel than $1 for equivalent fuel from a hostile nation, or a $1.50 from other imported or American non-renewable fuel.