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From The Onion, America’s Finest News Source, comes this take on the lives of those people you see waiting in lines every few months or so when Apple launches a new product.
It wouldn’t be surprising to learn that some of the conversations in this clip were real.
It’s kind of funny to think back to days of late-winter and early-spring when the braintrust at the nation’s central bank was debating whether it should raise short term interest rates before starting to sell some of its $1+ trillion hoard of mortgage-backed securities, sell some of the MBSes before raising rates, or do both a the same time.
Fast forward to summer and they’re debating how big Quantitative Easing II should be and some of the braintrust is already weighing in. According to this Reuters story, Dallas Fed President Richard “ninth inning” Fisher has cast an early vote for zero.
“People are uncertain — they are hoarding cash, they are holding back,” Fisher said, citing the complexity of the healthcare bill as a factor in making it difficult for corporations to project future costs.
“This is nothing to do with monetary policy — we have been as accommodative as possible,” he said. While the recovery has slowed, it is unlikely the U.S. will fall back into recession, he said.
The Fed does not need to buy more assets, and should be careful about “going too far,” he said, although not because of concerns over inflation, which he said is not an issue.
Buying more assets “could do damage by damaging our credibility,” he said. “There is plenty of liquidity in the system,” he said. “It will be utilized only if there’s confidence in the future.”
Just wait a couple months and, if the economy continues to weaken and Congress continues to balk at spending more borrowed money in advance of the fall elections, we’ll probably have an even bigger central bank money printing campaign than what we saw in 2009.
Those calls for the Fed’s balance sheet to reach $5 trillion may eventually be proven correct.
The word “funemployment” is noticeably absent from today’s NY Times story about how difficult the employment situation is for the twenty-somethings of the world, now two-and-a-half years into the worst job market in decades as shown in the accompanying graphic.
The discussion amongst the three generations of the Nicholsons, the subject family in this report, says a lot about how much things have changed in the U.S. – both its economy and its culture. Living at home after graduating from college, young Scott turned down the only job offer he’s received so far, as an insurance claims adjuster that paid $40,000 a year.
While Scott is keen on waiting for something better, his father thinks that maybe this would be a good “foot in the door” that could lead to bigger and better things, what is likely a foreign concept to someone who has seen only prosperity in the world.
USA Today reports on the many state and local government layoffs expected to come in the year ahead since state and local budgets are already many billions of dollars short in the new fiscal year with those many billions of dollars not likely to come from Washington.
Here’s another headwind for a sputtering job market: State and local governments plan many more layoffs to close wide budget gaps.
Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody’s Economy.com.
…
Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009.But the pain is likely to worsen. States face a $140 billion budget gap in fiscal 2011, which began July 1 for most, says the Center on Budget and Policy Priorities.
The layoffs are well underway in California and, based on this story in the Sacramento Bee, it’s not been a very pleasant affair so far. Contrary to the private sector, whether you keep your job in the public sector at times like this is often based on seniority alone.
An interesting sign of the times appeared in the last bullet item in the USA Today story:
• The city of Maywood, Calif., laid off all 68 of its employees July 1 and is contracting out police services, partly because of a $450,000 budget deficit
So, who’s keeping an eye on the budget if all 68 employees were let go?
Treasury Secretary Tim Geithner was on PBS NewsHour last night attempting to instill confidence in the U.S. economic recovery amid all the recent calls of slowing growth, a possible double-dip recession, and a massive overhang of foreclosures.
Maybe we ought to re-think the whole idea that housing should be such an important financial asset for American families. Look how far we’ve come since people were getting rich beyond their wildest dreams a few years ago just because they owned a house as Geithner comments, “The President has put in place a series of programs to give more Americans a chance to keep their homes, if they can afford to do that.“
A related item from the Huffington Post: Average Homeowner In Obama Foreclosure Program Deeply Underwater, Drawing Calls From GOP To Cut Off Help
MUST READS
American Dream Is Elusive for New Generation – NY Times
China won’t dump U.S. Treasuries or pile into gold – Reuters
National Mortgage Delinquency Rate Swells to 9.2% in May – Housing Wire
Mayberry Machiavellis: Obama Political Team Handcuffing Recovery – HuffPost
U.S. Commercial Property Sales at 26 Percent of Average – Bloomberg
Special Report: U.S. data dogs on quest for sexier statistics – Reuters
Martin Wolf Continues Attack on Fiscal Austerity – Naked Capitalism
Workers’ salaries lost ground in past decade – MarketWatch
MARKETS/INVESTING
Oil hovers below $72 ahead of US crude supply data – AP
Gold slips as dollar firms, and after China report – Reuters
Small-stock index Russell 2000 in bear market – USA Today
Gloomy Bond Investors Clash With Upbeat Stock Managers – BusinessWeek
Is Elliott Wave’s Robert Prechter Certifiably Insane? – Wall St. Cheat Sheet
Central banks’ gold with BIS? – Commodity Online
“Happy Birthday, America!” – Saut, Raymond James
ECONOMY/WORLD/HOUSING/FED
Unemployment Extension Could Boost Jobless Rate – WSJ
U.S. service sectors weaken a bit in June – MarketWatch
Global PMI sags in June as new order growth tapers off – Reuters
U.K. ‘Ponzi’ pension scheme threatens future generations – Telegraph
Vancouver home sales drop sharply – Globe and Mail
New Loan Delinquencies on the Rise Again – Olick, CNBC
SoCal short sales up 74 percent – O.C. Register
Average Homeowner In Obama Foreclosure Program Deeply Underwater – HuffPost
Geithner says US still feeling pain from crisis – Money Central
By Tim Iacono, Since 2005
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