The Economy Is Unlike Anything Previously Seen
Readers suggested a topic on adapting to the economic conditions. “It’s been about 4 years now since the “recession” has officially been over. We’ve had Stimulus, Harp, HAMP, QE1, QE2, TWIST, ROLL AND STUMBLE…… Endless bailouts and games played by the financial crooks on Wallstreet and K street. Housing has been a roller coaster along with the stock market, but in the end, no one is any better off, except Banksters and their cronies.”
“So, here’s my topic: How has the general public adapted to the shrinking income, with higher costs for food and fuel and NO HOPE of any gains in the near future.”
A reply, “It’s more like about 4 years since the propaganda machine achieved total power in the American media. The producers needed to gain total control of us, and we were too scared and so let them take control. Now everything they say is total bullsh*t, and it’s even obvious bullsh*t, but nobody dares to officially contradict them.”
One had this, “A friend is working on technology that will reduce the workforce of one of America’s largest private utilities by 30%. He is working 13 hour days essentially to make his company’s owners richer by firing workers. (This is a form of capitalism not the only form.) Multiply this by thousands in the USA.”
“The fundamental fact that no politician will admit is that technology, automation and outsourcing have reduced the number of needed workers in western economies. This is the STRUCTURAL change that few acknowledge. IMO, nowadays is not the time to fritter away time in college deciding what to do with one’s life. Study Anthropology for 3 years and then decide you want to be a nurse? What a waste of time and money. College is what, about 3-4 times more expensive now than the 80’s even inflation adjusted?”
An observation, “Business runs on fads and short term gain. Short term meaning 3 months to 6 months. Previously at least the business leaders could see some stability for 2 or 3 yrs, now they can’t even see a month ahead. ZIRP here, QE there, Euro there, these fookers have no idea how to navigate in this $hitstorm.”
And another, “Politicians also think short term. Kick the can down the road past my next term in office. Basically, the PTB (business and politics) do not have long term plans. Anyone see a problem here?”
One shared this “Really skilled workers will have demand. Despite the large pool of qualified engineers, accountants, lawyers from India the way the big businesses (with their clueless senior VPs, managers - see Peter Principle) are running the show, these professionals in Asian countries are not taught the right way. As a matter of fact, a majority of them cannot solve problems, through no fault of theirs. They will never replace a skilled worker in the USA.”
“This is a crucial time for American industry because most boomers will start their retirement. The gap in the skilled workers - those that can continue the work without affecting production business - needs to be filled somehow. Companies that compromise on this simple tenet will see a marked drop in quality of the product / services and as a consequence lose prominence. My sincere advice: be good at whatever you do. If you are extremely good then you really do not have competition; you will command a good wage with benefits.”
And finally, “I’m seeing the makings of LegDown Part Deux. A couple of my wife’s teacher friends are openly lamenting house purchases and are ‘dying’ to get into a rental. A colleague of mine just left with her husband to go to Arkansas (yup, he’s going to work for Mao), but she did not resign her position because she is coming back for the school year ‘until they sell their house.’”
“The rental market here has finally turned the corner. If I had to move right now, no sweat; bigger house, good schools, same rent, no problem.”
From CNBC. “There is a unique, structural imbalance in the U.S. economy, former Federal Reserve Chairman Alan Greenspan said on CNBC. ‘It may be a recession, but I’m not seeing it at the moment, and it’s not relevant as far as I can see,’ he said in an interview on ‘The Kudlow Report.’”
“The economy, Greenspan said, is unlike anything previously seen. ‘The best way I would describe it is to think in terms of two separate economies,’ he said. ‘One is probably 90, 92 percent of the GDP and is doing actually reasonably well. The other 8 percent is largely structures or more exactly, long-lived assets. The attitude of business and households against committing to long-lived assets is extraordinarily suppressed.’”
“Host Larry Kudlow suggested it resembled a capital strike. ‘It’s a capital strike for long-lived buildings, you know, those with 20 years of potential life and longer,’ Greenspan said. ‘It’s both household and residential. The rest of the economy is not doing well but is doing reasonably well. But if you take 50 percent out of 8 percent of the economy, that’s the 4 percentage points which the unemployment rate has run up. And that’s where all of the problem is.’”
The Review Journal. “Nevada Attorney General Catherine Cortez Masto said she has no regrets about passing the robo-signing law that has virtually brought foreclosure filings to a standstill in the state, and that banks are simply using the law as a ’scapegoat,’ allowing people to live in their homes for free.”
“‘It’s a changing environment right now, and repealing (Assembly Bill) 284 is not going to change the environment,’ Masto said at a panel discussion sponsored by the National Association of Hispanic Real Estate Professionals at the Gold Coast. ‘I hear that because of AB 284, banks can’t foreclose. How is it that 284 is preventing a bank from foreclosing on someone not making their payment?’ she asked the audience of about 300 real estate industry professionals. ‘There’s a reason banks aren’t foreclosing. I just haven’t figured it out yet.’”
From USA Today. “Scott Andresen would love to sell his Seattle house. He just can’t afford to. The 41-year-old policeman and his wife, Rebecca, an environmental consultant, bought the house six years ago. Because of falling prices, they now owe at least $25,000 more on it than it’s worth. The couple would like to move to a better neighborhood with better schools for their children, ages 7 and 4. But they’d have to write a check to cover the difference. ‘We can’t get out, because it would be too expensive,’ Andresen says. ‘It’s very frustrating.’”
“Rather than a housing market defined by weak demand and falling prices, the market is now being hampered by a restricted supply of homes for sale. Negative equity, also known as being underwater, is a big part of the issue. Nationwide, almost three of 10 homeowners with mortgages have no equity in their homes or less than 5% equity, says market researcher CoreLogic. Those homeowners would have to write a check in a traditional sale, so many are not selling.”
“Eric Berto and his wife, Kelci, bought their home in Kent, Wash., almost four years ago. They thought they’d bought at the bottom of the market. ‘We were seriously wrong,’ says Berto, 31, who works in public relations. The couple estimate they could get $250,000 for the home they bought for $100,000 more.”
“Berto is pursuing a lower interest rate loan so they can turn the house into a cash-flow-positive rental and still buy another home. ‘Right now, we’re operating under the assumption that the house will never again be worth $350,000,’ Berto says.”
