Many Now predicting Double-Dip Recession

[bamacre]

He was too busy getting rich to not vote for Bush. Being so prescient Dave bought in and out of the market and commodities at the most opportune times, then went all in with some credit derivative swaps to bet against the housing bubble and cashed out billions.

 

[Double Trouble]

There are significant philosophical differences between the two purported positions of the two parties, the problem is that neither party actually acts on those stated positions. The both act out of greed and self interest as soon as they get in power. Two party system FTL indeed.

 

[theeedude]

There are significant philosophical differences between the two purported positions of the two parties, the problem is that neither party actually acts on those stated positions. The both act out of greed and self interest as soon as they get in power. Two party system FTL indeed.

I think the problem is not that there are only two parties, but that one of them is GOP. It would be good to have two parties with competing ideologies, instead of one liberal party, and one that basically doesn't stand for anything but sabotaging the governing of this country for its own financial and political goals.

 

[Acanthus]

I think the problem is not that there are only two parties, but that one of them is GOP. It would be good to have two parties with competing ideologies, instead of one liberal party, and one that basically doesn't stand for anything but sabotaging the governing of this country for its own financial and political goals.

That, and our "liberal" party is more conservative than the conservative governments in the rest of the world.

 

[soccerballtux]

Don't say Zebo didn't warn y'all I have been regularly posting Zebo's budget survival guide for two solid years now. Sure most think it was loony but when heavy hitters are now finally saying we are 'going' into a depression you better get prepared.

I PM'd you like 40x for this and was expecting something significantly less obvious.

 

[jackace]

There are significant philosophical differences between the two purported positions of the two parties, the problem is that neither party actually acts on those stated positions. The both act out of greed and self interest as soon as they get in power. Two party system FTL indeed.

Exactly.

Like my grandfather always said, "Republicans want YOU to be conservative."

Democrats are no better. Both parties say one thing to get elected, but once in office they do another. Neither is looking out for the best interests of the country, especially not long-term.

 

[Double Trouble]

I think the problem is not that there are only two parties, but that one of them is GOP.

If you actually believe that the democrats act on their ideals and the GOP is the only problem, I have some oceanfront property to sell you in Nebraska.

It would be good to have two parties with competing ideologies, instead of one liberal party, and one that basically doesn't stand for anything but sabotaging the governing of this country for its own financial and political goals.

Hmm... not sure what you're talking about, both parties fit your second description to a tee.

 

[Double Trouble]

Essentially what we're getting is the worst of both worlds. From the right we seem to get more and more of the religious nuts, hardcore ignorant Rush types, and from the left we get more and more socialist-leaning politically correct nutjobs who would not know logic if it came and bit them on the ass.

We lose.

 

[alkemyst]

Those who think there are no differences between the parties on economic issues are the bigger dupes.

regardless whether they are wrong or right the problem is people vote blindly. "I am a X so I vote X".

In the end, rep vs dem vs anything it's just a person with an agenda.

 

[Fern]

Your analysis sounds cogent, Fern. But the actual bill had tax cuts directed at small businesses, and did have expanded SBA loans (with loan fees being eliminated, etc.). Now, if what you're saying is that the stimulus didn't do enough for small businesses, that is a reasonable opinion which can be debated. But you said nothing was done "at all." That isn't reality as I understand it.

Example:

http://money.cnn.com/2009/02/16/smallbusiness/smallbiz_stimulus.smb/index.htm

- wolf

I don't like that article, it's not clearly written.

And what they call the "small business stabilization financing" is actually the SBA's ARC program.

I have written here elsewhere about that program. While I'll agree it sounds like a benefit for small busineses, it's not. In actuality it's a another subsidy for banks, not a bene for small businesses.

Here's how it works and why it's a disquised bank subsidy (This is from personal experience and speaking with many of the major banks' ARC loan HQ officers):

SBA guaranteed small biz loan up to $35K. Interest on loan is also paid to the bank by the fed government.

How is it a 'bank subsidy'?

The banks would only extend ARC loans to their own small business customers with existing loans. And the Arc loan could only be used to pay that existing bank loan. I.e., banks were just 'churning' loans.

Thus, banks were replacing their loans with the ARC loans thereby ensuring that their loans would now be 100% federally gauranteed. I.e., banks swapped their loans that they may have exposure on with 100% fed backed loans, and interest was insured.

This was of little-to-no help to anyone but the banks. Perhaps there was a slight benefit to cash flow for the biz, but considering the highest amount available was only $35K, we're talking very very little benefit (if any) to the business when spread out over the loan term.

And equally important the whole program was whopping (approx) $250 million. A drop in the bucket if there was such a thing.

I think the program sounded good, but there needed to a provision to prevent banks from merely churnng loans to their own benefit. So, introspect it's been mostly considered a failure. IIRC Olympia Snowe, the sponsor of that provision, wanted it recinded because it wasn't working as intended.

The real money in that article is the $3 billion for SBA gaurantees to -wait for it - banks for existing loan bundles. If it was suposed to free up capital for additional lending, it just didn't work out that way. IMO, it's just another bank subsidy masquerading as something else.

This is already long so i won't get started on the employer's tax credit for certain new hires etc.

Edit: But I'll yield to your point and say 'very very little' was done for small biz

Fern

 

[Fern]

LOL

Must be Election Season: Fern starts a troll thread
(better talk down the economy, huh?)


Consumer expectations and sentiments are increasing steadily --- at the highest levels in more than 2 years. Gross private domestic investment and personal expenditures are up, as are exports/imports. Government consumption / expenditures are down (and depending upon your perspective this may/may not be a good thing).

Being that employment is a lagging indicator (and not surprisingly, *many* people outside ATP&N understand that ) the scenario is not all roses; but, reported job losses are way down. Folks will remain cautious --- no one anticipates significant declines in unemployment over the next year --- so effectively people are being prudent. That's a good thing.

The question really is, why does anyone want to pump the prospect of a double-dip for partisan political purposes? Is this where we are, today, in America?

If so, a pox on all our houses (oh ... wait a sec )

--

Re: Bolded portion (oh h3ll, all of it) - Are you serious?

Fern

 

[Fern]

It will dramatically increase demand for green energy products as well as green power generation in the long run.

In the short run it is damaging.

If cap-n-trade will stimulate demand for green energy products, then that's mostly unnecessary and unneeded stimulous.

Sectors of "green energy products" have been overheated for some time. E.g., photovoltaics saw enourmous price increases due to high demand and limited supply. These already had a cost benefit disadvantage, driving the prices up even further is of no help.

Through the decade (2000-2009) "green energy products" were the top benficiary of investment capital funds from venture capitalists etc. Billions have been pouring all over the globe, I don't personally see how that needs additional incentives, it's seems to be working fine all on it's own.

Fern

 

[Fern]

Except 90% of small businesses fail in the 1st year and tax breaks don't create jobs.

-snip-

And +90% of those small business failures can be attributed to adequate lack of capital from start-up. That's why I suggest using the already established SBA and network of banks to expand lending to small businesses, even those who are in start-up phase.

The small buisiness lending section of our local banks are perfectly capable of analyizing the probable success of a proposed new business. E.g., you're a laid-off carpenter who wants to start a new restaurant? Forget it. You're a laid-off manager with years of experience and a potential client base that knows you and now want to start you're own (similar) business? OK, the banks will gve it a serious look, and deservedly so.

So, if the government would use the existing public/private network to fund small businesses via guaranteed loans, and not some small $250M program, I think we could see many successful small businesses and new employment.

Tax breaks create demand, demand create jobs. That's one reason the tax credit for new hires is useless. You're only gonna hire if you already need them, the (small) tax credit to the employer is just a "bit of cream" who was already gonna hire. This is what we in business world call "trying to push a piece of string through a straw". You wanna a draw it through the straw. I.e., create demand and create jobs, you don't try to create jobs and hope that creates demand.

Fern

 

[IndyColtsFan]

Must kill you guys that I was right for so many years ahead.

Yeah, I know I am happy your $10/gallon gas and $7/gallon milk predictions were correct. Oh, wait a minute....

 

[yllus]

He was too busy getting rich to not vote for Bush. Being so prescient Dave bought in and out of the market and commodities at the most opportune times, then went all in with some credit derivative swaps to bet against the housing bubble and cashed out billions.

Nonsense, he wouldn't do anything that silly. He'd only invest in safe ventures and assets, like a restaurant and a boat.

 

[Jaskalas]

Yeah, I know I am happy your $10/gallon gas and $7/gallon milk predictions were correct. Oh, wait a minute....

A currency crisis from all our wonderful stimulus might make Dave a prophet.

 

[Schadenfroh]

Here we go boys, Dow to hit 1000:

http://www.reuters.com/article/idUSTRE6653XM20100706

Prechter says Dow could fall to 1,000

Longtime technical analyst Robert Prechter said on Tuesday he expects that as the U.S. economy sinks into a deflationary depression stocks will plunge

 

[dmcowen674]

Here we go boys, Dow to hit 1000:

http://www.reuters.com/article/idUSTRE6653XM20100706

My god and you guys had a cow when I said it would bottom at 6

 

[sandorski]

Here we go boys, Dow to hit 1000:

http://www.reuters.com/article/idUSTRE6653XM20100706

lol,sure.

 

[Acanthus]

And +90% of those small business failures can be attributed to adequate lack of capital from start-up. That's why I suggest using the already established SBA and network of banks to expand lending to small businesses, even those who are in start-up phase.

The small buisiness lending section of our local banks are perfectly capable of analyizing the probable success of a proposed new business. E.g., you're a laid-off carpenter who wants to start a new restaurant? Forget it. You're a laid-off manager with years of experience and a potential client base that knows you and now want to start you're own (similar) business? OK, the banks will gve it a serious look, and deservedly so.

So, if the government would use the existing public/private network to fund small businesses via guaranteed loans, and not some small $250M program, I think we could see many successful small businesses and new employment.

Tax breaks create demand, demand create jobs. That's one reason the tax credit for new hires is useless. You're only gonna hire if you already need them, the (small) tax credit to the employer is just a "bit of cream" who was already gonna hire. This is what we in business world call "trying to push a piece of string through a straw". You wanna a draw it through the straw. I.e., create demand and create jobs, you don't try to create jobs and hope that creates demand.

Fern

I would agree that some of the business failures are due to lack of capital, but i wouldn't peg it at 90%+. Many businesses are just poorly managed or a poor fit in their local economy.

I don't see how tax breaks create demand; demand for what? labor?.

Lets say you run a diner/bank/whatever. You are going to hire as many people as you need to get the job done... How does a 1/2/5/10% tax cut actually influence you to hire more people rather than pocket the difference? I think it is a fallacy that tax cuts somehow create jobs.

 

[First]

And +90% of those small business failures can be attributed to adequate lack of capital from start-up. That's why I suggest using the already established SBA and network of banks to expand lending to small businesses, even those who are in start-up phase.

The small buisiness lending section of our local banks are perfectly capable of analyizing the probable success of a proposed new business. E.g., you're a laid-off carpenter who wants to start a new restaurant? Forget it. You're a laid-off manager with years of experience and a potential client base that knows you and now want to start you're own (similar) business? OK, the banks will gve it a serious look, and deservedly so.

So, if the government would use the existing public/private network to fund small businesses via guaranteed loans, and not some small $250M program, I think we could see many successful small businesses and new employment.

Tax breaks create demand, demand create jobs. That's one reason the tax credit for new hires is useless. You're only gonna hire if you already need them, the (small) tax credit to the employer is just a "bit of cream" who was already gonna hire. This is what we in business world call "trying to push a piece of string through a straw". You wanna a draw it through the straw. I.e., create demand and create jobs, you don't try to create jobs and hope that creates demand.

Fern

Except tax breaks all never immediate unless they're tax credits, and consumer behavior doesn't actually change immediately when said break is given, which defeats the entire purpose of thwarting a recession from becoming overly severe. Meanwhile unemployment dollars are a direct injection of demand into an economy that is 68-70% driven by consumption. If you had your choice between tax breaks and unemployment extension it'd be unarguable statistically to favor tax breaks, yet somehow I get the felling you're more, um, "prone" to want a tax break instead of unemployment extension despite what we know of the actual measured impact of both.

 

[theeedude]

Don't forget the effect on consumer confidence when people who still have jobs see their friends and neighbors become poor after running out of unemployment. Going to make even the employed to pull back on their spending, resulting in a cycle of economic contraction and lay offs. We are going to be in a depression if the Republicans don't stop blocking unemployment extensions and further stimulus.

 

[Genx87]

Don't forget the effect on consumer confidence when people who still have jobs see their friends and neighbors become poor after running out of unemployment. Going to make even the employed to pull back on their spending, resulting in a cycle of economic contraction and lay offs. We are going to be in a depression if the Republicans don't stop blocking unemployment extensions and further stimulus.

Oh god unemployment already makes you poor lol. Who the hell would look at their neighbors on unemployment and think "gee I can spend like a sailor in port for the weekend"? None of these programs helps consumer confidence. Stimulus looks desperate and unemployment is a crutch until one finds another job.

 

[Acanthus]

Oh god unemployment already makes you poor lol. Who the hell would look at their neighbors on unemployment and think "gee I can spend like a sailor in port for the weekend"? None of these programs helps consumer confidence. Stimulus looks desperate and unemployment is a crutch until one finds another job.

There's a big difference between your neighbor struggling and your neighbor losing their house... etc.

 

[First]

Oh god unemployment already makes you poor lol. Who the hell would look at their neighbors on unemployment and think "gee I can spend like a sailor in port for the weekend"? None of these programs helps consumer confidence. Stimulus looks desperate and unemployment is a crutch until one finds another job.

Except you can't spend like a drunk sailor with unemployment and the alternative of no unemployment benefits is far far worse (again undeniable based on the numbers). You can talk about slippery slopes and moral hazards all you want, in this context they're theoretical, unprovable, and looking at history mostly baseless.