Posts Tagged ‘Recession’
Image from Time.
You may have heard the phrase “Bull market” when the Stock exchange is going up.
Then there’s “Bear Market” when stocks are heading south.
Right now we seem to be in a”Kangaroo Market” where the markets are wildly jumping all over the place.
After some great rises in recent days, stock markets Thursday lead off like lead balloon.
The Standard & Poor’s 500-stock index fell 3.9% before noon. The NASDAQ and the Dow Jones Industrial average fared similarly, dropping 5.2% and 3.68% respectively by close.
Our neighbors across the pond are facing similar economic downturn– London’s FTSE 100 index ended the day down 4.5% and Germany’s Dax lost 5.8%. The possible causes are numerous and range from gas prices rising 4.7% to rampant concern over a return of the dreaded r-word…recession.
The Economist has helpfully pointed out, however, that market falls do not necessarily indicate recession, and frequently occur in the midst of economic recovery.
Does this kind of drop bode well for the U.S. economy? We certainly hope so.
No, we’re not talking about salsa or hummus, we’re talking about the economy!
Over the past week, a number of factors have led to increased speculation of a “double dip” recession.
Anxiety over jobs, a slow growing GDP, and a first-time downgrade in the U.S.’s credit rating are all contributing to fears of the economy slipping back in to a recession.
On Friday, Standard & Poor’s lowering of the country’s top-level credit rating led Christina Romer, former Chair of Obama’s Council of Economic Advisers, to describe America’s future with some less than savory terms.
Pretty darn f#&%ed”
She may be pretty darn right..
Thanks to NPR!
A Happy, Healthy Meal: McDonald’s announces changes to its most famous order.
Call your legislators! Congress flooded with calls about the debt ceiling.
Another race gap? Recession has hurt minorities most.
Two more years! FBI Director’s term extended for the first time.
Traditionally, Memorial Day weekend has signaled the start of the summer vacation season. But in recent years, the economic downturn has made the holiday nothing more than a tease.
Over the past three summers, the travel and leisure sectors have been hurt by the surge in ’staycations,’ the stay-at-home alternatives for people who couldn’t afford destination vacations.”
This year, according to NPR, the tease is over!
Now that people are feeling more secure in their jobs, the travel and lodging industries are both predicting a healthy (or at least a healthier) vacation season ahead.
Not to bring you down: While job security might be becoming less of a thought, ever-increasing gas prices are still on the mind of many Americans.
Thanks to Economix
Bought gas lately? Not a pleasant experiece for the wallet.
Gas and other energy aren’t as cheap as they used to be.
As power prices go up, our spending power goes down.
Check out the chart above… Motoko Rich of Economix noted that
with real incomes falling and the prices of basic goods rising, this might not bode well for consumer spending and in turn, the fragile recovery.
What’s so bad about people buying less TVs, toys, and food? Well, if nothing else this stuff fuels our economy which is now expected to grow at a slower rate.
To make matters worse wages are hitting record lows, ZERO to be exact.
Katherine Reynolds Lewis notes that working for free, although not ideal, gives the worker valuable experience and a chance to prove themselves. With a hat tip to R.A. at Free Exhange who explains the trend by noting that
If it’s worth taking on someone to do a job, it’s probably worth paying them something. The problem is that there’s a discontinuity in the wage spectrum. Pay above the minimum wage is legal, and no wage at all is (probably) legal, but a positive wage less than the minimum is not. Market clearing job matches at wages between zero and the legal minimum can’t take place.
Unpaid labor is a sad truth for bloggers (hint hint) but would you our readers take a wage-less position over joblessness? Also, even if you are being paid is the price of things pinching your pocket?
Thanks to Wikicommons
Some of our readers may recall we recently suffered from a minor inconvenience called “the World Financial Meltdown”.
If you are still asking yourself, How the @#$%&!! did that disaster happen?…we have good news!
The US Government has the answers in the Financial Crisis Inquiry Commission Final Report.
It is a beast of a report so rather than have you wade through hundreds of pages of financial analysis, we’ll let the Internet do the mining for you.
The wonderful financial blog Calculated Risk highlights the reports BIG conclusion that the
financial crisis was avoidable. …
Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs. … Yet there was pervasive permissiveness; little meaningful action was taken to quell the threats in a timely manner.
Expanding on the points produced in the report Calculated Risk describes
the keys to the crisis are 1) the willful lack of regulators to do their jobs, combined with 2) the rapid “innovation” in the mortgage market
For a deeper look at who’s to blame check out Frum Forum’s collection of posts on the report.
The system may have failed in the past but this new information should let us prevent future meltdowns right?
Don’t count on it. As Sewell Chan, of Economix, notes:
The Wall Street overhaul enacted last year hopes to blunt the impact of such boom-and-bust cycles — by reining in the use of exotic financial instruments, better supervising big banks and limiting the damage if one of them fails.
But the first two efforts are under attack by the new Republican majority in the House, and the new process for containing the fallout from a giant bank’s collapse is untested. Meanwhile, the financial sector’s outsize role in the economy hasn’t changed; the giant banks that were considered “too big to fail” have only gotten bigger.
Not very comforting is it?
Thanks to Wikimedia
Everybody can remember a bully in the playground from their youth. This big nasty character would take candy or money from innocent little ones.
You better watch out! Today some of these bullies have grown up and may be after your house!
There has been a crisis in the housing market where big banks (who own the loans on homes around the country) have been falsely repossessing houses.
Here’s what’s been happening:
Banks make loans to individuals and resell the ownership of the loans to investors. To do this Stephen Ganel, of Time, notes
the banks had to file and retain paperwork that transferred the ownership of the mortgages from the original lenders to the new investors. Well, it appears the banks bungled that process, or at the very least in a number of case, in potentially many cases, they lost the paperwork.… (then)the banks tried to cover it up.
To deal with the missing paperwork, Calculated Risk notes, banks used
“Robo-signers” [, who] are individuals who signed affidavits stating that they had “personal knowledge” of the facts in a foreclosure case, when in fact they did not.
Was this just a mistake or was it something more sinister? …read more.
What do our economy and a really fat man have in common? Quite a lot according to Michael Pento (with a hat tip to Zero Hedge).
Even if that is just a bunch of Austrian assumptions (for a better explanation check out the video above) our economy is definitely not in the pink just yet.
With that comes pain and sacrifice for consumers (unless your Snooki who is the center of an insane reverse advertising war).
Economists see more than just sacrifice they see a Petri dish to be studied. One aspect that is being analyzed is what things are considered “necessities”.
Thanks to Free exchange
As pointed out by the Economist’s Free exchange:
I would not have imagined that the downturn would lead to decline of 20 percentage points in the share of those labeling a clothes dryer a necessity. It suggests that the psychological impact of recession extends well beyond those who remain unemployed.
It also seems that houses may be becoming a luxury:
Thanks to Yglesias
Houses may become a luxury but an economic downturn doesn’t have to stop you from living in a mansion for free.
Speaking from experience an abandoned mansion is a great place to blog from. Don’t take our word on it: find a mansion, fire up you laptop and drop us a comment. Writing comments is a penny pinching way to have fun.
Thanks to Wikicommons
Are You about to become EXTINCT?!? If you are a member of the Middle Class, we are talking to YOU!
That’s right there are some pretty smart people out there saying the American middle may go the way of the DoDo bird and be found only in museums.
The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
This is the dark projection Michael Snyder provides via Yahoo! Finance. The article provides a number of shocking statistics to support this view.
Thanks to Wikicommons.
We have some bad news for you. Brace yourself here it comes:
US payrolls GREW by 431,000 in May.
Bad news? that sounds like good news!?! Well it’s not good news… as economists expected 540,000 new jobs.
But wait, there is more. Free Exhange, a blog brought to you by The Economist, notes: …read more.
Money, thanks wikicommons!
Some of us here at USDemocrazy don’t trust banks and instead choose to keep money under our mattresses (and believe us, these mattresses need all the padding they can get).
Still, despite an uncertain economy gripping the country most folks still rely on banks and other institutions to manage their funds.
So, as a follow-up to last week’s post about how money is spent by the U.S. government, we decided to explore how America’s money is managed. …read more.
Living Green: Using your microwave is greener than using your oven.
Top ten unconventional indicators of the economic recession. To whet your appetite, men’s underwear sales is on the list!
Could health care reform be for the worst instead of the better?
Don't they look cozy?
We at USDemocrazy like to take a break from the news every once in a while.
And because we are wonderfully informed, cultured, connoisseurs of everything pop culture, we thought we’d do a little something on some recent summer movies. (If you’re behind a little, catch up on our posts on “Harry Potter and the Half-Blood Prince” and “Up!”)
This past weekend saw the opening of Judd Apatow’s “Funny People,” to only mediocre box office earnings. But, according to the L.A. Times, it’s been kind of a slow year for movies in general:
Ticket sales in the U.S. and Canada since the summer movie season began May 1 fell below 2008’s total for the first time, according to data from Hollywood.com.
(There’s a recession on, remember?)
So, should you spend your hard earned money on “Funny People?”
Well, that depends. Are you a man, or a woman? (or neither?)
Apparently, says the same article, this is not exactly a chick flick:
Audience reaction was starkly split along gender lines. Female moviegoers, perhaps put off by the number of jokes centered on male anatomy, gave the movie a C-plus, while men rated it a B-plus, according to market research firm CinemaScore.
Want a full review of the movie? Check out the review in the NY Times. Here’s the trailer:
If you’re feeling nostalgic, RottenTomatoes.com takes a walk down Apatow memory lane, here.
If that one’s not your speed, you might want to wait until this upcoming weekend, when two very opposite movies with duke it out for the top spot at the box office, “G.I. Joe: Rise of the Cobra” and “Julie and Julia.”
Here’s the trailers, respectively:
So, what’s the buzz? MSNBC named “Julie and Julia” a best bet for the weekend, mentioning that you might not want to go to the movie hungry. (It’s all about famed chef and madame de French cuisine Julia Child and how she inspired modern-day, real-life Julie Powell to change her own path.) It even promotes happy marriages. What’s not to love?
As for “G.I. Joe,” the L.A. Times seems to have taken a more cynical point of view, showing that maybe it won’t be released to critical acclaim, but the movie sure is trying to court mainstream America:
The subtext is none too subtle: Critics are likely to roast the film, and fanboys of the original toy line and comic book may be indifferent, but if you’re a flag-waving, Nascar-loving American, it’s practically your patriotic duty to see this movie.
Are you one of these people? Go ahead, support Hollywood, and see the movie. If not, well, stay at home and rent a movie.
There’s tons of movie still to come this summer, but now you’re at least somewhat up-to-date on a few different releases that want your money. If you want a fuller list, check out Movie-moron.com’s list of summer blockbusters here, as well as the all-knowing http://www.rottentomatoes.com/.
If you find yourself thinking that it’s too hot outside to go for a picnic or a hike, an equally fun activity is going inside an air-conditioned theater (and you don’t have to see the energy bill at the end of the summer!) to cool down and laugh, cry, or, you know, sit.
Anyone have a review of their own?
photobucket.com
If you’re like any of USDemocrazy’s friends, you’ve often heard the line “I’d join you, but I have no money!”
Now that it is vacation season… it got us to wonder: do other people have money to spend on vacations in this time of economic hardship?
After some research, we came up with an answer: YES.
As vacation season comes but once a year, few are willing to relinquish their precious summer moments and memories.
We found an article that says people are driving this year to their trip destinations rather than flying, despite the fact that gas prices go up during the summer. Also, there is an increasing demographic of spouses willing to spend time with their in-laws to save a few bucks off of a getaway:
Once they reached their destinations, two in five people said they stayed with friends or relatives. About half said they stayed at hotels during their last vacation, while 80% of vacationers stayed at hotels in 2007.
And if there’s anything less predictable than in-laws, it’s gas prices. Here, the Christian Science Monitor explores why fuel prices aren’t declining like demand is. (We’ll give you a hint: it has to do with the bad economy.)
Some people are opting for day or weekend trips to places a little nearer by (than, say, Europe), like Yvette Woolfolk of California:
“This summer, I’ve decided that a balanced approach to travel is in order,” she says. “I want to be able to travel within my means — no charging! — and support the local economy at the same time.”
Even the Choice Hotels International franchise is seeing some improvement, since, according to its CEO, their customers typically are ones who drive to their destinations. With more people taking to the road rather than to the sky or rails, this hotel group is getting pretty optimistic about the summer travel season.
But for those of you who still prefer to fly but maybe have been holding off for cheaper prices, Joshua Freed of the Associated Press indicated that you might want to book those tickets NOW. Could there be a better time? Writes Freed:
Fares have dropped for months while travelers held off buying tickets because they were afraid of losing a job or worried about affording even a scaled-back vacation. But with July 4th fast approaching and jet fuel prices rising, some fares could be set to climb again.
And then, there are people who have been bulking up their frequent flier miles and are saving some moola by cashing those miles in now. Smart move, guys and gals.
So, you might be going on a vacation, staycation, or blowing us off for summer plans like all our other friends, but still every day you’re probably learning more about how this recession is affecting everyone. Now, it’s time for the kids to get in on the learning, too.
We at USDemocrazy are now thinking that a little vacation might be nice… what are YOU up to this summer?
A face that could save the economy.
Three cheers! The worst may be over!
Gas going up… Does your wallet hurt yet?
Fight that case of the Mondays… Check out the best of last week’s late night jokes!
Wal-Mart helps the environment (by forcing its suppliers to).
