Someone once told me that being an optimist is a gift, but one has to be a realist too. That realism is born out of the fact that one has to understand what is going on "out there" and be able to somehow bring it to bear here. This is ever more so now as we are faced with an economy that continues to be tough as nails. Hope and optimism has to sustain us. There is no other way. The realities on the ground, though, continues to be ever more scary.
By now, the fact that the U.S. Senate did not pass Unemployment Insurance Extension is well known. Some 1 Million People will lose their benefits today. In my visits to the Local California One Stop Center, I have overheard folks repeatedly asking about extensions and assessing their status. I dread the day to see the face of those who had counted on this and will no longer be able to do so. There are some who say that this unemployment stipend helps to perpetuate a cycle of unemployment and dependency. I can understand that if the jobs were out there. But unfortunately they are not. I suppose that the fact that those who had depended on this stipend will go hungry and homeless is not as important as being fiscally responsible.
The first solution, of course, is to attack "Washington". The Corporate Mainstreat Media is beginning to go after it big time. For instance, Dylan Radigan on MSNBC has this "Fix It Week" thing to come up with solutions and to fight the "corruption" of Government. Fox continues its' quest to simply tell its' version of the way things are. There are also the same old tired solutions that are coming out of the U.S. Conservative Community. There is a continued call for more tax cuts, tax breaks, etc. etc. In the meantime, the man on Main Street continues to struggle to figure out how to survive it all!!!
As America gears up to celebrate the 4th of July, Cities are starting to cancel fireworks to save money. The reports I have seen are quite distressing. Some cities have supposedly depended on business contributions which have also dissipated as a result of the nervousness shown. I won't even go into the reports on the continued nervousness in World Markets and the dip in Treasury Yields. Although I respect what Governor Mitch Daniels of Indiana has done not to include "Funny Money" in his budget, States have profound challenges that somehow has to be met. Fiscal responsbility is commendable and has to be planned for long-term. I have to again wonder what will happen to all who have no hope and are increasingly despondent.
As "Main Street" continues to suffer, false prophets of hope continue to figure out ways to swindle their way to profit. The classic Work From Home Scamms are continuing to spring up. Yesterday's USA Today article made me mad beyond words about how people can be so cruel: Really Long Link
When will it all change? Will we be able to see better days ahead? I wonder.
As I begin the third year of "Outsiders" I will be relaunching the Economy Watch Series because of the continued calamity being faced in the United States. I view the possiblity of a double-dip recession to be ever more present as the signals I assess are not good at all.
The number of new home sales dropped 3.3 percent. Retail Sales were disappointing. The number of first time unemployment filings went down, slightly. But, one has to only see the job postings at the local unemployment office to realize that there is not much going on. In visiting the local One Stop Center, I see a continued stream of folks going in to assess what is at hand. There is a waiting list to use the system resources. Career Counselors have an increasingly larger case load as the budget is cut. That's the reality on the ground.
As the bloodbath continues on main street, Washington seems to be in its own world. The Republicans voted in unisom to block an extension of the Unemployment Insurance Payments because it was not funded. There is of course the folks who have exhausted their 99 Week payments as well. Those folks who have exhausted their 99 Weeks will basically be left on their own.
People will continue to chase shadows in the outside chance that they will be offered a job. Many will end up getting in the Multi-Level-Marketing Gig just to chase the pipe dream. Will America end up turning into a nation of mutual sellers? When will America get out of the consumption business and get back into the manufacturing business? When will we begin to create and not merely consume? Is this a pipe dream or can it again be reality?
It is now officially the day after the Election in California. I served as an Election Coordinator for my local County. It is always a privilege and a pleasure to see Democracy in Action and to be witness and part of history. For me, it was also especially fun because my son joined me in the early set up process so that he can understand and realize Democracy in Action. I was extremely grateful for it.
The vote count is continuing. However, the Republican and Democratic Nominees are known: Jerry Brown and Meg Whitman. As I have written before, Meg Whitman and Steve Poisner tried to outdo themselves in telling the State who was more conservative than the other. Meg Whitman came out swinging about old time politics, about how things are to change and how she was going to ride into Sacramento on her white horse trying to save the State Pension System, the Education System, etc. etc. etc. As for Jerry Brown, he reminded the State that he's been around and was at the forefront of technological innovation before Meg Whitman could spell computers
When the May unemployment numbers was announced on Friday, I initially jumped with joy when I heard the figure of around 450,000. But, then, my initial enthusiasm turned to disappointment when I saw that 411,000 of them were temporary Census Workers. Furthermore, I saw downward revisions of the Job Numbers which caused further concerns and caused the Dow Jones to drop.
There are some realities that has to be noted. The Fed is pretty much tapped out. It is beginning to gradually wind down its' purchases of mortgage securities. Consumer spending will tapper off and the level of Government debt is so high that future action by Governments to jump start another recession is going to be a major challenge. One of the statistics that really bothered me was the report by the IMF noting that the U.S. structural deficit will be 6% of the GDP. Despite a trillion dollars of stimulus being spent, the U.S. economy is yet to be on the sound footing necessary to sustain a long-term sustained growth that will bring the jobs back. Jobs continue to be lost. I also question the viability of Europe's 1 Trillion Dollar "rescue" package. The Greek Debt, The French Debt, the Spanish debt and the British debt are part of the problem and sovereign debt ratings continue to be downgraded. The Euro just dropped below US $ 1.20. That's why all Governments are now talking austerity. Although I welcome the committment by Governments to tackle deficits, the question yet to be answered is whether If the faucet of support is shut off, what will happen next
The past number of days has seen our Earth express its' rage yet again. The volcano in Iceland has wrecked havoc on the world. As I write on this, there are airports throughout Europe that have either closed or are on restricted operations. It was bad enough that caused President Obama to cancel his trip to Poland to attend the Polish President's funeral. There is of course the earthquakes that continue to occur in the so-called ring of fire and continued changes in the Earth that I have written throughout my daily "Write-Ups" here.
IATA, the World Aviation Body, is estimating the damage to the World Airlines to be around 200 Million Dollars a day. The large term impact is yet to be determined. What Mother Earth is doing now should truly put things in perspective as to how fragile life is and how the superficial seems to dominate the debate. When I just read the reports of the deaths in Pakistan, I thought about how stupid the loss of life truly is. It seems to me that we ought to embrace and celebrate life. We have to preserve this life and appreciate all the blessings. Such appreciation truly comes home when that is taken away. I have to question the wisdom of it all
I have been following the Republican talking points throughout the week. The basic contention by the Republicans was outlined by Senator Brown in the Republican Weekly Address on Saturday:
The Republicans have been on a continued warpath to circumvent Barack Obama's agenda at every turn. The healthcare debate has shown that all they are interested in an outright power grab to implement their narrow idelogical vision on the country. They are opposed to anything that remotely insures that the average person has a fighting chance. Paul Ryan's plan to replace Medicare with vouchers is just one of those extreme examples.
While the Republicans have continued to dominate the airwaves and win the public relations war, the real world goes on. There was a spike in unemployment not withstanding the 51,000 hires for the Census temporary jobs. The "real" unemployment rate stands at 16.8 Percent, on par with Spain. What Republicans should take notice of is a speech by the US Chamber of Commerce President Thomas Donohue. He spoke and made five key points
Recovery.Gov is reporting that it has paid out almost 40% of the 787 Billion Dollars in Stimulus Money. So far, almost 93 Billion Dollars has been in the form of Tax Cuts. The balance has been in the form of contracts and entitlements.
The loyal opposition in the Congress has been on the record noting how the stimulus has "failed". It has noted that not a single job has been preserved. This notion was reinforced by Senator Jon Kyl of Arizona the other day when he noted that unemployment does not create jobs. This was done in defense of the stunt that Jim Bunning pulled that would cost the Government even more to get it done now. I regard Jim Bunning 's bizzare stunt as the most extreme manifestation of what the loyal opposition in the U.S. Congress is hell bent on doing. I have noted that some 325,000 teachers not losing their jobs in and of itself is an achievement. In addition, it is clear that that the short term macro-economic effect has helped to forestall an even more dire situation
The White House Healthcare Summit took place. C-Span had gavel-to-gavel coverage. For those around the world who are not aware of C-Span, it is the public affairs programming that is provided as a public service by America's Cable Companies. It is devoid of political commentary, although it features reporters and political actors during its roundtables. But it is the best way to see Democracy in Action:
Glenn Beck and others within the so-called Modern Conservative movement have a right to speak. The First Amendment gives them the right to say what they have to say. Mr. Beck makes a heck of a living peddling his views and has quite a following. I think he is quite an entertainer and has proved to be quite an organizer and provocateur. As Senator Lindsay Graham once said, he makes quite a living crying on Television.
I think that he has found quite a home on Fox News. I found his comments here quite interesting
I was pleased to see the reports that the Economy is on the mend. The President talked about it during the State of the Union. I especially was jazzed about the 5.7% growth of GDP during the 4th Quarter of 2009. Jobs, though, continue to be lost--albeit at a slower pace. But, if anyone thinks we're out of the woods--I have a bridge in Alaska that I really want to suggest that they go out and check out. The point is that this growth is not translating into much.
President Obama hit the road noting that there is a lot yet to be done. He noted that 1 in 10 Americans can't find work. The President needs to be reminded that the actual number is almost 1 in 17. In California, it is almost 1 in 20. I think the President was brilliant in how he went on the offense with the Republicans during their Policy retreat on Friday
A very good friend turned me on to the National Priorities Project Website. With the Continued challenges we face in America, I was fascinated by what they had done. There is a cool feature that actualy analyzes what could have been done if the monies spent would have somehow been routed towards long-term sustainable development. I realize that some will question the analysis and the rationale. But the implications are staggering:
Tuesday November 3 was another election day in America. It was an election day to decide some governorships, a key mayoral election and very intersting race in the New York 23rd Congressional District. All the pundits have been pounding the pavements about how this was a referendum on President Obama and how the people have begun to speak up and be frustruated about the direction of the country. The Tea Party folks, the 9/12 Movement, Freedom Works and the Republicans are all celebrating tonight.
Well, it has been a good night for the Republican Party. They won two key Governorships. They have won other key statewide offices in Virginia. Yet, the national implications of these races is way overstated. The mainstream media (and yes that includes Fox) will be hard at work spinning this as a major setback for the White House. The reality is otherwise, though
It has been an interesting week. The US GDP numbers were announced Friday. It showed that the US GDP only shrank by 1%. This continued the drumbeat by the Obama Adminstration and the Fed underscoring the fact that things were really bad and the turnaround is now only a matter of time. The world needs to realize that this is only the first initial reading and will be subject to additional revisions over the next 45 days
When I first began to comment on our economic plight, I began by terming it an Economic Tsunami. I then continued the chronicles by talking about the Economic Winter we are in currently in. I have also been reading on the "happy talk" coming out of Washington and Frankfurt (the home of the European Central Bank) about "green shots" appearing. I don't see anything, yet. The scepticism of the leading lights of business who joined David Gregory at NBC's Meet the Press said it as such:
I am right now watching C-Span's Live Stream of the White House Correspodents Dinner. It is quite a show!!! There are a lot of celebrities and the video retrospective of the year is quite a feat. I am glad folks are having fun.
I was thinking about the White House Correspodents Dinner past. This one is a good one
We have begun a new month. May Day saw celebrations and demonstrations around the world by workers throughout the world. I have continued to see the "happy talk" on the economy coming out of the Adminstration and other governments. If the name of the game is confidence building, I don't see much of it just yet.
The International Monetary Fund has just come out with a scary assessment of the Global Financial System. The estmiated writedown of assets is somehow in the neighborhood of 4 Trillion Dollars, because they have included the estimated writedown on European, Japanese and emerging markets assets. The estimated writedown on US assets have been raised to almost 3 Trillion Dollars. Martin Wolf of the Financial Times noted that the writedowns come to some 13 percent of the aggregate domestic product. I stopped reading on because I got sick to my stomach
As I have been thinking about and assessing the Worldwide Economic Landscape, I continue to be worried. Spain's unemployment just hit the 4 Million Mark. Spain was one of the countries whose explosive growth was on the back of a real estate boom that has now gone bust. The parallels with the United States are just too scary to even contemplate.
The Organization for Economic Cooperation and Development has noted in its' interim Economic Report that, "...Economic activity is expected to plummet by an average 4.3 percent in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures for the first time since the early 1990s, according to the OECD’s Economic Outlook Interim Report...." (Source: Really Long Link retrieved April 26, 2009). Because of this pessimistic outlook, the "happy talk" that came out of the meeting of the Finance Ministers in Washington is unrealistic to say the least. Although the free fall may be ending, but I am not seeing any recovery for a while yet. Vice President Biden , to his credit, did not that things will get worst before they get better. I agree with him completely
As the week came to a close, the markets continued their recovery. Wells Fargo Bank had records profits and Ford cut its debt. But, unemployment has continued to rise. The International Monetary Fund has estimated worldwide losses at somewhat in the neighborhood of 4 Trillion Dollars.
In the United States, losses by US State and Local Pension Funds are estimated to be at approximately 40 percent of the 2 Trillion Dollars held by the 2600 Pension plans that pays out pensiosn for retired teachers, police officers and firefighters.hese pension plans are selling their assets at fire sale prices trying to make their pension obligations.In the midst of this mixed news. I continue to be concerned about Congressional Budget Office estimates on the actual costs of the proposed Budget Blueprint. The deficit is projected to be 9.3 Trillion Dollars over the next decade. It will average 5.3% of the GDP--something that the President's Budget Director himself concedes is unsustainable
Whenever someone dies, it is always a sad moment. Life is the most precious resource granted. The death always leaves a void. Although I have continued to believe that we are all passengers in this journey of life, the emptiness will never overcome. I view it as ever more tragic for the heroes who have paid the ultimate price while serving in wars in faraway lands. This includes Americans, Canadians, British, Australians, German, French and other NATO and coalition members who have strived to eradicate the extremism that continues to grow like a cancer.
When President Obama came into office, he directed Secretary Gates to leave it to the families to decide whether to allow coverage of their fallen coming back home. Mr. Gates decided to leave it up to the families. The first coverage was of the latest fallen hero, U.S. Airforoce Staff Sergeant Philip Myers
The numbers that came out on Friday on the U.S. Unemployment numbers were shocking. It went up "officially" to 8.25%. But, according to the Bureau of Labor Statistics Report, it did not include, "...About 2.1 million persons (not seasonally adjusted) were marginally attached to the labor force in March, 754,000 more than a year earlier. These individ-
uals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 685,000 discouraged workers in March, up by 284,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.4 million persons marginally attached to the labor force in March had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities."
(Source: Really]Really Long Link retrieved April 4, 2009
The World's top 20 countries have desended upon London. London has braced itself for anarchy. Anyone who does not understand the anxiety felt by the people of the world seems to be living in fantasyland
In the midst of all the continued bloodletting I have written, I was especially shocked to find out that the man in charge of the Pension Benefit Guarantee Corporation decided to move its' investments to stuff like hedge funds and other riskier investments. The fund appears to have lost substantial sums. What is troublesome is that this is the fund that guarantees defunct Pension Funds which continue to pile up as the US Economy continues to implode. I could only think what would have happened to the Social Security Trust Fund if George W. Bush would have succeeded in moving monies into the private markets. Why was this allowed to happen? Why weren't safeguards in place? Where was Congress in all of this?
I find the recent spat between Jon Stewart and Jim Cramer and Meghan McCain and Ann Coulter hillarious to say the least. Bill O'Reilly talked about it in his Factor show on Monday on Fox News. He talked the Cramer vs. Stewart feud with Stewart Varney of Fox Business and on Meghan McCain vs. Ann Coulter with a reporter for the Washington Times.
I saw Jon Stewart's show, I saw Jim Cramer's "response when he appeared on MSNBC and NBC and then Jon Stewart's rebuttal. Jon Stewart nailed Jim Cramer. There was no question about it. But, O'Reilly's way of lambasting Stewart for going after him for being "liberal" and "mainstream" is a bit far-fetched. What O'Reilly and the folks at fox forget to tell the rest of the world is that they were the "mainstream" during the 8 years of the Bush Adminstration. They pushed this fiction that markets work and self-regulate and had to be left alone. Well, this so-called conservative philosophy (as they call it) was in fact the cause of the economic winter we are faced with today. Bernie Maddoff and Allan Stafford are but the most extreme of examples. But, the entertainment nature of CNBC was also just as much to blame in my view. Jon Stewart called Jim Cramer on it. I do commend Jim Cramer for agreeing to appear on The Daily Show later on tonight. That should be quite interesting. But, this fiction of a liberal bias that Bill O'Reilly continues to push gets to be old. It is entertaining and funny, though. Cramer made some bad calls and he has to own up to it
The President's Budget Blueprint has been released and is now available on http://www.omb.gov, the Office of Management and Budget Website. It is 142 pages long. There is a big gap between capacity and the ability of businesses to produce right now. Government has to be the purchaser of last resort. The blueprint has begun this process.
Understanding this blueprint will take a while. I will not take what the Republicans or the Democrats say at face value. I do welcome a number of initiatives. For instance, I think that in the spirit of "Smart Government" that I advocate, some of the weapon systems is clearly not geared towards war in the 21st Century. The one weapon system is the F22 Raptor. There are jobs at stake. But the F22 has not seen one day of action and is suspectible to be brought down by a single missile. It seems to me that at $ 140,000,000 per plane, the taxpayers can get a lot better bang for the buck by investing it in drones. From the recent testimony I have seen Secretary Gates give before the Congress, he is in agreement with this. There are many other places where we can look at doing things differently
There is only one sentence to describe what happened in the markets on Monday: It was a dismal day. The Dow dropped down to 1997 levels. There were some discussions by analysts that markets may even drop to the 6500 level before any "turn-around" is evident.
Barack Obama hosted the Congressional Leadership at the White House and took questions. Today was the day when he addressed his goal to half the deficit by 2013. I commend him for this stance. But, with the exploding cost of Medicare and the continued stress on the financial system, it is going to be a tall order. In addition, there is of course the two wars in Iraq and Afghanistan. I view the committment to be more transparent in the budgeting process as a signifcant move in the right direction. I have continued to be bothered by how the Federal Government did not count the costs of the wars as part of the overall budget
The stimulus plan continues to be the talk of Washington as the Governors gathered for their conference. Apparently, Sarah Palin has been a no-show. I do find that interesting. Governor Palin has been quite busy, though.
I made the rounds of the Sunday talk shows to see who was there. ABC and CNN had the California Governor, NBC the Louisiana Governor and the Florida Governor and CBS the US Housing Secretary. Quite a few Republican Governors have spoken up against the stimulus and said that they would refuse some of the money. I commented on Governor Jindhal's decision a few days ago. Most of them (Jindhal, Barbor and a few others) are ambitious and want to be President. As I saw Jindhal on Meet the Press, he was focused on his talking points: lower taxes and smaller government. I hope Jindhal succeeds in Louisiana. Louisiana needs someone who is commmitted, honest and knows what he is doing. They seem to have one in their present Governor
As the stimulus plans begins to work its' way through the economy, the continued suffering continues. The news continues to be dreadful. There is the drop in Japan's GDP--some 12.7%. Spain's economy is in dire straights. The unemployment rate is forecast to be at 19.5% and the deficit at 6.5%of GDP. There is talk of a depression in Spain. Moving on to Russia, there is the drop in Russian Industrial Output of some 20%. Dmitri Medevedev seems to begin to get it. He came out criticizing the Government (headed by his old boss Vladimir Putin) and had already fired four Regional Governors.
The United States continues to be on the edge of the abyss. John Laing Homes, a major home builder, declared bankrupcy this past week. Markets continue to be spooked. The market dropped 100 points on Friday alone. Gold topped $ 1000/Ounce
The President's Stimulus Plan has made some headway. The U.S. House and Senate Conferees have come to an agreement. There are tax cuts and aid to the States. I am especially gratified to see that California may be getting monies necessary because of the predicament I just wrote about. My local school district has to find 38 Million Dollars in Cuts. I am seeing reports of teachers throughout the country being laid off. This is reality that the Republican do not seem to realize.
The three Republicans who participated in the Deal (Arlen Specter, Olympia Snow and Susan Collins) may be considered RINO's by the tried and true Conservatives. I consider them Americans because they seem to realize that we have an emergency. I salute them for their courage for having gone against the orthodoxy that the Republican Leadership seems to have laid out to oppose it
I saw the speech by the Secretary of the Treasury. From what I gathered, it promised a three-prong approach to re-do the TARP and insure that it is made more transparent. It also promised a comprehesive plan to deal with the housing crisis over the next few weeks.
As I listened to the speech, I viewed the speech as all well and good. The price tag was shocking, though: 1.5 trillion dollars. They're going to have to find the money somewhere. What was also startling to me was the fact that 8.7 Trillion in monies has been pushed into the financial system by the Federal Reserve. I wonder where all those monies have gone. Right as Geitner spoke, the markets tanked!!! The Dow lost almost 400 points. So, The markets spoke and they were not too happy. Although it is good news that the U.S. Senate adopted its' version of the stimulus plan, it still has to be reconciled with the house. So, we will end up losing more precious time. To underscore how precarious things are, GM announced another cut of 10,000 workers. I wonder who they will have left after all the cuts
Mr. Obama went on the road today to sell the stimulus. He went to Indiana and then onward to Washington for his primetime news conference. He is making the push to get this in place soon.
While Mr. Obama was on the stump, everything continues to fall apart at the extremes. The bad news keeps getting worst. Nissan came out with an annoucement that 20,000 people are losing their jobs. The U.S. National Retail Federation has come out with a report stating that retail store inventories will be falling by 11.8% for the first half of 2009. The Baltic States in the former Soviet Union are seeing their economies literally falling apart. Riots have been happening in Latvia and LIthuania. According to Fitch Ratings, European and Middle Eastern Companies are slashing capital spending by at least one third. Sales of Personal Computers are slated for their first drop in seven years. The U.S. Government is out with record amounts of debt it is trying to sell. The yields are starting to creep up which is another cause for worry. The most worrisome of all, for me, is the financial predicament of the States. California still does not have a budget. Other States are faced with budget shortfalls as far as the eye can see. States are faced with stark choices
The debate on what to do about how to jumpstart the US Economy rages on. I personally have received appeals from both Senator McCain's new CountryFirst PAC and President Obama's Organizing for America Organization. The roundtable held earlier between four leading lights of the U.S. Congress on NBC's Meet the Press underscores this divide.
As the debate continues, teachers, fire fighters and cops are on the chopping block. States are in dire straits. California continues to operate without a budget.
Earlier, I reported on an agreement in the U.S. Senate regarding the proposed stimulus plan to jumpstart the US Economy. I was pleased to see that the recovery.gov website is ready to go already. The need to get going on the day after is more critical than ever. I am of the view that is going to get worst before it gets better.
As the debate has gone on in Washington, two banks failed today. A bank in Georgia and a bank in Culver City California were shut down by Federal Regulators. Emerson, a major conglomrate, announced around 14,000 job cuts. California continues to be without a budget. Today saw over 200,000 California State Workers being furloughed. It is a shame that there is no budget after six months. The Dow was up as a sign of hope that the stimulus will be adopted. Maybe the markets know something
In my almost daily columns/comments on the Economy, I had thought about the calamity as a Tsunami. With a Tsunami, there is at least a chance to see Sunshine. However, I think the better term for it is a Winter Storm. I continue to wonder when we will see sunshine.
On Wednesday, the bleeding continued. Cisco Systems, the leading network gear maker, missed the numbers. Alcatel-Lucent continued its' downward slide which has been on-going for a number of years. Disney missed then it came out with its numbers and annouced jobs cuts totaling some 400 workers at the ABC unit. Earlier in the week, Electronic Arts annouced a job cut and delay in new games
The world is right now fascinated with Davos. The rich, the famous and the powerful are all there in paradise talking about the world and all the problems. There is enough being said by all pundits which will speak for itself on Davos. But, two key things occured which I wanted to note:
1) Turkey's Prime Minister Edrogan stormed out of a discussion with Shimon Peres during discusisons on Gaza. Edrogan was given a minute by David Ignathius of the Washington Post to rebute a lengthy comment by Shimon Peres. I think the gesture by Mr. Edrogan must be taken seriously by Israel. It shows the frustration with Israel and the fact that as Amr Mousa said, Israel "does not listen". I was quite disappointed by David Ignathius when he did not grant equal time during the discussions. It seems to me that Dinner could have waited
Although the Dow went up today, the bleeding has continued. Over 70,000 job cuts have been announced. This include massive cuts at Catepillar, Sprint/Nextel & Phillips. Auto Suppliers are getting ready to go to the Federal Government with a request for $ 10 Billion. To add insult to injury, Citigroup is about to take delivery of a $ 50 Million private jet.
Right now, The President has been given $ 350 Billion to Spend. He is pushing for another $ 825 Billion. Out of that, about $ 500 Billion is cash. So, he'd have a Trillion Dollars to spend. I will be many who will be holding his feet to the fire in terms of transparency. We will need to figure out how to jumpstart the economy. So far, nothing has worked. It is scary to see what is going on right now. The President spoke to this on Saturday during his weekly address. I wonder if the Republican Leadership was listening or truly understood what he was saying when he met with them at the White House. What he said was clear enough
I was listening to NBC News' Meet the Press. It appears that the Republicans are beginning to be obstructionists. The House Minority Leader acknowledged that there is a difficult economy. But, he thinks that the Economic Package will not work. The Adminstration believes that this is rightly sized. Larry Summers said it clearly so during the NBC interview:
Now the euphoria over the Obama Inauguration is over, it is now back to reality. The bad news continues unabatted. According to the Bank of Japan, Japan faces two years of contraction. It is facing deflation and issues with corporate liquidity. Exports have declined some 35%. South Korea is officially in recession and is facing a weakness in chip expoerts. Nouriel Roubin noted that China is in Recession. The Chinese may not agree. But that's reality. Thailand, New Zealand, Australia, Taiwan and South Korea all have clouds over their economic horizon. GE had a disappointing quarter. Even Lockheed Martin has slashed its forecast for 2009. Unilever disappointed and saw its' shares tumble in London. Microsoft and Sony announced job cuts as they fully anticipate further hardship down the line. Rachel Maddow termed it best, "yikes". It continues to get worst.
As Business continues to bleed, so do the States. California's unemployment is reaching 10% of the workforce. One has to realize that this is "official" figures. The actual figure is at least 2% higher due to factors such as folks having stopped looking and part-timers. Now, California is a special case anyway. There is no consesus on resolving the budget impasse. The state will run out of money. Everyone is waiting and waiting impatiently. I am especially eyeing the impact on schools
I have been come to grips with all that has been going over the past day or so. Between the Rick Warren Controversy, the Price of Oil, the continued saga of the Auto Industry and the turmoil in the Middle East, it has been quite a ride. Oil has steadied at $ 36/Barrel. That is almost 1/4 of the the price just six months ago. This is good news. But, the problem is that we will become complacent. I have warned about this before and I know based on history it will happen again. Many countries in the world will also be closer to the edge of the abyss because of this.
I changed the title to reflect the commentary on what we're faced with. Right now, reports are coming in that Rio Tinto, the big Australian miner, is about to cut 14,000 jobs. Worst than that is what is happening in the Democratic Republic of Congo. It is estimated that over 300,000 people have lost their jobs in the province of Katanga that produces the basic stuff that we all yearn for (Cobalt, etc.). The average guy who went into those hell holes to squeeze out a living is the only one losing. I think this should be an opportunity to see what alternatives can be available. I continue to wonder how long can we draw on this credit card called Earth. Suppose Cobalt goes out..what can we do to replace it? The problem with Oil seems to not have taught us anything. There is talk of a $ 1/Gallon of Gas. I welcome it. But, the problem is that people have short memories and will get back on the road until the spike occurs. The spike will occur.
Mr. Obama had his first Press Conference yesterday. I did not actually see it, but actually caught it on Radio. The pundits have been at it. Of the analysis I have seen, the only one I agree with is CNN's Gloria Borger when she noted how tired President-Elect Obama was. But, I did find him to be direct and to the point without giving the house away. The man has obviously been giving a lot of thought to the day after. The plan is in place and wide consultations have begun. The President-Elect's Website (http://www.change.gov) is also up. I am willing to be patient and give the President-Elect time to figure it out. The economic transition team is a team of All Stars. We need to give them time!!
On the foreign policy, I commend President-Elect Obama on his response to the congratulatory note from idiotnejad (Oh I meant Ahmadinejad, Sorry), the clerk-President of Iran. Iran subsequently blasted President-Elect Obama on the fact that Mr. Obama reminded the world that Iran will not be allowed to acquire a nuclear weapon
I can't help but be worried. As I continue to write about our world, I want to remain hopeful. But, the bad news continues coming in. The Dow lost over 300 points on Friday. As America continues to be in the midst of a Presidential Campaign, the world seems to be falling apart. BBC is reporting on a very disturbing development in Colombia threatens to undermine all that seems to have been achieved in the so-called war on drugs. A number of Army colonels have been sacked because they apparently kidnapped homeless men and then killed them to secure body counts and in turn promotions. Colombia was the same country, of course, that pulled off the release of Ingrid Betancourt and others using the emblems of the International commitee for the Red Cross. I view it as a bothersome development because it will undermine the very perilous nature of achievements made in the war on drugs that the world seems to be losing. Look at what is going on in Mexico. I regard Uribe as the ultimate teflon, though. I think he would muddle through as he has through other crisis.
The more worrisome development, though, is the killing of foreigners in the center of the Afghan capital, Kabul. Afghanistan is on fire. Karzai is useless and is a lost case. I am heartened by Joe Klein's comments on Time.com about Barack Obama's views. According to Klein, Barack Obama (and General Petreaus) are in favor of negotiations with the Taliban. I would be interested in any alternative anyone could offer. Right now, I see none
Mike Pouraryan
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