Ed Naha's blog
Mission accomplished: FUBAR 'R' us
by Ed Naha | March 15, 2008 - 8:39am
http://www.smirkingchimp.com/thread/13452Which one of these headlines scares you the most? "Recession fears rise on more job cuts." "Fed takes new steps to boost cash for banks." "World markets slide as US economy groans." "Housing market spirals, no end in sight." "Consumer confidence at lowest since 2002." "Studies: Iraq costs US $12B per month." "Gas prices rise to new national record." "Consumers increased their borrowing by $6.9 billion in January." "Bush says no recession in sight."
Yeah, I know. It's not even close. Once again, our President emerges victorious.
Over the years, Bush has acquired many critics. Some think him as being arrogant, stubborn, ill informed, short-sighted, paranoid, clueless and out of touch. Others consider him an ideologue, an overgrown frat boy with a warped sense of entitlement, a dry drunk, a sociopath, a fascist, a belligerent blow-hard, a monarch wannabe with the inherent intelligence of a kadota fig and a total failure. To be fair to Bush, he is all that and more - an unprecedented Black Hole in the history of American governance.
Our president, who believes in the piss on 'em, I mean, er, trickle down theory of economics and who has made a practice out of robbing the poor to give to the rich, is now faced with his latest monstrous creation: an American economy that has gone bust. The only reason there aren't Hoovervilles popping up around the country is that nobody can afford the cardboard.The sheer madness of King George has been highlighted in the past week by dire financial headline after headline and Bush's reaction, or lack of it, to the consequences of his "let them eat caca" economic policies.
Last week, the Labor Department announced that 63,000 non-farm jobs were lost in February, following January's 22,000 goners. February's figures were the worst in five years. In addition, 450,000 folks bade adios to the labor force. They just stopped looking for jobs that weren't there. (As a result, our unemployment rate eased to 4.8% from 4.9%, a fact Bush actually bragged about.)
The real job loss for February is a tad higher than the official number. Construction lost 39,000 posts. Manufacturing took a 52,000 hit. Retailers cut 34,100 jobs. Financial companies slashed 12,000 positions. Even temp agencies reported 27,600 jobs cut. The total job loss number was offset by the creation of new jobs in such sectors as government, service, prostitution and television punditry. (Okay, I made some of that last stuff up.)Consumer confidence sank to a new low of 33.1%.
"We've gotten to a point where there's very little for the consumer to cheer about. Everywhere you look - homes, grocery stores, gasoline stations - there are things that are all weighing on consumer attitudes," said Richard Yamarone, economist at Argus Research. "You have soaring energy and food prices, rising home foreclosures and uncertainties about the jobs climate. When you mix it altogether it is a recipe for miserable consumer sentiment."
D'ya think?
Adding to the hilarity, the dollar slid to record international lows this past week. It's right down there with colored beads, trinkets and beaver pelts.
Oil soared to a new high, just about $110 a barrel. Gas prices hit an all-time record, with regular unleaded going for $3.2272 a gallon, a figure that doesn't accurately reflect what's happening at the pump. In California, for instance, a gallon of unleaded averages $3.50, with one station in the northern part of the state pumping it up to $5.19! In other words, gas is now almost as costly as a D.C. hooker.The amount of consumer credit owed to banks and credit cards rose to $6.9 billion this year because people are now using their credit cards to survive.
Probably not coincidentally, a survey measuring an individual's outlook about their personal financial standing as well as that of the country's came up with a resounding NEGATIVE 41.6%
Think of this way: all those folks who wanted to have a beer with Bush can no longer afford the beer. (Nor can they afford his policies.)
<<snip>>
U.S. home foreclosure filings jumped 60 percent and bank seizures more than doubled in February as rates on adjustable mortgages rose and property owners were unable to sell or refinance amid falling prices.
More than 223,000 properties were in some stage of default, or 1 in every 557 U.S. households.
About $460 billion of adjustable-rate mortgages are scheduled to reset this year and another $420 billion will rise in 2011, according to New York-based analysts at Citigroup Inc. Homeowners faced higher payments as fourth-quarter home prices fell 8.9 percent, the biggest drop in 20 years as measured by the S&P/Case- Shiller home price index.
Foreclosure filings are likely to be "explosive'' in May and June as more payments jump Rick Sharga, executive vice president of RealtyTrac, said in an interview. There may be between 750,000 and 1 million bank repossessions in 2008. Bank seizures rose 110 percent in February from a year ago, he said.Even interest rates on 30-year fixed-rate mortgage are rising. Why? The mortgage market is short by roughly $1 trillion in capital.
Despite BushCo.'s efforts to make it nearly impossible for regular folks to declare bankruptcy, an average of 4,000 bankruptcy filings were made PER DAY in February.
Meanwhile, hidden bank fees are on the rise, with consumers paying over $36 billion in 2006, the last year on record.Americans are getting slapped around worse than Curly of The Three Stooges. The official government response? "I'm not saying there's a recession," insists Edward Lazear, chairman of the White House Council of Economic Advisers. (Bush has Council of Economic Advisers??? One that even has a president??? Who knew?) Ever the realist, Lazear stated: "We have definitely downgraded our forecast for this quarter."
That sort of thinking is akin to the National Weather Service forecasting "drizzle" before Katrina hit New Orleans.
The Ponzi Schemes run by unregulated lenders while Bush was asleep at the wheel has resulted in a housing credit mess that is almost unparalleled in American history.
For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built.
The Fed reported last week that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.
Economy.com estimates 8.8 million homeowners, or about 10 percent of homes, will have zero or negative equity by the end of this month. Even more disturbing, about 13.8 million households will be "upside down" if prices fall 20 percent from their peak. Again, U.S. home prices plunged 8.9 percent in the final quarter of 2007, so that 20 percent figure isn't all that far-fetched.So far, the government has stepped in with a number of half-assed measures to contain the housing fallout. Last month, Congress passed a $168 billion economic stimulus package with provisions aimed at helping homeowners refinance into more affordable loans. The Federal Reserve has also slashed interest rates in hopes of spurring growth.
Fed Chairman Ben Bernanke suggested lenders reduce loan amounts to provide relief to beleaguered homeowners. (The lenders are sure to cave. That "pretty please with sugar on top" negotiating style has worked so well nationally during the last seven years.) Most economists believe that it's all too little too late.
Peter Morici of the University of Maryland School of Business stated, on CNN: "This is a wholesale meltdown... Across the board the economy is shrinking. Over 600,000 Americans left the labor force. The labor department reports that unemployment is falling. That is simply because so many people have quit the labor market. They only count those that are looking for a job, not all those that are discouraged and decided to stay at home....MORE
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