Obama recession update

[Pepsi]

1) Federal taxes

2) Federal spending

3) Federal bailouts

    

oh brother mornac.. can you expand on this "analysis" a bit?

[Mornac]

What "analysis"? Who said anything about an "analysis"? Your question was, "what are the causes of the recession, your opinion?". I answered it plainly and precisely. If you have any questions about my answer, please feel free to ask them (one at a time if you don't mind).

[johnhp]

   

oh brother mornac.. can you expand on this "analysis" a bit?

Pepsi


Were you expecting something other than the type of hermeneutics you would get from a 15 year old Catholic school student reading the student handbook description of the proper school uniform and "explaining" to the teacher that the handbook requires a student to have the proper shoes but does not require the student to "wear" them?

[Velleity]

Your question was, "what are the causes of the recession, your opinion?". I answered it plainly and precisely.

No you didn't. You hunted and pecked your way to three bumper sticker talking points. You in no way established any causes of the recession, or provided any answer that even remotely resembles anything reasonably objective.

Federal taxes are and have been the lowest they have been since the 1950s. You can't even begin to make a real argument about federal spending. Federal bailouts means what?

You make no mention here of the housing market, financial derivatives, globalization, credit markets, the failure of financial institutions, affects of deregulation, monetary policy, two wars, unprecedented concentrations of wealth, massive fraud, or any of the other buffoonery that was directly and proximately caused by your stupid ideology.

You answered nothing, plainly and precisely or otherwise. You didn't say a damn thing.

[Mornac]

No you didn't.

Yes I did. I also offered to answer any questions he had about my answers. What is it you guys have about Pepsi that makes you feel you have to hold up his end of a conversation? I think he’s quite capable of doing it by himself. Why don’t you stand back and give him a chance.

[Velleity]

Yes I did. I also offered to answer any questions he had about my answers. What is it you guys have about Pepsi that makes you feel you have to hold up his end of a conversation? I think he’s quite capable of doing it by himself. Why don’t you stand back and give him a chance.

I post when I want to post Mornac. You should know that by now.

And no, you didn't. You didn't even come close.

[Mornac]

I post when I want to post Mornac. You should know that by now.

--I wasn't telling you not to. I was making a suggestion: "Why don’t you stand back and give him a chance." You're not required to take me up on it.

And no, you didn't. You didn't even come close.

--That's for Pepsi to determine. He asked the question, he has to decide whether or not the answer is adequate. At any rate, I've offered (as always) to answer any questions he may have about it and that offer stands. You can stick around and watch if you like.

[Mornac]

Food stamp use hit record 40.8m in May

By Bloomberg News
August 5, 2010

WASHINGTON — The number of Americans who are receiving food stamps rose to a record 40.8 million in May as the jobless rate hovered near a 27-year high, the government reported yesterday.

Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 19 percent from a year earlier and increased 0.9 percent from April, the US Department of Agriculture said in a statement on its website.

Participation has set records for 18 straight months.

Unemployment in July may have reached 9.6 percent, according to a Bloomberg News survey of analysts in advance of the Aug. 6 release of last month’s rate. Unemployment was 9.5 percent in June, near levels last seen in 1983.

An average of 40.5 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates.

The figure is projected to rise to 43.3 million in 2011.

http://www.boston.com/news/nation/washington/articles/2010/08/05/food_stamp_use_hit_record_408m_in_may/

[Velleity]

There is no more stimulative government action than food stamps. Plus you don't have people starving. Most people believe that stimulating an economy that isn't at full employment is a good idea. Most people, too, believe that it's not good to let people starve.

And you, Mornac? You believe it's bad to stimulate the economy when we're not at full employment? You believe it's good to let people starve?

[Mornac]

Why all the questions? All I did was post an update on the Obama recession. I'm trying to be informative.

[Mornac]

Stock futures little changed before jobs report
Stock futures trade in a tight range as investors cautious before key monthly jobs report
 
August 6, 2010, 7:54 am

NEW YORK (AP) -- Stock futures traded in a tight range as investors avoid any big bets before the Labor Department's monthly employment report.

High unemployment is often cited as the single most important component slowing an economic recovery. A lack of hiring has kept people concerned about their jobs, which in turn leads them to cut down their spending. A drop in consumer spending has helped lead to a slowdown in growth over the past few months.

The Labor Department is expected to say 65,000 jobs were cut in July and the unemployment rate rose to 9.6 percent from 9.5 percent in June, according to economists polled by Thomson Reuters. However, the loss of jobs is primarily from the government laying off temporary census workers.

So investors will more be focused on hiring by private employers, which accounts for the bulk of jobs in the country. Economists expect private employers added 90,000 jobs last month after adding 83,000 a month earlier. Expanding hiring by private employers would likely ease recent concerns that the economy could fall back into recession.

Economic data over the past three months has pointed to a slowdown in growth, and investors are unsure just how much more the recovery will weaken. A disappointing employment report would probably add to fears that the recovery will worsen during the second half of the year.

Investors will also be digging into other details in the report for cues about the health of the economy. Average hourly earnings likely rose 0.1 percent last month after falling 0.1 percent in June, while the average work week remained unchanged at 34.1 hours.

The work week details are also considered important because it shows how much work employers are squeezing out of current staff. If it climbs too high, productivity of current workers gets exhausted and employers must then turn to hiring new employees to handle the extra work.

Ahead of the opening bell, Dow Jones industrial average futures rose 10, or 0.1 percent, to 10,645. Standard & Poor's 500 index futures rose 1.70, or 0.2 percent, to 1,125.20, while Nasdaq 100 index futures rose 4.25, or 0.2 percent, to 1,905.25.

Bond prices also showed little movement leading up to the jobs report. The yield on the 10-year Treasury note, which moves opposite its price, was unchanged at 2.91 percent compared with late Thursday.

Reports over the past two days provided conflicting signs about the jobs market, which has led to mixed days for stocks. On Wednesday, major indexes rose after payroll company ADP said private employers added 42,000 jobs last month, slightly more than expected. On Thursday, stocks dropped slightly after the Labor Department said new claims for unemployment benefits rose unexpectedly last week.

Overseas, Britain's FTSE 100 rose 0.7 percent, Germany's DAX index rose 0.4 percent, and France's CAC-40 gained 0.5 percent. Japan's Nikkei stock average fell 0.1 percent.

http://finance.yahoo.com/news/Stock-futures-little-changed-apf-1463901510.html?x=0&.v=5

[IM2]

Why all the questions? All I did was post an update on the Obama recession. I'm trying to be informative.

There is no Obama recession to update. This recession is Bush made.

[Mornac]

Snap analysis: July jobs show odd mix of bad news
August 6, 2010

By Emily Kaiser

WASHINGTON (Reuters) - Friday's employment report provided an odd mix of unpleasant surprises that add another question mark to the pace of economic recovery.

Companies cut back on temporary hires, a segment normally considered a harbinger of future hiring. Government jobs dried up much faster than anticipated and not just because it saw the end of short-term census jobs.

The jobless rate held steady at 9.5 percent, defying expectations for a slight increase, but that was only because thousands more people dropped out of the labor force.

* Temporary jobs dropped by 5,600, reversing a streak of strong gains that economists had viewed as a hopeful sign that hiring would pick up.

* Normally, companies load up on temps at the beginning of a recovery when they are waiting for confirmation that growth is gaining momentum. This recovery has been unusual in that temporary hiring did not herald a jump in private hiring.

* Private hiring totaled a lackluster 71,000 in July, below expectations for 90,000 in a Reuters poll. June's tally was revised down to just 31,000 from an initially reported 83,000.

* Government hiring was another worrisome sign. The loss of 202,000 positions reflected the loss of 143,000 temporary Census jobs.

* The total also included 38,000 jobs lost in local government. For most municipalities, the fiscal year began on July 1, and government associations have been warning that huge budget gaps would force aggressive job and spending cuts. July's report suggests local governments got a quick start.

* There were a few positive signs buried among the bad news. The average work week edged up to 34.2 hours from 34.1, suggesting companies were squeezing more out of existing workers and may soon need more. Earnings also rose slightly, adding to consumers' spending power.

http://www.reuters.com/article/idUSTRE6752KD20100806

[Mornac]

Social Security in the red this year

By Stephen Dinan
The Washington Times
August 5, 2010

Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary.

Meanwhile President Obama's health care overhaul has given Medicare's basic Hospital Insurance an extra 12 years of financial stability, though it did not solve all of the program's long-term challenges.

"The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the Affordable Care Act," the program's actuary said in its annual report. "These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law and to 2028 under the alternative scenario."

But the actuary said the programs' finances are still troubled in the near and long terms, and warned that Congress is making things worse by putting off scheduled doctor fee cuts.

The Obama administration said the report shows the success of the health care overhaul, which passed earlier this year on the strength of Democratic votes.

"The impact of health care reform is made clear by the Trustees Reports, which show some very positive developments for Social Security and especially Medicare," said Treasury Secretary Timothy F. Geithner. "But they also remind us that we must continue to make progress addressing the financing challenges facing the long-term solvency of these programs."

Some of the grimmest immediate news comes in Social Security, where benefit payouts will exceed revenues this year for the first time since Democrats and Republicans came together to overhaul it in the 1980s.

The deficit will last through 2011, then an improving economy will put it back into balance for three years, then it will dip back into the red in 2015, the actuary said. The program has enough money in its trust fund to cover the annual deficit for two decades beyond that.

http://www.washingtontimes.com/news/2010/aug/5/social-security-red-first-time-ever/

[Mornac]

Fannie Mae Seeks $1.5 Billion From U.S. Treasury After 12th Straight Loss

By Lorraine Woellert
Aug 5, 2010

Fannie Mae, the mortgage-finance company operating under federal conservatorship, is seeking $1.5 billion in aid from the U.S. Treasury Department after a 12th straight quarterly loss.

A decline in costs from bad loans helped narrow the second- quarter loss to $1.2 billion from $14.8 billion in the same period a year earlier, the Washington-based company said today in a filing to the Securities and Exchange Commission. Fannie Mae has accrued more than $148 billion in consecutive losses since 2007, according to data compiled by Bloomberg.

The Treasury seized Fannie Mae and McLean, Virginia-based Freddie Mac, the biggest sources of U.S. mortgage funding, in 2008 as souring subprime loans pushed the companies to brink of collapse. Including today’s request, Fannie Mae has drawn $86.1 billion in aid. The growing tally has helped spur the Obama administration to solicit proposals to fix the companies, and prompted some lawmakers to demand their closure.

“Congress must act to end this taxpayer-funded bailout,” said Representative Jeb Hensarling, in a statement after today’s earnings were announced. The Texas Republican is the lead sponsor of legislation to abolish the companies.

Freddie Mac hasn’t yet disclosed second-quarter results.

Fannie Mae’s credit-related expenses, including home-loan delinquencies and defaults, fell to $4.9 billion from $18.8 billion a year earlier. Foreclosure sales, efforts to rework distressed loans, and a change in accounting helped reduce the costs, the company said.

Reducing Future Losses

Participation in the Treasury’s Making Home Affordable Program, which helps distressed borrowers lower monthly payments by rewriting loan terms, cost Fannie Mae $2.2 billion in the second quarter. Minimizing delays in repayment plans, forbearance programs and loan modifications can help reduce long-term losses by preventing defaults, the company said.

“These actions have been undertaken with the goal of reducing our future credit losses below what they otherwise would have been,” it said. “It is difficult to predict how effective these actions ultimately will be in reducing our credit losses.”

Though home prices improved in the second quarter, they may “decline slightly” through 2011, the company said. Losses on single-family mortgages fell about 60 percent from the first quarter to $5.1 billion. Since last year, “almost all” such losses were on loans made from 2005 to 2008, as a smaller share of newer loans, issued with higher underwriting standards, face delinquencies, the company said.

Seeking Ideas

The company forced lenders to repurchase about $1.5 billion in defective loans in the quarter, compared with $964 million a year earlier.

“We expect the amount of our outstanding repurchase and reimbursement requests to remain high” this year, it said.

Fannie Mae and Freddie Mac own or guarantee more than half the $11 trillion U.S. residential debt market. The Treasury and Department of Housing and Urban Development asked in April for public comment on how to fix the mortgage-funding system.

On Aug. 17, President Barack Obama’s administration plans to host a conference of lawmakers, financial executives and housing advocates to hear ideas for improving the property- finance system. Treasury Secretary Timothy F. Geithner has said his agency aims to offer “a comprehensive reform proposal” for the companies by January.
 
http://www.bloomberg.com/news/2010-08-05/fannie-mae-seeks-1-5-billion-from-u-s-treasury-after-12th-straight-loss.html