{"id":192939,"date":"2009-02-03T09:17:00","date_gmt":"2009-02-03T14:17:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/02\/03\/economics-update-289\/"},"modified":"2009-02-03T09:17:00","modified_gmt":"2009-02-03T14:17:00","slug":"economics-update-289","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/02\/03\/economics-update-289\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

To no one’s surprise, the Federal Reserve has extended its multi-trillion<\/span> dollar so called liquidity facilities another 6 months<\/a>, better known as the sh$tpile for cash program:<\/p>\n

In addition to prolonging the currency swap lines that were due to expire on April 30, the U.S. central bank said it would extend through October 30 a host of other programs providing liquidity to the U.S. commercial paper and money markets, and to large Wall Street firms.<\/p><\/blockquote>\n

They’ve already spent in excess of 8 trillion<\/span> dollars bailing out insolvent banks<\/a>, but they think that more of the same will help.<\/p>\n

The Federal Reserve is broken as an institution. It is run by and for the banks.<\/p>\n

We also have aggressive stimulus programs ramping up in Australia and Japan<\/a>.<\/p>\n

Meanwhile, real estate and construction continues to be a disaster with US construction falling 1.4% in December and 5.1% for 2008<\/a>, the largest drop since records began being kept in 1993, and the Homeownership rate has fallen to the 2000 level<\/a>, so much for Bush’s “Ownership Society….In stead of owning, we got pwn3d.*<\/sup> With current equity losses of US home owner pegged at $3.3 trillion<\/a>, a new record on vacant homes 19 million<\/a>.<\/p>\n

Even alleged good news in real estate, that the Pending Home Sales Index rose in December<\/a> is pretty hollow, because, money quote from CR, “The biggest gains were in areas with the biggest improvements in affordability.”<\/p>\n

So, if your house prices have dropped by 40+%, as they have in parts of California and Florida then homes might be moving…Otherwise, not so much.<\/p>\n

Still real estate is not as bad off as the auto industry, with GM and Chrysler offering buyouts to all of their hourly workers<\/a>, Ford posting 40.2% drop in January U.S. sales<\/a>, and GM dropping 49%, Chrysler down 55% LLC<\/a>, with the Japanese car makers seeing their sales dropping about 30% each<\/p>\n

BTW, it appears that China may be headed for a period of economically induced social unrest, because more than one in seven rural migrant workers<\/a>, more than 20 million<\/span>, are unemployed.<\/p>\n

In a nation that has systematically eliminated its safety net, 20 million pissed off unemployed people can make a lot of trouble.<\/p>\n

In energy, I’m not sure if $40\/bbl is the bottom, or if OPEC cuts are working, but oil was up today<\/a>, and it appears that we have found a bottom there.<\/p>\n

In currency, there dollar was down<\/a> as there was less “flight to safety.”<\/p>\n

*<\/sup>Leet speak<\/a> for “owned”.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

To no one’s surprise, the Federal Reserve has extended its multi-trillion dollar so called liquidity facilities another 6 months, better known as the sh$tpile for cash program: In addition to prolonging the currency swap lines that were due to expire on April 30, the U.S. central bank said it would extend through October 30 a …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1112,1108,1170,973,1004,1188,1088,985],"tags":[],"class_list":["post-192939","post","type-post","status-publish","format-standard","hentry","category-australia-and-new-zealand","category-auto-industry","category-china","category-economy","category-finance","category-japan","category-real-estate","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192939"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=192939"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192939\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=192939"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=192939"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=192939"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}