United States Heading towards a Depression?

60 votes to pass the legislation.....building an unnecessary jet engine is a better solution?

 

Yes, because we should continue to pay people NOT to work; indefinitely.

We can just pick the paychecks off the money tree on the South Lawn.

 

Helping the working poor is the only proper course of action while dismantling the Great Recession forced on them by the previous Administration.

 

All these quotes that come from out of no where? You're strange and bizarre obsession with the previous administration, (that of which for the last 4 years has been run by democrats) bewilders me.

It would be helpful if you made reference to these quotes you just keep posting. If it was not for your breezy avatar and absence of reference to Shakira, I'd swear you were AC.

 

Mia, do you ever have anything of substance to say......(Hint) the working poor is the subject matter of the post.

What is strange is all the different people you keep alluding to - do you ever sleep, have you any convictions of your own?

 

Corwin: I was looking at bank data at http://fdic.gov which is probably the best source of overall bank information and publishes the information that everyone else than argues and complains about.

The volume of failed banks is heavy, even alarming. Of interest, from a differernt perspective the FDIC publishes an historical list of new bank charters. From about 1995 through the start of this recession the annual increase of new banks ranged from 91 to over 200. New bank creation was offset by a lower number of failures (until this recession) and by mergers.

Overall from the mid 1990's til the recession there was a small decrease in total different banks. It appears that the decrease is mostly acountable to mergers. The big got bigger.

I was thinking about that because a new branch opened across from one of my businesses and I was speaking to the managers. The bank itself is about 20 years old and reasonably robust with over 20 branches and fine financials. (I checked it out). I got professionally with banks in the early 1980's. It was a key to developing my skills in commercial real estate. In the early 1980's the S & L industry was f*cked. It was only allowed to invest in residential mortgages. The incredible increase in interest rates was killing the industry. Then the congress passed legislation that unleashed the S& L's into other businesses. That created a wholly different mess, with the S&L's investing like nuts into wholly uncharted waters, primarily commercial real estate. The result of that was a commercial real estate bubble around the country and was the major contributor to the recession of the late 1980's early 1990's.

Connect this with some politics. In Feb 1991 Desert Storm occurred. It was relatively fast, hugely successful and Bush I was president. He had a huge surge in popularity.

The recession hit...and kaboom that opened the door for Clinton to beat him in the presidential election. Bush I' s popularity just vanished with the recession. Perot and Clinton were attacking him, the recession was hitting, Clinton's internal mantra to staff was "its the economy, stupid" remiding his team and him to stay on that message.

In economic reality if one was to look at the "bubble" of commercial real estate development that went from okay to sour...the bubble probably hit in the mid 1980's. From then on the aggregate of billions being poured into new properties was all stupid and simply led to accumulated losses. All those losses ultimately led to that recession. The losses led to the S& L industry crashing, a financial crisis and the recession. The bubble was probably created 4-6 years before the 1992 election. Bush I took the rap for it.

Similarly the recession of the end of the early 2000's probably occurred because of a bubble that hit around the end of the 1990's. The recession centered around the telecom industry that grew a ton during the 1980's and exploded in growth during the 1990's. The younger(ish) crowd calls it the dot com recession, but dot coms were the tiny pimple on the far larger enormous telecom industry. In the late 1990's hundreds of billions went into laying fiber everywhere and anywhere in anticipation of growth in the internet. It didn't pay off. By the early 2000's less than 2% of that hundreds of billions was generating return. Boom the $ flew out of the larger telecom industry, layoffs were gynormous and the dot.com problem was a small part of it.

Bush II took most of the hits on that recession, but 9/11 occurred, the world turned its head, and the seriousness of that corporate recession wasn't anywhere's as severe as the financial recession of the early 1990's and this financial recession.

Similarly all statistics point to a residential housing bubble hitting the peak around the mid 2000's. It started in the late 1990's caught fire in the early 2000's then probably peaked in the mid 2000's. Things started going down hill from there. This particular bubble was fueled by a lot of outright fraud as RobJones a realtor described. Nobody put a stop to it.

Frankly I see two humongous recessions that have been caused by the combinations of the financial industry teaming together and going hog wild moving money into the real estate world causing enormous destructive bubbles that cause horrible recessions.

Frankly, if I had my way, I'd put some dudes on top of that. Call em what you want. They monitor those combinations of markets. When they measure too much money flowing from financial institutions into real estate I'd turn off the money spigot. Bingo. Problem solved. Its measurable. One of my memories of the late 1980's was one well known DC real estate guy (major domo leading a big company) continuing to cite the oncoming problem of too much supply and too much vacancy. That guy used simple data to let everyone know what was coming. He just wasn't "the dude" in charge...and couldn't turn off the money spigot.

Actually that describes finance theory and practice and large companies. You measure results. If results go bad you stop investing. Bingo. Simple.

General Electric is probably the best example of this. Its a huge company, one of the largest in the US and the world, and its a conglomerate in ways that virtually no other company is. Here is sort of how Jack Welch its former CEO, who presided over the company during a period of incredible success dealt with the many elements of the business and its far flung incredibly different components.

He measured how they were doing. If a company component, industry wasn't in the top 3 in that industry in terms of market share and wasn't appropriately profitable he cut off funding into that component and sold it. Bam. Manage the whole damn thing.

After two huge enormously damaging recessions first around 1990 and secondly this one in which the financial industry and the real estate industry combine/ get huge amts of money and puts way too much into real estate I'd oversee it. I'd set up ways to measure results and turn off the money spigot. Don't let it get out of hand.

You guys can throw around a lot of political crap and free market bs. The real world doesn't work that way. The US is suffering from its consequences.

Now I've been a real estate guy. I was a deal maker like the financial industry. Make a deal, make money and screw everything else. That is how Wall Street works. I'm invested in real estate. As a landlord you are leased or you are not leased. When you aren't leased you have a problem. I like real estate. But damn I also know it turns into a very very very bad asset and a waste if its overbuilt. Its that simple.

The govt. could manage this stuff. Other nations do it. It doesn't kill economies or hamper capitalism. It puts a lid on market excesses and keeps the real estate and financial industries (aka potential or aspiring crooks in suits) from screwing up everyone else.

 

I'm assuming you are referring to yourself in the first person. All you do is copy/paste unreferenced quotes.

Do you have anything of substance of your own to post?

Do you understand what I am asking now?

 

The quotes are referenced in the previous post 4902: - Senate poised to OK jobless benefits for millions. From Associated Press July 21, 2010 12:21 PM EDT

......

Apparently being afraid of someone from your past prevented you from reading the substance of the post:

- Helping the working poor is the only proper course of action while dismantling the Great Recession forced on them by the previous Administration.


It is ok, I have had nothing to do with you in the past. Breeze Wood is all you are dealing with, you can sleep now.

 

Copy/Paste blah, blah, blah.

 

Geez, Mia is still stirring up trouble. Hehehe!


While all of you are arguing about the fate of the USA, I'll be nice and safe in my bunker.

 

Working poor and Jobless benefits? Breezewood if they are working why are they claiming benefits for being jobless? Are these the same people who voted for Obama 5 or 6 times?

 

Working poor being put out of work by the past Administrations mismanagement of the economy, their Great Recession and the Republicans desire to renew their own tax breaks while not the benefits of those earning their money for them. Same rules should apply for all those involved.

The Republicans were not against renewal just how to pay for it.

 

This cracks me up...

I read a BRILLIANT analysis from earlpearl, filled with facts and insight. Then, Breeze Wood writes childish posts that are completely empty of substance and comes across like a blind man in a dark room looking for a black cat that isn't there. The contrast is absolutely hilarious. I really, truly, sincerely don't understand how BW can't be embarrassed for being here. His posts aren't about persuasion, they are desperate attempts to save face in an area where he is completely outmatched and outclassed.
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Anyway, thanks earlpearl. I'll need to read and re-read your post, I appreciate the insight. But here's the question - how do you regulate an industry that is able to de-regulate itself via influence?

The chief ability of the lobbyist in Washington is their almost godlike ability to persuade. It's the top of the sales food-chain. Lobbyists that approach Washington politicians have powerful weapons at their disposal - immense personal charisma, money that can be quickly sent to overseas bank accounts, sex with high-class hookers, and for those honest politicians that can't be bought, a world-class smear machine.

How do you create a financial regulatory system that is immune to these sorts of influences?

 

Gotta keep fighting the good fight, else no one else will! I'm out spending the "working poors" money!

I think he's speaking from experience.

AnthonyCEA, is that you? Come on. I know its you. What's next, NIXON?

 

You have nothing better to do than waisting everyones time with your baseless insults....as prescribed before, find a real life for yourself.

 

A surprising week for the markets, the economy is clearly responding to the stimulus provided by the current Administration.

 

A couple of other things:

If you look at the aggregate sales volume of the fortune 1,000 you will see that their revenues or sales are slightly larger than twice the size of the GDP of the 2nd largest economy in the world, that of Japan. OMG. Large American businesses are an incredible testimony to capitalism at work. One component reflects economic activity that dwarfs the rest of the world. That is astonishing. The Fortune 500 alone comprise about 70% of US GDP and the Fortune 1,000 comprise over 75%. Large businesses dominate the productivity of US economic output and represent a pattern of dominance and growth that has seen Fortune 500 companies grew from 39% of US GDP in 1955 to over 70% today

Big companies dominate the economic landscape in a way that is dramatically different from the past.

Also as of the end of the first quarter 2010 The S&P 500 (virtually the same thing as the Fortune 500) had record breaking (or near record breaking) growth in corporate profits and growth in expanding cash holdings from one year previously.

Big companies did well by the most important measure for financial success of businesses. Their profits and their liquidity grew by record amounts.

The "big business" part of the American economy is doing fine. Their profitability and liquidity is soaring!!

And in this latest quarter things seem to be continuing; Ford had its largest quarterly profit in 12 years!

Big businesses use lobbyists to secure their interests before the US govt, congress and the executive. (hell they lobby on the state side too). According to this article lobbying is a $3 billion industry that has doubled in size in the last 6 years

Lobbying pays off for businesses. It pays off for businesses and special interests that can afford heavyweight lobbyists on big ticket issues. They don't just lobby on financial issues, they lobby on everything and anything that is big. All industries, interest groups and foreign nations lobby. Lobbyists also raise money for elections. They are a number one source.

I don't know how to impact all lobbyists but I'd suck the money out of politics. Cut down the money needed in campaigns and politicians don't need to suck the tit of lobbyists and special interests and industry. Shorten campaigns, put strict money limits and tight restrictions on who pays for what ads and the tight controls and connections between monied interests and politicians evaporates. Then we would see a very different equation with lobbyists' voices hopefully quieted from where it is now.

 

Great post Earlpearl. I find it a more than a little disturbing to see that more than 70% of our GDP rests with only 500 companies. When you consider the amount of money involved it seems that almost any one of them is, by definition, too big to fail. Also interesting to read the linked Fortune magazine article that shows those companies really don't feel the economic downturns like most Americans do. It seems to me that such consolidated power having its tentacles wrapped around our state and federal governments will, at some point, kill off social mobility completely.

It begs the question as to what, if anything can or should be done about it. How big is too big? Perhaps the FTC should be less permissive in allowing M&A activity. I hate to be the conservative pushing for more regulation so perhaps someone more educated on the matter than myself can sell me the other side of the argument. Personally, I don't see such consolidation of power as a good thing at all.

 

At least make the contributions and political connections of the politicians transparent through public registries. Elected officials are public servants.

The pending legislation by Schumer would go a long way in identifying the flow of money within politics. Coincidently to be introduced and most likely defeated before the Summer break.

 

@ O_Nation: I find it disturbing also. I didn't realize this stuff till looking at it in depth and aggregating the total '09 revenues and compared them against GDP. The article from Fortune referenced the self same phenomena using 2006 data. Its an amazing societal change from 1955 and of course earlier. I think it manifests itself in many areas and specifically manifests itself w/ regard to the influence business has over congress and legislation. The thing is it probably hits every industry. From my perspective that is an entirely different phenomena than the left right debates I often find myself here w/ the supporters of the right. Its different and it reflects an incredible source of power and influence.

@ breeze...I think any way we can stem the influence of powerful special interest sources we as a people and nation will be better off. Transparency is good. I'm simply for making elections so less expensive that they are far less subject to influence by big money.

Hey whatever works in that regard is fine by me.