Marvin Clark

Reich: Don't Expect Lost U.S. Jobs to Return

A more succinct way of describing this environment is: we have moved past the post-WWII American economy. We are standing firmly in the 21st century. The 20th century and 20th century jobs will not return.

If This Is a Recovery...

John, I agree with everything you say except your conclusion; we are in the early stage of a depression. The next phase of this depression is when cities and states "officially" run out of money and the "severance package" class runs out of funds and can't find work. The bell will toll for this economy in the spring of 2010 when it is announced that YOY state and federal tax revenue is down double-digits.

The Chinese Minsky Ladder Gets Its First Broken Rung

If the contraction in exports persists it will only be a matter of time before the Chinese government cannibalize their US treasury holdings for short-term liquidity. Furthermore, their leverage over our treasury auctions will reduce size announcements by Treasury to customized orders for China's consumption like a Burger King ad - have it your way; special orders don't upset us.

Why Another Stock Market Collapse Could Be Imminent

There were upside rallies throughout the 1930's for stocks. It did not negate the fact that we were in a secular bear market for stocks and that we were in an economic depression. The same is true today. It will take years before the collective balance sheets of the US becomes sound again. Meanwhile, enjoy the casino boys, but there are no free cocktails.

Here Come the Economic Clowns

Steven, this is an excellent analysis! You've written the article I wanted to write this weekend. A few additional clowns that will be appearing later this year at the economic circus: Nov./Dec. YOY jump in the CPI and PPI - will the media report or ignore this statistical aberration of gasoline? By year end 2008, here in Arizona, we were paying $1.55 a gallon for regular.

How will the media handle the doubling of the 30-Year T-Bond from the 2008 close of 2.50%

How will pundits dance around the fact that California's massive budget cuts (less spending and fewer jobs) represents 15% of the US economy?

The lack of earnings growth, rising interest rates, and higher inflation numbers should provide for a lively discussion around the Thanksgiving table.

Keep the Grey Goose next to the Black Swan just in case...

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

This is a poorly thought-out, slanted argument conflating economics with political ideology. The suggested $20,000 - $45,000 suggested cost per transaction wildly inflated and is disingenuous.

Furthermore, cars do magically materialize into showrooms. They are transported from manufactures to dealers, creating jobs. They are detailed before being delivered, creating jobs. Salespeople are paid commissions; finance workers and offices workers process paperwork, creating jobs. Taxes are paid on new transactions. New cars aren't purchased and parked in garages. New owners take them out on the road and drive them. New owners drive to dinner, visit friends and family; take quick trips. They test drive their new purchase. The velocity of money increases. By the way, this is the point of the program.

We can debate the politics of spending money this way, but to state each car purchase can cost up to $45,354, without honestly accounting for any offsetting financial benefits, only government bashing, displays a lack of any serious critical thinking.

The Low Hanging Fruit of Credit Downgrades

I'm glad not to be out on that branch alone.


On Jun 10 05:09 AM Roger Knights wrote:

> "What, if any, is the golden nugget we have in our back pocket this
> time to put us back on a winning economic path, long term?"
>
> Very little. Technological advances fueled the west in the past two-plus
> centuries, but nothing comparable on the whole is coming. The past
> decade has been one of blasted hopes. Here's support for that viewpoint
> from today's Business Week, Cover Story June 3, 2009, 5:00PM EST:
>
>
> The Failed Promise of Innovation in the U.S.: During the past decade,
> innovation has stumbled. And that may help explain America's economic
> woes
>
> By Michael Mandel
>
> www.businessweek.com/m...

Green Shoots Are Poisonous to Your Wealth

Pritchard makes several good points. Thanks.


On Jun 08 09:22 AM mtt04 wrote:

> One more thing, read ambrose pritchard's article today at the telegraph,
> it pretty much cuts through all the financial advisor crap and analyses
> REAL NUMBERS, not "it be the bottom or could be the top" nonsense
> tht is being spouted around here.
>
> Phase two of the depression is upon us and by Christmas this year
> the true horror will be visible as all the investment banks will
> have exited the markets with you all holding the bag ( as usual ).
>
>
> The true tragedy IMHO of this whole situation is that so few people
> are willing to accept that our way of life in the WEST is changing.
> Those so called jobs on Friday were mostly MacDonald's hirings.
>
>
> An economy does not MacDonald's make my friends. We manufacture nothing
> of value any more, we accept bank quarterly earnings as a sign of
> stability, we accept this stupid notion of green shoots as every
> country spirals downwards.
>
> I am sick and tired of the " we're all good" crowd - face it and
> prepare your family accordingly.

Green Shoots Are Poisonous to Your Wealth

How would you characterize the events (the fall of Bear Stearns, Lehman Bros., .0002 T-bills, The takeover of Fannie and Freddie, TARP, AIG, Merrill Lynch, suspension of short selling, etc) that took place in 2008?


On Jun 08 01:37 PM CLH wrote:

> Mr Clark--you say its different this time. You dont need to say any
> more for me to disregard your message.

Green Shoots Are Poisonous to Your Wealth

Those previous recessions occurred in a much different world. Our ability to grow our way out this recession is hampered by different markets, competitors, work force characteristics, debt levels, etc.


On Jun 08 10:21 AM thiazole wrote:

> Green shoots are leading indicators that the economy will reverse
> in the near future - the plant is the change in the economy and the
> fruit is the last thing to come which is an improvement in employment.
>
> Green shoots are yesterday's news and over the next couple months
> we will see plants like positive retail sales data (later this week),
> industrial production, durable goods, etc.
> Even in the sharpest V shaped recovery, you won't see an improvement
> in employment for a couple months after the GDP turns positive (like
> in the 74 recession) and it could take years (like in 2001 recession).
>
> Unemployment was much worse in 82-83, yet the economy still recovered
> BEFORE unemployment improved. This obsession with unemployment proves
> that bears are running out of arguments. When you won't even use
> coincident indicators to make your arguments anymore, that is a good
> sign the bear is about to die soon.

Green Shoots Are Poisonous to Your Wealth

I used the "official" unemployment numbers, but the true numbers are most likely much higher.


On Jun 08 01:18 PM lefty37 wrote:

> The economy can ONLY improve when the general public can purchase
> U.S. made goods and services. And we cannot do this unless we are
> gainfully employed. 14 million Americans unemployed according to
> our government, but the actual number is more than double this number.

Green Shoots Are Poisonous to Your Wealth

Good info, thanks. Keep in mind, however, that American Capitalism changed on September 15, 2008. Our C-banking and I-banking systems were smashed. The government now is an active investor in private industry, and we are in uncharted waters. The past is, as a guide to the the future, not as reliable as it used to be.


On Jun 08 11:35 AM Pangaea wrote:

> Importantly, here's a chart of unemployment rate vs. the stock market
> for past recessions:
>
> i44.tinypic.com/260fvv...
>
> I think the author is probably right over the longer term, but the
> ECRI is forecasting a cyclical recovery beginning this summer:<br/>
>
> businesscycle.com/reso...
> businesscycle.com/news...
>
> The interesting thing is that both arguments can be correct - but
> it's a matter of timing... Think of the 2003-2007 cyclical recovery
> in the context of a larger bear market.

Green Shoots Are Poisonous to Your Wealth

Just say no to green shoots (and stay away from the brown acid). I hope you're old enough to catch the second reference.


On Jun 08 09:15 AM mtt04 wrote:

> green shoots are nothing more than investment banks, hedge funds,
> and their ilk hoisting their leverage onto the dumbs dumbs who listen
> to them.
>
> Green shoots are for smoking not for investing. be cautious and critical
> of those who purport to see them. They probably have some shares
> they are dumping on you. nothing more.

Green Shoots Are Poisonous to Your Wealth

Everything changed on September 15, 2008. 20th century data sets and reference marks are questionable. Critical thinking is back!


On Jun 08 09:01 AM HardToLove wrote:

> Everyone's going to holler at you about it being a "lagging indicator".
> But I think that you tables, and conclusions, carry the seeds of
> the "weeds" that will obliterate the "green shoots" near-term.<br/>
>
> When the other fundamentals actually show improvement, not just the
> effects of sleight-of-hand bookkeeping by financials and other manipulated
> government data, then I will consider employment to be really "lagging".
> For now, it continues to be "leading", regardless of the recent reported
> number.
>
> HardToLove

So Long, Recession; Hello, Recession

If you believe like I do in government of the people, by the people, and for the the people, then it's time for us to go to work.


On Jun 08 01:18 AM dasd wrote:

> OIl need to be at $10 barrel. I'm tired of funding terrorists with
> petro dollars.
> good articles...
>
> When folks finally see that they can’t just get someone else to pay
> for all this, there will
> likely be a huge tax rebellion which will cause more short term problems,
> but may in the
> long term (hopefully) have the effect of getting the government to
> manage our money better.
>
> In the meantime, let’s hope we don’t have too many large national
> disasters, military
> conflicts, pandemics or the like to deal with. This country is in
> a lot of trouble and we
> need to start thinking like Americans instead of Republicans or Democrats
> if we’re going to get through this mess……..
>
> good articles: fhurl.com/c9055 recommended reading