Healthy economy equals quiet bulletin board

[dai bread]

I think they're right.

It's always the same- the pundits at home say their currency is strengthening. They never say the other currency is weakening. If I was a European supplying outside Europe, I'd quote in anything but Euros at present.

[Giant Communist Robot]

Existing Home Sales show improvement. Both quantity and price are up about ten percent over last year. Lawrence Yun, NAR Chief Economist, says the housing recovery is underway.

[Giant Communist Robot]

From today's FHFA Housing Price Index:

“Consistent with other housing market indicators, the FHFA HPI showed stronger house prices
in the first quarter, most notably in March,” said FHFA Principal Economist Andrew Leventis.
“Increased affordability and a somewhat smaller inventory of homes for sale are positively
impacting house prices.”

If I could characterize this, I'd say things are firming up but not likely to gain any traction. Uncertainty in Europe will put things on hold, and a jobless recovery is dubious at best. The economy needs to move away from marginal industries and towards more robust if we want to avoid large job losses with every hiccup. Any day now Obama will announce victory over all economic problems.

[dai bread]

What do you think the chances are of Germany walking away from the Euro? Their taxpayers were fed up long ago with having to bail out a large chunk of Europe, and that chunk is growing, if sensation-seeking "news" media are to be believed.

[Giant Communist Robot]

What do you think the chances are of Germany walking away from the Euro? Their taxpayers were fed up long ago with having to bail out a large chunk of Europe, and that chunk is growing, if sensation-seeking "news" media are to be believed.

I'm flattered you asked my opinion. Here's an idea no one seems to be discussing. Currently, the European Stability Mechanism serves as a firewall to limit financial contagion. I don't think there's any way of knowing how effective it will be in case of a default. The ECB's solution has been to ask for voluntary haircuts on Greek bonds. Many of those bonds have been purchased by hedge funds. The funds are refusing the haircut because they are covered by credit default swaps that will be triggered if the cuts become involuntary. Either way they win. The question, really, is can the ESM prevent harm outside of Greece.

AFAIK, within Germany the Free Democratic Party and the Christian Social Union (both minor parties) are the only opposition to the ESM. In the near term Germany has benefited from the European Monetary Union, but it looks like an unsustainable situation. Political solutions will have to be found. Media aside, the best way to judge what's happening is to watch the elections.

[dai bread]

A strong anti-austerity feeling is coming through. Understandably, the public don't see why they should suffer because of a crisis caused by investment bankers, who used to be called, with perjorative undertones, money-lenders.

In this country, right-wing zealots and opportunists are screaming for austerity and the sale of State assets, despite the fact that Government indebtedness is less than 40% of GDP and the rest is private-sector borrowing. There are a lot of influential people looking to make money out of the current financial crisis, and it would not surprise me if the whole thing was engineered for that purpose. Especially seeing the bankers who caused the strife are still in business.

[Giant Communist Robot]

In this country, right-wing zealots and opportunists are screaming

When the screaming starts, thinking stops. Hopefully, cooler heads will prevail.

[Shapley]

We right wing zealots always call for austerity in government. It's sort a philosophical thing.

[dai bread]

Sorry, Shap. It's what comes of living in a tolerably prosperous economy. We don't need austerity on the European pattern, but some people are screaming for it anyway. We need good stewardship, and, apart from some notable exceptions, not all in welfare, we get it.

In welfare, "Working for Families" amounts to a subsidy to employers so that they can keep wages low. People on $100 000 p.a. can get it if they have enough children. 6, I think, is the requirement.

In other matters, the Govt. insists on selling off revenue-producing assets and spending the proceeds on non-revenue-producing items. Nothing is said about how the revenue will be replaced. We are supposed to believe that Govt. spending will be reduced.

[Giant Communist Robot]

We need good stewardship

I like Keynes idea where the government runs a surplus, preferably by means of spending cuts, during times of economic growth; then run a deficit through spending increases during recessions. Looking at the GDP identity one can see that running a surplus through higher taxes removes money from the economy, whereas spending cuts simply don't add to it. Consequently the economy can continue to grow at it's natural rate. During a recession the spending adds to the GDP--and the best way to do this is through temporary entitlements because the government can crowd out and cannot efficiently allocate.

[Giant Communist Robot]

For the GDP figures coming out tomorrow I expect about 40% of the increase to be due to government spending.

[Giant Communist Robot]

For the GDP figures coming out tomorrow I expect about 40% of the increase to be due to government spending.

I don't know what I was thinking. I know government spending occurs in cycles and Q1 is always the low point.

[Giant Communist Robot]

Jobless Claims and Manufacturing continue to deteriorate. New Fed forecasts are revised downwards. Worrisome.

[Trumpetmaster]

Jobless Claims and Manufacturing continue to deteriorate. New Fed forecasts are revised downwards. Worrisome.

yes... very worrisome

jobless rate keeps going up here on Long Island

[Haggis@wk]

jobless rate keeps going up here on Long Island

Blacks Take It on the Chin in New York

“The New York Times is reporting that more than half of all black New Yorkers are now unemployed, and that they remain unemployed for a year on average after losing their jobs. . . . Numerous businesses have reported payroll increases, and important professional industries like law and accounting are beginning to recover. Blacks, however, have been largely left out of this recovery—including college-educated blacks, who in many cases have been forced to settle for jobs well below their qualifications.”

They told me if I voted for John McCain we’d see an economic catastrophe for African-Americans. And they were right!

Did I hear that Long Islanders are actually considering becoming a state??

[Shapley]

I continue to notice that no one wants to blame the higher minimum wage, whose increase coincided with the beginning of the recession, and which, in my opinion, will continue to delay hiring until inflation catches up with it.

[Shapley]

Well, if the title of this thread holds any water, the economy must be robust.

[Haggis@wk]

Euro-Zone youth unemployment hs now ticked back up to its euro-era record-high of 22.6% (18-year highs). … Italy was the hardest hit, back above 35% with its largest rise in youth joblessness in 5 months, Ireland rose back above 30% for its biggest rise in 11 months as France jumped to two-year highs and Spain and Greece are practically deadlocked with ~53% of their younger-generation out of work – new all-time records.

This is where our future is headed right now if we don’t make some sharp turns, and soon. By all means, federal government: Please keep on with our monstrously unsustainable habit of spending money we don’t have on programs we don’t need — it’s not like our country’s prosperity or my children's generation level of opportunity are at stake, or anything.

Sigh

[Haggis@wk]

these transfer payments consume 100% of federal tax revenues, leaving nothing at all to pay for any of the actually legitimate functions of government, nothing, everything else in the U.S. Government is paid for with borrowed money

[Shapley]

In order to make up the shortfall of $1.3 trillion (the difference between spending and revenue in 2011), taxing only the top 1%, you would need to raise their taxes an average of about $800,000 each. Given that fewer than a third of the top 1% have incomes over $1,000,000, that might be a bit difficult...