Day: February 25, 2009

My Response To The GOP Response

First of all, I want to say that Obama gave a masterful speech before the joint seesions of the US Congress.  He seemed to be truthful, yet hopeful, something all analysts have said he needs to do.  Well Irene, they got their wish.  All in all a helluva speech.

The GOP chose Gov Bobby Jindal of Louisiana to give the “rebuttal”, if you will.  What can I say?

He began his speech with a story, but he told it like he was talking to 6 year olds.  That immediately made me critical.  Then he went on to giving the talking points that all Repubs are using about the stim plan…you know…it spends it does stimulate…or a speed rail linking Disneyland with Las Vegas….the typical equine fecal matter….you know…LIES.  Then he went on to tell of the success of the Katrina programs…..that got a couple of holy craps!  And as predictable Gov. Jindal told us all about the Gop’s plan of tax cuts which would put more money in hands of the American people.

All in all, Jindal was a dud!  If this is the face of the new GOP then they are in sad shape.  But then after some thought, his infantile story telling would appeal to those of the mentality that thinks the conservative ways are the only ways.

The GOP is gonna have to do better, because if their huge gamble does not pay off then they are totally boned.

Stating The Obvious Does Not Help

We need answers, not obvious diatribes from those who are running our economny.

Federal Reserve Chairman Ben Bernanke told Congress Tuesday the economy is suffering through a “severe contraction” and pledged to use all available tools to lift the country out of the recession that already has cost millions of Americans their jobs.

In testimony prepared for the Senate Banking Committee, Bernanke said the economy is likely to keep shrinking in the first six months of this year. Housing, credit and financial crises — the worst since the 1930s — plunged the economy into its worst downhill slide in a quarter-century at the end of last year.

Bernanke hoped that the current recession, now in its second year, will end this year.

But he said there were significant risks to that forecast and any economic turnaround would hinge on the success of the Fed and the Obama administration in getting credit and financial markets to operate more normally again.

Another concern is that the Fed and other Washington policymakers won’t be able to break a vicious cycle where disappearing jobs, tanking home values and shrinking nest eggs are forcing consumers to cut back sharply, worsening the economy’s tailspin. In turn, battered companies lay off more people and cut back in other ways.

In addition, Treasury Secretary Timothy Geithner has revamped a controversial $700 billion bank bailout program to include steps to partner with the private sector to buy rotten assets held by banks as well as expand government ownership stakes in them — all with the hopes of freeing up lending. The Obama administration also will spend $75 billion to stem home foreclosures.

Radical actions taken by the government since last fall when the financial crisis intensified have relieved some credit and financial strains, Bernanke said.

Although Bernanke didn’t mention any such financial institutions by name, Citigroup Inc. — the industry’s troubled titan — is apparently in line for additional government help.

All the negative forces have battered consumers and businesses.

“The economy is undergoing a severe contraction,” Bernanke said.

The nation’s unemployment rate is now at 7.6 percent, the highest in more than 16 years. And it will climb higher — even in the best-case scenario that an economic recovery happens next year.

The Fed expects the jobless rate to rise to close to 9 percent this year, and probably remain above normal levels of around 5 percent into 2011.

Now with that speech did you learn anything new?  If you did then you have not been paying attention or your waist size and IQ are about the same.

What Is The Real Truth Of The Crisis?

I have asked this on many occassions.  People hear lots of fact and fiction in the news and it is all too confusing.  So, what is the real reason of the tanking economy.

I have said it all before…over and over……the consumer is the answer…both good and bad.

The February consumer confidence index fell to 25 from a downwardly revised 37.4 in January. Economists surveyed by MarketWatch had expected a February reading of 35.

Consumers’ view of current conditions fell, with the proportion of respondents saying that jobs are “hard to get” rising to 47.8% in February from 41.1% in January, and those saying that business conditions are “bad” rising to 51.1% from 47.9%.

The reading on consumers’ expectations fell to a record low, with those anticipating there to be fewer jobs in coming months rising to 47.3% from 36.9%. Those expecting “worse” business conditions also increased, hitting 40.5% from 31.1%, and those expecting more income fell to 7.6% from 10.3%

Those with plans to purchase cars within six months fell to 4.7% from 5.3%. Those with plans to buy homes also dropped, to 2.3% from 2.5%, while those with plans to make purchases of major appliances rose to 24.5% from, 23.6%.
Consumers’ 12-month inflation expectations rose to 5.9% from 5.6%.

Also on the data front Tuesday, the Case-Shiller home price index published by Standard & Poor’s showed that home prices in 20 major cities dropped by 2.5% in December from the prior month and by a record 18.5% from the final month of 2007.

I wrote back in November of 08…Demand must be found if the economy is to recovery.  So far all the best laid plans of mice and politicians have not helped create demand….and the crisis goes on….and on….and……