December 2009

A glimpse into our future?

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On the 20th Anniversary of the start of Japan's "lost decades", the government of Japan is announcing yet another plan to stimulate their economy.

Japan’s four-month-old Government, already reeling from a political funding scandal and dwindling public support, today vowed to enlarge the economy by 150 trillion yen (£1 trillion) and haul the nation out of a “long, downward-sloping tunnel”.
The Democratic Party of Japan said that the scheme would deliver annual real GDP growth of at least 2 per cent between now and 2020 and create more than 4 million new jobs over the same period....
Halfway through the Government’s ten-year plan, Japan's debt relative to GDP may rise to 246 per cent, according to analysts from the International Monetary Fund.

A very good idea from The Huffington Post

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The Huffington Post has a New Year's Resolution calling for everyone to move their money out of the large banks and into community banks and credit unions.

Frankly, forget the politics of blood thirsty conglomerates who in the 1980's started massive layoffs and in the 1990's started squeezing workers further with more work, less pay and in the 2000's started offshore outsourcing any job that wasn't either in the executive class or absolutely nailed down...

Think about the most bang for the buck. Credit unions have better credit cards, better interest rates, better loans, interest checking, interest CDs, much more flexibility, better terms and even better service.

Consumer Confidence for December 2009

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Consumer Confidence for December 2009 increased to 52.9 which is a 2.3 point increase from last month.

Expectations or what does the future hold increased to 75.6 from 70.3 in November.

But present situation confidence metric for December 2009, is 18.8, a drop from 21.2 last month and is at a 26 year low, with 1983 being the bottom reading of 17.5.

Recycled Corporate Executives

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You know what happens to you when you are incompetent and fail right? You're out of a job. Not so with the executive class.

In this New York Times article, once again we see recycled CEOs.

YOU might think that board members overseeing businesses that cratered in the credit crisis would be disqualified from serving as directors at other public companies.

You would, however, be wrong.

Directors who were supposedly minding the store as disaster struck at companies like Countrywide Financial, Washington Mutual or Fannie Mae have not all been banished from other boardrooms. In many cases, directors just seem to skate away from company woes that occurred on their watch.

On those Holiday Retail Sales 2009 Press Reports

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The headlines are once again, all ablaze at the projections of a 3.6% retail sales rise from November 1st to December 24th, 2009.

Not so fast. These preliminary numbers are generated from SpendingPulse and the report is not publicly online, so we cannot check the raw report ourselves.

Relying on the media, it appears there was an extra day in the tally and without that extra day, comparing apples to apples vs. oranges from 2008, the actual increase was 1%.

Even more interesting, the above report shows from November 1st to December 24th. The extra day was around Black Friday.

CBSMarketWatch, reporting on Black Friday or November 27th, to December 24th, 2009, without the extra day, holiday sales were actually down.

Oil Tanker Glut

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If you put all of the idle oil tankers in a row, it would stretch for 26 miles. Even worse, it might indicate a 25% rate decrease for shipping in 2010.

A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year.

The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

Notice that the shippers won't break even at that price.

You have been warned

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The underlying assumption that the current world monetary system is built upon is that America will always over-consume and the world will always accept our debt at face value. It's a warped and unhealthy relationship, but its worked (sort of) for several decades. That's why it was notable when a Chinese central banker spoke up last week.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

Impossible? That's absurd. For decades foreigners have been more than willing to exchange their excess dollars from trade surpluses for our debt in order to keep their currencies at artificially low levels.

Here Comes China - Moving up to #2 spot in biggest economy rankings

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If anyone calls China an emerging economy, giving it special status via the WTO, they are nuts.

China is now about to overtake Japan as the second largest economy, behind only the U.S. and catching up fast.

China raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.

China raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.

Meanwhile Japan's economy contracted 1.2%, India, another emerging economy expanded 6.7% and the United States is just dripping along.

Economists Predict a Decade of High Unemployment for United States

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If you are enjoying your holiday and hoping the next decade is way better than this one....stop reading now and go party. Trust me, this post will be here when you have a nice hangover on January 1st.

For the rest of folk, the Canadian Press, Even as the US economy recovers, a decade of joblessness and flat wages could lie ahead is a real bummer.

The decade ahead could be a brutal one for America's unemployed - and for people with jobs hoping for pay raises.

At best, it could take until the middle of the decade for the nation to generate enough jobs to drive down the unemployment rate to a normal 5 or 6 per cent and keep it there. At worst, that won't happen until much later - perhaps not until the next decade.

The deepest and most enduring recession since the 1930s has battered America's work force.

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