We are in a worse situation than The Great Depression Barry Ritholtz linked to a video of Paul Solomon of the PBS News Hour interviewing with Dr. Nassim Nicholas Taleb, famous economist and author of The Black Swan : The Impact of the Highly Improbable” and Taleb’s mentor, French mathematician, Dr. Benoit Mandelbrot, Professor Emeritus of Mathematics at Yale University. Dr. Mandelbrot, a pioneer in the development of chaos theory, is regarded as the father of fractal geometry. Both say that the present economic situation is actually more serious than the Great Depression. In fact, they fear the U.S. is in the worst situation it has been in since the American Revolution.
The reason, Dr. Taleb explained, is that “Never in the history of the world have we faced so much complexity combined with so much incompetence in understanding its properties.”
The following items have come to my attention the past few days, and, dear reader, I deem them worthy of your attention and perusal, and just generally good stuff for your edification and amusement.
President-elect Obama promises to create 2.5 million jobs and has plans for a massive stimulus package costing at least half a trillion dollars if not $1 trillion dollars.
But where exactly would those jobs be created?
Business Week Journalist Michael Mandel asks Can Obama Keep New Jobs at Home? Mandel points out that a massive stimulus might just well go offshore.
Some startling facts in this article:
Imports have risen from the equivalent of 9% of gross domestic product to almost 19%. Even more astonishing, the value of imported goods now is equal to almost 40% of the output of U.S. manufacturing.
A polling of economists are now expecting the unemployment rate to jump to 6.8% for November. 6.8% is the median.
U.S. payrolls probably shed 316,000 jobs in November, following October's drop of 240,000 jobs, according to economists polled by Reuters. The unemployment rate is seen rising to 6.8 percent in November from October's 6.5 percent
Poverty is spreading and may be re-clustering in suburbs, where a majority of America's metropolitan poor now live.
The full report (pdf), The Enduring Challenge of Poverty in America, is about as vague as the Reuters article.
The only cause hinted at is the loss of manufacturing jobs, causing wide spread poverty.
Why poverty is re-clustering into the suburbs is not spelled out. The report does show immigration is increasing not only in urban and the suburbs, but also rural areas where extreme poverty is increasing proportionately and mentioned low skilled or unskilled workers from Latin America.
Ya know if the facts say something researchers should fess up and stop playing political correctness.
These guys can't even take the Holiday off. In one week, the Federal Reserve increased by 8.5% it's commercial paper (business loans).
The Federal Reserve expanded its purchases of commercial paper to $295.1 billion and its loans to securities firms increased as the central bank uses its balance sheet to combat the worst financial crisis in seven decades.
Cash borrowing by Wall Street bond dealers from the Fed totaled $55.9 billion on Nov. 26, up from $46.6 billion a week before.
A man working for Wal-Mart was killed on Friday when a throng of shoppers surged into a Long Island, New York, store and physically broke down the doors, a police spokesman said.
Ha, ha, ha, ha ha. What can I say. Students don't want the Treasury to give even more money to predatory student lenders. Imagine that.
Considering how the Treasury and the Fed already gave to every other predatory lender out there, especially the credit card companies, why should this be any different?
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