Jobs, Inflation, Gas/Oil Prices... Up, Up & Away...

Jobless rate is much higher than the 8.9% in February:

Since November 2010, the unemployment rate has tumbled from 9.8% to 8.9% in February. That seems to signal a return to healthy job growth. But is it real?

While unemployment has fallen nearly a full percentage point, just 407,000 payroll jobs have been created — a mere 0.3% rise.

How can that be? Maybe it's because the real jobless rate — which includes those unemployed Americans so discouraged they've stopped looking — is higher than 8.9%. Much higher.

"Though the official unemployment rate is improving, according to our poll, we still have at least 20% of able Americans looking for full-time employment," said Raghavan Mayur, president of TechnoMetrica Market Intelligence, IBD's polling partner...

At one time, the jobless rate included all people without jobs.

But during the first Clinton administration, the BLS changed its definition to exclude long-term discouraged workers. As a result, the unemployment rate has looked far lower than it really is.

The labor-force participation rate, now 62.2%, is at a 27-year low. If you're not in the work force, you can't be "unemployed."...

Gallup's "broader unemployment" measure combines the unemployed with part-time workers seeking full-time work. It rose to an alarming 19.9% in March, from 17.2% in December.

March's "official" number dropped to 8.8%, but Gallup's true numbers rose to 20.3%. Also, there is this tidbit:

Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

Via Hot Air, on April 5 the Washington Post reported that inflation is here (duh!) and wages are lagging behind (double duh!!):

Today, Wall Street stumbles on news of inflation going up, the March unemployment numbers "unexpectedly" as initial jobless claims went back above 400,000. Core producer prices are up, too. I like this gem of a quote from The One's Labor Dept:

The Labor Department said on Thursday its seasonally adjusted index for prices paid at the farm and factory gate -- excluding volatile food and energy costs [emphasis mine] -- rose 0.3 percent after gaining 0.2 percent in February. Economists had expected core PPI to rise 0.2 percent in March.

Yeah, let's just EXCLUDED those pesky food and energy costs. And prices still rose!

Is there a bubble forming in food commodities? Via Daily Eudemon, there's this:

And, about those energy prices???

Energy prices, which rose 2.6 percent, accounted for nearly 90 percent of the increase in wholesale prices last month. Energy prices rose 3.3 percent in February.

Gasoline prices rose 5.7 percent after increasing 3.7 percent in February.

Let's chart that sucker (thanks to PoliPundit):

Here in southern California the cheapest gas price I can find is $4.11/gallon. (Ouch!)

What else could also be affecting the cost of government? How about this fact!:

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers.

The One's OMB admits that the Prez's budget won't reduce spending at the federal government level at all.

Flopping Aces has an antidote for too much government.

So where the heck am I???

Been busy...

... Putting together the complex pieces of the puzzle of a wedding...

... My wedding...

:-)

... which will occur in a couple months.

I will occasionally be blogging soon. Mostly good collections of links to stories and articles of note.

Hehehehe...

Chris makes me chuckle (click on the image below to see enlarged and in full):

Home Sales Drop Again... Big Time...

Sales of previously-owned homes dropped last month by almost 10%. The lowest level in almost a decade:

Fewer Americans bought previously occupied homes in February and those who did purchased them at steep discounts. The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly 9 years.

More info here:

At February's sales pace, the supply of existing homes represented an 8.6 months' supply, up from 7.5 in January. A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.

"Inventory is still high, about a third higher than it was pre-recession. We are not going to see any bounce back in new home sales until the inventory of existing home sales gets worked down," said Steve Blitz, a senior economist at ITG Investment Research in New York.

"We don't even know what the inventory is. We see a visible supply but then there is a shadow supply that comes on and off the market depending on the time of the year. It's still a morbid market on a national level."

New home sales dropped to a new low, down almost 17%:

...the Census Bureau confirms that sales of new homes has hit another record low in the 48 years that the US government has tracked this economic indicator, sliding to an annual sales rate of 250,000.

It hasn't been this bad since... the year I was born (a loooong time ago):

That marked the lowest number of units sold since 1963, when records began.

At the current rate it would take almost nine months for the all the new homes on the US market to be sold -- if no more homes are built.

The biggest slowdown in turnover was seen in the country's populous northeast, with sales down 57 percent from January.

"Nothing good can be said about the February report," said Steven Ricchiuto, an economist with Mizuho describing it as "several times worse that the markets expected."

The One Goes To War... Without Congressional Approval...

Ace has some commentary here and here on The One's decision to go to war against Libya.

Congress (including Democrats) is miffed (as well they should be) since The One did not seek Congressional approval (as is necessary under a certain insignificant document called the U.S. Constitution):

Article 1, Section 8:

"The Congress shall have Power To...declare War"

Hot Air asks, "Where's the anti-war movement now?"

The One even continues to flip-flop on Gaddafi.

Add this to the Egypt fiasco and you have what Flopping Aces and RedState both see as Jimmy Carter 2.0.

Meanwhile, back to Libya... let's see what Mr. Foot-in-Mouth (aka, VP Biden) has to say about Presidents going to war without Congressional approval:

One

Two

Three

I'm just waiting for #2 to lead the charge on that impeachment process.

Any day, Joe...... any day......... annnnny day......

TGIF...

UPDATED:

California's economic mess (it's been building since the early Gray Davis years).

The Michigan Democrats plot to put fake Tea Party candidates on ballots was a major FAIL.

Alan Grenstan admits that the stimulus plans did not help with the economic recovery, and actually hurt it.

Hedge Funds and Junk Bonds... again... OH MY!

The UK gets a clue and questions whether The One may be the weakest American president in history.

In the first two years of The One's term in office, he did not meet with half a dozen of his own Cabinet members!!!

And, about those ObamaCare waivers that are now over 700 companies and 2.2 million employees (and growing).

Flopping Aces has commentary on The One's quote about it being so much easier to be a leader China.

Europe, in general, gets a clue and allows crucifixes in classrooms.

And, on a tangent... what about increasing brain power and memory ability?

Hump Day Mish-Mash...

Wholesale prices increased in February at their fastest rate in over a year and a half, while housing starts dropped to their lowest level in 27 years. More info here.

Also, mortgage apps last week also dropped.

The markets are down for the third straight day after the Japanese earthquake and tsunami. At this moment, and Dow and S&P are off 6% and the Nasdaq is off 7.5% from their recent highs.

How about some electronic pickpocketing.

"If I'm walking through a crowd, I get near people's back pocket and their wallet, I just need to be this close to it and there's my credit card and expiration date on the screen," says Augustinowicz demonstrating how easily cards containing RFID can be hacked.

How about WMDs found... IN THE USA!

Or federal agents being told to allow weapons into Mexico, and then being used against Americans.

The problems with government (and cooky environmental) regulations causing plumbing problems.

Light bulb issues, too. Rand Paul asks an interesting question.

Sometimes Moore is less (heh!).

And the piéce de résistance:

Mr. Obama has told people that it would be so much easier to be the president of China. As one official put it, “No one is scrutinizing Hu Jintao’s words in Tahrir Square.”

Thursday Thrashabout...

Questions abound on whether we're about to see another bubble burst. AP business writers say this:

After two bubbles in the past 10 years — tech stocks and real estate — investors are suspicious of consistent gains that seem too good to be true. Some worry that the Fed's dramatic measures to pump up the economy mean the market's gains are an illusion. But a range of measurements suggest the market isn't in the midst of a bubble now. Instead, the stock market may simply be back to normal.

Really??? They continue:

One sign of a bubble would be if stocks rose far beyond what's normal by historical standards, says Bill Stone, chief investment strategist at PNC Asset Management Group. By that measure, it's not happening yet. According to Stone's research, since 1928, the average bull market runs almost five years and gains 164 percent. By comparison, this bull market has barely hit middle age.

Why does he say that? Earlier in the article it's stated that:

The Standard & Poor's 500-stock index is in its fastest climb since 1955, doubling since the market bottomed on March 9, 2009. In January and February alone, it's up 5.5 percent.

Hmmm... let me get this straight. It's only been a little over two years into this "bull" market, so you can't make any assumptions yet. [CORRECTION] Even though in just TWO year the S&P doubled (that's a 100% increase). That, stretched over a 5-year span would mean a 250% increase. Which is WAY more than the 164% average.

Here's even more:

Judged by other measures of value, the companies that make up the S&P 500 look rich. Investors are paying 24 times inflation-adjusted earnings over the last decade. The historical average is 16. That ratio could climb if people push stock prices higher because they expect earnings to catch up. But Arnott believes people are already underestimating larger problems ahead. The U.S. government's $14 trillion in debt and a greater share of the work force hitting retirement are both bound to drag down economic growth. "That's quite a hurricane," he says.

REEEEALLY???

...investor Jeremy Grantham, chief investment strategist of GMO... [states] If the S&P 500, at 1,321 on Friday, climbs to 1,500 by October, then watch out. At that point, he says, "it will be a market looking for an excuse to go. On the first piece of really bad news, it will make a determined effort to tank."

SO... about those jobs being created:

Several recent studies suggest that the new jobs pay less and offer fewer work hours than the ones they have replaced...

• Lower-wage industries -- things like retail and food preparation -- accounted for 23 percent of the jobs lost during the recession, but 49 percent of the jobs gained over the last year, a recent study by the National Employment Law Project found. Higher-wage industries, by contrast, accounted for 40 percent of the jobs lost, but just 14 percent of the jobs gained. In other words, low paying jobs are increasing as a percentage of total jobs, while high-paying jobs are on the decline.

• Meanwhile, the percentage of those working who have part-time jobs and want full-time ones surged in mid-February to 19.6 percent -- almost as high as it was a year ago before the recovery began, according to Gallup numbers. That suggests, of course, that a large number of the new jobs created over the last year are part-time.

• And a recent Wall Street Journal analysis found that even though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent. This time around, far more of the gains went to shareholders, in the form of profits, which are at record levels.

Spain's been downgraded by Moody, meanwhile. And the stock market took a hit today.

Lovely.

3/15 UPDATE: Looks like a massive natural disaster in Japan has pushed the markets back down. The Dow is off it's recent 12418 high to 11798 (a 5% drop). The S&P was at 1344, and is now at 1296 (a 4% drop). Oil is at $98/barrel (it reached $105 last week). And even Gold dropped to under $1400 (its high was $1430).

It's Ash Wednesday...

"Remember that you are dust and to dust you shall return."

Jobs, the lack thereof, and food you can't afford...

In January, jobless claims jumped and wholesale food costs begin to go up big.

Hiring fell short of expectations. (...unexpectedly...)

Eric (via Zero Hedge) went into the labor numbers here:

At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9%...

...Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year!

February wasn't much better.

ObamaCare will cost us yet another 800,000 jobs.

Then, the Obomination Administration and the Mainstream Media try to boast about the recent unemployment numbers.

Clarity is needed, here.

Eric, yet again, goes thru the real numbers.

Meanwhile, food prices worldwide are now at their highest:

Global food prices are the highest in 20 years and could increase further because of rising oil prices stemming from the unrest in Libya and the Mideast, a U.N. agency warned Thursday.

Skyrocketing food prices have been among the triggers for protests in Egypt, Tunisia and elsewhere, and raised fears of a repeat of the food price crises in 2007 and 2008...

The Food and Agriculture Organization said in a statement that its food price index was up 2.2 percent last month, the highest level since January 1990 when the agency started monitoring prices.

It also was the eighth consecutive month that food prices had risen, the Rome-based agency said. In January, the index had already registered a record peak.

The increase was driven mostly by higher prices of cereals, meat and dairy products, FAO said. Sugar was the only commodity of the groups being monitored whose price hadn't risen.

Global oil prices, which increased on concerns about the potential impact of supply disruptions following unrest in Libya, are a crucial variable...

Oil prices affect food markets in many ways, from production to transport costs. When oil prices are high, there is a bigger incentive to produce alternative fuels such as ethanol, which is made from crops such as corn. Increasing demand for alternative fuels made from crops drives up food prices.

Peachy!

NPR = Narcissistic Progressive Radicals...

So, on March 7 NPR's CEO Vivian Schiller claimed (on video) that:

"...NPR has 'no particular bias.' During the hour-long coverage on C-SPAN2, Mrs. Schiller repeats her evaluation that NPR is a bi-partisan news agency and that their reporting is 'ethical.'”

On March 8, Project Veritas released a hidden video of NPR Senior Executive Ron Schiller (no relation) saying things like this:

In a new video released Tuesday morning by conservative filmmaker James O’Keefe, Schiller and Betsy Liley, NPR’s director of institutional giving, are seen meeting with two men who, unbeknownst to the NPR executives, are posing as members of a Muslim Brotherhood front group. The men, who identified themselves as Ibrahim Kasaam and Amir Malik from the fictitious Muslim Education Action Center (MEAC) Trust, met with Schiller and Liley at Café Milano, a well-known Georgetown restaurant, and explained their desire to give to $5 million to NPR because, “the Zionist coverage is quite substantial elsewhere.”

On the tapes, Schiller wastes little time before attacking conservatives. The Republican Party, Schiller says, has been “hijacked by this group.” The man posing as Malik finishes the sentence by adding, “the radical, racist, Islamaphobic, Tea Party people.” Schiller agrees and intensifies the criticism, saying that the Tea Party people aren’t “just Islamaphobic, but really xenophobic, I mean basically they are, they believe in sort of white, middle-America gun-toting. I mean, it’s scary. They’re seriously racist, racist people.”

Apparently, it was publicly announced last week that Ron Schiller was leaving NPR in May. But the video was filmed on Feb 22 (three weeks ago). Ronny is now on administrative leave. (My non-liberal heart bleeds.)

Poor Ron is also apparently not taking on his new position at the Aspen Institute.

Vivian, meanwhile, has quit NPR over the incident. But this isn't the first issue that has haunted Viv. She was the one that fired liberal journalist Juan Williams last year:

Vivian Schiller was criticized for last year's firing of analyst Juan Williams after he said on Fox News that he feels uncomfortable when he sees people in "Muslim garb" on airplanes. She later said she was sorry for the way she handled Williams' dismissal but stood by her decision to fire him.

Juan Williams had PLENTY to say about the nasty culture at NPR.

As Ron Schiller said in that hidden video:

"NPR 'would be better off in the long-run without Federal funding.'”

Be careful what you wish for... you just might get it.

Heh!

3/10 UPDATE: Seems NPR was also willing to hide from the federal government the fact that the money they'd receive from the sting was from a Muslim Brotherhood front group. OUCH! That's gotta hurt.

Bernanke's An Idiot...

You probably already knew that, but his latest utterance kinda seals the deal on that sentiment for me:

Federal Reserve Chairman Ben Bernanke offered a fairly upbeat assessment of the economy on Tuesday, saying the recent surge in oil prices is unlikely to have a major effect on growth or inflation as long as higher prices do not become sustained.

Bernanke told the Senate Banking Committee he saw increasing evidence that the economic recovery has enough momentum to become self-supporting. But job growth remains far too anemic, he said...

... "We do see some grounds for optimism about the job market over the next few quarters," Bernanke said, citing a steep recent decline in the jobless rate among other factors.

Bernanke said downside risks to growth had diminished and, for the first time, stated that the risk of deflation was now "negligible." The threat of deflation, a downward spiral in wages and prices that could derail the economy, was a key justification for the Fed's bond-buying spree...

... [Bernanke] reiterated a warning that a failure by Congress to raise the government's debt ceiling could lead to a debt default that would have dire consequences for the economy.

"It would be extremely dangerous and very likely a recovery-ending event," he said.

You're kidding me, right? Rising oil prices won't have an effect on the economy? And, just at this moment, oil passed $100/barrel. The only things not in inflation mode are housing (because that bogus bubble burst, and the stale air from that false inflation is still deflating), and wages (how many of you who had wages cut in recent years have gotten any of that back - even partially?). Unemployment has not really recovered. And raising the debt ceiling - AGAIN - would be a friggin' disaster.

Yeah... okay.

No, Bernanke, we are NOT in a deflationary mode, nor were we threatened to be getting into one. INflation and HYPER-inflation, quite likely. Almost certainly STAGflation, with wages and unemployment stuck, and fuel/energy and food prices skyrocketing.

Let's read the definition of Stagflation on WikiPedia, shall we?:

Economists offer two principal explanations for why stagflation occurs. First, stagflation can result when the productive capacity of an economy is reduced by an unfavorable supply shock, such as an increase in the price of oil for an oil importing country. Such an unfavorable supply shock tends to raise prices at the same time that it slows the economy by making production more costly and less profitable.

Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply, and the government can cause stagnation by excessive regulation of goods markets and labor markets, Either of these factors can cause stagflation. Excessive growth of the money supply taken to such an extreme that it must be reversed abruptly can clearly be a cause. Both types of explanations are offered in analyses of the global stagflation of the 1970s: it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.

Just keep printing more dollars, Benji. That, plus more federal regulations, and rising oil prices will do the trick... make everything all hunky-dorey. Nothing to see behind the curtain... look away, look away.

*sigh*

Yep! Just as I had expected. Jimmy Carter 2.0.

Well Lubed by Oil...

After pushing the $100/barrel threshold last week, oil closed today on the market at $96.89/barrel. The national average for gas is now at $3.37/gallon.

Now, let's remember this post I had back in October of 2008.

To re-interate, in July of '08 oil peaked at $147.27/barrel and gas peaked at $4.11/gallon, nationally ($4.65/gallon in my area of California). Using that as the benchmark, if oil is currently at $96.89/barrel then that means it is at 65.7% of it's high. This SHOULD translate into a 65.7% of $4.11/gallon of gas.

But 65.7% of the national peak of $4.11 is... $2.70. And 65.7% of my area's peak of $4.65 is... $3.06.

So, WHY is the current national average 67-cents more than it should be?

And, WHY is my local area gas prices currently at $3.69 to $3.79/gallon, depending on the gas station (63- to 73-cents more than it should be)?

Housing Update...

This just in:

National home prices fell 4.1% during the last three months of 2010, compared with 12 months earlier, according to the latest report from the S&P/Case-Shiller home price index, a closely watched indicator of market trends. They were down 1.9% compared with three months earlier.

"Despite improvements in the overall economy, housing continues to drift lower and weaker," said David Blitzer, spokesman for S&P.

And things may get a lot worse, said Robert Shiller, a Yale economist and half of the Case-Shiller team, in a web conference after the report's release.

"There's a substantial risk of home prices falling another 15%, 20% or 25% more," he said.

Shiller cited a few reasons for his bearish stance. The government is expected to reduce the presence of Fannie Mae and Freddie Mac in the housing market. These agencies currently provide loan guarantees for about two-thirds of mortgages. If they fade away, private mortgage money will have to fill the gap and the cost of mortgage borrowing will surely rise. That will hurt home prices.

There's also talk of possibly ending the mortgage interest tax deduction for many homeowners. Meanwhile, the weak economic recovery may be threatened by higher oil prices as a result of turmoil in the Mideast.

UPDATE: HotAir has a new post that gives newer statistics on the mess:

... the Census Bureau announced that new residential sales dropped 12.6% over a mild bump upward in December, down to a seasonally-adjusted annual rate of 284,000 units. That number barely avoids the low-water mark reached in October 2010 of 280,000 units, which was itself the lowest such figure in the entire historical run of the data, which goes back to 1963...

The actual number of houses sold in January, not seasonally adjusted, was 19,000 — which is the lowest number in a month in the entire 48-year history of sales tracking. That beats the monthly low hit in November by 1,000, and is 3,000 less than December.

Housing Woes Continue...

Back in November there was a news report that housing prices were continuing to drop:

Millions of foreclosures and weak demand from buyers are forcing home prices down in most major U.S. cities.

Prices are falling even in places like San Francisco and San Diego, which had posted strong increases just a few months ago. Analysts say many markets won't improve until they see fewer foreclosures and more job gains.

"Unemployment is still high, people are afraid of losing their homes and credit is hard to get," said Maureen Maitland, vice president of Standard & Poor's indices.

A report Tuesday underscored the weakness. Home prices declined in 18 of the 20 cities, according to the S&P/Case-Shiller 20-city index.

The foreclosure crisis (as I had predicted in the past) will continue to steamroll this year:

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and industry experts say more people will miss payments because of job losses and also loans that exceed the value of the homes they are living in.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year.

The blistering pace of foreclosures this year will top 2010, when a record 1 million homes were lost, RealtyTrac said Thursday.

One in every 45 U.S. households received a foreclosure filing last year, a record 2.9 million of them. That's up 1.67 percent from 2009. [emphasis mine]

Housing starts in December were the worst in a year:

Housing starts fell 4.3 percent to a 529,000 annual rate, the lowest level since October 2009, Commerce Department figures showed today...

Home sales for 2010 was the worst since 1997:

The number of people who bought previously owned homes last year fell to the lowest level in 13 years...

The National Association of Realtors says sales dropped 4.8 percent to 4.91 million units in 2010. That was slightly lower than 2008, which had been the weakest level since 1997. [emphasis mine]

Home prices have been depressed by a record number of foreclosures and high unemployment. Many potential buyers held off on purchases last year, fearful that prices hadn't bottomed out yet.

Bank of America suffers a loss on the mortgage sector.

Via HotAir, the Washington Post had this interesting tidbit:

This “double dip” in real estate represents one of the worst fears of housing analysts and is developing just as it appeared that the overall economy was recovering. For now, many economists expect prices to keep slipping at least through the first half of the year, dragged down by the nation’s large volume of foreclosures and high unemployment rate.

HotAir then analyzes:

The reason for the upcoming “double dip,” which really has been upon us for a while, is because of ill-advised federal interventions after the bubble popped. Congress passed tax breaks for people buying homes, which did nothing to create more qualified buyers — that still required the normal income-to-debt ratios that got ignored during the bubble period — but instead subsidized sales that would have occurred anyway with tax dollars. It also stole demand from future sales, which has contributed to the poor performance in the second half of 2010.

Otherwise, we wouldn’t have needed a second “dip” to reach the proper market valuation for housing. These interventions only delayed the inevitable, which was the reset of prices to a norm outside of the bubble — perhaps back to 1998-2000 pricing, adjusted for inflation. Those who bought during the bubble understandably resist this, but the valuation of housing had always been coupled to the rate of inflation until Congress and successive administrations made home ownership into a fetish and incentivized lenders to give mortgages out to people who couldn’t afford them. [emphasis mine]

However, those millions of people whose mortgages are underwater make a powerful political force. They want Congress to address a problem that they believe Congress created to support at least the current valuation of homes. The only real way to do that, though, is to create more qualified buyers — and the only way to do that is to create public policy that stimulates growth in large quantities. That can be done through monetary policy, tax policy, and regulatory policy. The Obama administration has gone the wrong direction on the latter throughout its first two years, and until that gets reversed, expect home sales and values to continue their downward drift.

So, how bad is it, really?:

Buyers purchased the fewest number of new homes last year on records going back 47 years.

Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said Wednesday. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming... [emphasis mine]

... economists say it could be years before sales rise to a healthy rate of 600,000 units a year.

It's gonna be a long 2011 (and even 2012).

Hidden Inflation...

This January article points to something I've been saying for quite some time now.

A recent Consumer Reports investigation found that the amount of dish detergent, toilet tissue, and first aid spray in those same old containers has shrunk as much as 20%...

Blame it on the rising costs of producing these goods, such as raw materials, energy, and facility costs, say manufacturers. As their expenses rise, they've got to find ways to make up the difference: Either charge more for the product, or give less of it to you for the same money.

The latter strategy -- charging the same amount for less-generous servings -- is the safer bet: Studies show that shoppers are more sensitive to price increases than product volume decreases. And manufacturers go to great lengths to get you to overlook the downsized items in your shopping cart.

I'm sure you've noticed in recent years that a half-gallon of ice cream is now 1.5 quarts. Orange Juice is in 59 ounce cartons instead of half-gallon ones. Cheese-its are in 13 oz boxes instead of 1 lb. Coffee is sold in 13 oz cans instead of 1 lb cans. The list goes on and on and on.

And now food commodities are going through the roof (via Daily Eudemon):

“Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton…. up 17.08%. That’s in one month!”

Here's what's also interesting about commodities and pricing (from Daily Eudemon, again):

So what are the TBTFs doing with they money that they’re getting from the Fed? They’re buying stocks, bonds, and commodities (known as “prop trading“). As a result, the prices of everything are going up (see Friday’s TDE post). It makes Bernanke happy, because the stock market is up, and when the market goes up, Americans stop thinking about economic issues. In the words of Albert Jay Nock, “A falling stock market seems to clarify and stimulate thought. When it is rising, nobody cares to know why or how, but when it falls, everyone is very eager to know all about it.”

Unfortunately, commodity prices are increasing the fastest, and the people who are hurt worst by increasing food prices are the poor. Especially the poor in developing countries. As the price of food in these countries increases, so does the discontent. As discontent increases, the chances of rioting breaks out.

Yet another reason many intelligent people think Bernanke must be insane or evil or both.

The World Bank is very concerned about food prices being at dangerous levels:

Global food prices have hit "dangerous levels" that could contribute to political instability, push millions of people into poverty and raise the cost of groceries, according to a new report from the World Bank.

The bank released a report Tuesday that said global food prices have jumped 29 percent in the past year, and are just 3 percent below the all-time peak hit in 2008. Bank President Robert Zoellick said the rising prices have hit people hardest in the developing world because they spend as much as half their income on food.

Clothing prices to go up 10% in the Spring:

Cotton has more than doubled in price over the past year, hitting all-time highs. The price of other synthetic fabrics has jumped roughly 50 percent as demand for alternatives and blends has risen.

Clothing prices are expected to rise about 10 percent in coming months, with the biggest increases coming in the second half of the year, said Burt Flickinger III president of Strategic Resource Group.

Inflation? Or stagflation? Ace knows what's going on, too.

Double-Dip?

Back in August on 2010, Yahoo Financial also had this article about the potential double-dip recession. The article looks at 11 key factors that could show signs of a double-dip:

Housing (still dropping and stalling)

Unemployment (starting to inch up again)

Consumer Spending (stagnant)

Consumer Confidence (fickle)

Auto Industry

Trade

Budget (Hah!)

National Debt (Double Hah!)

Stock Market (not acting realistically in this economy... can you say "bubble"?)

Banking (will more banks fail in 2011?)

Interest Rates

It really makes you wonder.

So... let's look at the economy, shall we???

And let's start with an article from way back in July of 2010 in Yahoo's financial section. It's regarding the shrinking of the American middle class. Below are the 22 stats from the article:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.

• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.

• 36 percent of Americans say that they don't contribute anything to retirement savings.

• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

• 24 percent of American workers say that they have postponed their planned retirement age in the past year.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.

• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.

• In America today, the average time needed to find a job has risen to a record 35.2 weeks.

• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

• The top 10 percent of Americans now earn around 50 percent of our national income.

So, why the lack of posts???

Among other things... I'm putting the pieces of the puzzle together for a wedding in June. :-)

I'm still here... :-)

Real life takes over sometimes. Posts to come in Feb.

A belated Merry Christmas and a Happy New Year!!!

The next year or so will continue to be rough going, with unemployment remaining high, a further housing market collapse, coming inflation, fuel/energy price spikes, etc. But, eventually, it will get better.

I hope everyone had a Merry Christmas, despite these troubled times. And may your New Year be better, brighter and more prosperous.

Keep the faith, and don't give up hope!

God Bless!

End-of-Year Post...

Consumer confidence down "unexpectedly" while housing prices drop:

Consumer confidence unexpectedly deteriorated in December, while prices of single-family homes fell almost double the expected pace in October, tempering growing optimism on the economy's recovery.

Home foreclosures jumped in 3Q:

The regulators said one reason for the increase in foreclosures is that banks have "exhausted" options for keeping many delinquent borrowers in their homes through programs such as loan modifications.

Newly-initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from the same quarter a year ago, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) said in a quarterly mortgage report.

The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.

The blizzards kept consumers from buying:

A blizzard in the U.S. Northeast this weekend postponed about $1 billion in holiday retail sales by keeping shoppers out of stores in the days after Christmas, research firm ShopperTrak said on Wednesday.

The snowstorm shut roads and canceled flights in New York City and created havoc across the Northeast, where shopper traffic was 11.2 percent below ShopperTrak's expectations for Sunday December 26 and off 13.9 percent on Monday December 27.

Ninety-eight of the TARP'ed banks are close to failing (despite the bailout):

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.

What's coming to your local hotels and malls:

The United States is stepping up security at “soft targets” like hotels and shopping malls, as well as trains and ports, as it counters the evolving Al-Qaeda threat, a top official said Sunday.

And the internet and the so-called "net neutrality" law: link 1, link 2, link 3.

National Insecurity...

A Mexican drone invaded USA airspace, but nothing to see here... look away, look away.

Meanwhile, TSA deploys scanners at bus stations. and gropes grandma while an Iranian-American gets thru with this wonderful little mistake.

*sigh*

End-of-Year Econo-mishmash...

Fuel prices are a-risin' (national average at $2.99 as of yesterday, and oil price for barrel is currently at $91), adding inflationary pressure.

Stocks are flat due to lower than expected GDP growth.

Mortgage apps fall again.

Good news, though, is that Senator Reid pulled the pork-filled spending budget. (Republican pork was $1 billion, Democrat pork was almost $52 billion.)

Good news, though, is that the GOP landslide last month forced The One to continue the Bush tax cuts for 2011.

UPDATE: Durable goods drops and November consumer spending stays flat once you factor in inflation. Stag-flation, baby!

Ewwwww... The EU Mess

Spain's about to be downgraded by Moody.

Same with Portugal.

Portugal has since been downgraded by Fitch.

Ireland drops down, too.

All this is following Greece.

We all saw this coming way back in April and June, remember?

Econo-collapse...

So... consumer confidence rose... to a 5-month high!!! WOW!!!

Umm... five months ago consumer confidence was at 54.3. June... of this year... 54.3... and it's now at 54.1. As the article states oh so elegantly:

It takes a level of 90 to indicate a healthy economy, which hasn't been approached since the recession began in December 2007.

Could it be that, even though the administration tried to make hay out of so-called rosy job-creation numbers for last month (it was the typical seasonal temp hiring), the truth is that the unemployment rate jumped to 9.8%.

In addition to that is the fact that 2 million more people have now run out of unemployment benefits... just before Christmas. These are benefits that were extended and extended to a full 99 weeks (normally, it lasts only 26 weeks). And these people are not included in the official 9.8% statistics.

Employers added a net total of only 39,000 jobs last month, a sharp decline from the 172,000 created in October, the Labor Department said Friday. The weakness was widespread. Retailers, factories, construction companies, financial firms and the government all cut jobs.

The disappointing figures caught economists off guard. They had predicted the addition of 150,000 jobs, based on a raft of positive reports that showed busier factories, rising auto sales and a good start to the holiday shopping season in November. Yet all that failed to translate into mass hiring.

Another report states:

One of the big surprises was the loss of 28,100 retail jobs last month despite signs of a busy holiday shopping season.

Manufacturing and durable goods are down, too. As HotAir states:

These numbers show an economy in stagnation, with no real momentum in any direction.

Stagnant economy... higher inflation... stag-flation... like Jimmy Carter in the late-70s. Why, it's Carter 2.0. Hmm... who could've predicted this? Way back in March of 2009. Even further back in November of 2008.

I wonder......