David Kirkpatrick

August 12, 2010

Foreclosures still a problem

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:04 pm

To join my previous post on the sluggish nature of the current economic recovery, here’s more dark gray news on foreclosures

From the link:

The latest foreclosure numbers carried a mixed message: They’re up 3.6% from the month before but down 9.7% from 12 months earlier.

In July there were more than 325,000 foreclosure filings — including notices of default, auctions notices and bank repossessions. That is the 17th month in a row total filings exceeded 300,000, said RealtyTrac’s CEO, James Saccacio.

“Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July,” he said, “have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month.”

June 30, 2010

Interest rates are going to stay low

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 11:56 pm

In other words, move along everyone — there’s nothing to see here

From the link:

Jitters that financial strains may derail the U.S. economic recovery mean the Federal Reserve will be in no rush to end its ultra-low interest rates, comments by officials of the U.S. central bank suggested on Wednesday.

One senior Fed official went as far as acknowledging that falling inflation could spur the central bank to further ease financial conditions, and another policy maker would not rule out additional measures to stimulate growth.

When asked whether lower inflation would prompt the Fed to try to push borrowing costs even lower, Atlanta Federal Reserve President Dennis Lockhart told a Rotary Club audience: “It’s appropriate to think about what we would do under a deflationary scenario. At this point, no specific planning in my view is occurring but discussion in all likelihood will be on the agenda.”

June 18, 2010

Line the nest, this recovery is gonna be slow

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 7:39 pm

Real slow.

From the link:

A gauge of future economic activity rose 0.4% in May, signaling slow growth for the U.S. economy in the summer and fall.

The private Conference Board’s leading economic index is designed to forecast economic activity in the next three to six months.

Economists had expected a reading of 0.5% in May.

March 25, 2010

Corporate belt tightening led to cash reserves

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 4:38 pm

Of course all this liquidity was wrung out of Main Street and the lifeblood of the economy — the workforce.

From the link:

The brutal recession has left many American families, small businesses and state and local governments in financial ruin or teetering on the brink.

But it’s a much different story for the nation’s biggest companies. Many have emerged from the economy’s harrowing downturn loaded with cash, thanks to deep cost-cutting that helped drive unemployment into double digits.

And although the banking crisis starved countless entrepreneurs for money last year, credit was never scarce for business titans.

March 1, 2010

The state of the recession

Filed under: Business — Tags: , , , — David Kirkpatrick @ 3:53 pm

So-so at best. By all, or a least most, accounts the national recession is over and recovery, however slow, is going on right now. Break that national figure down a bit and the picture changes dramatically. Two-thirds of all states are still in a recession. That’s a lot of people who just get frustrated and angry when told things have hit bottom and are now getting better. For a lot of Americans things are not getting any better just yet. And Nevada is alone as the the state with a still-shrinking economy.

From the link:

The national recession may be over, but not everyone feels the change. Some industries and regions continue to suffer. The tepid 3% pace of growth in this recovery means no rising tide lifting all boats.

And here’s a handy chart outlining who’s still feeling the pain:

February 21, 2010

Truly frightening unemployment news

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:14 am

Well, I suppose this falls more under conjecture than news, but quite frightening nonetheless.

From the link:

Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

And:

Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.

Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.

We may have avoided a second Great Depression to date, but the long-term effects on the U.S. economy may be very severe. Hopefully the economists who see major downturns rebounding with equally major expansions are correct. If this recession creates a large class of the permanently unemployed and drives more of the middle class down toward, or into, poverty, the social, political and economic repercussions probably are beyond our ability to imagine right now. A sizable and battered lower class does not make for a stable society.

December 7, 2009

The bank bailout may end up in the black

Who’d a thunk this a year ago?

From the link:

The Treasury Department expects to recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit, according to a new Treasury report.

The new assessment of the $700 billion bailout program, provided by two Treasury officials on Sunday ahead of a report to Congress on Monday, is vastly improved from the Obama administration’s estimates last summer of $341 billion in potential losses from the Troubled Asset Relief Program. That figure anticipated more financial troubles requiring intervention.

The officials said the government could ultimately lose $100 billion more from the bailout program in new loans to banks, aid to troubled homeowners and credit to small businesses.

Still, the new estimates would lower the administration’s deficit forecast for this fiscal year, which began in October, to about $1.3 trillion, from $1.5 trillion.

November 25, 2009

Almost a quarter of all mortgages under the water line

Ouch. This economy just doesn’t look or feel any better right now. I just had a major project for this year — a project on standby for around five months — move into the “not likely to happen” file. At least I’m ahead of the game on my mortgage.

From the link:

In a sign that more foreclosures could be on the horizon, 23% of people with mortgages owe more than their home is worth, according to a report released Tuesday.

Almost 10.7 million U.S. mortgages were “underwater” as of September, said research firm First American CoreLogic.

Another 2.3 million homeowners are within 5% of negative territory, the report said. The two figures combined comprise almost 28% of all residential properties with mortgages.

Negative equity, also called an “underwater” or “upside down” mortgage, has become more common as home values plummet. The report is closely watched because borrowers who are underwater are more likely to be foreclosed.

November 24, 2009

Unemployment taxes an impediment to small business job creation

This is one of those chicken/egg scenarios, but states are hurting for revenue, unemployment remains high and small business are being dissuaded from hiring because those broke states are cranking up the unemployment taxes on those small businesses. The end result? Small businesses are going to put of taking on new employees right at a time when jobs are needed. There’s no great answer here, but I’m going out on a limb and the discussion needs to be begin in state capitals around the nation.

From the link:

Employers already are squeezed by tight credit, rising health care costs, wary consumers and a higher minimum wage. Now, the surging jobless rate is imposing another cost. It’s forcing higher state taxes on companies to pay for unemployment insurance claims.

Some employers say the extra costs make them less likely to hire. That could be a worrisome sign for the economic recovery, because small businesses create about 60 percent of new jobs. Other employers say they’ll cut or freeze pay.

October 29, 2009

But then again …

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 2:19 am

Right after this positive post, I hit you with this:

But while there is a growing consensus that the so-called Great Recession ended some point earlier this year, some economists think that one quarter of solid economic growth does not indicate that a Great Recovery has begun.

Unemployment continues to rise and about 30% of factory capacity remains idle. Credit for businesses is still tight and consumer confidence is falling.

It’s also worth remembering that the economy grew as recently as the second quarter of 2008, when rebate checks sent to most taxpayers created a sugar rush of economic activity and a 1.5% rise in GDP.

Of course, that growth wasn’t enough to prevent the meltdown in financial markets last fall that touched off sharp declines over the next three quarters.

This sounds like …

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 2:14 am

some pretty promising news.

From the link:

For the first time since the recession began, the portion of companies planning to add employees in the next six months outnumbered those expecting to cut jobs, according to this month’s quarterly survey of economists at 78 firms by the National Association for Business Economics.

September 30, 2009

The economy wasn’t quite as bad as thought for Q2

More of that, “Well, the news still isn’t good, but it is better than we thought.” There’s a lot of looking for any ray of positive economic news still going on.

From the link:

The U.S. economy contracted at slower pace than previously thought in the second quarter as improved consumer and business spending cushioned the impact of a record decline in inventories, according to a government report on Wednesday.

The Commerce Department’s final estimate showed gross domestic product fell at a 0.7 percent annual rate instead of the 1.0 percent decline reported last month.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, slipping at a 1.2 percent rate in the second quarter after dropping 6.4 percent in the January-March period.

This will probably mark the last quarter of decline in output for the U.S. economy, which slipped into recession in December 2007. The economy is believed to have rebounded in the July-September quarter.

With the second-quarter contraction, the country’s real GDP has shrunk for four straight quarters for the first time since government records started in 1947.

August 7, 2009

Unemployment — more “good” bad news

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 2:06 pm

In yet another case of calling bad news an encouraging sign (and as much as I’ve derided the practice, even I dipped a toe in that pool) the latest jobs report is bad — but, wait for it — it isn’t as bad as expected.

Here’s three links from the New York Times today on the topic: the news report, an Economix blog putting positive spin on the report and Floyd Norris bringing things back to reality.

The Old Grey Lady news:

The most hopeful jobs report since last summer suggested Friday that the recession was ending, but the recovery will be marked by a still-rising unemployment rate and tens of thousands of job losses each month until next year.

The American economy shed 247,000 jobs last month, the smallest monthly toll since last August, the government reported on Friday. While businesses are expected to keep cutting positions through the rest of the year, the Labor Department’s latest figuresoffered hopeful signs for the American worker and a measure of relief to the Obama administration, which has faced rising criticism as unemployment blew past its earlier projections.

“The trend lines are positive,” said Mark Zandi, chief economist at Moody’s Economy.com. “We are going from massive job losses to just big job losses on our way to a stable job market, I think by next spring.”

A bit of bloggy pollyannaish spin:

The story of today’s jobs report is pretty simple: given what was expected, it’s very good news.

The economy lost significantly fewer jobs in July than expected. Forecasters were predicting a loss of about 325,000 jobs in June. The actual loss was 247,000 — the smallest since August 2008.

The average hourly pay of rank-and-file workers, which had been flat in June, rose 3 cents in July, to $18.56 an hour. That wage is up 2.5 percent over the past year, while inflation has been roughly zero. So the average person who’s still employed has actually received a raise in the last year.

The average private-sector workweek increased by one-tenth of an hour, to 33.1. It was the first increase since last summer.

And the government said that the economy had shed somewhat fewer jobs in May and June than previously estimated.

And now Norris getting this topic back on firmer ground:

There are clear signs that world economy is turning up, or at least not sinking further, but today’s jobs report is not a bright spot. The unemployment rate went down, from 9.5 percent to 9.4 percent, but that is statistically unimportant given the sampling error in the household survey. In any case, it fell not because more people said they had jobs — employment was down in that survey — but because fewer people were still looking for work.

The key to Norris’ point is that last line. As the unemployed give up and stop looking for work they are no longer “unemployed.” Sure they aren’t working, but since they are seeking employment they aren’t considered unemployed. Last fall the Bush administration used the same rationale to attempt and spin up negative jobs reports. This thing ain’t over by a long shot.

July 23, 2009

Dow tops 9000

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 3:22 pm

A first in six months. Are these finally those green shoots we’ve been reading about? I’m not holding my breath, but a lot of indicators seem to be at least a little positive. A definite uptick from either not so negative or neutral that had everyone excited earlier this year.

From the link:

In early afternoon trading, the Dow Jones industrial average was 2 percent, or 179 points, higher, while the broader Standard and Poor’s 500-stock index rose 22 points, or 2.2 percent. The Nasdaq gained 44 points, or 2.3 percent.

“We’ve had an exceptional rally here,” said Peter Cardillo, the chief market economist at Avalon Partners. “In the remainder of the summer we’ll see the S.&P. challenging the 1,000 mark.”

“The housing market does point to signs of stabilizing and that obviously is key to consumer confidence to begin to rebuild,” Mr. Cardillo said. “If we see daylight in the housing market that will give another indication that the economy crawling out of recession in the fourth quarter is achievable.”

Shares were up across all sectors in the S.&P., led by telecommunications, consumer goods and energy. Ford, which is the only Detroit automaker now publicly traded, was up almost 11 percent.

July 16, 2009

Fed offers mixed signals

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 3:33 pm

I’m going with they still don’t have a clue what is happening or what is going to happen over the next six to twelve months.

From the link:

The unemployment rate could top 10% later this year, the Federal Reserve said Wednesday, but the central bank also said it believes the end of the recession could be in sight.

July 9, 2009

Home equity credit crunch hurts entrepreneurs

Many small business have been relying on home equity loans as opposed to Small Business Adminstration loans or lines of credit based solely on the business. This avenue of funding has proven to be very, very volitile in today’s financial market. As home value drops, banks are very quick on the draw to freeze home equity credit. Just one more obstacle in the path of Main Street business.

From the link:

As home equity lines vanish, other avenues of small business financing are also running dry. More than 40% of small business owners polled in April by the National Small Business Association said the limits on their credit cards had been cut in the past year, and 63% said their interest rates went up. Bank lending is in freefall. Even with stimulus incentives, the SBA backed 30% fewer bank loans to small businesses last quarter than it did a year earlier. The agency’s lending volume has dropped to less than half what it was before the recession set in at the end of 2007.

The allure of home equity loans is their liquidity: Business owners can tap cash without submitting detailed business plans. But easy access can be a double-edged sword.

“Used properly, home equity lines of credit are great and get the job done. But a business that isn’t self-sustaining can’t pay it back, and that’s where the problem lies,” says Norm Bour, a debt management strategist and founder of BusinessCashFlowPros.com in Laguna Niguel, Calif.

July 7, 2009

Get ready for another stimulus package

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:03 pm

Bush threw some federal money at the economic downturn and Obama added a large stimulus package. Even as the ink was drying on Obama’s stimulus it was assumed another round of federal money would be necessary and expected, unfortunately that fact did not get reported on all that much. It’ll be interesting to see how the general public reacts to a second stimulus to try and goose this recession.

From the link:

The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy after the $787 billion rescue package launched in February, an adviser to President Barack Obama said.”We should be planning on a contingency basis for a second round of stimulus,” Laura D’Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis. said on Tuesday.

Addressing a seminar in Singapore, Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked and that a possible second round should be directed at infrastructure investment.

“The stimulus is performing close to expectations but not in timing,” Tyson said, referring to the slow pace at which the first round of stimulus had been spent on the economy.

Tyson, who is a dean of the Haas School of Business at University of California, Berkeley and was also a White House economic adviser to former President Bill Clinton, said an additional factor affecting the stimulus was that the economy was in a far worse shape than the administration had estimated.

June 18, 2009

Hope springs eternal

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:23 pm

In an informal web search poll of no import — or is it? — by CIO.com blogger Gary Beach finds either a lot of positive attitude on economic conditions out there, or maybe just a lot of people searching (see what I did there?) for something economically positive to hang on to for a while.

From the link:

Here’s what I found in returns from my search

Economic hope (99,800,000 returns), economic recovery (34,400,000), economic despair (311,000) and economic pessimism (1,350,000). 

What does this mean to your business? Probably not much. But you might want to share the search results with your staff and management to brighten their day and get the team focused on the coming upside!

June 4, 2009

Economic indicators not behaving

News stories like this perfectly illustrate why I remain skeptical of any rosy near-term predictions. I honestly think the media is doing the general public a great disservice with the “doom,” “doom,” “doom” and then, “it’s all going to be great!,” followed soon after with, “alas, woe is us.” The news cycles leave people tired, confused and probably distrustful of most things they hear.

The fact is we remain in fairly uncharted territory and even though things are looking a little better in that everything is no longer in a free fall, many things can happen to really crater the global economy. Let’s just say we are not on solid footing by any measure right now. Any report to the contrary is just blowing smoke.

Instead of worrying over all this bipolar news, the best bet is to keep the stiff upper lip, chin up approach and just stay alert to the facts and conditions on the ground.

From the link:

The nation’s service sector shrank in May at the slowest pace since late last year. And factory orders rose in April. But the improvements fell short of economists’ expectations and disappointed investors, who sent stocks lower.

Economic reports earlier this week on home sales and manufacturing had been encouraging, but Wednesday’s figures sent a reminder that the economy remains sluggish.

“People assumed it was safe to go back outdoors, but it’s still raining,” said David Wyss, chief economist at Standard & Poor’s. “It’s just not raining quite as hard.”

The Institute for Supply Management said its services index registered 44 in May, up slightly from 43.7 in April. It was the highest reading since October. Service industries such as retailers, financial services, transportation and health care make up about 70 percent of U.S. economic activity.

But the ISM figure marked its eighth straight monthly decline, and it fell slightly below economists’ expectations. Any reading below 50 indicates the services sector is shrinking. The last time the index was at 50 or higher was in September.

Separately, the government reported that orders to U.S. factories rose 0.7 percent in April, the second increase in three months.

But the Commerce Department’s report fell short of analysts’ expectations. And the government also marked down the March figure to a 1.9 percent drop, from the 0.9 percent decline previously reported.

Wall Street fell after the disappointing figures were released. The Dow Jones industrial average dropped more than 65 points to 8,675.24. Broader averages also declined.

Federal Reserve Chairman Ben Bernanke, meanwhile, said Wednesday that the economy will begin growing later this year, but the improvement will be slight.

“We expect that the recovery will only gradually gain momentum,” he told lawmakers. “Businesses are likely to be cautious about hiring, and the unemployment rate is likely to rise for a time, even after economic growth resumes.”

The current recession, the longest since World War II, began after the bursting of the housing bubble led to a financial crisis last fall. Economists say recoveries after such crises tend to be slower, as credit remains tight even after growth returns.

May 29, 2009

Reading these economic indicators …

… might have less worth than reading tea leaves or engaging in navel gazing. Like most numbers they can be spun up, down or sideways, but anyone seeing blue skies and smelling roses from these reports has given up and started taking antidepressants.

From the link:

The economy is sending a message of hope laced with caution: That the recession is steadily easing, but new threats could delay any recovery.One piece of heartening news was that the number of people seeking first-time jobless aid fell last week, a sign companies are cutting fewer workers.

And even though sales of newly built homes were flat last month, the figures suggested that the battered U.S. real estate market is nearing a gradual comeback.

But pessimists could point to bleaker news Thursday: The number of people continuing to receive unemployment benefits rose to 6.78 million _ the largest total on records dating to 1967 and the 17th straight record-high week.

The figure signaled that the jobless rate, which reached 8.9 percent in April, will rise in May, economists said. And many economists expect the rate to approach 10 percent by year’s end.

Another worrisome sign is that a record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit, the Mortgage Bankers Association said. And the wave of foreclosures isn’t expected to crest until the end of next year.

May 28, 2009

How this downturn stacks up

Filed under: Business — Tags: , , , — David Kirkpatrick @ 3:17 pm

I’ve done plenty of blogging on the financial crisis/economic downturn/recession/possible depression, and lately I’ve been pushing back a little at what I see as overly optimistic short-term outlooks.

This thing is far from over, but in the interest of fairness this chart provides a little perspective. Things are rough — as in as bad as has been seen in around fifty years — but no where near the Great Depression. And I do think the worst of bleeding has been staunched so it’s really unlikely we to those depths.

From the second link:

Six Downturns

The Great Depression was an unspeakably bad time for the U.S. economy.  I know that sounds obvious, but it seems necessary to say given all the recent rhetoric about “the worst economy since the Great Depression.”

Our economy has indeed been in terrible shape lately, with millions of families struggling with falling incomes, job losses, home foreclosures, and plummeting wealth.  The current recession is severe by any reasonable metric.  But it still pales in comparison to the Great Depression.

(Hat tip: the Daily Dish)

May 21, 2009

Fed sees longer recession

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 2:50 pm

I hate to always blog about tough financial news or to dispute what I see as overly rosy near-term projections, but I think reality should trump blind wishes. Particularly when those wishes will most likely be dashed in short order.

In an interview I was asked my operating philosophy of life and my response was “optimistic pessimism,” which for me is a succinct way of saying I hope for the best and plan for the worst. Optimistic pessimism is a very prudent way to view the world’s economy in both bad and good times.

From the link:

Federal Reserve officials fear the recession is worse than recent projections and that the recovery could drag on for two years as unemployment continues to edge higher, according to the minutes from the Fed’s April meeting.

Some members noted that it might be necessary to raise the amounts of mortgage and Treasury securities purchased above the $1.75 trillion that the government has already committed to buying.

“Some members noted that a further increase in the total amount of purchases might well be warranted at some point to spur a more rapid pace of recovery,” according to the minutes of the April 28-29 meeting.

The buying programs were put in place to create liquidity for these types of securities created from loans, and to serve as a catalyst for lending in an effort to thaw frozen credit markets.

The Federal Open Market Committee minutes are always released three weeks after the meeting is held. 

As widely expected, the Fed left a key interest rate alone at that meeting, leaving the target federal funds rate at a range near zero. 

Fed officials have said rates will stay “exceptionally low…for an extended period,” which some analysts have interpreted as meaning possibly into next year.

The economy looked a little brighter three weeks ago when Fed officials released a statement at the conclusion of their two-day meeting. Things are less rosy now.

May 2, 2009

Oracle of Omaha still sees short-term bears

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 5:41 pm

From the report the annual Berkshire Hathaway meeting was a bit somber again this year. Operating profit fell another 12 percent over last year and Warren Buffett sees more short-term losses on the horizen.

From the link:

Berkshire’s stock has fallen 39 percent since December 2007, but Buffett said no stock buybacks are planned because Berkshire’s share price is not “demonstrably below” the company’s intrinsic value. Profit fell 62 percent last year.

Buffett offered a gloomy forecast for parts of the economy and Berkshire itself, saying some units are laying off workers as managers “look at the reality of the current situation.”

He also said massive federal efforts to stimulate activity could pay off, at a possible cost of higher inflation.

“It has been a very extraordinary year,” Buffett said. “When the American public pulls back the way they have, the government does need to step in…. It is the right thing to do, but it won’t be a free ride.”

April 30, 2009

Unemployment news

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 2:58 pm

Not so good.

From the link:

Unemployment rates rose in all of the nation’s largest metropolitan areas for the third straight month in March, with Indiana’s Elkhart-Goshen once again logging the biggest gain.

The Labor Department reported Wednesday all 372 metropolitan areas tracked saw jobless rates move higher last month from a year earlier. Elkhart-Goshen’s rate soared to 18.8 percent, a 13 percentage-point increase. That was the fourth-highest jobless rate in the country.

The Indiana region has been hammered by layoffs in the recreational vehicle industry. RV makers Monaco Coach Corp. Keystone RV Co. and Pilgrim International have sliced hundreds of jobs.

The jobless rate jumped to 17 percent in Bend, Ore., a 9.2 percentage-point rise and the second-biggest monthly gainer. Bend for years has been the center of the central Oregon real estate and construction boom, largely fueled by retirees from California. Many of them bought vacation or retirement homes in high-end rural developments called destination resorts, which the state began allowing in 1984 as an exception to land use laws that otherwise aim to preserve rural land from development.

And if you want more food for not so happy thoughts:

Unemployment rates in 109 metropolitan areas reached 10% or higher in March, almost eight times more than a year earlier, according to a government report released Wednesday.

Just 14 cities reported jobless rates of at least 10% last year, the Labor Department said.

The March 2009 report said unemployment rates in all of the nation’s 372 metropolitan areas rose in March compared with the same month in the prior year.

Jobless rates of at least 15% were reported in March in 18 areas, compared with only one – El Centro, Calif. – the previous year.

The number of metropolitan regions that had unemployment rates under 7% dropped significantly to 95 from 329 in March 2008.

A total of 33 metro areas registered unemployment rates that were at least 6 percentage points higher than a year ago, and another 42 areas’ increases were 5 to 5.9 percentage points.

April 16, 2009

Fed sees light at the end of tunnel

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 3:11 pm

The latest beige book report goes for optimism. I’m guessing they’re more just satisfied things aren’t spiraling even further down as opposed to seeing anything worth getting excited about. But I’ve been pretty contrarian about this financial crisis going back to the first days of this blog.

From the first link:

The Fed’s “Beige Book,” which offers an anecdotal look at economic activity in its 12 districts, said that “overall economic activity contracted further or remained weak,” noting that areas such as manufacturing were still depressed.

But the report said that five of the districts “noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level.”

The positives may have been the “green shoots” that Fed Chairman Ben Bernanke referred to recently when saying he saw some signs of life in the economy.

It was “consistent with the recent data that have shown improvement in some sectors of the economy, particularly consumption and housing,” said Michelle Meyer of Barclays Capital.

“While downward pressure continues, the pace of the declines may be easing up, somewhat. Not a major surprise in light of the data we’ve seen for March, but noteworthy nonetheless,” said Ian Lyngen of RBS Securities. “That said, the overall picture remains negative for the U.S. economic outlook — home prices continuing to decline and credit remaining ‘very tight’ throughout the country.”

In finance, the Beige Book said “bankers reported tight credit conditions, rising delinquencies and some deterioration of loan quality.”

Though the report said home prices and construction were largely falling, “better-than-expected buyer traffic led to a scattered pickup in sales in a number of Districts.”

April 3, 2009

Words of wisdom for job seekers

Filed under: Business — Tags: , , , — David Kirkpatrick @ 6:14 pm

Something to keep in mind during the search for employment.

From the link:

One of Jaffe’s tips stood out, and I thought it was worth sharing. It was to not take rejection in your job search personally. His press release notes:

It’s not you. It’s the economy. Please, please remember that what’s happening is a reflection of the overall economy. It’s not a commentary on your specific qualifications. Sometimes stuff just happens…and we all get stuffed in the process. Don’t take it personally.”

In other words, lots of highly qualified people (like yourself) are on the market and aren’t getting responses to their résumés or callbacks for interviews—let alone job offers. It’s not because you lack credentials. It’s not because you’re doing something wrong. It’s the economy, so don’t beat yourself up over the lack of progress you’re making in your job search. 

March 23, 2009

Second worst quarter in 50 years

Filed under: Business — Tags: , , , — David Kirkpatrick @ 4:10 pm

Ouch.

From the link:

The great recession is shifting into a new phase, with the manufacturing sector taking the spotlight away from the consumer who got it all started.

Economic data to be released in the coming week could show that consumer spending has seen its worst, even as factories continue to slash output in the face of weakening demand from U.S. businesses and foreign buyers.

The weekly calendar also brings the third and final estimate for fourth quarter gross domestic product, with another downward revision likely to show the second worst quarter in the past half century, with GDP plunging at a 6.7% annualized rate. The final GDP revision will come Thursday at 8:30 a.m. Eastern.

The first quarter could be almost as bad, but economists say the economy is making progress in adjusting to a world with slower income growth and smaller sales.

March 19, 2009

World economy shrinks …

Filed under: Business — Tags: , , , — David Kirkpatrick @ 5:21 pm

… for the first time in sixty years.

House votes to tax AIG bonuses

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 4:23 pm

To the tune of 90 percent. We’ll see if the Senate does likewise and this bit of taxpayer outrage becomes a reality. I don’t like government being used in this fashion, but AIG is a pretty unsympathetic victim.

From the link:

Spurred on by a tidal wave of public anger over bonuses paid to executives of the foundering American International Group, the House voted 328 to 93 on Thursday to get back most of the money by levying a 90 percent tax on it.

The Fed’s printing money

This move could really hurt the dollar, and is seen by many (most?) economists as a true “nuclear option.” Make sure you’re belted in — this ride ain’t over yet.

From the link:

Expectations of Fed buying raised the prices, and consequently pushed down the interest rate yields, on mortgage-backed securities as well as Treasury bonds, which were included in the deal. Stocks rose slightly as well, while the dollar fell on inflation worries. The yield on the benchmark 10-year Treasury note plummeted one-half percentage point, to around 2.5%.

“The good news is that the Fed is clearly being a lot more aggressive,” said Desmond Lachman, a resident fellow at the American Enterprise Institute. “The bad news is that I think it reflects their assessment that the economy is a whole lot weaker than they thought it would be.”

The Fed did not cut short-term interest rates because it can’t—they’re already at virtually zero. The post-meeting statement said the rate-setting Federal Open Market Committee “anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

The FOMC statement was full of surprises, albeit in the Fed’s typical bland language. The Fed committed itself to buying another $750 billion this year in mortgage-backed securities issued by “agencies” like Fannie Mae and Freddie Mac, on top of the $500 billion it had already committed to buying. It doubled to $200 billion the amount of agency debt it will buy this year.

And in a surprising change of direction, the Fed said it will buy $300 billion of longer-term Treasury securities. Up until now, Federal Reserve Chairman Ben Bernanke had said there was no need for the Fed to buy Treasuries since there was a strong market for them already. The Fed’s new thinking seems to be that it can’t hurt to try a little Treasury buying in hopes that the money will trickle down to non-Treasury securities. It said the goal of the Treasury purchases is “to help improve conditions in private credit markets.”

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