By The Tim on November 4th, 2009 at 8:23 AM · 110 Comments
A reader wrote in requesting an update to this February post, in which I criticized Nancy Pelosi’s misleading chart of job losses.
Here’s an update to the post-WWII job loss chart, courtesy of Calculated Risk, in which I’ve added a mark so you can see where the “stimulus” was passed.
Wow, good thing we changed direction to the tune of $787 billion*, huh?
*(Actual cost: much, much more)
If there is any doubt about who the stimulus was really directed at saving, just take a look at an update to the stock market crash comparison:
Woo, go Wall Street!
Finally, speaking of bailouts for Wall Street and the banks: Congress Poised to Keep Homebuyers’ Tax Credit
The Senate and House are poised to agree on a compromise measure to extend unemployment benefits that also would expand a popular $8,000 tax credit for homebuyers, despite a recent government report on extensive mistakes and suspected fraud in the program.
The Senate might pass its version as early as Wednesday, and aides to Congressional leaders say the House could accept it this week, sending the bill to President Obama to sign into law. After weeks of partisan delay in the Senate, Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment.
Super! So while people continue to lose their jobs, and absolutely zero of the underlying problems in the economy have been fixed, let’s pour another ten or twenty billion dollars into the housing market to try to keep prices propped up (i.e. – keep homes as unaffordable as possible) a little longer so our buddies in the big banks that got us into this mess can avoid taking losses.
Sounds like a plan to me!
Categories: Opinion · Statistics
Tags: depression, Jobs, recession, unemployment
Please vote in this poll using the sidebar.
Most probable outcome of massive government spending & bailouts?
- Japan-style "lost decade" (47%, 85 Votes)
- 2nd Great Depression (22%, 40 Votes)
- Recovery in <5 years (20%, 37 Votes)
- Other... (11%, 19 Votes)
Total Voters: 181
This poll will be active and displayed on the sidebar through 05.30.2009.
Categories: Polls
Tags: depression, government_meddling, Polls
By The Tim on February 28th, 2009 at 2:25 PM · 28 Comments
Great visualization of the mess we’re in.
Categories: Media
Tags: credit, depression, recession, video
By The Tim on February 11th, 2009 at 6:00 AM · 55 Comments
House Speaker Nancy Pelosi recently posted an alarming chart of job losses that has been making the rounds.
What jumps out to me when I look at her chart is the fact that the y-axis shows raw number of jobs rather than a percentage loss, and therefore fails to account for the increased size of the job pool from one recession to the next. To give you an idea of how misleading this can be, just check out a chart comparing the current Dow Jones crash to the Great Depression, but in raw points rather than as a percentage:
A reader requested that I post a graph similar to the Dow Jones percentage decline crash chart I have published on here a few times, but showing job losses as a percentage loss from the peak. Coincidentally, Calculated Risk posted that exact chart a few days ago. Here it is:
The current rate of job losses is bad, but it doesn’t look quite as alarming when you compare it in a scaled chart.
While we’re at it, here’s an updated edition of the Dow Jones crash chart:
Categories: Statistics
Tags: depression, Dow Jones, Jobs, recession, Stock Market, unemployment
By The Tim on February 4th, 2009 at 4:56 PM · 83 Comments
I read a great post today over at Behavior Gap (thanks to an email from J.D. @ Get Rich Slowly) that is definitely worth sharing:
The Great Reset
A recent New York Times headline read:
“Consumers Increase Savings While Spending Less”
That sounds like a GOOD thing doesn’t it?
It used to be that savings and thrift were basic, core, American values. Check out Tom Brokaw’s the Greatest Generation if you can’t remember a time when Americans valued thrift and savings. The media is so focused on “reviving” the economy that it is now seen as a negative sign when saving increases and spending declines. I know the economy as we have known it over the last 10-20 years depended on consumer spending, but the problem was THAT WAS MONEY WE DID NOT HAVE!
Part of the problem is that we are still viewing this as a recession. Hopefully this is not a recession. Hopefully this is the GREAT RESET.
The word recession implies that it is a temporary decline and that things will return to “normal.” If we define normal as the last 10-20 years, “reviving” that version of the economy would be the definition of insanity (doing the same thing and expecting a different result). That version of of the economy was not REAL. That version was on the wicked, performance-enhancing drug LEVERAGE. That version was not sustainable.
…
Now in real life this GREAT RESET is a very painful process, but to ignore the reality won’t help. We can’t go back to the levered up version because it is not REAL. As Thomas Friedman said recently, “…there is no easy escape here, except taking our medicine, getting our fundamentals right again and working our way out of this, brick by brick…”
Carl hits the nail on the head.
Over the last few decades, we have constructed a sham economy that was not sustainable.
When the pyramid scheme failed (as all such schemes are destined to do eventually), rather than the healthy response of “whoops that was stupid, now let’s rebuild a sustainable, sound economy,” we’re hearing nonsense like “we need to prop up housing prices” and “we need to spur more consumer spending.”
Let’s put a stop to the delusion that things can just magically go back to the way they were when everybody (individuals and corporations alike) was hopped up on leverage. It’s not going to happen, nor should it.
Falling home prices and consumer spending are the necessary medicine that must be taken to return to a fundamentally sound and sustainable economy.
Categories: Opinion
Tags: depression, economy, recession
By The Tim on January 16th, 2009 at 11:47 AM · 56 Comments
I thought it would be interesting to post an update on the stock market crash graph that I first posted back in October.
In the chart below I have graphed the crashes of 1929, 1973, 1987, and 2001 alongside the current fall, with the peak points aligned near the left. Each crash is scaled on the y-axis to show the percent of the peak Dow Jones price.
464 days into the crash, the current plunge still ranks second only to 1929. Back in October, we did drop for a brief time to a point lower than the lowest point on the green ’70s graph (45.1% off-peak), but we currently appear to be in a bit of a holding pattern at about 40% off peak.
On a related topic, I spotted this article from late last month that amused me: Market predictions proved to be tricky business
At a small, private event at the Metropolitan Grill in January, nine of the region’s brightest and most respected financial advisers gathered to sip fine wine, eat prime beef and forecast the financial future.
The date was Jan. 10. The Dow Jones industrial average was 12,853. And Washington Mutual was a pillar of the Seattle business scene.
With a quarter-century of such gatherings, the “Guess the Dow” luncheon at the Met has become an annual fat-cat Seattle tradition.
…
Consensus was that Starbucks Corp., Nordstrom Inc. and Microsoft Corp. stocks all would rise, the Dow would close above 14,000 and Hillary Clinton would be president.
Wrong. Wrong. Wrong. Definitely not. And wrong.
This year’s “Guess the Dow” luncheon is today was yesterday. I haven’t heard what their predictions are for 2009, but I have a contact that is attending and will ask him this afternoon will try to find out. Let’s see if the Seattle Bubble readership can collectively beat the “region’s brightest and most respected financial advisers.”
Where will the Dow Jones close for 2009?
- Below 6,000 (17%, 118 Votes)
- 6,000 to < 7,000 (18%, 124 Votes)
- 7,000 to < 8,000 (22%, 156 Votes)
- 8,000 to < 9,000 (20%, 139 Votes)
- 9,000 to < 10,000 (16%, 112 Votes)
- Above 10,000 (7%, 55 Votes)
Total Voters: 704
Categories: Polls · Statistics
Tags: depression, Dow Jones, Polls, recession, Stock Market
