The New Kid - Wish Me Luck

Click here to first to watch the one minute commericial: The New Kid - Late 80's McDonalds Advert, then come back and read below.

In response to yesterdays post's - Recession's Act Two & The Double Dip, a Naybob of Transport notes...

Good morning *********, or should I say Mr. Naybob

I always enjoy your nattering’s as depressing as they may be, and I agree with you most of the time.

I too feel that we are already in a second recession. If it looks, feels, smells and tastes like sh*t, there is a good chance it is, even if the Government wants to call it something else.

Anyway you cut it, it’s still sh*t, and Obama’s jobs bill is an utter joke as well. There is not one thing contained within it that would prompt me to hire someone that I wasn’t already going to hire anyway. Sure I’ll take the credits but they would be better off leaving as is.

When you use the terms Gutless and spineless, you are being way too nice in my opinion.

My personal net worth has dropped by more than 50% in the past 2.5 years, so forget about my prior plans for retirement.

I just might be that 90 year old man in the old McDonalds Commercials walking out the door in his new McDonalds Uniform walking to work on this first day on the job with his new employer, waiving to my wife with my cane saying “Wish Me Luck”.

I don’t know if you ever recall that commercial but it gave me nightmares. They were trying to recruit older folks that needed a little extra income, but to me it was a nightmare. A total failure of the system.

They tried to make it look like fun, you know get out of the house and be productive. I looked at it as work your ass off all your life and then what do you have to look forward to in your final days?

Wiping down tables at McDonalds, working with people that don’t even know how to count change unless they look at the picture buttons on the register and earn top dollars at minimum wage.

(The Nattering One muses... the next passage may seem racist, but it is just an observation of this individual.)

Stopping at McDonalds and observing who is working there is one of the many gauges I use to determine how bad the economy really is.

When the economy is bad, you will find mostly white people working there. When the economy is a little better you will see mostly white and some african american.

When it’s doing ok you will see a mix of african american and some hispanic. When the economy is humming along you will find hispanic supervisors, an almost all Hispanic work force...

with few african americans and virtually no whites unless of course you are in the middle of corn field USA. I have been observing this for years.

As you know, the majority of my employees are blue collar. I pay on the very high end of the scale but from what I see of these guys in their 40’s, 50’s, and 60’s are living check to check to check with no savings.

They have no skills other than driving, and they have no money. A nice flat screen TV, but no money.

Very few employers offer any sort of pension program and 401k’s have surely shown what can happen. It’s amazing how many people don’t even have a 401k.

The vast majority of our generation will be looking to Washington for handouts when they get older because they have not saved a penny, or we will be an economy of minimum wage geriatrics.

The meat wagons will be coming by daily to pick up the dead bodies as we drop like flies on the job from old age. “Wish me Luck”.

The Nattering One muses... Tonights offering for your acceptance, submitted for your approval....

Most often heard phrase at Walmart or McDonald's, often being uttered by an employee over the age of fifty...

"Welcome to Walmart, how can I help you?" ; "Would you like to Supersize that order?"

We have noted many a time in these pages about the new world disorder in which one is expected to work till they die...

This is why UNIONS are a necessary evil, TO PROTECT THE RIGHTS OF THE INDIVIDUAL against the profit motive AKA GREED, and no Gordon Gecko, greed is NOT good.

Workers must unite in all industries and at all levels, to prevent management from abusing the populace under the profit motive and outsourcing to labor at the margin.

Unchecked and left to their own devices, management will ALWAYS abuse the rights of the individual in favor of the capitalist creed.

What part of FOR PROFIT, did you NOT understand?

We defer to the Grass Roots song "Live for Today":

When I think of all the worries people seem to find
And how they're in a hurry to complicate their mind
By chasing after money and dreams that can't come true
I'm glad that we are different, we've better things to do
May others plan their future, I'm busy lovin' you (1-2-3-4)
Sha-la-la-la-la-la, live for today
Sha-la-la-la-la-la, live for today
And don't worry 'bout tomorrow, hey, hey, hey

This is also why PENSION plans, public and private MUST exist. Left to their own devices, individuals will NOT plan for the future.

Again, individuals as a group can muster better placement, control and return's on their nesteggs.

Individual 401K's are nothing more than a Wall Street broker scam to make more managment fees off the individual.

Remember PLANNING IS ESSENTIAL and UNITED WE STAND, DIVIDED WE FALL. There is power in numbers, NOW is the time to "come together right now".

Recessions Act Two

Recession's second act would be worse than the first

By John W. Schoen, Senior Producer

Fresh evidence of a global economic slowdown has raised fears that governments around the world may be powerless to reverse it. If the world does fall into back into recession, it could be much harder to escape than the contraction that ended in 2009.

With banks still recovering from a decade-long credit bubble, governments slashing spending to cope with unsustainable debt, and unemployment at levels not seen in decades, a new recession would be “disastrous,” according to Roger Altman, a senior Treasury official in the Clinton administration.

“We could be in for a repeat of the experience of 1937, when America fell back into recession after three years of recovery from the Great Depression,” he wrote in the Financial Times.

Altman was referring to the fact the global downturn of the 1930s technically included two U.S. recessions, from 1929 to 1933 and again from 1937 to 1938. U.S. unemployment peaked at over 20 percent in the 1930s, according to historical estimates, and did not decline significantly until factories began gearing up for World War II.

Two years after the latest U.S. recession technically ended, evidence continues to build that the weak recovery is stalling out. The U.S. economy stopped producing new jobs in August after a string of mostly meager monthly job gains that failed to bring the unemployment rate below 9 percent.

On Thursday, fresh data showed the Eurozone's service sector contracting for the first time in two years; a separate index of the manufacturing sector, which has provided much of the region’s growth, slowed for the second month in a row.

A global stock sell-off that dragged market indices to their lowest level of the year spread to the U.S., where the Dow Jones industrial average was down nearly 400 points.

Until recently, there were hopes that emerging economies in places like China and Brazil could prop up global growth until a stronger recovery took hold elsewhere. But China’s two biggest export markets -- Europe and the United States -- are struggling, and that has cut into demand for Chinese goods. A report out Thursday showed that China’s factories slowed for the third month in a row.

"There is a global slowdown,” Jeavon Lolay, head of global research at Lloyds Banking Group, told Reuters. “There is no doubt the risks of a global recession have grown."

That’s also the opinion of Federal Reserve policymakers, who said Wednesday they saw "significant downside risks" to the U.S. economy after deciding to launch an unusual program of reshuffling $400 billion in Treasury holdings to try to push interest rates lower.

But with interest rates already at record lows, few expect the program to do much to increase the demand for loans. Businesses face weak demand for their products and services and consumers are continuing to work to pay down their debts. Though mortgage rates remain at record lows, millions of homeowners are unable to refinance their higher rate loans because they owe more than their home is worth.

Some analysts argue that the Fed’s latest move (dubbed Operation Twist because it “twists” the relationship between short- and long-term rates), will hurt economic growth because it will squeeze bank profits and lower the income consumers earn on their savings. Public and private pension funds, already under strain, will be even more badly underfunded because they’ll have to set aside more money to generate the same amount of cash to pay retiree benefits.

“In a couple of weeks (Operation Twist) will be a subject for economic history, and the main discussion will be that the Fed is grasping at straws,” former Fed governor William Poole told CNBC. “I think that they have thrown lead into the life preserver, and they are sinking.”

‘Slow motion train crash’

European central bankers appear increasingly unable to contain a widening banking crisis, sparked by the threat of bond defaults in Greece and Italy, Europe’s third-largest economy.

The International Monetary Fund warned Tuesday that Europe and the United States could slip back into recession next year without bold action

"We are seeing a slow-motion train crash in the euro area, where credit contraction risks leading to a new recession by Christmas unless governments face up to the task swiftly and forcefully," Martin Enlund, market strategist at the Swedish bank Handelsbanken told Reuters.

Policymakers in China, the world’s third largest economy behind the U.S. and EU, face their own set of tough choices. Rapid growth rate has fueled inflation that is running at a double-digit rate, according to analysts -- much higher than official targets. To contain inflation, Beijing has raised interest rates five times and lifted banks' reserve requirements nine times since October. If it clamps down too hard, though, a deeper economic slowdown could reverse China's efforts to lift hundreds of millions of people out of poverty.

China is also coping with a banking hangover of its own, after years of massive government lending for expansion of state-owned enterprises an infrastructure upgrades.

"There is a two-tier system within China and I think the lending that's taking place and the percentage of nonperforming loans is now at a level that is disturbing," David McAlvany, chief executive at McAlvany Financial Group told CNBC. "Ultimately, (China's banks) will have to see some comeuppance."

Recessions Act Two

The Double Dip

The Nattering One muses... long ago in these pages we predicted the double dip.

We keep hearing all these stories about recovery from the pollyannas we know. We quip, what recovery?

The markets are jury rigged and contrived, witnessed by the stock market level and real estate prices being completely false.

As stated before, the equation is simple...

Bail out all you like... until real durable economic jobs are created domestically, there shall be no recovery.

We differ with Mr. Altman in only one aspect, inflation is anything but negligible and tame.

Much like the guvmints unemployment number at 9%, the inflation number at 3% is missing something... the truthful number one in front of it.

19% and 13% would be accurate numbers for unemployment and inflation respectively.

In Greece it's reported that something like 50% of ALL jobs are Government or Government related. Outside of tourism and olive oil they produce NOTHING.

Greece have been in technical default fo something like 100 of the last 150 years. They have no industry that exists anymore that they can even tax to make it look as if they are even trying.

We have institutionalized and fed a dysfunctional and corrupt, gluttonous, slothful, over-paid and under-performing Government for decades. WE ARE GREECE.

We have stated many times that globalization and outsourcing to labor at the margin are nothing more than euphemisms for global corporate rape and pillage.

This is what happens when the special interest lobbyists run everything, and our government is no longer for the people and by the people, but for the corporations and by the rich upper 2%....

you outsource everything and turn to globalization, you wind up with a soft non durable service based economy...

dependent on the largess of others to patronize you with loans and tourism.

We can't come to a budget deal because the layers of corruption overlap on so many levels, and we have no national will to self-correct.

Everything is broken, and the leadership we've elected whether they be Republican, Democrat, Tea Party, Libertarian or Independent...

are just spine-less jellyfish and pawns of groups that don't want to compromise on anything that they have control over.

It's a total catastrophe, a failure of epic proportion. We have failed at every level, Main Street, Wall Street, The Financial System, everybody and every institution is corrupt and lazy.

As Jonathan E.(James Caan) said in the original Rollerball: "It's like people had a choice a long time ago between having all them nice things or freedom. Of course, they chose comfort."

Bartholomew (John Houseman): "The game was created to demonstrate the futility of individual effort."

"Corporate society takes care of everything. And all it asks of anyone, all it's ever asked of anyone ever, is not to interfere with management decisions."

There are no heroes. We're just spineless sputem of our forefathers and we've squandered the whole deal.

Ladies and gentlemen, will you stand please for the playing of our Corporate Hymn.

America and Europe are on the verge of disastrous recession

Roger Altman

September 21, 2011

Interest rates on US, German and UK government bonds have fallen to all-time lows. Yields on 10-year US Treasury securities, for example, are below two per cent.

That is the lowest recorded since the Federal Reserve began publishing market data in 1953.

In addition, yields on the inflation-protected 10-year Treasuries are zero. These are nearly incomprehensible levels whose implications are profoundly negative. Namely that Tuesday’s International Monetary Fund report is quite correct to warn that America and Europe are on the verge of renewed recession.

It is only the anticipation of negligible demand for capital and negligible inflation ‑ both hallmarks of recession ‑ that could drive rates this low. For the American and western European economies to decline again, when unemployment levels are already so high, would be disastrous.

It would shock consumers, businesses and financial markets. Fearful, they would retrench further, causing the economic decline to accelerate. Weak labour markets would get even worse, as would the already swollen government deficits and debt.

Overall, we could be in for a repeat of the experience of 1937, when America fell back into recession after three years of recovery from the Great Depression.

How do we know that another recession is approaching? For starters, there is no other credible explanation for the relentless fall in interest rates.

Yes, monetary policy is on maximum ease and that controls short-term rates. Safe haven psychology also is at work. However, these cannot explain such low yields on longer-term government and corporate bonds.

Further, bond markets usually signal recession through an inverted yield curve, when long-term rates are lower than short-term ones. Technically, this is impossible now, as short-term rates are zero. But, the recent movement in long-term rates is the equivalent.

Moreover, recent US and European economic data conveys serious weakness. US household net worth has begun to fall again, and jobless claims have been rising for several weeks.

Retail sales are flat and consumer confidence is hovering around modern lows. Onshore corporate liquidity has reached a record $13,000bn, which signals that businesses are uncertain over the outlook.

Across the Atlantic, the trend is also poor. Neither Germany nor France grew in the second quarter. Household consumption in the eurozone actually fell during that period.

Moreover, the European Commission is forecasting only 0.2 per cent and 0.1 per cent growth across the region for the third and fourth quarter respectively. The worsening of the sovereign debt crisis surely means that actual results will be worse.

It is the debilitating sovereign debt crisis in Europe that is pushing both regions back towards the brink. It is causing credit conditions to tighten again for sovereign credits, weaker borrowers and small and mid-sized business. It also is suppressing consumer and business confidence and the export outlook.

The never-ending nature of this crisis was avoidable. At every opportunity Europe’s leaders have delayed, taken the tiniest steps possible and generally averted their eyes to the elephants in the room.

Yes, everyone knows that the country-by-country politics are difficult, starting with Germany. But the risk of another Lehman-like market collapse and subsequent economic contraction is huge.

Faced with this, European leaders must confront the politics. Instead, their grudging incrementalism is deepening the risks. Implicitly, this was the message behind Treasury Secretary Geithner’s presence in Poland last week.

A single currency representing 17 separate nations inevitably requires a unified balance sheet behind it and, following that, a form of fiscal union. The time for denying the latter is over.

The European financial stability facility must be enlarged exponentially so that it can stand behind nations such as Italy or Spain. In addition, the mandate of the European Central Bank must be expanded.

Just like the Federal Reserve, it should be responsible for maintaining a sound banking system and stable capital markets. This requires a permanent capacity to finance banks directly, just as a group of central banks did last week.

It also requires the flexibility to buy and sell sovereign debt securities in secondary markets. These reforms must be accompanied by tighter, eurozone-wide bank regulation and supervision.

It also requires IMF-like conditionality to accompany direct EFSF loans to member nations. Finally, the ECB should ease monetary policy now as there is no visible inflation risk.

America also must stop its own partisan bickering and undertake one last round of fiscal stimulus. The $447bn job-creation plan by President Obama, or another quick-acting plan of similar magnitude, should be enacted immediately. The Fed should also initiate further moves to promote credit availability and lending.

Another recession would be profoundly damaging to labour markets and public confidence. It would take years to fully overcome.

We must try to avoid such an outcome at all costs. That requires the type of far-sighted leadership that we haven’t seen much of lately.

The writer is founder and chairman of Evercore Partners and former US deputy treasury secretary under President Bill Clinton.

Roger Altmans Financial Times Op-Ed (Registration Required)