What is wrong with the US economy? Part 2

[mheslep]

Income growth a matter of perspective
http://marketplace.publicradio.org/display/web/2008/11/25/wolfers/...

'Distortion' would more aptly replace 'perspective' in that NPR piece.

I'd like to see 'household' income completely banned from the economic lexicon, henceforth replaced with per capita income, as 'household's very across, well, almost everything.

https://www.amazon.com/gp/sitbv3/reader?asin=0465003494&pageID=S03U&checkSum=nefgtWl2vEehNJUfOXYp0a9lSVRiIZT5iujeReo8Zy8="&tag=pfamazon01-20, Thomas Sowell:

It is an undisputed fact that the average real income ... of American households rose by only 6 percent over the entire period from 1969 to 1996. ... But it is equally undisputed that the average real income per person in the United States rose by 51 percent over that very same period. How can both of these statistics be true? ...
...
Differences in household size are very substantial from one income level to another. U.S. Census data show 39 million people living in households whose incomes are in the bottom 20 percent of household incomes and 64 million people living in households in the top 20 percent. Under these circumstances, measuring income inequality or income rises and falls by households can lead to completely different results from measuring the same things with data on individuals. Comparing households of highly varying sizes can mean comparing apples and oranges. Not only do households differ greatly in the numbers of people per household at different income levels, the number of working people differ even more widely.

In the year 2000, the top 20 percent of households by income contained 19 million heads of households who worked, compared to fewer than 8 million heads of households who worked in the bottom 20 percent of the households. These differences are even more extreme when comparing people who work full-time and year-round. There are nearly six times as many such people in the top 20 percent of households as in the bottom 20 percent. Even the top five percent of households by income had more heads of household who worked full-time for 50 or more weeks a year than did the bottom 20 percent...

There was a time when it was meaningful to speak of the "the idle rich" and the "toiling poor" but that time has long past. Most households in the bottom 20 percent by income do not have any full-time, year-round worker and 56 percent of these households do not have anyone working even part time. Some of these low-income households contain single mothers on welfare and their children. Some such households consists of retirees living on Social Security or others who are not working, or who are working sporadically part time because of disabilities or for other reasons.
...
Most statistics on income inequality are very misleading in yet another way. These statistics almost invariably leave out money received as transfers from the government in various programs for low-income people which provide benefits of substantial value for which the recipients pay nothing. Since people in the bottom 20 percent of income recipients receive more than two-thirds of their income from transfer payments, leaving those cash payments out of the statistics greatly exaggerates their poverty -- and leaving out in-kind transfers as well, such as subsidized housing, distorts their situation even more. In 2001, for example, cash and in-kind transfers together accounted for 77.8 percent of the economic resources of people in the bottom 20 percent.

 

[russ_watters]

So the fundamentals of the economy are still strong?

Gee, could that post be any more useless?

 

[russ_watters]

'Distortion' would more aptly replace 'perspective' in that NPR piece.

I'd like to see 'household' income completely banned from the economic lexicon, henceforth replaced with per capita income, as 'household's very across, well, almost everything.

https://www.amazon.com/gp/sitbv3/reader?asin=0465003494&pageID=S03U&checkSum=nefgtWl2vEehNJUfOXYp0a9lSVRiIZT5iujeReo8Zy8="&tag=pfamazon01-20, Thomas Sowell:

D'oh - I keep forgetting about the shrinking household size thing and the distribution of single and double income households. Very good points.

[edit] I'm curious as to why the census bureau doesn't break up individual incomes into fifths like they do for household incomes. It makes it harder to interpret the data when everyone gets so lumped together. That's why I use the household tables instead of the individual tables.

 

[OmCheeto]

Note that a couple of months ago when gold was just over a $1000, people should invest in gold and Schiff said on CNN it was going to several thousand as the US economy tanked. It is now at $816.

Perhaps he has a lot of gold. Maybe if the price goes way up he'll be rich.
I believe I was trying to imply that I trust his analysis. I never said anything about him not being human.

I suppose the lust for gold is such an old tradition, one shouldn't worry too much about it's value going down. Until of course, people figure out it's really just a pretty, shiny metal, with little real value. (Outside of electronics, space helmet visors, dental crowns, and O₂ sensors.)

Also Schiff has been predicting this crash since 2002 when the Dow was at ~8000, and kept doing so while the Dow climbed to ~14000.
5:00 -
http://www.youtube.com/watch?v=drJ6QxSO5gw&feature=related

Makes one wonder how the crash would have been different had it happened in 2002-3.

 

[Jimmy Snyder]

Makes one wonder how the crash would have been different had it happened in 2002-3.

The Dow would have crashed from ~8000 to ~8500. Some crash.

 

[Office_Shredder]

If the crash was in 2002... didn't we have a crash in 2002? What happened to the dot com bust?

 

[turbo]

Manufacturing index hits 26-year low.

http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/economy_manufacturing;_ylt=Avuf97.LKfDr2kHRhCCPdSKs0NUE

 

[Astronuc]

Manufacturing index hits 26-year low.

http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/economy_manufacturing;_ylt=Avuf97.LKfDr2kHRhCCPdSKs0NUE

This is one of the main reasons that the Dow and NASDAQ dropped more than 4% in the first hour of trading.

Oct. construction spending down 1.2%, which was more than expected, and this is another reason.


But wait - it gets even better!

Credit card industry may cut $2 trillion of lines: analyst
http://news.yahoo.com/s/nm/20081201/bs_nm/us_finance_research_oppenheimer

(Reuters) – The U.S. credit card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form or credit-card lines to decline by 45 percent."

Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co represent over half of the estimated U.S. card outstandings as of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

A consolidated U.S. lending market that is pulling back on credit is also posing a risk to the overall consumer liquidity, Whitney said.

Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said.

That will have a significant impact of the purchasing power of many Americans, but this is necessary in order to significantly reduce the number of consumers who are over-leveraged. However, that will surely have a cascading effect in the retail sector and will add to reduced tax revenues for states and local governments.

 

[turbo]

According to Construction Data New England, housing starts in southern Maine (the most populous area of the state) are down from an average of 2100-2200 (years 2000 through 2005) to 1599 (2006), to 1293 (2007), to 841 (2008). Our housing industry has pretty much collapsed. It's a bad time to be a carpenter, operate a lumber-yard, operate a sawmill, or to be employed in the timber industry in general (harvesting, scaling, trucking, etc). People like my uncle (commercial and residential heating and refrigeration business owner) still get trouble calls, repairs, etc, but the collapse of the housing industry is pinching them badly, since there are few new installations to be made. A good friend of mine runs a small truck dealership. He buys used tractor-trailer rigs, rebuilds them (often transforming them from one use to another) and sells them. It's a buyer's market, with so many owner-operators failing right now, but he can't sell a truck to save his soul. His wife used to run his office - she is now working full-time at the local hospital.

 

[OmCheeto]

If the crash was in 2002... didn't we have a crash in 2002? What happened to the dot com bust?

Ok. You caught me. But like politics, I haven't followed the market in 30 years.
The DJIA dropped from about 11,000 to 8,500(-23%) between '01 and '03, but went back to 10,500 in '04.
Not quite the level of the current crash: 14,000 to 8,500(-40%)
Does anyone think we'll get back to at least 13,000 by this time next year?

Credit card industry may cut $2 trillion of lines: analyst
http://news.yahoo.com/s/nm/20081201/bs_nm/us_finance_research_oppenheimer
That will have a significant impact of the purchasing power of many Americans, ...

How am I going to buy my cigarettes and beer?

 

[Astronuc]

Panel says US has been in recession since Dec. '07
http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/recession

WASHINGTON – The U.S. economy has been in a recession since December 2007, the National Bureau of Economic Research said Monday.

The NBER — a private, nonprofit research organization — said its group of academic economists who determine business cycles met and decided that the U.S. recession began last December.

The White House commented on the news that a second downturn has officially begun on President George W. Bush's watch without ever actually using the word "recession," a term the president and his aides have repeatedly avoided. Instead, spokesman Tony Fratto remarked upon the fact that NBER "determines the start and end dates of business cycles."

It seemed obvious at the time.

 

[edward]

I like this simple visual of the collateralized debt obligations. I have a feeling the investment banks doing business with the second tier of derivative managers are getting the bail out money.

http://infosthetics.com/archives/2008/10/visual_explanation_of_collateralized_debt_obligations.html

 

[Astronuc]

If the crash was in 2002... didn't we have a crash in 2002? What happened to the dot com bust?

It wasn't considered a crash in the sense that there was an abrupt sell off, but the tech sector and NASDAQ subsequently lost a lot of value.

Consider this history.

Jan 03, 2000 3882.62
Mar 06, 2000 5058.62
Jan 01, 2001 2407.65 Down more than 50% from its high 9 months earlier
Mar 26, 2001 1840.26 Down about 64% from its high.
Sep 17, 2001 1423.19 Down about 72% from its high.
Sep 30, 2002 1139.90 Down about 78% from its high.
Dec 31, 2002 1335.51

There were intermittent recoveries during the gradual decline between Mar 06, 2000 and Sep 30, 2002. All markets took big hits surrounding the attacks on Sep 11, 2001. A slow and sustained recovery began Oct 1, 2002 and continued into 2003. Slow recovery from Jan, 2003 throught Oct 29, 2007 (NASDAQ composite 2810.38, which just about doubled in value), but now:

Oct 01, 2008 2069.40
Dec 01, 2008 ~1440.00 Down about 48% since it's relative high October 2007.

This is a good chart to play with.
http://finance.yahoo.com/echarts?s=%5EIXIC

or Summary Page
http://finance.yahoo.com/q?s=^IXIC

and the Dow
http://finance.yahoo.com/q?s=^DJI

----------------
For now, the crash is not abrupt, and the economy is not totaled. On the other hand, it's not just a fenderbender either. It's more like a chain reaction collision, and there are some severe injuries in addition to minor injuries. For some it's a temporary setback, but for others it's more severe, and some will not recover their losses, particularly those close to retirement or those beyond 50 who had much of their investments in the equities markets.

One big problem facing the recovery is the potential rise in oil and gas as the economy rebounds, and if the price of oil moves toward $75/bbl, that will have an adverse impact on the recovery.

 

[Astronuc]

Another Bearish (or bloody) day in the equity markets.

The Dow 30 pretty much lost all the gains from last week! Just before the bell, the Dow 30 were down 7.5% below 8200. Perhaps it will rebound somewhat during the week, but it seems the markets are just going to be volatile until the economy stabilizes.

Elsewhere I heard speculation that the US economy will shed another 1 million jobs between Nov and end of 1Q 2009. The 4th quarter GDP is expected to fall at a -4% annual rate. I guess we will see in January.

 

[Proton Soup]

the thing about the DOW, look at it on the max timeline. the growth appears exponential since about 1980. Yahoo even charts it on a logarithmic axis. are we at the point now where if the market were to only grow linearly, that would be considered a failure? how are we supposed to sustain that, short of just printing huge piles of dollars?

 

[quadraphonics]

Panel says US has been in recession since Dec. '07
http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/recession
It seemed obvious at the time.

Maybe someone should go back through this thread and count how many times jimmysnyder expressed confidence that the US economy was not in recession since last December??

 

[mheslep]

the thing about the DOW, look at it on the max timeline. the growth appears exponential since about 1980. Yahoo even charts it on a logarithmic axis. are we at the point now where if the market were to only grow linearly, that would be considered a failure? how are we supposed to sustain that, short of just printing huge piles of dollars?

I don't immediately know why a small exponential growth can not continue far into the future. Economic growth does not necessarily require increased physical resource use. Continually increasing productivity of services could do it in theory. For instance, what is the upper limit on lines of code, or whatever measure that innovation morphs that metric into?

 

[mheslep]

Maybe someone should go back through this thread and count how many times jimmysnyder expressed confidence that the US economy was not in recession since last December??

Zero.

 

[Proton Soup]

I don't immediately know why a small exponential growth can not continue far into the future. Economic growth does not necessarily require increased physical resource use. Continually increasing productivity of services could do it in theory. For instance, what is the upper limit on lines of code, or whatever measure that innovation morphs that metric into?

well, have we really increased productivity that much, or have we just changed metrics? if we've changed metrics, then much of the panic is out of proportion.

 

[mgb_phys]

It's hard to measure productivity in terms of simple GDP. Especially in technology.
As things get cheaper to make - making them has less value and so productivity goes down (unless you can sell them for the same amount!) The only solution is to convince people to buy bigger and better versions of the same thing - if this spiral stops it's a recession.
But if that means you can only afford to buy the same size car, LCD TV or CPU as last year then should you worry?

 

[Office_Shredder]

Ok. You caught me. But like politics, I haven't followed the market in 30 years.
The DJIA dropped from about 11,000 to 8,500(-23%) between '01 and '03, but went back to 10,500 in '04.
Not quite the level of the current crash: 14,000 to 8,500(-40%)
Does anyone think we'll get back to at least 13,000 by this time next year?

Who knows? On the other hand, the NASDAQ tanked 80% during the dot com bust and is still only at half the level it was at the (admittedly artificial) high around 2000 (but who's to say the previous stock market value wasn't artificial too?)

 

[Proton Soup]

well, have we really increased productivity that much, or have we just changed metrics? if we've changed metrics, then much of the panic is out of proportion.

and the other thing that occurred to me, later... is ca. 1980 when many companies stopped paying dividends?

 

[Gokul43201]

Maybe someone should go back through this thread and count how many times jimmysnyder expressed confidence that the US economy was not in recession since last December??

Zero.

These don't count?

Some posts, in reverse chronological order:

What a difference a word makes. Mr. Volker knows that the nber decides when recessions begin and end, not former Fed chiefs. The nber has not. Don't give up hope though.

Technically, we're in a recession when the nber says we're in a recession. The nber has not said that we're in a recession. So technically, we're not now in a recession. Don't give up hope though.

Hopes for a recession were dealt a very hard blow today.
...
I don't know how these things work, but I doubt the NBER is going to declare a recession with a negative 1.9% decrease. Don't give up hope though, the previously reported 0.6% increase in the last quarter of 2007 has been revised to a positive 0.2% decrease.

Hopes that the US economy was in recession were dealt a setback today when the Commerce department issued a revision to the 1st quarter GDP numbers. Optimists were looking forward to the revised numbers to wipe the excreme?t-devouring grin off my ugly face. Too bad. Don't give up hope though.

Another beautiful theory destroyed by an ugly fact.

Frankel cautions against giving up hope.

Frankel is a member of the NBER Business Cycle Dating Committee. These are the people that meet after every recession to let you know that there had been one. One of the things they look for is two consecutive quarters of negative GDP growth. However, that is not the only criterion they look at, so keep your fingers crossed. On the down side, I doubt that they will declare one when we haven't even had one quarter of negative GDP growth. When they finally give into popular opinion they will have lost all purpose in life.

There is no recession.

Here's a new definition of recession: When a president and chief investment officer at an advisory says that "employment is clearly staying more solid than a recession would indicate", then it's not a recession.

OK, so far I'm argumentative, insubstantiative, insecure, wrong, and shouldn't bother replying at all. But at least I'm not daft. Only my arguments are. And even that is under review. But we are not in a recession. Don't give up hope though.

I decline to agree that I am daft. Thanks for the suggestion anyway. When the NBER says we were in a recession, you can gloat all you want. To me you all sound like Hillary.

Here is yet another definition of recession:
When the current president of the NBER says unequivocably back in March that we are in a recession, even though in May he said unequivocably we are not in a recession.
...
Actually, the definition of a recession is when the NBER says we are in a recession. They haven't. We aren't. Don't give up hope though.

More like 232 years according to the mood of this thread. But only in eastern Kentucky. The rest of the country doesn't have the recession it needs. Don't give up hope though.

As long as we are willing to rely on opinions and not facts we are in a recession of a non-economic sort.

Hopes that the US was in a recession were dealt a setback today.

GDP was up in the first quarter 2008

A recession is defined as two consecutive quarters of negative growth in GDP. We haven't had a negative quarter since December 2001. Egad pessimists, what does the economy have to do before you'll admit we aren't in a recession? If you're not optimistic, you haven't been paying attention.

 

[mheslep]

These don't count?

Some posts, in reverse chronological order:

Nope. The point, as JS made repeatedly, was that a recession is declared by the NBER and not another. Other people are free to point to economic down/up turns, observe the various economic indicators and comment thereon as they see fit. They do not get to declare a recession, period.

 

[Astronuc]

The Dow 30 components have been changed as some fall out (stock price collapses, e.g. AIG) and others take their place. The Dow is supposed to represent the broader market.

Some companies cut back on or eliminated dividends in the 80's and 90's, particularly those in the NASDAQ, but they did not necessarily reinvest in the companies as much as they filled the pockets of management. One can check the dividends for any company through their filings with the SEC or go on-line.

Now these companies do have the option of declaring one-time or special dividends, or do a cash distribution to shareholders, and some have done so. One has to be holding the shares at the time of the declaration to benefit.

 

[Gokul43201]

Nope. The point, as JS made repeatedly, was that a recession is declared by the NBER and not another. Other people are free to point to economic down/up turns, observe the various economic indicators and comment thereon as they see fit. They do not get to declare a recession, period.

The point that others made to JS was that the NBER only calls a recession several months after the fact. So, to speculate whether or not we are currently in a recession, you can not use the NBER's silence at that moment to pronounce, as jimmy did on May 22, that "there is no recession."

Furthermore, JS said a lot more that you claim he did. He expressed his own personal opinion of the economic situation.

From Jul 31: "...I doubt the NBER is going to declare a recession...".

And on May 29:"... I doubt that they will declare one when we haven't even had one quarter of negative GDP growth. When they finally give into popular opinion they will have lost all purpose in life."

I'm not sure what jimmy meant by that last sentence. Has the NBER now lost all purpose in life?

 

[quadraphonics]

Nope. The point, as JS made repeatedly, was that a recession is declared by the NBER and not another.

Actually, that was a point I made repeatedly, which was only accepted by JS after much argumentation.

Other people are free to point to economic down/up turns, observe the various economic indicators and comment thereon as they see fit.

Indeed, and that's why I asked for instances in which JS expressed confidence that we are not in recession (i.e., that NBER would not declare a recession to have been occurring at the date when the comment was made). Although, as Gokul's research shows, JS did indeed categorically declare that the US was not in recession, even after the issues relating to the NBER were brought up.

I'm just taking him up on his offer to let us gloat all we wanted once the NBER had ruled that a recession was in effect :] He went pretty far out on a limb on this issue, and said limb has now decisively broken off beneath him.

 

[Astronuc]

Americans' Food Stamp Use Nears All-Time High
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/25/AR2008112502553.html
By Jane Black
Washington Post Staff Writer
Wednesday, November 26, 2008; Page A01

Fueled by rising unemployment and food prices, the number of Americans on food stamps is poised to exceed 30 million for the first time this month, surpassing the historic high set in 2005 after Hurricane Katrina.

The figures will put the spotlight on hunger when Congress begins deliberations on a new economic stimulus package, said legislators and anti-hunger advocates, predicting that any stimulus bill will include a boost in food stamp benefits. Advocates are also optimistic that President-elect Barack Obama, who made campaign promises to end childhood hunger and whose mother once briefly received food stamps, will make the issue a priority next year.

"We soon will have the most food stamps recipients in the history of our country," said Jim Weill, president of the Food Research and Action Center, a D.C.-based anti-hunger policy organization. "If the economic forecasts come true, we're likely to see the most hunger that we've seen since the 1981 recession and maybe since the 1960s, when these programs were established."

The Agriculture Department is set to release the new numbers as early as this week. Agency officials declined to confirm the figures but outlined them in a briefing last month for advocates and administrators of state food stamp programs. Breaking the symbolically important 30 million mark comes on the heels of government data showing that 11.9 million people went hungry in the United States at some point last year. That included nearly 700,000 children, up more than 50 percent from the year before.

Food pantries and other charitable organizations are also reporting an increase in demand from those in need. Visits to local pantries are up by 20 to 100 percent over the past six months, and calls to the Capital Area Food Bank's hunger hotline have jumped 248 percent. Most are from people who have never used food stamps or a pantry before, said Lynn Brantley, the organization's president and chief executive.

. . . . Although prices have fallen from the levels of this past spring, they remain high. In October, the consumer price index for food and beverages had jumped 6.1 percent over last year. Staples such as eggs and bread rose even faster.

For low-income families, who spend a higher percentage of their monthly budget on food, that rise has been particularly painful. Food stamp benefits are adjusted for inflation only once a year, and as of September, the maximum benefit fell $64 a month short of the cost of the thriftiest, USDA-established diet for a family of four. The annual adjustment in October of 8.5 percent largely brought the benefit in line with food costs again, but the Center on Budget and Policy Priorities, a nonpartisan policy group, estimates that if current inflation persists, by December benefits will again fail to match the cost of the thrifty food plan.

. . . .
The benefits, which average $109.93 a month ($3.66/day) per person, are based on a plan set by the government to represent a low-cost but nutritionally adequate diet. Participants apply locally to receive an electronic card that is used like an ATM card to buy food at most grocery stores and some farmers markets. The maximum benefit for a household of four is $588 a month ($147/mo per person, or ~$4.90/day per person).
. . . .

More families turning to food banks
http://marketplace.publicradio.org/display/web/2008/11/28/mm_food_banks/


When the Downturn Sailed Into Savannah
http://www.nytimes.com/2008/11/30/business/economy/30econ.html

“You are seeing a fairly widespread recession, with all major components of demand now in decline,” said Brian Sack, an economist in Washington for Macroeconomic Advisers L.L.C., a consulting and forecasting firm. It expects the gross domestic product to decline in the fourth quarter at an annual rate of 4 percent, down sharply from the contraction of 0.5 percent in the third quarter.
. . . .
No one has a greater stake in keeping the recession mild than Doug J. Marchand, executive director of the Georgia Ports Authority, which operates the port here, a mile upriver from the Atlantic Ocean. It is now the fifth-largest port on the East Coast, as measured by cargo tons; most cargo is shipped in huge steel containers.
. . . .
But the tonnage in those containers, rising at an annual rate of 10 percent or more annually through most of the last 20 years, has lately “flattened,” as Mr. Marchand put it, to almost no rise at all — the first time that has happened in his 13 years as port director.

That unanticipated slowdown caught Savannah off guard. The city has four million square feet of newly built, never-occupied warehouse space, intended primarily as temporary quarters for the growing flow of imports. Big as hangars, these buildings sit shuttered and alone in industrial parks sprouting weeds.
. . . .
And so it goes across the Savannah economy: falling retail sales, fewer hotel bookings, a canceled convention, layoffs at Memorial Hospital, an announcement late this month that Great Dane Trailers, a major manufacturer, would soon close its factory here, and weakened tourism in a city that over the last 15 years has built an industry out of visits to its historic downtown.
. . . .
The Savannah Economic Development Authority, having signed up $360 million in new investment last year, has commitments this year for only $33 million.

Stocks eye dour jobs, shopping data
http://news.yahoo.com/s/nm/20081130/bs_nm/us_column_stocks_outlook

The Standard & Poor's 500 Index had its best week since at least 1980 -- jumping 12 percent. That's a turnaround from the previous week, when the S&P had its lowest close since 1997. For the four-day week, the Dow Jones industrial average rose 9.7 percent and the Nasdaq Composite Index (.IXIC) surged 10.9 percent. The U.S. stock market was closed on Thursday for Thanksgiving.

Still, steep losses among financial and automaker stocks made this [Nov] among the worst months for Wall Street since the October 1987 stock market crash. For November, the Dow fell 5.3 percent, the S&P 500 dropped 7.5 percent and the Nasdaq lost 10.8 percent.

Year to date, the Dow is down 33.4 percent, while the S&P 500 is off 39 percent and the Nasdaq is down 42.1 percent.
. . . .
U.S. payrolls probably shed 316,000 jobs in November, following October's drop of 240,000 jobs, according to economists polled by Reuters. The unemployment rate is seen rising to 6.8 percent in November from October's 6.5 percent.
. . . .

After 99 years, Woolworths goes bust [but not to worry - it's in the UK]
http://marketplace.publicradio.org/display/web/2008/11/27/woolworths/

Scott Jagow: More dire economic news from overseas. In Britain, more than 30,000 jobs are in jeopardy after a major retailing firm collapsed. That would be Woolworths -- the low-cost chain has gone bust after 99 years. From London, Stephen Beard reports.

--------------------------------------------------------------------------------

Stephen Beard: Woolworths, an off-shoot of the American five and dime stores, has over 800 shops in Britain. They all face closure. The company went bankrupt last night after its bankers pulled the plug.

The timing is unprecedented, with almost a month to go before Christmas. British consumers are famous for their prodigious levels of shopping throughout the festive season.

To pull the plug now shows how desperate for cash the banks have become, says analyst Robert Clark.

Robert Clark: The irony of it is with Woolworth that it actually makes money at Christmas -- it's the only time that it does make money. So it would probably have been profitable trading fully through Christmas.

Britain's Times newspaper had said Woolworths was in discussions with Hilco UK Limited, a firm that buys underperforming retail businesses and turns them around for profit. The sale price would be a nominal 1 pound ($1.50), according to the report. Hilco declined to comment.

In August, Woolworths rejected a 50 million pound offer for its retail division from Iceland Foods Ltd.


In the US, Harold's will be closing the doors of its 43 stores in 18 states and holding a giant liquidation sale.


Pilgrim's Pride files for bankruptcy protection (AP)
By EMILY FREDRIX, AP Food Industry Writer, MILWAUKEE
http://marketplace.publicradio.org/apheadline_detail.php?story_id=D94Q662O3&group=ap.online.headlines.business
Monday, December 1, 2008 05:35:14 PM PT

Pilgrim's Pride Corp. filed for Chapter 11 bankruptcy protection on Monday, hurt like other meat producers by volatile feed prices and slumping demand but also hobbled by an unmanageable debt load.

The Pittsburg, Texas-based company, the nation's largest chicken producer, sought protection in a filing with the U.S. Bankruptcy Court for the Northern District of Texas, saying that as of Sept. 27 it had $3.75 billion in assets and $2.72 billion in debts.

Pilgrim's Pride, which controls about 23 percent of the U.S. chicken market, will continue operating during the reorganization and will not liquidate its assets, spokesman Ray Atkinson said.
. . . .

And to top it off -

Saudi Arabia wants oil price at $75 a barrel
http://www.cnn.com/2008/BUSINESS/11/29/oil.saudi.arabia.opec.ap/index.html

CAIRO, Egypt (AP) -- Saudi Arabia said Saturday that it hoped to raise oil prices to $75 a barrel, but indicated that no measures would probably be taken until an OPEC meeting next month in Algeria.

Good thing that they are our friends.

 

[mheslep]

well, have we really increased productivity that much ...

Example: labor hours require to produce 100 bushels of wheat, US:
1830: 250-300 labor-hours (5 acres)
1890: 40-50 labor-hours (5 acres)
1930: 15-20 labor-hours (5 acres)
1955: 6 1/2 labor-hours (4 acres)
1965: 5 labor-hours (3 acres)
1975: 3-3/4 labor-hours (3 acres)
1987: 3 labor-hours (3 acres)
and last year, 2007, 100 bushels of wheat were grown organically on one acre.

So while the US population increased 25x, the labor productivity increased 300x plus.
http://www.agclassroom.org/gan/timeline/farm_tech.htm
http://www.montana.edu/cpa/news/nwview.php?article=5704

 

[Jimmy Snyder]

Today the NBER announced that we have been in recession since December of last year. I felt that even though things were bad, they weren't that bad. To those whose hopes were fulfilled, and who now gloat over my abject defeat, I offer no regrets, only my congratulations on your prescience. Go easy on me. After all, I had always encouraged you to keep on hoping.

 

[Jimmy Snyder]

Actually, that (a recession is declared by the NBER and not another) was a point I made repeatedly, which was only accepted by JS after much argumentation.

I don't recall that exchange. In post #490, page 31 of this thread:
https://www.physicsforums.com/showthread.php?t=130611"
I had indicated that I knew the definition. Did you convince me of it before or after post #490?

 

[turbo]

Today the NBER announced that we have been in recession since December of last year. I felt that even though things were bad, they weren't that bad. To those whose hopes were fulfilled, and who now gloat over my abject defeat, I offer no regrets, only my congratulations on your prescience. Go easy on me. After all, I had always encouraged you to keep on hoping.

Hi, Jimmy! Astronuc and I and others have been pointing out for a LONG time that our economy was in trouble and was in fact in recession. You gleefully denied that we were in recession (for what reason I do not know) and claimed that we "hoped" that the US was in recession in advance of the NBER pronouncement (ALWAYS made well after the fact!)

Welcome to the real world.

best regards...
Skip

 

[lisab]

Today the NBER announced that we have been in recession since December of last year. I felt that even though things were bad, they weren't that bad. To those whose hopes were fulfilled, and who now gloat over my abject defeat, I offer no regrets, only my congratulations on your prescience. Go easy on me. After all, I had always encouraged you to keep on hoping.

jimmy, although I never knew quite what your intent was in your posts, I always gave you the benefit of the doubt that your intent wasn't simply to be mean. I don't pick that up in any of your posts, ever.

But I don't think you ever saw the economy through my eyes. I work in a lab that serves the building industry. We've been in a recession for many, many months. But things have taken an ugly turn in the last few weeks, from bad to unprecidented. We're looking at a 50% cut in income in the next quarter - and possibly worse in the quarter after that. I expect to lose my job.

I just assumed you worked in a field that was more shielded from the storm than mine is.

BTW, the president of my company has announced that the hit list will be announced on Jan 5th - sigh!

 

[quadraphonics]

I don't recall that exchange. In post #490, page 31 of this thread:
https://www.physicsforums.com/showthread.php?t=130611"
I had indicated that I knew the definition. Did you convince me of it before or after post #490?

It is true that you mentioned the NBER's arbitration role in that post, but the understanding evident in your subsequent comments was perverse to the point of either basic misapprehension or dishonesty. See post https://www.physicsforums.com/showpost.php?p=1737376&postcount=576", for example:

Actually, the definition of a recession is when the NBER says we are in a recession. They haven't. We aren't.

 

[Jimmy Snyder]

I always gave you the benefit of the doubt that your intent wasn't simply to be mean.

Thank you. The economy is not made of things, it is made of people. When the fabric of society is strong, the economy thrives. I have been a cheerleader for saying that we were not in recession. It was not merely to win an argument, but to have a real effect on peoples' attitudes. I still think that if I got one person to look to the future with hope, who otherwise would not have done so, then I had done my part to improve the economy. Aside from keeping my own spirits up, of course. The internet is famous for masking peoples' intents and many flame wars get started on that account. I hope you won't mistake my upbeat message for meanness, nor give into anyone else's call for hopelessness. I could easier ascribe meanness to their intents.