Friday, November 30, 2007

Jobless Claims Spike

The good economic news just keeps coming.
The number of new people signing up for jobless benefits last week jumped sharply, suggesting that the labor market is softening as national economic activity slows.

The Labor Department reported Thursday that new applications filed for unemployment insurance rose by a seasonally adjusted 23,000 to 352,000. It was the highest level since Feb. 10.

The report surprised economists. They were forecasting claims to hold steady around 330,000.
The Republican must be losing sleep at night over these economic reports. What better for the Democratic nominee in 2008 then a little recession to give you extra votes. The Republicans have presided over economic policies that have hurt the average American while the wealthy gained an even bigger piece of the pie.

Its time to hold our elected officials of both parties accountable for the financial mess we find ourselves in as a nation. We must elect officials dedicated to the people not the corporations but that will never happen until we have public financing of all campaigns. That is the key to sane politics.

Thursday, November 29, 2007

New Home Prices Plunge

New home prices plunge but buying still lags.
The biggest plunge in new home prices in 37 years was not enough to revive October sales, according to the government's latest reading on the battered housing and home building markets.

The sales pace for October was well short of economists' forecasts. The Census Bureau's latest report also sharply cut back on its earlier estimates for sales in August and September, when a meltdown in mortgage markets kept many potential buyers from getting the financing they needed.

Also depressing sales and prices was a record 191,000 completed new homes on the market that have not yet been sold.
This report tells you that home prices have a lot more to fall. Even with the steepest price drop in 37 years, people are still not buying. Where is the bottom in this market and how much of the economy will it take down with it?

Consumer debt is at an all time high and the affordability index at an all time low. Together this is a toxic mix for the housing market. Fear will keep even those who can afford a home on the sidelines while this all shakes out. The economic worries for 2008 seem to grow by the day.

Next year should be so much fun.

The Republican Debate: My Observations

The "You Tube" debate was more interesting for what it did not touch on then what it did. The questions seemed tailored for a neanderthal crowd but hardly touched on issues that are truly relevant to middle class Americans.

Where were the questions on health care? Where were the questions on the outsourcing of jobs? What about the fact that Americans are working longer and harder but are still falling further and further behind? The reason those questions were not asked should be clear to all. Those are not Republican issues. They simply could care less about the economic health of the middle or lower classes. We simply are not their base. You might ask why then do so many middle class Americans get tricked into voting for Republicans and against their own best interests. The answer is simple, they rely on prejudice and fear and it works all too often.

Gays, Guns and God are what propels these people. It always amazes me that those who claim to have God in their lives can be so hateful. They seem consumed with hatred and fear. Is that the way you want to live your life? In large part the middle class has been responsible for their own destruction when they voted based on hatred and fear.

Will the middle class be fooled again in 2008? The Republicans are already trying to use fear and hatred to garner votes and it was evident in last nights debate. We must hate gays, Muslims and of course the brown undocumented workers. We must fear the terrorists who want to "follow us home". This is their platform and they are sticking to it. Not one of those on that stage last night are fit to serve as President of the United States. Most are not fit to serve as the local dog catcher.

Wednesday, November 28, 2007

Middle Class Feels The Squeeze

As I was reading this article it reminded me of exactly why I started this site.
Middle-class households in America have to work harder than ever to maintain their standard of living, according to a report released Wednesday.

Sixty nine percent of middle-class households are at risk of losing their standard of living in the long term, says Demos, an advocacy group for lower and middle-class Americans.

And the rising costs of health care, housing, and education are forcing middle-class families to work harder to maintain that standard, said Jennifer Wheary, the report's co-author in an interview with

"The way that they have stayed secure is by tightening belts," said Wheary. "People now have to work more hours to be at that same level."
Where is the family values crowd as parents are forced to work longer and longer hours just to maintain the lifestyle they currently enjoy? When will people finally realize that it is this unholy alliance between big business and the religious right called the modern Republican party that is destroying the middle class?
The Demos report is designed to measure the financial health of the American middle class by measuring certain key variables.

If their main source of income dries up, only 13 percent of middle class households can live off their assets for nine months, after reducing basic living expenses by one quarter, estimates Demos.

52 percent have no net financial assets at all after debt (excluding home equity), and live paycheck to paycheck.
When you live paycheck to paycheck are you really middle class or are you actually the working poor? I would argue that the working poor is a much more accurate description.

I remember my childhood when almost all the mothers on my middle class street in Yonkers, NY were stay at home moms. That is a pipe dream for the families of today. The question now becomes how do we fix this before the middle class is gone and we have a nation of just rich and poor. The answers to that question are complex but the first two solutions I think are absolutely necessary are the public financing of campaigns and universal health care. Unfortunately I think you will never get the second solution until you institute the first.

The political process in this nation has been completely corrupted by big money. Our Presidential race has become about fund raising not ideas and our media is owned by just a handful of big corporations whose main goal is profit not the truthful dissemination of information.

It will take a middle class movement to reverse this trend but who will have the time when work consumes more and more of your day. Maybe that's the goal. There is a reason that the poor do not vote in the same numbers as the rich. They are normally consumed with what they think are more important priorities. As the middle class is more and more consumed with the problems of making ends meet they too will find voting not as big a priority and the destruction of the middle class will be complete. It is time to fight back.

Tuesday, November 27, 2007

Home Prices Take A Steep Drop

Third-quarter home prices dropped 1.7% from prior quarter, largest drop in 21-year history.

The housing bubble has officially burst and its not pretty. With numbers like this the foreclosure rate can only climb as people realize their home is worth less than they currently owe.
Home prices have fallen steadily since July 2006, but plunged even more steeply in the third quarter, according to a report released Tuesday by S&P Case/Shiller.

According to the Case/Shiller index, which covers 20 local markets and a national average, third-quarter home prices dropped 1.7 percent from the second quarter.

The housing market could possibly get a lot worse, according to Yale economist and index co-founder, Robert Shiller. He was asked at a press conference following the release of the latest index data whether housing price increases, which had far outstripped income gains, could revert back to more normal ratios.

Shiller said, "You're talking about [home-price] declines of 50 percent, in real terms. That's not out of the question."
Did you just read that? A 50% decline is not out of the question. Can you really relate all of this to the subprime debacle? I think that is a good part of it but it is also that wages have been stagnant for years while home prices have climbed out of the reach of most Americans. First time home buyers were faced with mortgage payments totally more than 50% of gross income. How can any family sustain those types of payments for long? This is the result of greed and stupidity in the Bush era.

How can consumers not reign in spending when every one of their assets is in decline? Unless we are dealing with a totally new psychology when it comes to spending then a recession is nearly guaranteed.

The housing cycle is very important to the business cycle, according to Shiller. Most economic recessions are preceded by housing declines and residential construction is an important leading indicator for the economy. The weakness in the housing market is causing him to wonder whether the nation could slip into recession.
It seems the time has come to pay the piper and the bill will be staggering.

Monday, November 26, 2007

Markets Get Hammered Again

Is there anyone who still thinks we are not headed for recession?
Stocks tumbled and bonds rallied Monday on revived worries about the threat of the credit and mortgage market crisis on the broad economy.

The Dow Jones industrial average lost 240 points, or 1.8 percent, according to early tallies. The S&P 500 index lost 2.3 percent and fell into negative territory for the year. The Nasdaq composite fell 2.1 percent.
The American people are feeling much less financially stable lately and with good reason. All their major investments are worth less and seem to moving in the wrong direction. The wealth factor is a strong determinant of whether or not to spend and with the wealth factor declining for nearly everyone, recession becomes a self fulfilling prophecy.

This is the result of horrible economic policy coming home to roost. It is time to get the grown ups back into government. I feel sorry for the next President. The mess being left behind will be monumental.

Citigroup Will Soon Shed Jobs

Once again the middle class will pay for the mistakes of those making millions.
Citigroup Inc., bracing for big credit-related losses in the fourth quarter, is looking to lower costs -- which could mean another round of job cuts at the nation's largest bank.

"We are engaged in a planning process in anticipation of our new CEO, and our business heads are planning ways in which we can be more efficient and cost-effective to position our businesses in line with economic realities," said Citi spokeswoman Shannon Bell.

She was responding to a report on CNBC that "massive" layoffs were planned.
Do you think these workers will be afforded severance packages like the executives that have driven Citigroup into the ground? The Citigroup example is just another in a long line that says failure at the upper levels of big business are meaningless to those that caused the failure.

Every day we hear more and more about the subprime crisis and its announced that those at the top are "Resigning". With every announcement comes word of their multi-million dollar golden parachute and word of layoffs.

Where can I get a job that would pay me millions to screw up? What do we tell the children? Do we tell them that the rules are different for those at the top? What kind of a message are we sending when incompetence is rewarded and those who worked hard and played by the rules are penalized for the actions of those multi-millionaires at the top? Isn't it time that we demand equal treatment for all?