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refresher course

chris floyd: Blood Pact: American Hegemony and the True Bush "Base"
www.chris-floyd.com/index.php
The American conquest of Iraq is an emotional matter. Passions flare at white heat on both sides of the issue. This is understandable. It is indeed very difficult to remain dispassionate while watching a mass murder take place. Opponents of the conquest are naturally driven into chaotic furies of outrage and despair, while supporters are necessarily pushed to rhetorical and political extremes in their frantic attempts to countenance such an appalling crime. It is not a situation conducive to rational analysis.

Nevertheless, it is instructive to step back from the barricades now and again, to remind ourselves of the hard ground of reality so often obscured by the blood-red mist of emotion clouding our eyes. The chief reality, of course, is that the invasion and occupation of Iraq is primarily about oil and the preservation of the American way of life. It is based on the premise that the latter is a question of supreme importance, a moral value overriding all others. That "the American way of life" is itself riddled with gross inequalities is beside the point here, for these inequalities greatly benefit all those who have the power to make or influence policies in "the national interest."

Once this basic premise is accepted, the conquest – which otherwise seems a pointless, reckless paroxysm of elitist greed – can be seen as a logical if difficult step undertaken in accordance with a carefully reasoned strategy. War, mass death, torture, repression and the monstrous lies surrounding the instigation of the conquest can thus be justified as "necessary evils" to secure a greater good.


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f william engdahl: The US's geopolitical nightmare
www.atimes.com/atimes/China/HE09Ad01.html
By drawing attention to Iraq and the obvious role oil plays in US policy today, the George W Bush-Dick Cheney administration has done just that: it has drawn the world's energy-deficit powers' attention firmly to the strategic battle over energy, and especially oil.

This is already having consequences for the global economy in terms of US$75-a-barrel crude-oil price levels. Now it is taking on the dimension of what one former US defense secretary rightly calls a "geopolitical nightmare" for the United States.

The creation by Bush and Cheney, Defense Secretary Donald Rumsfeld and company of a geopolitical nightmare is also the backdrop to comprehend the dramatic political shift within the US establishment in the past six months, away from the Bush presidency. Simply put: Bush and Cheney and their band of neo-conservative war hawks, with their special relationship to the capacities of Israel([search]) in Iraq and across the Mideast, were given a chance.

The chance was to deliver on the US strategic goal of control of petroleum resources globally, to ensure the US role as first among equals over the next decade and beyond. Not only have they failed to "deliver" that goal of US strategic dominance, they have also threatened the very basis of continued US hegemony, or as the Rumsfeld Pentagon likes to term it, "Full Spectrum Dominance".


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The signing of a disabled Portland man despite warnings reflects problems nationally for military enlistment
www.oregonlive.com/printer/printer.ssf
Jared Guinther is 18. Tall and lanky, he will graduate from Marshall High School in June. Girls think he's cute, until they try to talk to him and he stammers or just stands there — silent.

Diagnosed with autism at age 3, Jared is polite but won't talk to people unless they address him first. It's hard for him to make friends. He lives in his own private world.

Jared didn't know there was a war raging in Iraq until his parents told him last fall — shortly after a military recruiter stopped him outside a Southeast Portland strip mall and complimented him on his black Converse All Stars.

"When Jared first started talking about joining the Army, I thought, 'Well, that isn't going to happen,' " said Paul Guinther, Jared's father. "I told my wife not to worry about it. They're not going to take anybody in the service who's autistic."

But they did. Last month, Jared came home with papers showing that he not only had enlisted, but also had signed up for the Army's most dangerous job: cavalry scout. He is scheduled to leave for basic training Aug. 16.

Officials are now investigating whether recruiters at the U.S. Army Recruiting Station in Southeast Portland improperly concealed Jared's disability, which should have made him ineligible for service.

Jared's story illustrates a growing national problem as the military faces increasing pressure to hit recruiting targets during an unpopular war.

Tracking by the Pentagon shows that complaints about recruiting improprieties are on pace to approach record highs set in 2003 and 2004. The active Army and the Reserve missed recruiting targets last year, and reports of recruiting abuses continue from across the country.

A family in Ohio reported that its mentally ill son was signed up, despite rules banning such enlistments and the fact that records about his illness were readily available.

In Houston, a recruiter warned a potential enlistee that if he backed out of a meeting he would be arrested.

And in Colorado, a high school student working undercover told recruiters he had dropped out and had a drug problem. The recruiter told the boy to fake a diploma and buy a product to help him beat a drug test.

Violations such as these forced the Army to halt recruiting for a day last May so recruiters could be retrained and reminded of the job's ethical requirements.

The Portland Army Recruiting Battalion Headquarters opened its investigation into Jared's case last week after his parents called The Oregonian and the newspaper began asking questions about his enlistment.

Maj. Curt Steinagel, commander of the Military Entrance Processing Station in Portland, said the papers filled out by Jared's recruiters contained no indication of his disability. Steinagel acknowledged that the current climate is tough on recruiters here and elsewhere.

"I can't speak for the Army," he said, "but it's no secret that recruiters stretch and bend the rules because of all the pressure they're under. The problem exists, and we all know it exists."
 

Comments

Re: refresher course

Again, when military viewpoints support your personal views then those military sources are worthy. Yet when the military view is different than yours, you label the military mind as unable to distinguish right from wrong.

You again claim that the Iraq war is about oil, and again I ask you ... If it's about oil then why didn't we "invade" Mexico? The world's 7th largest reserve sits there just waiting for an oil hungry America. The answer is simple ... It's not about oil. We're in Iraq (and Afghanistan) due to a fundamental belief that we can kill those who want to kill us on their ground. The decision to go to war was presented to the American public as a battle against those who want to hurt us (WMD, supporting terrorists training camps and leadership, etc). We can contain collateral damage away from our fellow citizens. I know that this must seem unfair or heartless to you, but it's that way it is.

As a member of the Missouri Army National Guard, I can tell you that the Army National Guard has exceeded its National recruiting goal to date in 2006. As a matter of fact, Missouri is the number one recruiting State in the Nation (leding in write-rate, overall accessions, and end strength). To further the point, the Missouri Army National Guard only has to meet 37% of it's monthly mission goal for the remainder of the year and it will meet is mandated mission.

(P.S. I apologize for using my own words to counter your points instead of posting someone else's thoughts and opinions. How's that on-line law degree coming?)
 

refresher course, part II

The answer is simple … It's not about oil. We're in Iraq (and Afghanistan) due to a fundamental belief that we can kill those who want to kill us on their ground. The decision to go to war was presented to the American public as a battle against those who want to hurt us (WMD, supporting terrorists training camps and leadership, etc).

january 31, 2003: Bush Flatly Declares No Connection Between
Saddam and al Qaeda

www.thememoryhole.org/war/no-saddam-qaeda.htm
Q One question for you both. Do you believe that there is a link between Saddam Hussein, a direct link, and the men who attacked on September the 11th?

THE PRESIDENT: I can't make that claim.

THE PRIME MINISTER: That answers your question


Wednesday 17 September 2003: Bush: No Proof of Saddam Role in 9-11
www.truthout.org/docs_03/091903C.shtml
President Bush said Wednesday there was no evidence that Saddam Hussein was involved in the terrorist attacks of Sept. 11, 2001 disputing an impression that critics say the administration tried to foster to justify the war against Iraq.

"There's no question that Saddam Hussein had al-Qaida ties," the president said. But he also said, "We've had no evidence that Saddam Hussein was involved with September the 11th."

The president's comment was the administration's firmest assertion that there is no proven link between Saddam and Sept. 11.


9/16/2003: Rumsfeld sees no link between Saddam Hussein, 9/11
www.usatoday.com/news/world/iraq/2003-09-16-rumsfeld-iraq-911_x.htm
Defense Secretary Donald Rumsfeld said Tuesday he had no reason to believe that Iraq's Saddam Hussein had a hand in the Sept. 11, 2001, terrorist attacks on the United States.

june 16, 2004: 9/11 panel sees no link between Iraq, al-Qaida
www.msnbc.msn.com/id/5223932/
The report, the 15th released by the commission staff, concluded, "We have no credible evidence that Iraq and al-Qaida cooperated on attacks against the United States."

June 17, 2004: Al Qaeda-Hussein Link Is Dismissed
www.washingtonpost.com/wp-dyn/articles/A47812-2004Jun16.html
The Sept. 11 commission reported yesterday that it has found no "collaborative relationship" between Iraq and al Qaeda, challenging one of the Bush administration's main justifications for the war in Iraq.

Along with the contention that Saddam Hussein was stockpiling weapons of mass destruction, President Bush, Vice President Cheney and other top administration officials have often asserted that there were extensive ties between Hussein's government and Osama bin Laden's terrorist network; earlier this year, Cheney said evidence of a link was "overwhelming."

But the report of the commission's staff, based on its access to all relevant classified information, said that there had been contacts between Iraq and al Qaeda but no cooperation. In yesterday's hearing of the panel, formally known as the National Commission on Terrorist Attacks Upon the United States, a senior FBI official and a senior CIA analyst concurred with the finding.


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As a member of the Missouri Army National Guard, I can tell you that the Army National Guard has exceeded its National recruiting goal to date in 2006.

march 12, 2006: Army Guard Refilling Its Ranks: Members Get Bonus For New Recruits
www.washingtonpost.com/wp-dyn/content/article/2006/03/11/AR2006031101342.html
The Army National Guard, which has suffered a severe three-year recruiting slump, has begun to reel in soldiers in record numbers, aided in part by a new initiative that pays Guard members $2,000 for each person they enlist.

The rebound is striking because since 2003, the Army Guard has performed worse in annual recruiting than any other branch of the U.S. military. The Guard was shrinking while it was being asked to shoulder a big part of the burden in Iraq. Together with the Army Reserve, it supplied as many as 40 percent of the troops in Iraq while also dispatching tens of thousands of members to domestic disasters.

One factor in the recruiting success is the initiative, expanded to 22 states in December, that christened 31,000 Guard members nationwide as "recruiting assistants" who can earn $2,000 for every enlistee — $1,000 when the recruit signs a contract and another $1,000 when he or she enters boot camp([search]) or completes four months of service. The program, whose success has begun to get publicity in recent weeks, has "taken off like wildfire," said Maj. Gen. Roger P. Lempke, head of the Nebraska Guard and president of the Adjutants General Association of the United States.

The first enlistment under the program was by a West Virginia guardsman who signed up his wife.

"I told her, the money is coming; this is a good idea," said Chief Warrant Officer Felix Osuna Cotto…who plans to use the $2,000 to buy his son a used car for college.

Guard Sgt. Clay Edwards, 30, has brought in more than a dozen recruits since he returned in 2004 from driving a wrecker in Iraq with the 1092nd Engineer Battalion.

"In the past, I might think, 'I don't really want to talk to that guy,' " said Edwards, a tire salesman in Parkersburg, W.Va. "Now I say, 'What the heck, I might be able to make a little money,' "

…Guard officials say recruiting is historically stronger in the early months of the calendar year, suggesting that the current growth could taper off. But the Guard is surpassing higher monthly targets now than at this time last year, having raised its annual goal to 70,000 from 63,000 in fiscal 2005.

The active-duty Army has also met its recent monthly goals. But that is in part because the Army had set the goals significantly lower for the first part of the fiscal year, banking on dramatic increases in recruiting this summer to meet its annual target of 80,000.

The fresh wave of sign-ups came at a critical time as the Army National Guard faced funding cuts based on manpower shortfalls. Guard strength hit a low of 331,000 after it met only 80 percent of its enlistment goal last year. Army leaders said in January that they would cut funding for the Guard in the fiscal 2007 budget by 17,000 slots.

The decision drew protests from a majority of U.S. senators, state Guard leaders and all 50 governors. The Army has since agreed to restore the funding, but pressure remains on the Guard to produce the 350,000 troops.
..
The new "recruiting assistant" program accompanies a range of initiatives, such as a major increase in the official recruiting force from 2,700 to 5,100 since 2004. The Guard has also shifted from costly television ads to appeals that are more narrowly targeted at the young, such as pitches on pizza boxes and iTunes giveaways. In late January, it doubled to $20,000 its bonus for recruits who had never served in the military.


paul craig roberts: Life in the Bush Economy: Fat, Drunk and Broke: A Nation of Waitresses and Bartenders
www.counterpunch.org/roberts05082006.html
The Bureau of Labor Statistics payroll jobs report released May 5 says the economy created 131,000 private sector jobs in April. Construction added 10,000 jobs, natural resources, mining and logging added 8,000 jobs, and manufacturing added 19,000. Despite this unusual gain, the economy has 10,000 fewer manufacturing jobs than a year ago.

Most of the April job gain —72%—is in domestic services, with education and health services (primarily health care and social assistance) and waitresses and bartenders accounting for 55,000 jobs or 42% of the total job gain. Financial activities added 26,000 jobs and professional and business services added 28,000. Retail trade lost 36,000 jobs.

During 2001 and 2002 the US economy lost 2,298,000 jobs. These lost jobs were not regained until early in February 2005. From February 2005 through April 2006, the economy has gained 2,584 jobs (mainly in domestic services).

The total job gain for the 64 month period from January 2001 through April 2006 is 7,000,000 jobs less than the 9,600,000 jobs necessary to stay even with population growth during that period. The unemployment rate is low because millions of discouraged workers have dropped out of the work force and are not counted as unemployed.

American consumers are heavily indebted. The growth of consumer debt is what has been fueling the economy. Social Security and Medicare are in financial trouble, as are many company pension plans.
 

Re: refresher course, part II

And there it is ... The fundamental misunderstanding that many of your kind share. Terrorism was about more than 9-11. Remember the attack on the USS Cole? Remember the attacks on the USMC barracks? Remember the fist WTC attacks? Are you so blind to think that terrorism is limited to the events on 9-11? 9-11 was the culmination of events which led to a succesful mass attack on American soil. The President used 9-11 as a rallying cry to attack terrorists in Afghanistan and Iraq (oh yes, and thanks to the Special Forces community, in Pakistan, Saudi Arabia, etc). Did we find huge stockpiles of WMD? No, only some VX barrels and long range delivery systems.

AQ had training camps in Iraq. Zarqawi was in Baghdad prior to the invasion. We are killing Sudanese, Somalian, Egyptian, Pakistani, Saudi, Ethiopian, and other country's terrorists. And we're killing them in Iraq and Afghanistan. We're killing people who want to kill us, and we're killing them somewhere other then in the US. Call me crazy, but me likey that idea.

Again, explain why you think it's about oil. If it was about oil, we'd be in Mexico. Either explain your reasoning or grab another liberal talking point to churn out in your posts.

The Guard Recruiting Assistance Program (or GRAP) that you qouted is actually reducing the funding requirement of the National Guard's accession management branch. The Guard typically spends about $3,800 per recruit now ... down from $7,900 prior to GRAP. Nice try, but even Liberals have to agree with the financial sense that makes. And, as I stated, the Guard is well over its mission goal.

The Army has had a similar program called Every Soldier a Recruiter (or ESAR), but it has been much less succesful.

Don't even ry to attack the economy or you'll truly be showing your ass. New home sales, home ownership, individual debt indicators, the stock market, consumer confidence, unemployment figures ... all support a strong economy. Stick to the things you know, kiddo... like explaining how your on-line law degree program is going or how comunity college really opened your eyes to the capitalist injustice.
 

economy refresher course

"New home sales … support a strong economy"

New Home Sales YTD
calculatedrisk.blogspot.com/2006/04/new-home-sales-ytd.html
Is housing slowing? Looking at New Home Sales, the answer is unequivocally yes.

New Home Sales for 2006 are below both 2004 and 2005. In February I cautioned "One month does not make a trend, but New Home Sales have fallen in six of the last seven months."

That same caution applies to the March numbers. New Home Sales have now fallen six of the last eight months - a definite down trend. But 2006 is still the third best year so far.

The reason I follow housing so closely is I expect a slowing housing market to impact the economy.


March New Home Sales: 1.213 Million
calculatedrisk.blogspot.com/2006/04/march-new-home-sales-1213-million.html
On a year over year basis, March 2006 sales were 7.2% lower than March 2005.

The median and average sales prices declined.

The seasonally adjusted estimate of new houses for sale at the end of March was 555,000. This represents a supply of 5.5 months at the current sales rate.

The 555,000 units of inventory is another all time record for new houses for sale. On a months of supply basis, inventory is significantly above the level of recent years.

Although sales bounced back in March from the February lows, this report shows that the housing market continues to slow down.


money.cnn.com/2006/04/26/news/economy/newhomes/index.htm
economist Bob Brusca of FAO Economics said last month's drop in new home prices is a sign that the market for new homes isn't nearly as strong as the jump in sales would suggest.

He noted that the report showed an unusual drop in prices from both February and a year earlier, which could be a sign that home builders are cutting prices to move a large supply of new homes now on the market.

"New homes sales sprang back to life like a zombie in a cheap horror flick," Brusca said. "And like that zombie, housing really is dead. Don't let all that twitching fool you."

He said that many of the new homes sold in March were probably built in a stronger real estate market.

And unlike existing homes, where sellers can live until they get an acceptable price, "builders can't live in these houses unless they have a lot of family," he said. "By and large they must finance them at rising interest costs."

In fact, about one builder in five has reported a jump in cancellations of new home orders, according to a recent industry survey. And Wednesday's report showed that there were 553,000 new homes for sale in March, up 25 percent from a year earlier.

Meanwhile, average prices fell 7.1 percent from February to $279,100, after topping $300,000 for the first time in the February revised figures. The median price, which reflects the point at which half the homes sell for more and half sell for less, also fell 6.5 percent to $224,200.

And while month-to-month declines in home prices are not unusual, more significantly, prices also fell from a year earlier: a 2.2 percent decline in median prices and a 3.6 percent fall in average prices over that time.

New home sales, while a fraction of the overall real estate market, are more closely watched since they're more of a leading indicator of conditions in the housing market.


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"home ownership … support a strong economy"

bernanke: In particular, one sector that is showing signs of softening is the residential housing market. Both new and existing home sales have dropped back, on net, from their peaks of last summer and early fall. And, while unusually mild weather gave a lift to new housing starts earlier this year, the reading for March points to a slowing in the pace of homebuilding as well. House prices, which have increased rapidly during the past several years, appear to be in the process of decelerating, which will imply slower additions to household wealth and, thereby, less impetus to consumer spending. At this point, the available data on the housing market, together with ongoing support for housing demand from factors such as strong job creation and still-low mortgage rates, suggest that this sector will most likely experience a gradual cooling rather than a sharp slowdown. However, significant uncertainty attends the outlook for housing, and the risk exists that a slowdown more pronounced than we currently expect could prove a drag on growth this year and next.
www.federalreserve.gov/BoardDocs/Testimony/2006/20060427/default.htm

Housing Bubble Bust Will Take Down the Global Economy
www.oftwominds.com/blogmay06/housing-global-recession.html
The U.S. housing bubble deflating will take down the global economy. Here's how.

1. The U.S. economy consists largely of consumer spending. This dependence has reached an unprecedentedly high level.

2. The global economy is heavily dependent on the U.S. consumer.

3. U.S. consumers have financed this vast spending spree by borrowing stupendous quantities of money from their home equity.

4. U.S. consumers are spending far more than they earn ( i.e. disposable personal income.) This reliance on borrowed money for spending is unprecedented.

5. Is this unprecedented borrowing and deficit spending sustainable? We all know the answer is no.

6. Housing need not drop precipitously to cause a precipitous drop in home equity extraction.

7. Once this monumental extraction of equity dries up, so will consumer spending.

8. Once U.S. consumer spending plummets, our global trading partners will immediately feel the pinch.


Buffett: Real estate slowdown ahead
The Oracle of Omaha expects the housing market to see "significant downward adjustments," and warns on mortgage financing.

money.cnn.com/2006/05/05/news/newsmakers/buffett_050606/index.htm
Buffett: "What we see in our residential brokerage business [HomeServices of America, the nation's second-largest realtor] is a slowdown everyplace, most dramatically in the formerly hottest markets. [Buffett singled out Dade and Broward counties in Florida as an area that has experienced a rise in unsold inventory and a stagnation in price.] The day traders of the Internet moved into trading condos, and that kind a speculation can produce a market that can move in a big way. You can get real discontinuities. We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments, especially in the higher end of the housing market."

Munger: "There is a lot of ridiculous credit being extended in the U.S. housing sector."

Buffett: "Dumb lending always has its consequences. It's like a disease that doesn't manifest itself for a few weeks, like an epidemic that doesn't show up until it's too late to stop it Any developer will build anything he can borrow against. If you look at the 10Ks that are getting filed [by banks] and compare them just against last year's 10Ks, and look at their balances of 'interest accrued but not paid,' you'll see some very interesting statistics [implying that many homeowners are no longer able to service their current debt]."


from "American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century", by kevin phillips
The housing and mortgage markets, especially after 2001, had blended into the larger financialization of America in multiple and unnerving ways. Simply put, for many people, homes had become vehicles of household financing - "my home is my castle" giving way to "my home is my ATM machine." As such, and with the collusion of the Federal Reserve Board, homes became financial assets in everything but statistical classification. Beyond that, they became tools of speculative finance in that persons mortgaging or refinancing had to choose from a dizzying array of options, many of which held out, in credit-card fashion, unusual attractiveness in the first months or years. In June 2005, Chairman Greenspan deplored some of the most egregious, allowing that "the dramatic increase in the prevalence of interest-only loans,k as well as the introduction of other relatively exotic forms of adjustable-rate mortgages, are developments of particular concern."

Between 2000 and the market bottom in 2002, when U.S. stocks lost $7 trillion of their $15.5 trillion value, home values held up and then spurted ahead. To critics, the rescuing was essentially a rebubbling. Should a credit and financial collapse follow that second stage in the manner that Volcker and others feared, stock and home prices would presumably sink together, making that second downturn the more destructive of the two.


mortgage debt outstanding
Mortgage Debt Outstanding

Housing Bubble News Links
patrick.net/housing/crash.html

offline, check out the current issue of harper's, which features a lead article entitled "An Illustrated Guide to the Coming Real Estate Collapse" by michael hudson

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"individual debt indicators … support a strong economy"

from the phillips book
Between 1990 and 2003 the number of people holding credit card jumped by 75 percent - from 82 million to 144 million - but the amount actually charged exploded by 350 percent, up from $338 billion to $1.5 trillion.

Betweem 2000 and 2004 … mortgage debt in the United States rose from $4.4 trillion to $7.5 trillion. Surging home values shared the limelight with bargain refinancing. The caveat was that although mortgage debt in the United States increased 66 percent between 2000 and 2004, Americans heeding the government's call to refinance at low rates usually spent the proceeds on consumer goods, not savings or home improvements. Thus, although the value of household real estate climbed 40 percent between the end of 2000 and the middle of 2004, owners collectively wound up having lower percentages of equity in their own homes.

Total household debt, which includes both consumer debt and mortgage debt, jumped from $6.5 trillion in 2000 to $10.2 trillion in 2004. This leap reflected the government's emphasis on stimulating private debt, and the sum exceeded most national-debt calculations.

In ordinary times, the idea of bankrupt Americans becoming "indentured" to credit-card operators could be taken as overwrought political propaganda. However, the fallout from a 10 to 20 percent national housing price slump could make the analogy somewhat more credible. Bankruptcies or shattered credit might well put millions of cardholders in thrall to dozens of issuers and mortgage lenders. And if household America slowed in its consumption, thereby ceasing to play locomotive to the world, the domestic and global effects could be incendiary.

Between 1995 and 2004 financial sector domestic debt soared from $4.33 trillion to $11.79 trillion.


US Savings Rate Sinks to Lowest Since Great Depression
www.commondreams.org/headlines06/0131-03.htm
Americans spent $42bn (£24bn) more than they earned last year, turning the annual US savings ratio negative for the first time since the Great Depression.

The offical figures published yesterday [jan. 30, 2006], a day ahead of the retirement of Federal Reserve Alan Greenspan, will be seen as a telling verdict on his 18 year reign at the US central bank.

The savings ratio fell to minus 0.5 per cent last year, meaning Americans not only spent all of their after-tax income but also had to increase their borrowings or plunder their savings. This is the first time the ratio has gone negative for an entire year since 1932 and 1933, when the US was struggling to cope with the Great Depression.

The savings ratio is seen as a key economic indicator as it shows how vulnerable households are to a sudden shock such as a surge in interest rates or unexpected redundancy.


www.msnbc.msn.com/id/11098797/
A negative savings rate means that Americans spent all their disposable income, the amount left over after paying taxes, and dipped into their past savings to finance their purchases. For the month, the savings rate fell to 0.7 percent, the largest one-month decline since a 3.4 percent drop in August.

The 0.5 percent negative savings rate for 2005 followed a 1.8 percent rate of savings in 2004. The last negative rates occurred in 1932, a drop of 0.9 percent, and a record 1.5 percent decline in 1933. In those years Americans exhausted their savings to try to meet expenses in the wake of the worst economic crisis in U.S. history.

One major reason that consumers felt confident in spending all of their disposable incomes and dipping into savings last year was that a booming housing market made them feel more wealthy. As their home prices surged at double-digit rates, that created what economists call a “wealth effect” that supported greater spending.

The concern, however, is that the housing boom of the past five years is beginning to quiet down with the rise in mortgage rates. Analysts are closing watching to see whether consumer spending, which accounts for two-thirds of total economic activity, falters in 2006 as Americans, already carrying heavy debt loads, don’t feel as wealthy as the price appreciation of their homes would seem to indicate.


US Savings Crisis Continues — and Deepens
www.mydd.com/story/2006/4/29/10453/3171
Savings is vitally important to an economy for two very important reasons. First, suppose the economy hits an extended slow-patch, growth decreases, job growth decreases and businesses increase layoffs. People will have to live off something - usually savings. When savings is low, people have less of a financial cushion is case of economic hardship. The more people who have a smaller financial cushion means a greater possibility of an economic "dip" becoming something larger.

The second vital reason for national savings is it finances the trade deficit. Without savings the US is completely dependent of foreign creditors to lend us money to pay for the trade deficit. Right now, the US consumers about 70% of the world's excess capital which goes to paying for out trade deficit (because we won't finance it from savings). Right now everything is fine because foreigners are happy to lend us their excess funds. But as investment in other countries (probably Asia) increases at some point, foreign lenders will demand a higher rate of return from the US to make their lending of funds financially beneficial.

The bottom line is right now the US is ill-prepared for a financial shock. Considering the nation's exposure to risk from out record trade deficit, it would behoove us as a nation to get better prepared.


and have a look at the charts in the "May 2, 2006" post at www.oftwominds.com/blog.html

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"the stock market … support a strong economy"

What Will the Stock Market Return over the next 10 Years?
bigpicture.typepad.com/comments/2006/05/what_will_the_s.html

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"consumer confidence … support a strong economy"

www.conference-board.org/economics/consumerConfidence.cfm
Consumers' overall assessment of current conditions remains favorable. Those claiming conditions are "good" rose to 29.7 percent from 27.9 percent. Those claiming conditions are "bad," however, also rose to 15.1 percent from 14.7 percent. Labor market conditions, which had been mixed, improved. Consumers saying jobs are "plentiful" increased to 29.1 percent from 28.3 percent, while those claiming jobs are "hard to get" edged down to 19.6 percent from 20.4 percent.

Consumers' outlook for the next six months improved moderately in April. Those expecting business conditions to worsen decreased to 9.1 percent from 9.8 percent. Those expecting business conditions to improve, however, also decreased to 17.1 percent from 17.8 percent.

The outlook for the labor market was mixed. Those expecting more jobs to become available in the coming months increased to 15.7 percent from 13.7 percent in March. Those expecting fewer jobs, however, remained unchanged at 16.4 percent. The proportion of consumers anticipating their incomes to increase in the months ahead declined to 17.1 percent from 19.3 percent.


"strong"?

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"unemployment figures … support a strong economy"

Employment Growth Less Than Expected
angrybear.blogspot.com/2006/05/employment-growth-less-than-expected.html
The Employment Situation Summary for April 2006 reports that employment per the payroll survey rose by 138,000. The household survey shows an increase of only 47,000.

Critiquing misleading White House statements about the economy
www.epi.org/content.cfm/webfeatures_snapshots_20060504
From 2001q1 to 2005q3, epops in both the EU15 and Japan have risen, while the U.S. epop has fallen. In short, in terms of creating enough jobs to keep pace with growth in the working-age population, the United States actually lags both the EU15 and Japan since the beginning of 2001.

Employees on nonfarm payrolls by major industry sector, 1956 to date
ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb1.txt

U.S. jobs growth weaker than forecast, wages up
today.reuters.com/business/newsarticle.aspx
U.S. employers added 138,000 jobs in April, far fewer than had been expected, while annual wages rose at the fastest rate in more than 4-1/2 years, a Labor Department report on Friday showed.

Wall Street analysts had expected 200,000 jobs would be added last month. Not only was the actual figure below forecast but the government also said 36,000 fewer jobs were created in the February-March period than previously thought.

It revised March job growth down to 200,000 from 211,000 originally estimated and February down to 200,000 from 225,000.

The unemployment rate was unchanged from March at 4.7 percent.


triple that to get roughly the actual unemployment rate
 

Re: economy refresher course

Why are you such a pessimist? Did one of your on-line law degree courses not go so well?

I looked thru your postings, and found most of them to be based on some individual thought instead of spectrum-wide thought. Here's a hint ... Blogs are not entirely factual and additional research might need to be conducted to determine their validity.

And how can anyone claim that inerests raates are too high. Here's a personal example: We just built and last week closed on a $225K house at 6.375% fixed. (We were blessed that interest rates dropped to 5.115% in 2002, but no one in their right mind expected that to last. Until the rates climb over 9%, your argument holds little weight.) The house we built for $225K appraised for $315K, and much like the last 3 houses we've purchased we expect to make a decent profit on this one. Forgive me for relying on personal experience versus some fourth hand account ... I know how you hate to hear opposing views from someone with actual experience on a subject.

The housing boom has slowed and home sale prices have flattended, but they flattended from last year's 13 year high. Even in the midst of a two front war, the housing market is soaring. Even your postings support that claim.

I'm sorry, I understood from Ecomomics 101 that "debt is good". I guess that your on-line degree program hasn't required that class yet. Anyway, personal debt, much like National debt is positive for both individual and the National economy. Are you aware that the lowest debt our Country has had in the last 100 years occurred during the depression, and many economists agree that a low National debt contributed to the Great Depression? If citizens choose to over stretch tehn that;s apersonal decision, and one that the government can rarely be held accoutnable for.

The data you supplied supports my consumer confidence claim... Thanks.

You can manipulate the unemployment rate however you want, but the simple fact is that it's holding steady at 4.7%. Pretty amazing when you consider the current state of world affairs.
 

Re: economy refresher course

Why People Think the Economy Sucks
billmon.org/archives/002377.html
Many conservatives profess to be puzzled by the fact that many Americans don't appreciate the wonderful economic boom we're enjoying, now that the Cheney administration has led us into the supply side utopia.

And it's true, they don't:

Four in 10 – 40 percent – say Bush is doing a good job with the economy, down eight percentage points in a month.

The latest spike in sour feelings can probably be traced to the return, in many parts of the country, of $3-a-gallon gas. But economic sentiment has been unusually negative throughout this recovery – at least when compared to past relationships between consumer confidence and GDP growth, or confidence and the unemployment rate. Even now, with the unemployment rate below 5%, consumer confidence is still about where it was when the last recession officially ended.


charts help to better visualize any hint of a strong economy:

University of Michigan: Consumer Sentiment
research.stlouisfed.org/fred2/series/UMCSENT/98/10yrs

Federal Government Debt: Total Public Debt
research.stlouisfed.org/fred2/series/GFDEBTN/1

Federal Debt Held by the Public
research.stlouisfed.org/fred2/series/FYGFDPUN/1

Gross Federal Debt Held by the Public
research.stlouisfed.org/fred2/series/FYGFDPUB/1

Gross Federal Debt
research.stlouisfed.org/fred2/series/FYGFD/1

Federal Surplus or Deficit [-]
research.stlouisfed.org/fred2/series/FYFSD/1
[last 5 yrs]
research.stlouisfed.org/fred2/series/FYFSD/5/5yrs

Household Financial Obligations as a percent of Disposable Personal Income
research.stlouisfed.org/fred2/series/FODSP/1

Household Sector: Liabilites: Household Credit Market Debt Outstanding
research.stlouisfed.org/fred2/series/CMDEBT/1

Net Exports of Goods & Services
research.stlouisfed.org/fred2/series/NETEXP/108

Real Imports of Goods and Services
research.stlouisfed.org/fred2/series/IMPGSCA/108

Balance on Current Account, NIPA's
research.stlouisfed.org/fred2/series/NETFI/108

Personal Consumption Expenditures
research.stlouisfed.org/fred2/series/PCEC/110/Max

Personal Savings Rate
research.stlouisfed.org/fred2/series/PSAVERT/112

Consumer Price Index for All Urban Consumers: All Items
research.stlouisfed.org/fred2/series/CPIAUCNS/9

Balance on Current Account
research.stlouisfed.org/fred2/series/BOPBCA/125

Balance on Goods and Services
research.stlouisfed.org/fred2/series/BOPBGS/125

Balance on Merchandise Trade
research.stlouisfed.org/fred2/series/BOPBM/125

Trade Balance: Goods and Services, Balance of Payments Basis
research.stlouisfed.org/fred2/series/BOPGSTB/125
 

Re: Re: economy refresher course

Wow! 60% of those surveyed thought the Adminsitration was doing a bad job with the economy. Was that the same polling group that couldn't find Louisiana on the map? Come on, you're grasping at straws. Your own data supports that CCLs are the same level as the mid 90s.

Where are you paying $3 a gallon for gas? I filled up this morning for $2.47 a gallon ... Ooops, sorry for interjecting with a personal, first-hand example instead of some fourth hand account or liberal talking point.

I looked thru your source postings. Basically, "consumer sentiment" is as good as it was in 1996 when all was right with the world. Thanks again for supporting my originial assertion.

The other source postings basically the same. In spite of a two front war, natural disasters, a pessimistic oposition, and lefty media ... All is well with the economy.

OK, now that we've dismantled your claims: (1) the Iraq war was about oil, (2) recruiting numbers are down (and subsequently that the National Guard is buying enlistments), and (3) the economy is bad ... What do have left to offer?

Here's some suggestions:

1. What's a realistic alternative in Iraq?
2. Explain to us how to pursue an on-line law degree.
3. Why did Democrats vote overwhelmingly in support of the Iraq war?
4. Who can authorize the use of US military force - the President of Congress?
5. If a tree falls in the forest, and no one is around to hear it, does it make a sound that is offensive to liberals or can it be somehow tied to global warming?
 
Reply: Re: Re: Re: economy refresher course / 09 May 2006
Reply: Re: Re: Re: Re: economy refresher course / 09 May 2006
Reply: Re: Re: Re: Re: economy refresher course / 09 May 2006

collapse primer

phillips leaves out some key factors in his otherwise detailed analysis (electoral fraud, hot money, etc…) but his prognosis aptly sums up our current predicament.

American Theocracy : The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21stCentury
www.americantheocracy.net/

www.tpmcafe.com/node/28025
 

Re: collapse primer

Now come on ... Why would you use a book review as a source document?

Again, get out and live life. You'd be surprised how life looks when viewed away from the walls of academia. (...or in your case, how life looks away from the computer screen).
 

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Quote-of-the-Moment

An inglorious peace is better than a dishonorable war.
-- Mark Twain
Source: "Glances at History" (suppressed)
 

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