The president who campaigned for a more “open government” and “full disclosure” will not unseal his medical records, his school records, his birth records or his passport records. He will not release his Harvard records, his Columbia College records, or his Occidental College records—he will not even release his Columbia College thesis. All his legislative records from the Illinois State Senate are "missing" and he claims his scheduling records during those State Senate years are "lost" as well. In addition, no one can "find" his school records for the elite K-12 college prep school, Punahou School, he "attended" in Hawaii. On Jan 21, 2009, he issued an Executive Order,further sealing these records, EO #13489. Former Columbia students that would most certainly have had a class or two with him have stated they never saw him.
Why? This guy got 52% of the vote. Why?
Friday, February 12, 2010
Thursday, February 4, 2010
Stagflation - The Real Recession
Stagflation
I remember every minute of this recession[s] and we were scared to death. It was actually a 16 year recession with minor quarterly up-ticks in the interim. It started in 1967 and remained until 1983. It was a scary time. The term Stagflation was coined during this time: 13.5% inflation and 8.5% unemployment, for a total of 22%. It was unprecedented and nothing has even come close since. The T-Bond actually got to a high of 15.3%, price per bbl of oil got to $104.60 in 2007 dollars.
Some economists of the day argued that this was at least as bad as a depression--contraction, deflation and high unemployment. They were perplexed about inflation, due to lack of knowledge of the money supply side of the ledger, and were unable to get it under control. There is really no significant inflationary pressure today so you are really talking about a 9.4% rate of stagflation today compared to 22% in the REAL recession.
Now that was a recession[s]!!! This current recession is merely a pimple on the butt of that one. It is amazing to me that 90% of Americans do not even know the definition of a recession. It was formerly 3 consecutive quarters of downturn in GNP. The morons now say it is 2 consecutive quarters. To come out of a recession, we must have 2 consecutive quarters of GNP growth—I say 3 quarters. See Ben Bernanke’s quote in the following article and tell me how you feel about his veracity now. This White House must think we are as stupid as they are. I don’t even know anyone this stupid.
http://www.investopedia.com/articles/economics/08/1970-stagflation.asp
I remember every minute of this recession[s] and we were scared to death. It was actually a 16 year recession with minor quarterly up-ticks in the interim. It started in 1967 and remained until 1983. It was a scary time. The term Stagflation was coined during this time: 13.5% inflation and 8.5% unemployment, for a total of 22%. It was unprecedented and nothing has even come close since. The T-Bond actually got to a high of 15.3%, price per bbl of oil got to $104.60 in 2007 dollars.
Some economists of the day argued that this was at least as bad as a depression--contraction, deflation and high unemployment. They were perplexed about inflation, due to lack of knowledge of the money supply side of the ledger, and were unable to get it under control. There is really no significant inflationary pressure today so you are really talking about a 9.4% rate of stagflation today compared to 22% in the REAL recession.
Now that was a recession[s]!!! This current recession is merely a pimple on the butt of that one. It is amazing to me that 90% of Americans do not even know the definition of a recession. It was formerly 3 consecutive quarters of downturn in GNP. The morons now say it is 2 consecutive quarters. To come out of a recession, we must have 2 consecutive quarters of GNP growth—I say 3 quarters. See Ben Bernanke’s quote in the following article and tell me how you feel about his veracity now. This White House must think we are as stupid as they are. I don’t even know anyone this stupid.
http://www.investopedia.com/articles/economics/08/1970-stagflation.asp
Investors Business Daily Story on the Causes and Effects of the Bailout Debacle
Investors Business Daily Story on the Causes and Effects of the Bailout Debacle
The following is a condensation of a series from the Investor's Business Daily explaining "What Caused the Loan Crisis":
1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify.
The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.
My Note: Results--You must be kiddin’
How did the government get so deeply involved in the housing market?
My Note: Answer-- You must be kiddin’
1992: Republican representative Jim Leach (IA) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.
1993: The Clinton administration extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.
1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.
1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.
1997 - 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.
With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.
Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.
2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status". Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. "We think that the statements evidence contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.
2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen. Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.
2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership". The bill went nowhere.
2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, sub-prime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.
My Note: Folks, that is $6 Trillion owned or guaranteed by Fannie & Freddie
2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!
If you doubt any of this, just click the links below and listen to your lawmakers own words. They are condemning!
http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related#
http://www.youtube.com/watch?v=pIgqfM5C8lY#
http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related#
Postscript: ACORN is one of the principle beneficiaries of Fannie/ Freddie's slush funds. They are currently under indictment or investigation in many states. Barack Obama served as their legal counsel, defending their activities for several years.
The following is a condensation of a series from the Investor's Business Daily explaining "What Caused the Loan Crisis":
1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify.
The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.
My Note: Results--You must be kiddin’
How did the government get so deeply involved in the housing market?
My Note: Answer-- You must be kiddin’
1992: Republican representative Jim Leach (IA) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.
1993: The Clinton administration extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.
1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.
1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.
1997 - 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.
With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.
Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.
2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status". Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. "We think that the statements evidence contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.
2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen. Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.
2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership". The bill went nowhere.
2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, sub-prime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.
My Note: Folks, that is $6 Trillion owned or guaranteed by Fannie & Freddie
2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!
If you doubt any of this, just click the links below and listen to your lawmakers own words. They are condemning!
http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related#
http://www.youtube.com/watch?v=pIgqfM5C8lY#
http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related#
Postscript: ACORN is one of the principle beneficiaries of Fannie/ Freddie's slush funds. They are currently under indictment or investigation in many states. Barack Obama served as their legal counsel, defending their activities for several years.
Go Naked Short
Go Short
• Hearings on Hill now are all aimed at punishing Wall Street and the GOP and will not even mention Fannie Mae and Freddie Mac prior to the election. Wall Street does NOT want to hear that.
• The direction the election is heading, in no small part due to the above, and below, is NOT what Wall Street wants to hear, so the discounting has begun in earnest.
• The Bailout bill was a dog and no one on Wall Street expects Washington to all of a sudden grow a set of cahones and say NO MAS! It should NEVER have happened.
• I, Mr. X, am a smart investor and I know how the stock & paper markets work--what do I do, starting tomorrow?
• Short the market.
• If the election goes to Obama, I will Short the market, AGAIN!
No one is talking about it because they are more interested in being PC than in their country.
Dear Sir:
I know this is the second time I have commented on the Short Traders/Sellers subject and I do not wish to be redundant. However, I consider this to be inexplicably important. This practice was abolished following the Crash of '29 and for a good reason. A quick study of the factors that led to the Crash will support my contention. It is unconscionable to me that we fairly recently allowed for the dangerous practice again. If we do not bury it now, for the foreseeable future, the results may be devastating. There are several reasons going short may be the only way to make real money in this market presently: Wall St. /Main St. does not like the way this election is heading; neither likes the direction of these bogus hearings on the Hill - looking for every scapegoat except the ones that matter - Fannie Mae, Freddie Mac & ACORN; neither are too proud of the "rescue" plan. If this practice of short trading is not stopped, then I will join the party and start trading short as well.
Thank you for your good work and excellent constituent service. I remain a democrat for Wolf.
Steve Matthews
• Hearings on Hill now are all aimed at punishing Wall Street and the GOP and will not even mention Fannie Mae and Freddie Mac prior to the election. Wall Street does NOT want to hear that.
• The direction the election is heading, in no small part due to the above, and below, is NOT what Wall Street wants to hear, so the discounting has begun in earnest.
• The Bailout bill was a dog and no one on Wall Street expects Washington to all of a sudden grow a set of cahones and say NO MAS! It should NEVER have happened.
• I, Mr. X, am a smart investor and I know how the stock & paper markets work--what do I do, starting tomorrow?
• Short the market.
• If the election goes to Obama, I will Short the market, AGAIN!
No one is talking about it because they are more interested in being PC than in their country.
Dear Sir:
I know this is the second time I have commented on the Short Traders/Sellers subject and I do not wish to be redundant. However, I consider this to be inexplicably important. This practice was abolished following the Crash of '29 and for a good reason. A quick study of the factors that led to the Crash will support my contention. It is unconscionable to me that we fairly recently allowed for the dangerous practice again. If we do not bury it now, for the foreseeable future, the results may be devastating. There are several reasons going short may be the only way to make real money in this market presently: Wall St. /Main St. does not like the way this election is heading; neither likes the direction of these bogus hearings on the Hill - looking for every scapegoat except the ones that matter - Fannie Mae, Freddie Mac & ACORN; neither are too proud of the "rescue" plan. If this practice of short trading is not stopped, then I will join the party and start trading short as well.
Thank you for your good work and excellent constituent service. I remain a democrat for Wolf.
Steve Matthews
Former Fannie Mae Executives Who Brought Down Wall Street
Former Fannie Mae Executives Who Brought Down Wall Street
Franklin Raines
Former Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to resign from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae's accounting activities. At the time of his departure The Wall Street Journal noted, ' Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that 'mistakes were made' and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years.' Fannie Mae had to reduce its surplus by $9 billion.
Raines left with a 'golden parachute valued at $240 Million in benefits. The government filed suit against Raines when the depth of the accounting scandal became clear. See: http://housingdoom.com/2006/12/18/fannie-charges/
The Government noted, 'The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.' These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the misstated Fannie Mae profits.
Tim Howard
Former Chief Financial Officer of Fannie Mae. Howard 'was a strong internal proponent of using accounting strategies that would ensure a 'stable pattern of earnings' at Fannie. In everyday English - he was cooking the books. The Government Investigation determined that, 'Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,' On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses.
Raines and Howard resigned under pressure in late 2004.
Howard's Golden Parachute was estimated at $20 Million!
Jim Johnson
Former executive at Lehman Brothers who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight's May 2006 report on mismanagement and corruption inside Fannie Mae, and you'll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson's 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.' Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.
Johnson's Golden Parachute was estimated at $28 Million.
WHERE ARE THEY NOW?
FRANKLIN RAINES?
Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD?
Howard is also a Chief Economic Advisor to Obama
JIM JOHNSON?
Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee
O sure knows how to pick ‘em.
Franklin Raines
Former Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to resign from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae's accounting activities. At the time of his departure The Wall Street Journal noted, ' Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that 'mistakes were made' and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years.' Fannie Mae had to reduce its surplus by $9 billion.
Raines left with a 'golden parachute valued at $240 Million in benefits. The government filed suit against Raines when the depth of the accounting scandal became clear. See: http://housingdoom.com/2006/12/18/fannie-charges/
The Government noted, 'The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.' These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the misstated Fannie Mae profits.
Tim Howard
Former Chief Financial Officer of Fannie Mae. Howard 'was a strong internal proponent of using accounting strategies that would ensure a 'stable pattern of earnings' at Fannie. In everyday English - he was cooking the books. The Government Investigation determined that, 'Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,' On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses.
Raines and Howard resigned under pressure in late 2004.
Howard's Golden Parachute was estimated at $20 Million!
Jim Johnson
Former executive at Lehman Brothers who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight's May 2006 report on mismanagement and corruption inside Fannie Mae, and you'll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson's 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.' Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.
Johnson's Golden Parachute was estimated at $28 Million.
WHERE ARE THEY NOW?
FRANKLIN RAINES?
Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD?
Howard is also a Chief Economic Advisor to Obama
JIM JOHNSON?
Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee
O sure knows how to pick ‘em.
U.S. Oil Reserves - The Real Story
U S Oil Reserves
About 6 months ago I was watching a news program on oil and one of the Forbes Bros. was the guest. This is out of context, but this is the actual question as asked. The host said to Forbes, "I am going to ask you a direct question and I would like a direct answer, how much oil does the U.S. have in the ground." Forbes did not miss a beat, he said, "more than all the Middle East put together." Please read below.
The U. S. Geological Service issued a report in April ('08) that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota western South Dakota and extreme eastern Montana--check THIS out:
The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.
When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea, says Terry Johnson, the Montana Legislature's financial analyst.
This sizable find is now the highest-producing onshore oil field found in the past 56 years' reports, The Pittsburgh Post Gazette. It's a formation known as the Williston Basin, but is more commonly referred to as the 'Bakken. And it stretches from Northern Montana, through North Dakota and into Canada. For years, U. S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves.... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That's enough crude to fully fuel the American economy for 2041 years straight.
And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO!
U. S. Oil Discovery- Largest Reserve in the World! Stansberry Report Online - 4/20/2006:
Hidden 1,000 feet beneath the surface of the Rocky Mountains lay the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this mother load of oil why are we still fighting over off-shore drilling?
They reported this stunning news:
We have more oil inside our borders, than all the other proven reserves on earth. Here are the official estimates:
- 8-times as much oil as Saudi Arabia
- 18-times as much oil as Iraq
- 21-times as much oil as Kuwait
- 22-times as much oil as Iran
-500-times as much oil as Yemen
- It's all right here in the Western United States
HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America becomes independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy.....WHY?
James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, it has to. Think OPEC just might be funding the environmentalists?
Got your attention/ire up yet? Hope so! Now, while you're thinking about it...and hopefully P.O'd, do this:
Pass this along. If you don't take a little time to do this, then you should stifle yourself the next time you want to complain about gas prices--because by doing NOTHING, you've forfeited your right to complain.
Now I just wonder what would happen in this country if every one of you sent this to every one in your address book.
By the way...this is all true. Check it out at the link below! GOOGLE it or follow this link. It will blow your mind.
http://www.usgs.gov/newsroom/article.asp?ID=1911
Recession? My goodness, if we tapped into even a portion of our reserves, not only would recession be laughable, we would own OPEC.
About 6 months ago I was watching a news program on oil and one of the Forbes Bros. was the guest. This is out of context, but this is the actual question as asked. The host said to Forbes, "I am going to ask you a direct question and I would like a direct answer, how much oil does the U.S. have in the ground." Forbes did not miss a beat, he said, "more than all the Middle East put together." Please read below.
The U. S. Geological Service issued a report in April ('08) that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota western South Dakota and extreme eastern Montana--check THIS out:
The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.
When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea, says Terry Johnson, the Montana Legislature's financial analyst.
This sizable find is now the highest-producing onshore oil field found in the past 56 years' reports, The Pittsburgh Post Gazette. It's a formation known as the Williston Basin, but is more commonly referred to as the 'Bakken. And it stretches from Northern Montana, through North Dakota and into Canada. For years, U. S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves.... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That's enough crude to fully fuel the American economy for 2041 years straight.
And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO!
U. S. Oil Discovery- Largest Reserve in the World! Stansberry Report Online - 4/20/2006:
Hidden 1,000 feet beneath the surface of the Rocky Mountains lay the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this mother load of oil why are we still fighting over off-shore drilling?
They reported this stunning news:
We have more oil inside our borders, than all the other proven reserves on earth. Here are the official estimates:
- 8-times as much oil as Saudi Arabia
- 18-times as much oil as Iraq
- 21-times as much oil as Kuwait
- 22-times as much oil as Iran
-500-times as much oil as Yemen
- It's all right here in the Western United States
HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America becomes independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy.....WHY?
James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, it has to. Think OPEC just might be funding the environmentalists?
Got your attention/ire up yet? Hope so! Now, while you're thinking about it...and hopefully P.O'd, do this:
Pass this along. If you don't take a little time to do this, then you should stifle yourself the next time you want to complain about gas prices--because by doing NOTHING, you've forfeited your right to complain.
Now I just wonder what would happen in this country if every one of you sent this to every one in your address book.
By the way...this is all true. Check it out at the link below! GOOGLE it or follow this link. It will blow your mind.
http://www.usgs.gov/newsroom/article.asp?ID=1911
Recession? My goodness, if we tapped into even a portion of our reserves, not only would recession be laughable, we would own OPEC.
Bailout Debacle
Bailout Debacle
September 28, 2008
Two things that must be a part of the Bailout:
1-Abolish short-selling in the markets. Short-selling was no less a contributor in this 2008 debacle than in the 1929 Crash.
2-Strip all provisions regarding the 20% giveaway ($140 Billion) to ACORN, National Community Reinvestment Coalition, etc. and repeal the Community Reinvestment Act. This Act is destructive.
Otherwise, we will never be convinced that there truly is a problem that is being sold to us, that anyone in Washington is truly serious about ameliorating. It is pretty clear that my party, the Democratic Party, has sufficiently hoodwinked and rolled the administration and republicans who have bought into this plan. I feel confident they have done the same to the population at large.
If these items are not addressed, I predict we will be revisiting this issue within 24 months and it may be so catastrophic that it cannot be fixed.
I hope you vote against the bailout plan unless the above has been effected. It would be better to do nothing, save the abolition of short-selling. I am embarrassed to say that there are many (Democrat) fellow party members who care more about this election and their future than the future well being of this nation.
Steve Matthews
Gr_llc@msn.com
Sent via email to Congressman Frank R. Wolf
See link:
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
September 28, 2008
Two things that must be a part of the Bailout:
1-Abolish short-selling in the markets. Short-selling was no less a contributor in this 2008 debacle than in the 1929 Crash.
2-Strip all provisions regarding the 20% giveaway ($140 Billion) to ACORN, National Community Reinvestment Coalition, etc. and repeal the Community Reinvestment Act. This Act is destructive.
Otherwise, we will never be convinced that there truly is a problem that is being sold to us, that anyone in Washington is truly serious about ameliorating. It is pretty clear that my party, the Democratic Party, has sufficiently hoodwinked and rolled the administration and republicans who have bought into this plan. I feel confident they have done the same to the population at large.
If these items are not addressed, I predict we will be revisiting this issue within 24 months and it may be so catastrophic that it cannot be fixed.
I hope you vote against the bailout plan unless the above has been effected. It would be better to do nothing, save the abolition of short-selling. I am embarrassed to say that there are many (Democrat) fellow party members who care more about this election and their future than the future well being of this nation.
Steve Matthews
Gr_llc@msn.com
Sent via email to Congressman Frank R. Wolf
See link:
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
A Nation of Whiners
A NATION OF EXAGGERATORS
Quit Doling Out That Bad-Economy Line
By Donald Luskin
Sunday, September 14, 2008; Page B01, Washington Post
"It was the worst of times, and it was the worst of times."
I imagine that's what Charles Dickens would conclude about the current condition of the U.S. economy, based on the relentless drumbeat of pessimism in the media and on the campaign trail. In the past two months, this newspaper alone has written no fewer than nine times, in news stories, columns and op-eds, which key elements of the economy are the worst they've been "since the Great Depression." That diagnosis has been applied twice to the housing "slump" and once to the housing "crisis," to the "severe" decline in home prices, to the "spike" in mortgage foreclosures, to the "change" in the mortgage market and the "turmoil" in debt markets, and to the "crisis" or "meltdown" in financial markets.
It's a virus -- and it's spreading. Do a Google News search for "since the Great Depression," and you come up with more than 4,500 examples of the phrase's use in just the past month.
But that doesn't make any of it true. Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.
Overall, the pessimists are up against an insurmountable reality: In the last reported quarter, the U.S. economy grew at an annual rate of 3.3 percent, adjusted for inflation. That's virtually the same as the 3.4 percent average growth rate since -- yes -- the Great Depression.
Why, then, does the public appear to agree with the media? A recent Zogby poll shows that 66 percent of likely voters believe that "the entire world is either now locked in a global economic recession or soon will be." Actually, that's a major clue to what started this thought-contagion about everything being the worst it has been "since the Great Depression": Politics.
Patient zero in this epidemic is the Democratic candidate for president. As it would be for any challenger, it's in his interest to portray the incumbent party's economic performance in the grimmest possible terms. Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the "percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression." At best, this statement is a good guess. To be really true, it would have to be heavily qualified with words such as "maybe" or "probably." According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, "there are no consistent data on foreclosure or delinquency going all the way back to the Depression."
My NOTE: “Figures don’t lie, liars figure”
The Mortgage Bankers Association (MBA) database, which allows rigorous apples-to-apples comparisons, only goes back to 1979. It shows that today's delinquency rate is only a little higher than the level seen in 1985. As to the foreclosure rate, it was setting records for the day -- the highest since the Great Depression, one supposes -- in 1999, at the peak of the Clinton-era prosperity that Obama celebrated in his acceptance speech at the Democratic National Convention late last month. I don't recall hearing any Democratic politicians complaining back then.
Even if Obama is right that the foreclosure rate is the worst since the Great Depression, it's spurious to evoke memories of that great national calamity when talking about today -- it's akin to equating a sore throat with stomach cancer. According to the MBA, 6.4 percent of mortgages are delinquent to some extent, and 2.75 percent are in foreclosure. During the Great Depression, according to Wheelock's research, more than 50 percent of home loans were in default.
Moreover, MBA data show that today's foreclosures are concentrated in that small fraction of U.S. homes financed by sub-prime mortgages. Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. This suggests that today's mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time.
My Note: This is a false economy created by Fannie & Freddie—these loans were simply not bookable.
Here's another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that "the personal savings rate is now the lowest it's been since the Great Depression." The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.
Full disclosure: I'm an adviser to John McCain's campaign, though as far as I know, the senator has never taken one word of my advice. He's been sounding a little pessimistic on the economy of late, too. And to be fair, he isn't immune to the Depression-exaggeration virus, either. At a campaign news conference in July, my fellow adviser Steve Forbes warned that Obama was seeking "the biggest tax increase since Herbert Hoover and the Great Depression." Factual? Almost certainly not.
But at least Forbes wasn't dissing the economy -- he was dissing Obama. And Obama's infection by the Depression-exaggeration bug goes way back. His first outbreak came on Oct. 2, 2002, in his famous speech opposing the invasion of Iraq, delivered when he was an Illinois state senator. He said that the invasion was "the attempt by political hacks like Karl Rove to distract us from" a litany of economic troubles including "a stock market that has just gone through the worst month since the Great Depression."
Quite an exaggeration. When state senator Obama made that remark, the Standard & Poor's 500 had just dropped 11 percent for the month of September 2002. But stocks dropped twice that much in October 1987. Since the Great Depression, the stock market has had bigger one-month drops on four occasions. Obama's pessimism on stocks then happened to be as ineptly timed as it was factually incorrect. Exactly one week later, stocks hit bottom, and over the next five years the S & P 500 more than doubled, surging to new all-time highs.
So much for Obama's hyperbole about our terrible economy. But what about the media's?
A housing "slump," a housing "crisis"? A "severe" price decline? According to the latest report from the National Association of Realtors, the median price of an existing home is up 8.5 percent from the low of last February. And according to the U.S. Census Bureau, the median price of a new home is up 1.3 percent from the low of last December. Home prices may not be at all-time highs -- and there are pockets of continuing decline in some urban areas -- but overall they've clearly stopped going down and have started to recover. So why keep proclaiming a "crisis" after it's over?
"Turmoil" in the debt markets? Sure, but we've seen plenty worse.
According to the FDIC, there have been a total of 13 bank failures in 2007 and so far into 2008. There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures -- almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94.
Despite highly publicized losses in sub-prime mortgage lending, bank equity capital -- the best measure of core financial strength -- is now $1.35 trillion, more than the $1.28 trillion level of mid-2007, before the "turmoil" even began.
Financial market "crisis" and "meltdown"? Yes, from all-time highs last October, the S&P 500 has fallen 20 percent. But that's nothing by historical standards. Stocks have often fallen more than that over comparable spans of time. They fell more than twice that much in 1974 -- which was truly the worst drop since the Great Depression. Even the present 20-percent loss isn't what it seems. The damage has been heavily concentrated in the financial sector -- banks, investment firms and mortgage companies. If you exclude that sector, stocks are off 14.8 percent.
Some economic indicators -- export growth and non-defense capital goods orders such as industrial machinery, for example -- are running at levels associated with brisk expansion. Others are running at middling levels, such as the closely followed Institute for Supply Management manufacturing index. But it's actually difficult to find many that are running at truly recessionary levels.
There have been 11 recessions since the Great Depression. And we're nowhere close to being in the 12th one now. This isn't just a matter of opinion. Words -- even words as seemingly subjective as "recession" -- have meaning.
In a new working paper, economist Edward Leamer of UCLA's Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer's paper, we'll only fall into recession "if things get much worse."
My NOTE: the traditionally recognized definition of a recession is two consecutive quarters of downturn in GNP.
This would suggest that anyone who says we're in a recession, or heading into one -- especially the worst one since the Great Depression -- is making up his own private definition of "recession"; and, probably for his own political purposes.
McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators.
My NOTE: I still like “whiners”
Yet Gramm was pilloried for his remarks, and McCain had to distance himself from his adviser by joking that in a McCain administration, Gramm would be ambassador to Belarus. What does it say about our nation that it has become political suicide to state the good news that our economy is not in recession?
Whatever the political outcome this year, hopefully this will prove to be yet another instance of that iron law of economics and markets: The sentiment of the majority is always wrong at key turning points. And the majority is plenty pessimistic right now. That suggests that we're on the brink not of recession, but of accelerating prosperity.
Maybe this will turn out to be the best of times -- at least since the Great Depression.
don@trendmacro.com
Donald L. Luskin is chief investment officer of Trend Macrolytics LLC, an economics consulting firm based in Menlo Park, Calif.
http://en.wikipedia.org/wiki/Donald_Luskin
Quit Doling Out That Bad-Economy Line
By Donald Luskin
Sunday, September 14, 2008; Page B01, Washington Post
"It was the worst of times, and it was the worst of times."
I imagine that's what Charles Dickens would conclude about the current condition of the U.S. economy, based on the relentless drumbeat of pessimism in the media and on the campaign trail. In the past two months, this newspaper alone has written no fewer than nine times, in news stories, columns and op-eds, which key elements of the economy are the worst they've been "since the Great Depression." That diagnosis has been applied twice to the housing "slump" and once to the housing "crisis," to the "severe" decline in home prices, to the "spike" in mortgage foreclosures, to the "change" in the mortgage market and the "turmoil" in debt markets, and to the "crisis" or "meltdown" in financial markets.
It's a virus -- and it's spreading. Do a Google News search for "since the Great Depression," and you come up with more than 4,500 examples of the phrase's use in just the past month.
But that doesn't make any of it true. Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.
Overall, the pessimists are up against an insurmountable reality: In the last reported quarter, the U.S. economy grew at an annual rate of 3.3 percent, adjusted for inflation. That's virtually the same as the 3.4 percent average growth rate since -- yes -- the Great Depression.
Why, then, does the public appear to agree with the media? A recent Zogby poll shows that 66 percent of likely voters believe that "the entire world is either now locked in a global economic recession or soon will be." Actually, that's a major clue to what started this thought-contagion about everything being the worst it has been "since the Great Depression": Politics.
Patient zero in this epidemic is the Democratic candidate for president. As it would be for any challenger, it's in his interest to portray the incumbent party's economic performance in the grimmest possible terms. Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the "percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression." At best, this statement is a good guess. To be really true, it would have to be heavily qualified with words such as "maybe" or "probably." According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, "there are no consistent data on foreclosure or delinquency going all the way back to the Depression."
My NOTE: “Figures don’t lie, liars figure”
The Mortgage Bankers Association (MBA) database, which allows rigorous apples-to-apples comparisons, only goes back to 1979. It shows that today's delinquency rate is only a little higher than the level seen in 1985. As to the foreclosure rate, it was setting records for the day -- the highest since the Great Depression, one supposes -- in 1999, at the peak of the Clinton-era prosperity that Obama celebrated in his acceptance speech at the Democratic National Convention late last month. I don't recall hearing any Democratic politicians complaining back then.
Even if Obama is right that the foreclosure rate is the worst since the Great Depression, it's spurious to evoke memories of that great national calamity when talking about today -- it's akin to equating a sore throat with stomach cancer. According to the MBA, 6.4 percent of mortgages are delinquent to some extent, and 2.75 percent are in foreclosure. During the Great Depression, according to Wheelock's research, more than 50 percent of home loans were in default.
Moreover, MBA data show that today's foreclosures are concentrated in that small fraction of U.S. homes financed by sub-prime mortgages. Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. This suggests that today's mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time.
My Note: This is a false economy created by Fannie & Freddie—these loans were simply not bookable.
Here's another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that "the personal savings rate is now the lowest it's been since the Great Depression." The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.
Full disclosure: I'm an adviser to John McCain's campaign, though as far as I know, the senator has never taken one word of my advice. He's been sounding a little pessimistic on the economy of late, too. And to be fair, he isn't immune to the Depression-exaggeration virus, either. At a campaign news conference in July, my fellow adviser Steve Forbes warned that Obama was seeking "the biggest tax increase since Herbert Hoover and the Great Depression." Factual? Almost certainly not.
But at least Forbes wasn't dissing the economy -- he was dissing Obama. And Obama's infection by the Depression-exaggeration bug goes way back. His first outbreak came on Oct. 2, 2002, in his famous speech opposing the invasion of Iraq, delivered when he was an Illinois state senator. He said that the invasion was "the attempt by political hacks like Karl Rove to distract us from" a litany of economic troubles including "a stock market that has just gone through the worst month since the Great Depression."
Quite an exaggeration. When state senator Obama made that remark, the Standard & Poor's 500 had just dropped 11 percent for the month of September 2002. But stocks dropped twice that much in October 1987. Since the Great Depression, the stock market has had bigger one-month drops on four occasions. Obama's pessimism on stocks then happened to be as ineptly timed as it was factually incorrect. Exactly one week later, stocks hit bottom, and over the next five years the S & P 500 more than doubled, surging to new all-time highs.
So much for Obama's hyperbole about our terrible economy. But what about the media's?
A housing "slump," a housing "crisis"? A "severe" price decline? According to the latest report from the National Association of Realtors, the median price of an existing home is up 8.5 percent from the low of last February. And according to the U.S. Census Bureau, the median price of a new home is up 1.3 percent from the low of last December. Home prices may not be at all-time highs -- and there are pockets of continuing decline in some urban areas -- but overall they've clearly stopped going down and have started to recover. So why keep proclaiming a "crisis" after it's over?
"Turmoil" in the debt markets? Sure, but we've seen plenty worse.
According to the FDIC, there have been a total of 13 bank failures in 2007 and so far into 2008. There were 15 in 1999-2000, the climax of the Obama-celebrated era of Clintonian prosperity. And in recession-free 1988-89, there were 1,004 failures -- almost an order of magnitude more than today. Since the Great Depression, the average number of bank failures each year has been 94.
Despite highly publicized losses in sub-prime mortgage lending, bank equity capital -- the best measure of core financial strength -- is now $1.35 trillion, more than the $1.28 trillion level of mid-2007, before the "turmoil" even began.
Financial market "crisis" and "meltdown"? Yes, from all-time highs last October, the S&P 500 has fallen 20 percent. But that's nothing by historical standards. Stocks have often fallen more than that over comparable spans of time. They fell more than twice that much in 1974 -- which was truly the worst drop since the Great Depression. Even the present 20-percent loss isn't what it seems. The damage has been heavily concentrated in the financial sector -- banks, investment firms and mortgage companies. If you exclude that sector, stocks are off 14.8 percent.
Some economic indicators -- export growth and non-defense capital goods orders such as industrial machinery, for example -- are running at levels associated with brisk expansion. Others are running at middling levels, such as the closely followed Institute for Supply Management manufacturing index. But it's actually difficult to find many that are running at truly recessionary levels.
There have been 11 recessions since the Great Depression. And we're nowhere close to being in the 12th one now. This isn't just a matter of opinion. Words -- even words as seemingly subjective as "recession" -- have meaning.
In a new working paper, economist Edward Leamer of UCLA's Anderson School of Management shows that changes in the unemployment rate, payroll jobs and industrial production almost precisely explain every recession as officially determined by the National Bureau of Economic Research. At present, only the unemployment rate exceeds the recession threshold. The other two factors are far from it. According to Leamer's paper, we'll only fall into recession "if things get much worse."
My NOTE: the traditionally recognized definition of a recession is two consecutive quarters of downturn in GNP.
This would suggest that anyone who says we're in a recession, or heading into one -- especially the worst one since the Great Depression -- is making up his own private definition of "recession"; and, probably for his own political purposes.
McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators.
My NOTE: I still like “whiners”
Yet Gramm was pilloried for his remarks, and McCain had to distance himself from his adviser by joking that in a McCain administration, Gramm would be ambassador to Belarus. What does it say about our nation that it has become political suicide to state the good news that our economy is not in recession?
Whatever the political outcome this year, hopefully this will prove to be yet another instance of that iron law of economics and markets: The sentiment of the majority is always wrong at key turning points. And the majority is plenty pessimistic right now. That suggests that we're on the brink not of recession, but of accelerating prosperity.
Maybe this will turn out to be the best of times -- at least since the Great Depression.
don@trendmacro.com
Donald L. Luskin is chief investment officer of Trend Macrolytics LLC, an economics consulting firm based in Menlo Park, Calif.
http://en.wikipedia.org/wiki/Donald_Luskin
Tuesday, February 2, 2010
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