Category Archives: Business/Economics

Business/Economics, Opinion, U.S.

What Economic Recovery? Obama spouts the neccesity of higher education, but Middle Class is now officially unable to pay for it

“We’re seeing further differentiation in incomes, with the rich get richer and the poor getting poorer. Meanwhile, the middle class often claims they’re too wealthy to get student aid, yet too poor to afford college.”-Mark Kantrowitz,  FinAid.org and FastWeb.com

President Barack Obama is constantly stumping for higher education as a way to recover the U.S. economy, the problem is most people in the United States can’t afford to go.

According to a CNN/Money report (based on the findings of the College Board), tuition and fees have skyrocketed 130% in the past 20 years, while incomes for the majority of U.S. workers have stayed relatively the same.  By the way a recent IRS report says the same thing about U.S. incomes.

In 2008 median income was $33,000, when adjusted for inflation that means the average person was making $400.00 less than in 1988 (I knew I wasn’t crazy).

In 2008 tuition and fees averaged $6,500 per year, which is 130% more than what they were in 1988.

What happened to financial aid?  Obama ran for president partly on a promise to make more federal aid available.  Didn’t happen.  According to the College Group, the maximum federal aid (which includes loans, which should not be considered “aid” ’cause you have to pay it back) has remained stuck at 1992 levels; only $23,000  (by the way that “aid” is limited, so if you don’t get a ‘four year degree’ in ‘four’ years, which is actually the reality for many, you don’t get anymore federal “aid”).

Two trends have developed as a result: Families hell bent on their kids getting worthless degrees (I have one, from Idaho State University) are getting deeper into debt (isn’t that part of our country’s economic problems?).  The other bigger trend is that people are delaying entry into college, or just saying “forget it, it ain’t worth it”.

Here’s a sobering thought: According to Mark Kantrowitz, the cost of higher education is such that many of today’s college students will still be paying their student loans when their children are college age!  That is a sure sign that college is no longer “worth it”!

 

Business/Economics, Idaho, U.S.

What Economic Recovery? Arby’s Sold

Wendy’s/Arby’s Group sold off its Arby’s restaurant, for $430 million.  The new owner is Atlanta based Roark Capital Group.

Earlier in the year it was announced that if Arby’s sales didn’t improve, the fast food restaurant would be sold.  The former Wendy’s/Arby’s Group still holds 15% of Arby’s stock.  The CEO, Roland Smith, says they can now focus solely on the better performing Wendy’s fast food chain.

Smith says that any closing of Arby’s stores will involve those already slated to be closed, which will happen as leases expire.  The deal with Roark Capital Group will result in changes for Arby’s, including a name change.

I can tell you that here in Chubbuck, Idaho, the Arby’s store has the lowest customer traffic of any of the national chain fast food restaurants.

 

Business/Economics, U.S.

What Economic Recovery? Proof that it’s gotten worse since Obama became President

The following list is not necessarily blaming Obama for the economic problems, it’s just showing how things have gotten worse since he became President.

1: In January 2009, the official U.S. unemployment rate was 7.6 percent. Today it is 9.1 percent.

2: When Barack Obama took office, the number of “long-term unemployed” in the United States was approximately 2.6 million. Today, that number is up to 6.2 million.

3: When Barack Obama first became president, the average price of a gallon of gasoline in the United States was $1.83. Today it is $3.79. This also affects the price of almost everything else that we buy.

4: In April 2009, the average U.S. household spent approximately $201 on gasoline. In April 2011, the average U.S. household spent approximately $369 on gasoline.

5: According to an article in the Daily Mail, the cost of a Memorial Day cookout was 29 percent higher this year than it was last year.

6: When Barack Obama was sworn in, there were nearly 32 million Americans on food stamps. Today, there are more than 44 million on food stamps.

7: According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years.

8: When Barack Obama took office, the U.S. national debt was 10.6 trillion dollars.  Today it is 14.3 trillion dollars.

9: The federal government has borrowed 29,660 more dollars per household since Barack Obama signed the economic stimulus law two years ago.

10: During Barack Obama’s first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

11: The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  Thanks to George W. Bush, Barack Obama and the U.S. Congress, U.S. taxpayers are standing behind that debt.

12: Under Obama, the U.S. trade deficit continues to grow. The trade deficit was about 33 percent larger in 2010 than it was in 2009, and the 2011 trade deficit is expected to be even bigger.

13: Only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.

14: Just since August, 2 million more Americans have left the labor force.

15: In 2010, more than a million U.S. families lost their homes to foreclosure for the first time ever, and that number is expected to go even higher in 2011.

16: The U.S. real estate crisis just continues to get worse. During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.

17: The U.S. dollar has fallen by 17 percent compared to other major national currencies since 2009.

18: Faith in the U.S. dollar and in U.S. Treasuries is rapidly declining.  The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping U.S. government debt. That is not a good sign.

19: When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs about $1500.

20: Americans seem to be more pessimistic about the economy than ever.  According to a brand new poll, 61 percent of Americans believe that they will not return to their “pre-recession” lifestyles until at least 2014.

Source: The American Dream

Business/Economics, U.S.

What Economic Recovery? U.S. Investor Markets about to crash

1: According to The New York Post, nearly all of the major Wall Street banks are planning huge layoffs….

“Barclays Capital, Goldman Sachs, Bank of America, JPMorgan Chase and Morgan Stanley currently are among those financial institutions either weighing staff cuts or actually paring payroll.”

2: A new CNBC article claims that a “negative feedback loop” has “taken control” on Wall Street.  Essentially what is happening is that bad economic news is creating an “environment of pessimism” which creates even more bad economic news, etc. etc.

3: OPEC has announced that oil production levels will not be raised. This is likely to spook the financial markets and cause the price of oil to go up even higher in the coming weeks. The last time U.S. energy expenditures were over 9 percent of GDP was back in 2008 and at that point the economy rapidly plunged into a very deep recession. For the first time since 2008 we have reached the 9 percent figure again, and many on Wall Street fear that this could lead to bad things.

4: QE2 will be wrapping up at the end of June, and many on Wall Street had been counting on yet another round of quantitative easing. Over the past couple of days, however, it has started to become clear that is just not going to happen – at least for now. In fact, Pimco’s co-chief investment officer, Bill Gross, is telling investors that for the Fed it will “be difficult to initiate a QE3.” But without artificial stimulation the U.S. economy may start really struggling again, and Wall Street knows this.

5: Moody’s recently warned that it may downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo. Bank stocks were on the cutting edge of the financial collapse of 2008, and it looks like that may happen again this time.

6: Faith in the U.S. dollar continues to decline. Back on April 18th, Standard & Poor’s changed its outlook on U.S. government debt from “stable” to “negative” and warned that the U.S. could soon lose its AAA rating. China has been very busy dumping short-term U.S. government debt and there does not seem to be a lot of people (other than the Federal Reserve) that are eager to buy U.S. Treasuries right now.

7: U.S. consumer confidence is already lower than it was back in September 2008 when Lehman Brothers collapsed. Consumer spending makes up approximately 70 percent of the U.S. economy and Wall Street is watching this number closely.

8: A whole slew of bad economic news has been pouring in lately. Mike Riddell, a fund manager at M&G Investments in London, recently pointed out to CNBC some of the data points that have been particularly alarming….

“US house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed and Chicago Fed were all very disappointing.”

9: A whole lot of folks in the financial industry have been warning about the next financial collapse lately. For example, economist Nouriel Roubini recently made the following statement….

“I think right now we’re on the tipping point of a market correction. Data from the U.S., from Europe, from Japan, from China are suggesting an economic slowdown.”

10: According to a new CNN/Opinion Research Corporation poll, 48% of Americans believe that it is either “very likely” or “somewhat likely” that the United States will experience a “depression” within the next 12 months. Needless to say, Wall Street is highly influenced by the overall mood of the nation.

Source: The American Dream

 

Business/Economics, Idaho

What Global Warming? Idaho Potato farmers running out of time, cool weather adding to Global Food Crisis

It’s June 11, and potato farmers in Ashton, and Driggs, Idaho, have been hoping for warmer, dryer weather.  They can’t plant potatoes in wet, cold ground: “This season has been especially hard because every time we are about to get into the fields for a couple days it rains us out. It takes sometimes five to 10 days to dry up in good enough shape in preparation for planting.”-Dennis Fransen, potato seed farmer

Potato seed farmers are at the bottom of the potato farming chain.  Commercial potato farmers rely on the seed farmers for their new crop.  Bigger potatoes are sent to the commercial farmers to grow even bigger.  The small potatoes are kept for ‘seed’ for the next planting.  This year, because of the wet, cool weather it looks like most of the seed crop will be the small type, that commercial farmers don’t want.

 

Business/Economics, U.S.

What Economic Recovery? Beige Book shows New York, Philly, Atlanta and Chicago Slow Down

The big bank known as Federal Reserve released its “Beige Book” of economic conditions (aka Summary of Commentary on Current Economic Conditions).  Four districts of the United States show a slow down in economic activity.

Activity in the New York (district 2), Philadelphia (district 3), Atlanta (district 6) and Chicago (district 7) regions are slowing down.  The Federal Reserve blames the down turn on everything from the March 11 disasters in Japan, to a weak housing market, to increasing food and energy prices.

Their are 12 Federal Reserve districts in the United States.  The Beige Book will be presented at a Federal Reserve meeting on June 21.

Business/Economics, U.S.

What Economic Recovery? Diesel Fuel usage new Canary in the Coal Mine, Recovery is Dead

“I was optimistic we’d have a better month, but it looks now like the recovery ended last summer, which means we’re just idling.”-Ed Leamer, University California Los Angeles economist

If you use diesel fuel you might have noticed that the price has been slowly going down.  That’s good for those of use who pay at the pump, but for the economy as a whole it’s a Canary in the Coal Mine of worse to come for our economy.

Diesel fuel prices are dropping because of a huge drop in demand.  That drop has been ongoing since last year, and in the past four months has been picking up speed.

Most users of diesel are transportation industries.  They ship products all over the country, but shipments of new products have dropped so much in eight of the past 12 months, that trucks, ships and aircraft are sitting idle.

According to the Ceridian-UCLA Pulse of Commerce Index, the drop in diesel fuel demand is proof any economic recovery that might have been, is over.

Ed Leamer says the two main reasons demand is down: Low wages/lack of jobs and high debt.  Notice they’re the two things our elected officials, across the board from local leaders to the White House, can’t seem to deal with.

Leamer also says such a drop in demand, in the U.S., is a first in world history: “U.S. demand has been such a key for the rest of the world for so long. This is sort of uncharted territory.”

 

 

Business/Economics, International

Government Incompetence: Greece has been paying thousands of dead people money

The insolvent government of Greece has just discovered that 4,500 dead people have been receiving government retirement pay, for years.

The government is now investigating whether there was a slip up on their side, or the families never filed notifications of death.  At least $23 million was paid out to dead people.

The Greek government is also investigating another 9,000 possible dead recipients of retirement money.

Business/Economics, U.S.

What Economic Recovery? U.S. unemployment much higher than officially reported, Corporate America needs to create 500,000 jobs EVERY month

The official U.S. unemployment rate is currently 9.1%, but that does not count those unemployed who dropped off the official lists, or those who are discouraged job seekers.

Fadhel Kaboub, an economics professor at Denison University in Ohio, says when you take into account people who are no longer counted by official sources, the actual unemployment rate is 17%.

The U.S. Department of Labor said 14 million people are officially unemployed, but Kaboub believes it’s actually 20-23 million.

He said the reason the stock markets reacted badly to the May job creation numbers, is because the only way there can be a recovery is if Corporate America creates 500,000 new jobs every month.  That has yet to happen, and as demonstrated by the May numbers, jobs creation is actually going down.