The National Bureau of Economic Research says they don’t think there is enough evidence to conclude that the recession is really over. These are the egg head economists that make the “official” determinations that everybody quotes on the news. They don’t think we’ve moved from the bottom “trough” (that’s the opposite of a peak on a graph). Basically they aren’t sure the GDP numbers have been reflecting what is really going on in the economy. (you think?)
Jobs continue to drain out of the country, the pace of home foreclosures is picking up and business activity is sluggish at best. US corporations are awash in cash but aren’t investing, at least not in the US. The stock market is up but only because the investment banks trade back and forth between each other (the consistently low volume gives this away). These banks are doing the same with oil futures and we’ll probably see $4.00 gas by the election.
Then you have the commercial debt bubble that is already dragging hundreds of small and medium banks under and that won’t really start getting bad for another year. And there are the big banks who used to be restricted to being leveraged only 10 to 1. Thanks to Greenspan’s insistence that credit derivatives or anything else not be regulated the big banks are leveraged thousands to one and getting worse every day. The numbers are about double what they were when they crashed in ’08 and they needed a bail out. Any payback of TARP monies banks have made is just an illusion, they are getting far beyond the ability of the government to bail them out. The bulk of their assets exist only as electrons in a computer. The only reality they deal in is the 150 billion in bonus checks they wrote to themselves.
The economy may start to look better if China adjusts the value of its currency and slows the out-sourcing of US jobs by increased regulation. This is only temporary fix however. Unless there is a comprehensive rollback of the last thirty years of Reagonomics the spiral to corporate feudalism will just pick up speed again.
Another 200,000 new serfs lost unemployment benefits today on top of the 200,000 last week. The Republicans refuse to allow funding for extended benefits claiming pay/go rules apply since people starving is not an emergency. Even if the Senate provides the funding the people who have been out of work the longest are running out of eligibility anyway. There are a lot of people falling into the “trough” of the recession. www.prairie2.com