Summer of Recovery Dog Days

I haven't been checking in with Bill McBride's Calculated Risk much lately, so it was instructive just now to spend an hour on the blog and realize how uniformly dismal the economic news is. A quick sample of the gangrene shoots:

Moody's June Commercial Real Estate Price Index declined 4 percent.

The Philly Fed's Business Outlook Survey says that "after two months of slowing activity," regional manufacturing activity contracted in August, for the first time since July 2009

Back to half-million numbers on weekly initial unemployment claims, which are the highest since November 2009.

New Home Affordable Mortgage Program data show some home borrowers putting 80 percent of their income into debt service, rising rates of cancellations on mortgage modifications, and the HAMP program itself entering its death throes. (Good news for America, but not the kind of thing the administration wants to brag about.)

No improvement in state unemployment rates.

Things have gotten so slow that Wall Street traders are giving up coke for pot.

Note that, according to the White House itself, we have already enjoyed most of the benefits of the $787 billion ARRA Stimulus. These benefits seem to have consisted of making signs to tell people about the stimulus.

All this can only mean one thing: We need to spend even more on an even bigger, better stimulus, because it's always darkest before the dawn. Take it away, Dr. Pauly Krugnuts.

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  • Almanian||

    Wall Street traders are giving up coke for pot.

    Whoa. I wasn't overly concerned till I got to that part.

    *trembling under desk*

  • maryj||

    The Porkulus logos feature mary jane leaves.

  • ||

    I have to agree, when the financial go-getters start thinking they can get by without the coke it's bad enough, but taking up pot, we're in big trouble now. I'm thinking about how well I can sleep on a lumpy mattress.

  • Not a New Yorker||

    I thought coke was an 80s thing? No?

  • ||

    I know. Their job is to be paranoid and edgy, not laid back. Maybe we should encourage them to switch to crystal meth.

  • Almanian||

    And remember: "It's always darkest right before it turns pitch black."

    How long till 2012 again?

  • J||

    The question might become how long 'til 2016.

  • sloopyinca||

    The REAL question is how long till the revolution.

  • Thane Eichenauer||

    If you wait for other people to start the revolution you will be waiting a long time.

  • sloopyinca||

    You've got a point there. I guess I'll start tomorrow.

  • ||

    I'll bring the snacks!

  • Spiny Norman||

    Will it be televised?

  • Leon Trotsky||

    It will be on YouTube.

  • AA||

    It will also be available on Podcast.

  • cynical||

    I just wanna watch.

  • ||

    I'm sure you'll be able to TiVo it.
    The Revolution will fit everyone's schedule.

  • AA||

    Modern technology will make revolutions so much more fun.

  • Ted S.||

  • Greer||

    Just for what it's fucking worth...

    I have a business contracting to Silicon Valley companies, I work in high tech stuff for electonics companies.

    I have seen a big increase in business this year. Last year sucked small limp dicks but this year is much better. I don't consider myself an indicator of the whole of the economy but my business is picking up so I'm hopeful. Use your statistics and macro data as you wish.

  • Jeffersonian||

    I wonder if this has anything to do with the expiration of the Bush tax cuts, as Art Laffer has been pointing out.

  • ||

    Yes...that and Obama and the democrats are still perceived and nuts with the productive class.

  • ||

    opps i thought you were talking about how the economy is now tanking again.

  • Brett L||

    I've heard that, too. From what I can tell, companies put off IT spending for about 2 years. At some point you've put off all the IT spending you can put off, and you've got to replace and maintain. As an IT contractor in North Florida, it's gonna be a really shit year unless the State hits the BP jackpot* before the December budget revision. It sucks, because we were just starting to think we might live through this round.

    *None of this should be taken as a statement that BP is at fault for driving away the tourists, or that the fucking they are going to get by the State of Florida is deserved. I heard some flunky talking on the news about it being "years" before they know the full extent. BP should really call Philip Morris and ask what kind of lube works best for the permanent fucking.

  • kreminitly||

    "None of this should be taken as a statement that BP is at fault for driving away the tourists, or that the fucking they are going to get by the State of Florida is deserved."

    ************
    I'd drive to the coast to see an oil slick. If there was one. Seems as good a tourist attraction as any other. In fact, here is a can't lose merchandising angle. Suck out that oil, refine it into gasoline, and presto... Gulf Gas! Oh wait......never mind.
    Anyway, regarding the coastal clean-up, the residents of Florida can always look forward to Obama's forthcoming book, "The Audacity of Soap"

  • ||

    Computers do not need health insurance.

  • ||

    You've obviously never owned a Dell.

  • Wind Rider||

    And won't after having worked on 'em!

  • Ron L||

    Joshua Corning|8.21.10 @ 2:56AM|#
    "Computers do not need health insurance."
    I think you're on to something.
    Turns out that French productivity/employee is pretty good, and the reason is the employment laws. No sane French employer (permanent-) hires since it's like getting married and the divorce is equally expensive. Instead, the employers buy the absolute best automated equipment. Doesn't go on strike, no benes and you can 'fire' it. Plus it takes fewer employees to per output.
    What sane US employer is going to add staff when you have no idea WIH Obama-care is going to do the labor costs?
    I wouldn't be surprised to see IT and plant-automation do well, while U/E stays high or goes higher. And see more off-shoring of jobs.

  • Team Blue||

    business equipment, including tech products, have been the one really strong sector this year. This areas had added a couple points to GDP growth the past two quarters.

  • #||

    wrong tag

  • Kevin Leo||

    you are a beneficiary of Obamacare...you sell contractors who would otherwise be expensive FTEs under this regime...

  • ||

    Part of this recession is a big shift to online retail. Brick-and-mortar stores are espensive to operate. And more people are shopping online for deals.

    What we're experiencing now is (IMO) the wave that the dot-commers wanted to happen in 1999. When the recession ends, brick-and-mortar retail will be in fucking ashes.

    Another interesting thing - have you noticed the number of ebay stores that seem to be run by mom-and-pop operations in China? You can buy iPhone knockoffs on eBay and they'll be shipped directly from Hong Kong.

  • ||

    Those signs are going to come back and bite them in the ass.

    Every time I see one, it's like a little reminder of what a waste of money the stimulus was.

  • ARRA Sign Maker||

    Every time I see one, it's like a little reminder of what a waste of money blessing the stimulus was.

    FTFY

  • sloopyinca||

    The IG looking into the signs concluded that they were propoganda, so it looks like the stimulus will create a few more jobs for people to tear the signs down.

    Maybe Obama was right about this multiplier thing after all.

  • ||

    Nice image, btw. But I think it needs some star spangles.

  • ||

    Maybe photoshop in some bits of Starry Night.

  • Wind Rider||

    As long as they don't repost that picture of Franken in a diaper again, it's all good.

  • ee(fake)||

    but just waits
    until the
    stimileus takes effect!!

  • kreminitly||

    For the first time in my life, I'm proud to be a teabagger.

  • Binky||

    We need to spend even more on an even bigger, better stimulus

    But what if the economy gets overheated? Isn't that a bad thing?

  • #||

    "But what if the economy gets overheated?"

    It will be Bush's fault.

  • ||

    "And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all."

    Oh, Krugman! Why should a Nobel prize winning economist need to be told what that means?

    "But isn’t keeping taxes for the affluent low also a form of stimulus?"

    That's a rhetorical question!

    I'm surprised to see that comin' from Krugman--it must have just slipped out!

  • ||

    Oh, and just to add a little to the gloom, I count 119 bank failures so far this year:

    http://www.fdic.gov/bank/individual/failed/banklist.html

    And you all know what the recipe is for stopping bank failures and that kind of thing...

    According to Krugman, that's getting around people's marginal propensity to save, isn't it?

  • sloopyinca||

    /makes straight face

    Seriously, Mr. Cavanaugh, you can do better than "Pauly Krugnuts." This is no place for sophomoric name-calling.

  • JoshINHB||

    Krugmanauts.

    Krugmites

    Krugmanistas

    are all acceptable.

  • sloopyinca||

    Freddy Krugger.

  • ||

    Krugmelites.

  • ||

    Since he's the Most Trusted Economist in America, maybe we should call him Walter Krugkite.

  • Corduroy||

    What happened to Krugabe? I liked that one.

  • Tman||

    Pauly Krugnuts was the name we all agreed to call him from now on. Tim is just keepin it real.

  • mr simple||

    Seriously, someone tell the noob to read the FAQ.

  • sloopyinca||

    Sarcasm detector must have dead batteries, Mr Simple.

  • mr simple||

    Uh, there's not really an FAQ. It was a joke. But nice try.

  • ||

    Was no FAQ...

    There is one now.

  • -||

    Pauly Krugnuts was the name we all agreed to call him

    "We"?

  • Wind Rider||

    I'd say, what's this 'we' shit white man, but that would be racist.

  • Coach||

    There is no "we" in libertarianism.

  • RichN||

    krug oil, noun - 1. darker crude discovered while drilling hole to china with no use in real world application because it can't refined and/or processed.

  • Patrick||

    So Krugman blames the anti-big government crowd for the fact that government can't raise enough taxes to keep its spending bender going?

    Sometimes I think this guy just writes this stuff to sell newspapers.

  • Corduroy||

    Say it isn't so!

  • Invisible Finger||

    Seems like he's writing stuff to put newspapers out of business (or on the dole).

  • SPQR||

    He certainly lost any concern for his reputation long ago.

  • ||

    http://www.youtube.com/watch?v.....r_embedded

    Welcome to the New Great Depression.

  • Almanian||

    Off with my son to rack 100-150 rounds of 9mmm, plus backup of 500 .22 through the trusty Colt Challenger if further fun is required.

    And we'll eat lunch at the steak place near the gun shop.

    $$ into the economy. Just trying to do our part to move those numbers North.

  • Spiny Norman||

    If you're buying ammo at these prices, you really are propping up the economy.

  • Paul Krugman||

    Enough with the "Pauly Krugnuts" crap already.

    I'm Gumby, dammit!

  • Fluffy||

    I'm absolutely flabbergasted at Krugman's complete dishonesty.

    As he well knows, the issue is not current interest rates - the issue is what % of the nation's future income has to be devoted to servicing interest on the national debt.

    "Hey! Money's almost free! Let's borrow trillions!" That sounds good when you purposefully avoid telling people how you intend to pay it back.

    I am absolutely sure that he knows this. I have to assume he either doesn't care, or welcomes historic levels of inflation in the future to allow the federal government to pay its debts.

  • Cap'n NoStar||

    Krugnuts wants to "Cloward and Piven" the system drowning the government in interest debt, and, per Saul Alinsky, being intellectually dishonest is an acceptable tactic to get readers to buy in.

  • Mike M.||

    Furthermore, no matter how many times Krugman uses his favorite phrase of "invisible bond vigilantes", he knows full well that real demand for our treasuries is now on the way down.

    Our biggest foreign creditor, China, has deemed U.S. treasuries to no longer be top level investment grade and has stopped buying them altogether. That's why the Fed has had to once again step in with quantitative easing to pick up the slack and keep the interest rates artificially low.

    Needless to say, Krugman will never mention that in his blog. The man is a hack and a joke in every possible regard.

  • ||

    It would be alright if they were using the low interest rates to refinance the nations high interest rate debt.

    But they are not. It's NEW debt.

  • ||

    From Krugtard's op-ed

    How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

    Compare government expenditures (adjusted for inflation and population growth, of course) from thirty years ago with those today and tell me again that fucking governemnt is underfunded you goddam bloomin' idiot.

    The NY Times should print Krugman's coulumn on double ply Charmin® stock so folks can at least get some use of his delusional musings.

  • tarran||

    J Sub D,

    Remember, it's always the libertarians' fault: from George Bush's failure to shrink government (anti-war libertarians stabbed him in the back) to the failure of the government to end the recessions (anti-tax libertarians prevent the govenrment from spending enough) it's always the libertarians shoving sticks in the spokes of good governance.

    Our power is quite amazing when you consider that the same guys bitching about us claim that were a miniscule fringe philosophy that only appeals to teenager who can't get girls.

  • ||

    Cities can't pay to maintain their streets. Boo fuckin' hoo. You think that senior citizens center and water park you built between '95 and '05 might have something to do with it? How about that SWAT team (used to sever warrants that used to be done by a uniformed cop knocking on the door? Maybe the gold plated pensions for the city work force that are just now coming due has a significant impact on present fiscal realities.

    Yep, it'a all that anti-government rhetoric, not all the real government spending and obligations, that got us into this mess.

  • sheryl crow||

    "on double ply Charmin®" -- oh, no they shouldn't.

  • Paul||

    Fucking proposition 13...

  • ||

  • Mike M.||

    Jean is despised by a lot of people in Haiti; many believe that his charity is a crooked organization simply designed to put money in his pocket.

  • marlok||

    Maybe that realized that all of his entertaining songs had nothing to do with his presence but with that of his co-stars (Hill, Shakira, etc).

    Anyway, Danzig was better with Shakira.
    http://www.youtube.com/watch?v.....ure=search

  • robc||

    Was playing around with Case-Shiller numbers late last night.

    If you completely arbitrarily set jan 2000 as having a "real" CS of 100 (that month chosen for two reasons - 1, it was the first month to have a CS greater than 100, 2, it was the first month of the Composite20 instead of just the Composite10 [# of cities]) and have the monthly increase in "real" CS be .25% (or 3% annually, although more like 3.04% with compounding) you can see a pretty clear pattern of the overpriced/underpriced market from Jan 1987 to May 2010. Yes, that is two arbitrary assumptions (that Jan2k was priced right and a constant 3% growth rate) but they work. And work slightly better than raw CS for seeing trends.

    In Jan 1987 the national housing market was "underpriced" about 6%, but housing was increasing faster than 3% and hit an overpricing of 11% in 1989/90. Then it started declining again going as low as -14% in 1997 (Im calling this as global bottom of market for the 87-now time period). From that point the run up started, hitting the arbitrary zero point in Jan 2000 and getting to 70% overpriced for Jan-May 2006. Then it bottomed out as we are all aware, getting all way down to 6.5% overpriced in May 2009 and has increased back to 8% overpriced as of May 2010. While the sales havent come back yet, we may have hit bottom in prices last year.

    Interestingly, I thought the market was still more overpriced because the CS is only down into the 140s, which is 2003 level. But a 3% inflation/growth/whatever rate assumption puts us actually more at late 2000 levels.

    Anyway, arbitrary #s may lead to arbitrary results, but seems to work for me. I guess I could adjust my monthly cpi numbers instead or something, but that is work. This was just drunken, late-night, cant sleep, spreadsheet stuff.

    And, of course, all markets are local, so your market may have never bubbled and some arent down far enough yet (LA and SD have a good 20+% to go still)

    Note: all #s after 2000 based on 20 cities composite, before 2000 based on 10 cities composite.

  • Tom||

    Perhaps instead of the arbitrary 3%, you could use inflation rates and/or rates of change in median income.

  • robc||

    As I said above, that would be work.

  • ||

    Krugabe is the poster boy for magical thinking.

  • ||

    Did anyone here read the comments at Krugman's site? It's like the Rearden cocktail party scene in Atlas Shrugged. I guess I'd never seen "progressives" in their own environment before...frightening.

  • ||

    The reason most progressives become progressives is to feel the moral approval of like-minded people.

    In this light, their tendancy to congregate in circles of nodding agreement and backslapping is totally explicable.

  • hmm||

    Krugnuts comments are generally 90-95% slobbering, with a 5-10% dash of other economists making fun of his stupidity.

  • ||

    MSNBC this morning spun the rising unemployment numbers this morning by saying "More states gained jobs than lost them in the latest report". They conviently left out the overall numbers showing a massive spike in unemployment.

  • BakedPenguin||

    I saw Wolf Blitzer on CNN talking about how the President really, really, needed a vacation, and how he was still taking calls re: national defense and such, as so it wasn't really a vacation anyways.

    That POS should either wipe off his chin and stick to the facts, or stop calling himself a journalist.

  • megapotamus||

    Well, so far so good. The second scoop of this double-dump will cure the holdouts. That won't include Obama or Krugman though.

  • ||

    Take it away, Dr. Pauly Krugnuts.

    Krugman needs to have a Moe Howard-style slap administered to the side of his head.

  • RichN||

  • ||

    Depending upon how you compute unemployment, it can be as high as around 22% right now. No one takes the 8-9% figures seriously except the Feds and a few news outlets.

  • hmm||

    Excellent use of the proper form of "Pauly Krugnuts."

  • merry||

    Matt didn't even show up in person? No chance he's going to get hit in the face with a chair. What a gyp.

  • Abercrombie||

    Excellent blog! I actually love how it is easy on my eyes and also the

    details are well written.

  • دردشة||

    thanks

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