Bad “Stimulus,” Bad
The U.S. unemployment rate will remain at 9.5% (or higher) through 2010, according to a disturbing report release yesterday by the Federal Reserve – which has blown trillions of dollars over the last year on “economic recovery” efforts.
Obviously, these predictions vary considerably from the 8.8% “unemployment peak” that the Fed predicted back in January.
Specifically, they are considerably sh*ttier.
In addition to the grim employment forecast, the Fed report says that it will be a long, long time before the economy achieves “full convergence.”
“Most participants indicated that they expected the economy to take five or six years to converge to a longer-run path characterized by a sustainable rate of output growth and rates of unemployment and inflation, but several said full convergence would take longer,” the report said.
Translation? “Ruh-roh.”
The Fed report also threw out a term that we’re guessing you’ll be hearing a lot of in the months to come … “jobless recovery.”
Seems like that’s something we heard back in 1992, isn’t it?
Comments
By Pat Hendrix on July 17th, 2009 at 10:01 am
The Economy Stinks. In other news, dog bites man.
But don’t you think you were little selective in your “reporting”?
From US Today (yes, I know it’s not great journalism – but does have pretty graphs):
“At the same time, the Fed said the economy will be stronger in the fourth quarter and in 2010 than it previously expected. The central bank expects the economy to contract 1% to 1.5% this year, better than its April forecast of 1.3% to 2%. And it should grow 2.1% to 3.3% in 2010, the Fed said, slightly better than it previously forecast.
The Fed cited a litany of factors for its improved outlook, including more stable consumer spending, the bottoming of home sales, higher household wealth and falling corporate bond rates. The more vibrant economy should help lower unemployment “significantly” by 2011 and 2012, the Fed said.
The more vibrant growth forecast prompted the Fed to modestly increase its inflation forecast to about 1.2% this year and 1.5% in 2010, though that’s still well below historical levels.
“It’s good news,” says John Ryding of RDQ Economics. “Three, four months ago, it wasn’t’ clear that there was bottom in sight and now the debate has switched to what kind of recovery we’re going to have.”
http://www.usatoday.com/money/economy/2009-07-15-fed-projections_N.htm
By Brandon on July 17th, 2009 at 10:34 am
There is no recovery. What you are about to experience is equivalent to a shot of adrenaline from the “stimulus”. It will feel good for a while, but will not change the rudimentary cause of this recession/depression. The demographic changes we are experiencing as the baby-boomers past the half century mark are to blame, and were predicted well in advance.
Read “The Great Depression Ahead” by Harry S. Dent, Jr.
Oh, and while your at it, get into a cash position before the end of 2010. The worst is yet to come.
By cerius on July 17th, 2009 at 11:00 am
As long as George Soros is rolling in the money Barry O will continue to grin!
By Doubting Thomas on July 17th, 2009 at 12:41 pm
Why would anyone believe anything the Fed predicts? Their projections have all been wrong. They are in charge of stabilizing the dollar- yet the dollar today is worth only 4 cents since the Fed was created.
This idea that the Fed is the mother hen of the economy and that Uncle Sam can”create” jobs by spending money we do not have is a myth that needs debunking.
By Pat Hendrix on July 17th, 2009 at 1:54 pm
What we are experiencing is not some George Soros conspiracy (I think her lost his ass, Goldman Sachs on the other hand…), it’s a painful deleveraging of our economy. The Chinese, who refused to invest back into their own economy for fear of driving up the standard of living, thus ruining their competitive advantage in manufacturing, lent us our own money at incredibly low rates. The financial institutions flush with cheap capital started lending money to anyone and everyone with thumbs and a heartbeat. Combined with deregulatory measure passed from 1983-2004, it created a bubble that has since deflated. Now we have to get back to reality. Houses off Rosewood Avenue ain’t worth 250k, meaning lots of people are upside down. It will take a couple of years to sort it out.
But don’t worry, the Democrats, just like the Republicans, have no interest in reigning in the financial industry. They’re both sold out lock stock and barrel. It’s not socialism, its mercantilism.
By James the Foot Soldier on July 17th, 2009 at 8:57 pm
Aluding to Fed “predictions” made in the present seems foolish when the article notes the Fed’s prediction of the peak of unemployement was passed almost as soon as it was uttered from Bernake’s mouth mere months ago.
Don’t tell anyone this but the un-written reason the economy is tanking is the flood of immigrants from Mexico has reversed since their shadow economy has collapsed. When you have un-natural population growth it gives a boost to GDP without even trying. Now that giant sucking sound of reverse population growth is excacerbating a decade of borrowing.
Culprits in the borrowing spree: Bush, Republicans in Congress, rating agencies (finally Calpers has filed suit against those dumb-fuks),Americans buying homes with no down payment, buying cars with no down payments, big-honkin’g plasmas with no down payment, etc. etc. etc.
That state governments are slashing spending even with ginormous amounts of Federal stimuli tells the true story of an economy that is NOT fundamentally sound. Invite the bankrupt Ponzi twins (Social Security and Medicare) and I fear for my children.
Somebody slip a note to Biden – eventually creditors stop lending to bankrupt entities – if that were to happen that cash position will be as meaningless as a Confederate dollar.
By liz on July 18th, 2009 at 7:10 am
The stimulus money is being recouped by FMR, Fidelity Management and Research. Fidelity has been holding the SSA Medicare Trust Fund and most likely the trust that the FULL FAITH AND CREDIT OF THE UNITED STATES GOVERNMENT IS based on.
That particular Trust Fund got away from the lady who is the ’signatory’ in 1989.
In 1989, Fidelity set up operations in Buenos Aires………..
The Stimulus money, the bail out money and the TARP money all indirectly goes to FMR!!!!
By dirtbogger on July 21st, 2009 at 2:13 pm
If the Fed is audited it will be shut down. The corruption will be exposed and the imporer will have no clothes.