No question...the economy is on the upswing.

[Sheepshank]

Not looking at State or Federal employment data. Not looking at polls (push or pull). Not looking at DOW. Not looking at corporate
earnings, Christmas spending spree, grocery sales, GNP, import or export, or any of that stuff.

My indicator? It's my job. My job is to work with the business in my local community. 2700 commercial businesses and almost 3000 home businesses in a community where the resident population is 100K.

In the case of the 2700 Commercial Businesses, it's time to renew licenses. Two huge trend indicators are very apparent. Fewer businesses have gone belly up this last year. And even more importantly, of every 10 that are making changes to the workforce....8 of them are adding to that workforce. These are a majority of small businesses (less that 8 employees) These are the nations employers....and they are increasing their work force. Stats on polls can be interpreted in so many ways.....but in my community, a suburb surrounded by "like" communities, there is a clear job growth.

Gawd, I really needed to see this for myself. And frankly I'm telling as many as will listen in this Red State.

[ixion]

1. An upswing sort of like the Titanic just before it went under...

[leeroysphitz]

2. That's the spirit! n/t

[BootinUp]

3. lol nt

[Sheepshank]

4. Not sure if you just think you're being clever..

...I don't. Snark is easy...stupid, but easy.

For several years the downward spiral in th elocal business jobs loss had been all too evident. Comparatively speaking This is huge huge...and your not so factual remark can't change that. I get the feeling you're disappoint in hearing this.

[ixion]

5. No, not disappointed. The statement that the "economy is improving" is wildly incorrect.

Hence my comment.

The core issues that caused the meltdown not only have not been dealt with, but further, they've been ignored. Ergo, nothing is fixed, nothing is getting better.

[elleng]

8. Not sure of your 'logic.'

There is much debate about what are the 'core issues that caused the meltdown,' but Sheep has presented hard evidence that, in fact, some things are getting better. I don't think there's any 'ergo' available here.

[ixion]

11. it's simple macro-economics.

When you've got 20+ trillion in toxic derivatives floating around, an unstable real estate market, and a stock market swollen more than twice real-market value, you don't have a recovery, you've got a serious mess.

[elleng]

13. Nothing like relying on 'macro-economics!'

[joshcryer]

23. "Unstable real estate market"?

Why do you say that?

Every single person in my family, for the first time in 3 generations is going to own a home.



The entire time we've had the capital or capacity to own a home (the past 10-15 years) home prices were overvalued due to the toxic markets.

If you think the status quo of the past 10-15 years was 'stable' I have a bridge to sell you.

[ixion]

27. Nothing has been stable since the 80's.

Pick your market. It's been gamed.

The real estate market has not reached equilibrium yet, nor will it for several years.

[joshcryer]

28. It looks as stable as could be expected from the 1950s to the 2000s.

Can you provide data to back up your assertions?

[ixion]

44. ...

Around 1985-86 the stock market de-coupled from the real market value. It's never returned. If you extend a line across the peaks prior to the initial anomaly, you get a rough idea of the median growth one would expect to occur, if growth was constant, and you get an idea of what real market value is today.

It was during this period where the S&L and Junk Bond scams occurred, and during the initial de-regulation years of Ray-gun. Also note that since this period, the market has been far more volatile, as the chart indicates.

[joshcryer]

47. I'm sorry, I'm a dullared here, but I don't see the connection to the real estate market.

[ixion]

49. real estate would be a different chart

but it's kinda late. We'll have to pick up the discussion tomorrow. Have a good night.

[ixion]

59. here you go...

Dr. Housing Bubble has been on top of the mess since before it was considered a mess.

http://www.doctorhousingbubble.com/5-charts-exploring-financial-quicksand-real-estate-baby-boomers-real-estate-housing-home-equity-income/

[joshcryer]

60. Thanks, I'll look in to it when I come back on DU.

[elleng]

38. Right, and I'm looking forward to the return to a stable real estate market,

even tho that means adjusting to values resulting in many 'underwater' situations.

[joshcryer]

42. I expect a bump as homebuyers and investors start soaking up houses like crazy.

It may even be a bit of a toxic bump because investors would only be planning to resell when they get high, sitting on homes in islands of foreclosures waiting for the toxic assets to get brought up (as people move back into abandoned neighborhoods), then selling as home values rise. But they were overpriced, overvalued to begin with, and people aren't going to fall for the whole "easy home buying" attitude that Bush pushed (and unfortunately the Democrats fell for it as they weren't thinking about the underlying mechanisms and how they were going to hurt home buyers who couldn't cope with a mortgage that blew up twice as much as when they got it).

[paulk]

45. first the homebuyers need to get loans

that's been the problem with everyone I know - banks still aren't loaning money.

[joshcryer]

46. I'm more worried about the student loan bubble that is going to burst than banks loaning money.

[paulk]

48. yeah, I know some folks who are paying so much on their student loans

that they couldn't buy a house even if they could get a bank to loan them the money.

[girl gone mad]

17. Sheep presented anecdotal evidence..

which is not, as it were, hard evidence.

[elleng]

24. Hard evidence in Sheep's city/town, as I understand it.

[EFerrari]

39. Except we don't know the context or if what looks like growth there

generalizes or not.

Here, there is little work, credit is still very tight and no one is doing new building and services are being cut right and left. I'd love to know things are getting better because it's exhausting to be scared all the time.

But as ixion says, the underlying problems have not been corrected. We still have high unemployment and a crashed housing market, for example. I don't know what kind of magic people are expecting but I'm not seeing any here.

[BootinUp]

9. Your interpretation is undoubtedly an extreme one.

There is plenty of empirical evidence that the economy has improved since the recession. Just the fact that the recession ended is the proof in the pudding. Is it improving fast enough for me? Hell no.

I think its good for folks to keep the Democrats feet to the fire, but when statements are clearly not true it only lessens the intended impact.

[ixion]

12. No, it's a realistic one.

As opposed to all this delusional talk of recovery.

[FarLeftFist]

16. Misery loves company.

[ixion]

18. It has nothing to do with emotional and/or petty concerns such as you note.

It has to do with the principles of economics.

[FarLeftFist]

31. The principle of economics is: Shit goes up, shit goes down. No one fully knows why.

Not even Nobel Prize winning economists can stabilize the economy. The economy is its own living, breathing entity. It is this giant mystery that has yet to be solved. We know what works, but we can't see the future or anticipate how those future events effect our economy unless we've been in that exact same situation under the exact same circumstances as before, which has never occurred and is almost statistically impossible being life is in a constant state of change. If someone COULD have figured out the economy by now they WOULD have. You saying things will get worse isn't really brave, or a smart prediction, it's an obvious prediction. Because just as the human heart pumps and contracts so does our living breathing economy. Obviously yes, at some point due to the nature of capitalism we will over-produce and industry will once again grind to a halt leading to stagnation. The problem is knowing WHEN, WHY, and HOW. Then learning how to minimize and learn from our mistakes.

[ixion]

37. uh, no.

it's a human creation, not it's own entity. It's a board game that we like to pretend is real, but it's just a series of constructs strung together over time. And there are a basic set of principles that apply.

[FarLeftFist]

43. I get it, we trade paper for products, goods, or services. But there isn't a basic set of principles

because the economy continues to evolve and morph, sometimes even devolve. So I guess there probably ARE a set of principles but it is FAR from basic, that list would probably number the hundreds of thousands of principles, as there would be hundreds of thousands possibly millions of different situational outcomes. There is no guaranteed silver bullet solution because of the unpredictability of the economy and each uniquely different situation. Most economists can't even figure out a solution to a recession. The math is ANYTHING but basic.

[stevenleser]

15. Yes to both of your contentions. That poster thinks they are clever & they want the economy to tank

so they can say "I told you so" to President Obama's policies.

There is little you can say or do, facts included, to convince them otherwise.

[ixion]

19. well, gee, steve, you're wrong.

but I'm sure that won't stop you from talking rot.

[stevenleser]

21. It's impossible to miss. The emotions you feel literally drip into the expressions you use.

I suppose its possible you are deluding yourself as to what's really behind the things you write, but it's pretty obvious to most of us.

[ixion]

29. It has nothing to do with emotion. That's all you.

I'm just crunching numbers.

[stevenleser]

34. As Spongebob Squarepants would say, "Good luck with that." nt

[ixion]

36. right back at'cha.

[joshcryer]

26. The good thing about such a hard prediction is such people are easily called out...

...on it in the future. I'm not one for that, but I'm sure that if the poster continues the meme and is incorrect, it will be relatively simple to do so.

[ixion]

30. If I'm wrong, I'll be happy to admit it.

That's more than I can say for many on this board.

[joshcryer]

32. Good for you. I hope you're wrong.

[ixion]

35. Believe me when I say: so do I.

However, personally I don't see any way to avoid it at this juncture.

[whatchamacallit]

33. Lol! n/t

[elleng]

6. Great to hear this!

Where are you located?

[Sheepshank]

51. A suburb of SLC, Utah ...as I said a Red State n/t

[elleng]

53. Great news! Thanks!

Sure started an interesting kerfuffle!!!

[Throd]

7. I will be requesting a brand new business license next week, in California no less.

[AnotherMcIntosh]

10. Your post would have more credibility if your location was identified so the claims can be verified.

[Sheepshank]

52. I don't know how you are going to check real time data flowing in to my office

but as for location look at #51

[AnotherMcIntosh]

62. The country's unemployed cannot all move to Utah, and particularly Salt Lake City suburbs.

I understand that employment is up in North Dakota as well.

[mahina]

14. James Altucher agrees

http://www.jamesaltucher.com/2012/01/my-last-death-threat-in-2011/

[girl gone mad]

20. Who is this guy, and can someone please give him some economics lessons?

Last edited Tue Jan 3, 2012, 12:32 AM - Edit history (4)

Bank cash: The Federal Reserve printed up $1.6 trillion in cash for “QE2″. Guess what. Bank reserves increased by $1.6 trilion in cash. They haven’t spent the money! The Federal Reserve DID NOT NEED TO PRINT THAT MONEY. But the banks will spend it. It typically takes 6-18 months for quantitative easing to have an effect on the economy. Nobody tells you that in the news. Guess when the last dollar of QE2 was printed? Six months ago. The only issue with all this is that the accelerator is going to hit too fast. The Federal Reserve should NEVER have done QE2. The accelerator is going to be so fast only the nimble will be able to keep up with it and the middle class will once again be left behind while the banks and the people who “Occupy Money” will win. While the short-term might appear to stimulating it will be stimulating like a roller coaster. The Federal Reserve needs to tell it’s employees to go on a vacation for a decade or so.

This is not how QE2 worked. Not even freaking close.

ETA: Ok. I googled him. Hedge fund manager with a background in computer science.

What he is saying above is totally wrong. I see Kid Dynamite tried to correct him (himself maybe a little off-based) in the comments.

QE2 did not involve the Federal Reserving printing up $1.6 Trillion in cash. It was just an asset swap, with no net financial assets created. The banks don't have $1.6 Trillion burning a hole in their pockets ready to be spent in the real economy. In reality, banks are never reserve constrained. You may as well think of them as having access to infinite reserves at all times. The Federal Reserve could flood the banks with trillions and trillions of reserves, but it wouldn't matter one iota, outside of the psychological side effects (encouraging risk-on trading strategies). The impetus for lending is always demand for loans. If the banks have many good quality loan applicants, they will make many loans. If the economy stays in the crapper, they'll sit on the cash and keep drawing interest. They have nothing to lose.

This is another point that our economic and political leaders seem to continually get wrong. We can't fix the economy by stuffing more money into the banks. In order to fix the economy, we have to force money into the hands of the workers.

[mahina]

50. Thanks for your take on this,

I found it informative. I've been kind of surprised to hear more than a few people talking about 2012 really being a strong year, and this guy was one. I'm glad you clarified this point.

What do you think about his take on the Greek crisis and Eurozone situation as it relates to the US economy? Is he wrong when he compares it to South America in the 80s and its limited impact, and all that?

[girl gone mad]

55. I think he is right that Greece cannot bring down Europe.

Spain and Portugal are slightly bigger worries. If the ECB does not act to end the sovereign debt crises, the US will face another recession. We are too interconnected.

I don't think our problems are so difficult to solve, but it will require that politicians everywhere start taking the right actions. That's easier said than done in this environment. But aren't we all tired of the high poverty levels and joblessness? I'd like to see Obama run in 2012 on a message of economic re-invigoration, then I'll be more optimistic. We can't rely on asset bubbles anymore. We have to do big things again.

[mahina]

56. Thanks, I appreciate your thoughts.

Mahalo!

[Cali_Democrat]

22. The economy will eventually fall apart completely

It's just not sustainable. It could be in two months, two years or twenty years, but it will happen eventually. Hyper-capitalism that benefits the wealthy 1% is doomed to failure.

It's inevitable.

[bhikkhu]

25. Very nice to hear!

In my own area things are stable, and maybe a little up. Definitely 2011 was a better year than 2010, which was in turn a better one than the year before.

[OregonBlue]

63. In my area too. I own a small business (import) and my clients are definitely buying more. My sales

aren't back to what they were 5 years ago but they were up 20% over the previous year. Retail sales have increased for almost all my customers.

[T S Justly]

40. Question ...

On what planet? Lol!

[EFerrari]

41. As Good as It Gets?

Published: December 31, 2011

The economy was weak in 2011, but it ended better than it started, with growth up from its lows and unemployment down from its highs. The question now is whether that progress will continue into 2012. We wish we could say yes, but unless policy makers are incredibly lucky or remarkably adept — certainly not the description that comes to mind when thinking of, say, Congress — the answer is no.

http://www.nytimes.com/2012/01/01/opinion/sunday/as-good-as-it-gets-for-the-economy.html

[just1voice]

54. Article on unemployment in Utah

I don't see how this applies to the overall economy in the U.S. but if someone could point out some ways that it does that would be interesting:

http://www.sltrib.com/sltrib/money/52937756-79/utah-percent-rate-state.html.csp

---...Job growth is helping the state get back to pre-recession payroll levels. Utah’s economy lost about 80,000 jobs since the downturn began in 2007, and has gained about half of them back. ---

[Sherman A1]

57. This is a good indicator to be sure

one point I would mention that this is an election year and using the logic of my 92 year old Mother who has seen many an up & down, is that things stagnate in an election year until as she puts it, "the big money guys figure out who wins and can take that into account for their planning."

I thought she was being silly until I ran my own business for 18 years and saw the trend every 4 years. Our sales (retail hobby & games) would simply slow down during presidential election years.

I do hope that you are right in what you are seeing and it is a trend across the country.

[eridani]

58. Yes. It is on the upswing to a "new normal" that is an utter disaster

We have had nothing but jobless recoveries since the turn of the millenium. Increases in poverty, hunger, underwater mortgages, foreclosures, food stamp usage and long-term unemployment are absolutely unprecedented in post WW II history. Lowest percentage of people of working age with jobs since the 30s.

The rate of job growth you are describing means that we can expect job recovery to the 2007 level sometime near 2020, provided there are no downturns from now until then. This is NO FUCKING WAY acceptable! Sure, an anemic recovery is better than no recovery, but apparently condemning millions to permanent poverty is getting acceptable even to Democrats.

[KharmaTrain]

61. Depends On Where You're At...

After nearly 5 years of contraction, the economy was due to rebound a bit...but I think it depends on where you're located and what type of businesses are in that area. Credit is still tight due to the still high number of foreclosures and defaults. Thus I see things as half empty and half full. The economy is more stable than it has been in recent years but its still weighed down by lots of debt. Lets see how many companies announce layoffs in January...that is always an indicator to me of the true nature of the economy.

[Scurrilous]

64. K & R

Thanks.

[Sheepshank]

65. Interestingly enough...an obvious fallout against the GOP

The GOP has tried with all of it's might to destroy the economy...halt any and all potential progress with one goal in mind. To make Obama a one term President. It never really mattered to the GOP if Obama was responsible for any national economic improvement or not. It was always about tanking the economy so it could be blamed on Obama. Well.............

[great white snark]

66. So you'd think all on the left would be praising any improvement.

meep

[Sheepshank]

67. Ahhh many here on DU claim to be of the left

and would still rather a GOP win...so it seems. So praising any improvement, acknowledging any GOp hinderance, isn't part of the game plan.

[B Calm]

68. The company I work for is busy.

We make bumpers for the big auto companies.