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Thread: US Economy Contracting Much More Rapidly than the Government is Reporting

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    Default US Economy Contracting Much More Rapidly than the Government is Reporting

    (snip)The Economy Is Contracting A Lot More Rapidly Than The Government Is Reporting, Per TrimTabs

    Posted by Tyler Durden at 3:53 PM
    TrimTabs is out with their most recent employment data, which compares to the earlier ADP report, that the market forgot about after the first 30 minutes of trading. According to TrimTabs "the U.S. economy lost 700,000 to 750,000 jobs in March as wages and salaries plunged 4.5% year-over-year. TrimTabs estimated that the economy shed 4.3 million jobs in the past 12 months, the largest annual job loss since 1970."

    "Job losses have been accelerating in recent months," said Charles Biderman, CEO of TrimTabs. "Investors who think the economy is bottoming out are going to get quite a shock this spring." TrimTabs uses daily income tax withholdings into the U.S. Treasury to estimate changes in employment. According to TrimTabs, the country lost 2.1 million jobs in the past three months and 3.4 million jobs in the past six months.

    Much more interestingly, TrimTabs estimates that Joe Schmoe's conviction that the market has bottomed is translating into returns to good ole spending behavior and savings rates are in fact lower than reported, meaning the as savings rates inevitably run up, the pain for the economy will just get so much worse.

    TrimTabs reported that the personal savings rate in February was much lower than the 4.2% reported by the Bureau of Economic Analysis. "Real-time income tax data indicates that personal income is plummeting and that the savings rate was no more than 0.9% in February," said Biderman. "The only reason the savings rate was positive was that income tax refunds were up sharply relative to last year."

    And to add to the gloom and doom, which Zero Hedge does not disagree with, TrimTabs concludes: "The key macroeconomic and liquidity indicators TrimTabs tracks show no sign of a bottom for the economy. The economy is still contracting a lot more rapidly than the government is reporting."(snip)

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    Default Re: US Economy Contracting Much More Rapidly than the Government is Reporting

    In other news: The sun did in fact come up this morning.



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    Default Re: US Economy Contracting Much More Rapidly than the Government is Reporting

    ^^^ yes, and the US government indirectly waved a magic wand which will make a huge portion of bank / insurance company derivatives losses magically disappear ...



    (snip)"April 2 (Bloomberg) -- The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive.

    The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more. FASB voted on the rules at a meeting today in Norwalk, Connecticut.

    House Financial Services Committee members pressed FASB Chairman Robert Herz at a March 12 hearing to revise fair-value, which requires banks to mark assets each quarter to reflect market prices, saying the rule unfairly punished financial companies. FASB’s proposals, made four days later, spurred criticism from investor advocates and accounting-industry groups, which say fair-value forces companies to disclose their true financial health.

    Blackstone Group LP Chairman Stephen Schwarzman, the American Bankers Association and 65 lawmakers in the House of Representatives urged that fair-value accounting, mandated by FASB, be suspended last September. William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “extremely and needlessly destructive” and “a major cause” of the credit crisis. Robert Rubin, the former Citigroup Inc. senior counselor and Treasury secretary, said Jan. 27 the rule has done “a great deal of damage.”

    ‘Essential’ Transparency

    Fair-value “provides the kind of transparency essential to restoring public confidence in U.S. markets,” former Securities and Exchange Commission Chairman Arthur Levitt said in an interview yesterday.

    Levitt is co-chairman, along with former SEC head William Donaldson, of the Investors’ Working Group, a non-partisan panel formed to recommend improvements to regulation of U.S. financial markets. Other members of the group, which met in New York yesterday, include Brooksley Born, former chairman of the Commodity Futures Trading Commission, and Bill Miller, chief investment officer of Legg Mason Capital Management Inc.

    “The group is deeply concerned about the apparent FASB succumbing to political pressures, which prevent U.S. investors from understanding the true obligations of U.S. financial institutions,” Levitt said. Levitt is a senior adviser at buyout firm Carlyle Group and a board member at Bloomberg LP, the parent of Bloomberg News. "(snip)


    This should be good for a HUGE rally in stock prices of 'troubled' financial institutions. But does it really change anything in regard to the true health of those financial institutions, other than allowing their management and accountants to 'hide' losses more effectively from the investing public and financial news media ? In principle this is exactly the same sort of thing that the US gov't is already engaged in re publishing 'official' unemployment statistics that do not jive with actual paycheck tax withholding data !

    So yes the sun is shining so brightly this morning that 'you need to wear shades'. But the arguable reason for that is that the 'shadows' got even darker !!!

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    God/dess Zofia's Avatar
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    Default Re: US Economy Contracting Much More Rapidly than the Government is Reporting

    Quote Originally Posted by hockeybobby View Post
    In other news: The sun did in fact come up this morning.


    Hey Bobby, it came up in NC too! Woo Hoo!!!!

    I went to work, and in keeping with my profession, I counted money, rather a lot of it. Playing on my new netbook is sooo much fun. Living well is the best revenge, isn't it!

    Instead of committing to spending most of the year away from my friends and family, last night BF and I had my dad, his new girlfriend, my brother, his wife and baby, my daughter and her best friend and her parents over for dinner to celebrate closing on our new house. 4.78% fixed rate 30 year mortgage from a bank that doesn't sell its mortgages. BF is going to have to adjust to not living on the golf course, like we do now. But, the new house is just a block away, so he might survive. For my daughter, that is the best news, as she doesn't have to disrupt her established friendships. The owner of the condo we were leasing has agreed to extend the lease by a month so we can move into our new house without a lot of drama.

    XOXO
    Z

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    Default Re: US Economy Contracting Much More Rapidly than the Government is Reporting

    Congrats on the new house !!!

    Fortunately for those who live there, North Carolina is still an island of capitalism. It is also fairly free of unions, comparatively free of onerous state and local income taxes, and has chosen NOT to provide ultra-generous levels of social welfare benefits (in the past at least).

    However, as the likely result of Obama's stimulus package (which sets defacto federal standards for unemployment and medicaid benefits in any state that accepts the money) and card check law (which strongly increases the potential for union organizing), this too will change ! Enjoy living well ... while you still can ! Neighboring SC governor Sanford has so far threatened to refuse Obama's stimulus money for this very reason ... along with Sarah Palin, Bobby Jindal, Haley Barbour etc. But NC governor Perdue seems to already be wallowing in stimulus money, already hiring construction contractors at prevailing union wage rates, as well as actively promoting increased gov't health care benefits and increased education spending. In fact, a friend of mine relocated to Charlotte last year (but then again he is a schoolteacher, and collecting a gov't paycheck at union wage rate with tenure)



    and

    I seriously considered relocating from New York to low tax southern states, and investigated the possibility of Greenville / Spartanburg very seriously. However, given that my family in New York is still a plane ride away, and given that no 'foreign income exclusion' exists if I had remained in the USA, I simply opted to keep going farther south.

    ~
    Last edited by Melonie; 04-03-2009 at 03:47 AM.

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    Default Re: US Economy Contracting Much More Rapidly than the Government is Reporting

    Quote Originally Posted by Melonie View Post
    Congrats on the new house !!!

    Fortunately for those who live there, North Carolina is still an island of capitalism. It is also fairly free of unions, comparatively free of onerous state and local income taxes, and has chosen NOT to provide ultra-generous levels of social welfare benefits (in the past at least).
    Have no fear, the Democratic Party in NC is completely and totally in the pocket of business interests. Wall Street exerts more control over NC Democratic party politics than it does over NY.

    But NC governor Perdue seems to already be wallowing in stimulus money, already hiring construction contractors at prevailing union wage rates, as well as actively promoting increased gov't health care benefits and increased education spending.
    Governor Dumpling, she's about as smart as a dumpling, would go the full Obama in a heartbeat if she could. But, our ever so corrupt general assembly won't let her without massive payoffs to their corporate backers. Payoffs that would vastly exceed any new tax she could dream up. And believe me, she's a tax dreamer. The problem is her tax schemes always bump up against her allies need to give huge tax incentives to their corporate sponsors. The only new tax that has really passed in the last sixteen years is the lottery. It's ironic that the party that allegedly cares for the poor would pass a tax that almost totally falls on the poorest of people. She also wants to raise the cigarette tax. Again, a tax the poor scheme.

    Oh well, off to a night on the town. Daddy is watching the baby tonight.

    XOXO
    Z

    PS, hockeybobby, GO 'CAINES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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