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Sunday, June 24, 2012

Economic Stories of Relevance in Today's World -- June 24, 2012

Obama's Approval in Freefall on Stagnant Economy - - Paul Scicchitano - June 22, 2012 - Just 33 percent of Americans now believe the president is doing a “good” or “excellent” job when it comes to the economy, according to a Rasmussen poll.             That’s down from 41 percent at the beginning of May, which could be yet another sign that the president’s re-election chances are tied more to the economy than to any other political issue.                 “This election is more than just a referendum on President Obama. It is a referendum on his handling of the economy,” declares Political analyst and Democratic pollster Doug Schoen in an exclusive interview with Newsmax on Friday.                 ... U.S. manufacturing grew at its slowest pace in 11 months in June and the number of Americans filing new applications for unemployment aid fell only slightly last week.               “With more than 8 percent out of work and an equal number under employed or discouraged workers, the American people are hurting and the fall in president Obama’s approval rating, vote share, and ratings on the economy reflect just that,” Schoen explained.            Most Americans already believe that the United States is in a recession, observed Towery.                “People don’t have any money in their pocket and they can’t borrow any money. They don’t qualify for loans,” he said. “The banks will only loan to people who have money in the first place and so we are basically at a complete stalemate in terms of our economy. There’s nothing that anyone can think of that will spur it to go forward.”                ....“If the election were a personality contest there’s every reason to believe president Obama would have a very good chance of getting re-elected, but since it’s a referendum on the economy it makes for a much more difficult and uphill climb for President Obama than anyone would have expected just a few short months ago,” Schoen said.

Analysts: Moody’s Bank Downgrade Will Hurt Recovery, Consumers - - Jim Meyers - June 22, 2012 - The decision by Moody’s Investors Service on Thursday to downgrade the credit ratings of 15 global banks and securities firms will have a negative impact on borrowers as well as the banks themselves.                  The downgrades of financial institutions such as Citigroup, Bank of America, J.P. Morgan, Barclays, and Goldman Sachs reflect Moody's concern over the ability of the banks to repay their debts during times of crisis.                  The result: Credit could become costlier and/or harder to obtain.                   Since the cost of doing business for these giant financial institutions will go up as a result of having their rating lowered, the banks could pass along their higher costs — such as the higher interest rates they will have to pay to borrow money.               Or the institutions will have lower profits, which will inhibit their ability to lend.

Job Growth: Why US Remains Stuck in Neutral - CNBC via Yahoo - Mark Koba | CNBC – June 22, 2012 -... The lack of job growth in the U.S. should not be a surprise. Even before the Great Recession of 2007-2009, the number of jobs created tapered off significantly from the Internet boom in the 1990s, leaving the economy very little cushion when the downturn slammed the country with the loss of some 7.5 million jobs....                 The numbers show that as bad as the unemployment rate is for college graduates-around 19.1 percent-the jobless rate for high school graduates is near 54 percent......                  And the skills gap could get worse. Nearly 17 percent of high school graduates had no job or were not enrolled in college in 2011, up from 13.7 in 2007, according to the Economic Policy Institute.......                  The shortage of high tech workers has created a demand for the right skills and a jobless rate for the sector at half the national rate. With more seniors retiring than ever before, health care related positions are expected to grow at a rate of 35 percent in the next eight years, according to the Bureau of Labor Statistics. Professional and business services are also expected to see job growth as well as green energy sectors and even construction.               Many areas of the country are seeing fewer job losses if not some minimal job growth. Some 32 states, including Minnesota as well as Texas, New Hampshire and New Mexico are below the national average on jobless rates, according to the BLS. Ohio has seen its rate drop 10 months in a row to a current 7.3 percent.                       If the projections of job growth don't match the current reality, it shows the instability of the moment and beyond, say experts.                      Coupled with the sluggish economy are upcoming political battles: ending or extending the Bush era tax cuts, scheduled payroll tax increases, as well as another showdown over the government's ability to borrow money.

Bernanke 'prepared' to do more - CNN Money - Annalyn Censky - June 20, 2012 - Could more stimulus be on the way?             Federal Reserve Chairman Ben Bernanke certainly left the option on the table Wednesday, making perfectly clear that he stands ready to do more should the U.S. economy take a turn for the worse.                 Could more stimulus be on the way?                     Indeed, the job market remains one of Bernanke's top concerns. The unemployment rate is still uncomfortably high at 8.2%, and the government's latest jobs report showed employers added only 69,000 jobs in May-- the weakest hiring in a year.                    Amid those concerns, the Fed extended its existing policy known as Operation Twist, and lowered its expectations for the job market and the broader U.S. economy this year.The central bank predicts the unemployment rate will end the year between 8% and 8.2%. Just two months ago, it was more optimistic, predicting the jobless rate could fall as low as 7.8%.                       "Growth in employment has slowed in recent months, and the unemployment rate remains elevated," the Fed said in an official statement.                   The Fed also sees broader weakness ahead, predicting the economy will grow between 1.9% and 2.4% this year. When the Fed met back in April, it had forecasted that the economy would grow as much as 2.9%.                  That weaker outlook prompted the Fed to extend Operation Twist by $267 billion.                  The program swaps short-term bonds for ones with longer durations, thereby pushing interest rates lower on mortgages and business loans. The hope is that cheaper credit will reach consumers and business, who will then boost the economy by spending more.                  The effect on Main Street has been questionable though. Mortgage rates are at record lows, but even so, new home sales have been choppy and banks are still unwilling to lend to anyone with less-than-perfect credit. Small business owners are also struggling to get loans. To top of page

Lost in Recession, Toll on Underemployed and Underpaid - New York Times - Michael Cooper - June 18, 2012 - Throughout the Great Recession and the not-so-great recovery, the most commonly discussed measure of misery has been unemployment. But many middle-class and working-class people who are fortunate enough to have work are struggling as well,....                             These are anxious days for American workers. Many, like Ms. Woods, are underemployed. Others find pay that is simply not keeping up with their expenses: adjusted for inflation, the median hourly wage was lower in 2011 than it was a decade earlier, according to data from a forthcoming book by the Economic Policy Institute, “The State of Working America, 12th Edition.” Good benefits are harder to come by, and people are staying longer in jobs that they want to leave, afraid that they will not be able to find something better. Only 2.1 million people quit their jobs in March, down from the 2.9 million people who quit in December 2007, the first month of the recession.                “Unfortunately, the wage problems brought on by the recession pile on top of a three-decade stagnation of wages for low- and middle-wage workers,” said Lawrence Mishel, the president of the Economic Policy Institute, a research group in Washington that studies the labor market. “In the aftermath of the financial crisis, there has been persistent high unemployment as households reduced debt and scaled back purchases. The consequence for wages has been substantially slower growth across the board, including white-collar and college-educated workers.”                   And household wealth is dropping. The Federal Reserve reported last week that the economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, wiping away two decades of gains. With stocks too risky for many small investors and savings accounts paying little interest, building up a nest egg is a challenge even for those who can afford to sock away some of their money.                    People with college degrees still get jobs with better pay and benefits than those without, but many recent college graduates are finding it hard to land the kinds of jobs they had envisioned. David Thande, 27, who graduated from the University of California, Los Angeles, five years ago, works part time as a clerk in an Apple Store.                         Things are much worse for people without college degrees, though. The real entry-level hourly wage for men who recently graduated from high school fell to $11.68 last year, from $15.64 in 1979, according to data from the Economic Policy Institute. And the percentage of those jobs that offer health insurance has plummeted to 22.8 percent, from 63.3 percent in 1979.                       Though inflation has stayed relatively low in recent years, it has remained high for some of the most important things: college, health care and even, recently, food. The price of food in the home rose by 4.8 percent last year, one of the biggest jumps in the last two decades. 

Turns Out China IS Lying About Everything - Zero Hedge - Tyler Durden - June 23, 2012 - Even that lonely indicator that some, even us, had considered somewhat realistic: electric output, is a mirage.               Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country’s economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.             But an economist with ties to the agency said that officials had begun making inquiries after detecting signs that electricity numbers may have been overstated.               Another top corporate executive in China with access to electricity grid data from two provinces in east-central China that are centers of heavy industry, Shandong and Jiangsu, said that electricity consumption in both provinces had dropped more than 10 percent in May from a year earlier. Electricity consumption has also fallen in parts of western China. Yet, the economist with ties to the statistical agency said that cities and provinces across the country had reported flat or only slightly rising electricity consumption.

War On The American Middle Class - Fifteen Steps to Corporate Feudalism author Dennis Marker provides a step-by- step account of how and why the US middle class has been working harder than ever and is still losing ground . There are fifteen steps to corporate feudalism outlined in Dennis Marker's new book.If you are an American citizen, and you hear this report, and it doesn't make you either upset or angry, then you are in denial. The American Worker has been utterly forgotten and screwed up by everyone in power .We need to downsize the Federal Government and give more power to the States and each other. As a Nation we could stand without the Government ruling our every move.

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