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Goldman On Why A Second Stimulus Is Merely Months Away

Tyler Durden's picture





 

Earlier today, Goldman came out with a harbinger piece on why a second stimulus announcement is essentially a formality. The administration has already promptly forgotten the lessons from the recent elections which were a failure for the Democrats, and a resounding vote against incremental deficit spending. The people spoke, and they will have no more of it. Alas, Obama is now stuck: any action he does to create jobs and to rope consumers back into the clearance sale stores, will be met with increased political disapproval and risk of a major failure at both the mid-term and next presidential elections. Yet, courtesy of his economic think tank, he can not leave the status quo as the current situation leaves the economy on an untenable course of 12%+ unemployment. In this case the lesser of two evils is moot as both have the same likelihood of making the "change you can believe in" campaign one for the history books prematurely.

 


Two More Signs that Additional Fiscal Support Is Coming

Since Congress enacted the American Recovery and Reinvestment Act (ARRA) in February, there has been intermittent discussion of a “second stimulus bill” (never mind the fact that ARRA was in fact the second bill; the first one was enacted in 2008).  However, officials who raised the possibility of additional stimulus always quickly backtracked or made clear that they were not actually proposing additional fiscal support.  This has begun to change. We point to two particular statements in the last few days:

1.  Senate Majority Leader Reid (D-NV) was quoted in The Hill newspaper (a Capitol Hill-focused publication) yesterday indicating that the Senate will consider a “jobs bill” in early 2010. It’s not clear what such a bill might include, or how large it might be.

2. President Obama announced this morning that the White House would convene a "job creation forum" in December.  While the event clearly serves a public relations purpose, the scheduling of such a high profile event implies there probably will be some new proposals to go along with it.

This may be the set up for yet another round of springtime stimulus in 2010, to be crafted in December and considered by the Congress in its second session early next year. Interestingly, this is the same timetable we've seen in each of the last two years-- policy formulated internally in December, debated publicly in January, enacted in February. If we do see a replay late this year and early next year, it seems likely to take a bit longer, and meet more resistance than the last two stimulus packages, which moved surprisingly quickly through the legislative process due to broadly held bipartisan concerns over the state of the economy. 

As outlined in last Friday's weekly,  we expect $250 billion (bn) in further fiscal support over the next three years, including $75bn in 2010. However, we have generally assumed that most of this would come from extension of current law policies, as opposed to new stimulus measures, for two reasons: (1) over the last several months there has been little appetite for explicit "stimulus," though there remains broad support for certain targeted policies, like the homebuyer tax credit and unemployment benefits just enacted into law (worth $45bn of the expected $250bn); and (2) the prior stimulus package included most of the obvious ways to stimulate the economy, so extending them is a more natural next step than coming up with new provisions.

However, last week's employment report seems to have changed sentiment in Washington (and last week's election certainly played a role as well, insofar as it highlighted the electoral challenges for congressional Democrats that were already evident in public opinion polls). So while another explicit "jobs" bill looked like a long shot a week ago, the notion seems to have gained momentum since. While the path such a measure may take over the next few months is highly uncertain, among the (oversimplified) implications of a more explicit stimulus effort early next year we see the following:

1. New measures would become easier to pass. If Congress actually takes up a new stimulus package, it becomes somewhat easier to enact new measures, rather than just extending unemployment benefits or some of the other things under consideration. A hiring tax credit, lending incentives, and some way to provide additional timely benefits to consumers in 2010 appear to be front of mind for staff trying to present options to their members of Congress, though there don't seem to be many concrete ideas at this point.

2. Fiscal assistance to state governments and infrastructure spending becomes more realistic. We have penciled into our estimates $25bn in additional fiscal aid to state governments in 2011 and around $30 billion in additional infrastructure spending over 2010-2011. Doing these on a stand-alone basis is harder than, say, extending the homebuyer tax credit or unemployment benefits, because there aren't as many direct beneficiaries (who vote).  Passage of an explicit stimulus jobs bill would raise the odds of more action in this area, particularly with regard to state fiscal assistance.

3. Additional tax relief for consumers becomes feasible, if not likely. An unresolved question has been what Democratic leaders might do to directly help consumers (i.e., voters) next year, prior to the election. So far, the main items discussed have been (1) extended unemployment benefits (incl. health subsidies), (2) another $250 payment to seniors in early 2010. There has been surprisingly little discussion so far of additional tax relief to put money into consumers' pockets, but it is easier to see something like this getting added to a "jobs" package.

4. The rest of the agenda shifts. In the campaign of 2008, the major items on the agenda were healthcare and energy/environment. Both sides of the aisle now realize that if Congress can influence the election at all, it will be through (1) fiscal policy and (2) financial reform. The other issues – the pending health bill, and even more so climate change – may no longer be seen as "must pass" legislation. In the case of health reform, so much time has been invested in it, and in explaining the dire consequences of not passing it, that it is unlikely to be abandoned, but it seems more likely than ever to be scaled back. In the case of energy/environmental legislation, the odds increase further that any legislation enacted in 2010 will focus more on subsidies and renewables and less on increasing the cost of carbon emissions.

5. Increased focus on laying down markers on medium term fiscal restraint. To the extent we actually see a major new push on stimulus; we will probably see additional efforts to show a credible path to fiscal consolidation over the medium term. Note, for instance, that today's announcement of a "jobs summit" coincided with the leak of plans for “setting aside a chunk [of unspent TARP funds] for debt reduction,” according to today’s Wall Street Journal.  (This is mainly cosmetic, as TARP funds that have not been spent have also not yet raised the level of debt, though they could do so in the future.)  Of course, it also coincided with Treasury's report on the October budget deficit, which showed a $176bn shortfall to begin the new fiscal year.

 


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Fri, 11/13/2009 - 02:34 | Link to Comment Altan311
Altan311's picture

A jobs bill after they kick the snot out of this market sounds about right. What's the good of all these new TBTF resolution authorities if you can't use em?

Fri, 11/13/2009 - 08:43 | Link to Comment anynonmous
anynonmous's picture

 

TD  - I assume the above is a copy of the Goldman letter, do you have a link to it or PDF?

thanks

 

Fri, 11/13/2009 - 10:04 | Link to Comment berlinjames02
berlinjames02's picture

I was surprised by the 'jobs forum' bit too. I thought Biden had already formed the "Jobs Task Force", and it was his #1 priority after the election- or something to that effect.

I suppose these are the side effects of incompetents in power. (To be 'fair and balanced', I doubt McCain or Palin would have been any better.)

Fri, 11/13/2009 - 10:18 | Link to Comment berlinjames02
berlinjames02's picture

Correction: It's a 'Middle Class Task Force" focused on "Green Job Creation" and was formed in February.

http://www.whitehouse.gov/the_press_office/Middle-Class-Task-Force-Holds-First-Meeting-in-Philadelphia-Focus-is-on-Green-Jobs/ 

 

Fri, 11/13/2009 - 02:39 | Link to Comment mule65
mule65's picture

One-n-done for Obama Claus.  Hope is a failure.

Fri, 11/13/2009 - 03:02 | Link to Comment Master Bates
Master Bates's picture

I hope we get some jobs, personally.  Being unemployed really sucks.

It would have been nice if the original 787B went for jobs instead of in Goldman's pocket.

Fri, 11/13/2009 - 08:14 | Link to Comment Anonymous
Fri, 11/13/2009 - 12:12 | Link to Comment chumbawamba
chumbawamba's picture

+Fried Chicken mutha fucka.

I am Chumbawamba.

Fri, 11/13/2009 - 08:57 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:06 | Link to Comment MinnesotaNice
MinnesotaNice's picture

I wouldn't get my hopes up.  The last stimulus allowed us to create "busy work" resurfacing a lot of roads in our country... and if that is your line of work then you might be in luck... because with a second stimulus I am quite sure the remainder of our roads will be resurfaced in Summer 2010. 

Fri, 11/13/2009 - 11:57 | Link to Comment WaterWings
WaterWings's picture

Get a teaching certificate and move to Chicagoland.

Fri, 11/13/2009 - 14:45 | Link to Comment loki
loki's picture

+1 Trillion

Fri, 11/13/2009 - 03:02 | Link to Comment Harbourcity
Harbourcity's picture

"Fiscal assistance to state governments and infrastructure spending becomes more realistic. We have penciled into our estimates $25bn in additional fiscal aid to state governments in 2011 and around $30 billion in additional infrastructure spending over 2010-2011."

Drop in the bucket unless it's all going to California. 

 

Fri, 11/13/2009 - 03:18 | Link to Comment A Man without Q...
A Man without Qualities's picture

Is it a second stimulus or a bailout for the Muni and CRE markets, which are the next things to fall? 

Fri, 11/13/2009 - 03:20 | Link to Comment mrhonkytonk1948
mrhonkytonk1948's picture

Why is it always "roads and bridges"?  Of course they need refurbishment, but how many boomers can drive a D-9?  If they want to [re-]create well-paying jobs, why not automate more of the government and require that it be done by US IT professionals?   OK, smirk and mutter under your breath about Smoot-Hawley if you must, but brazillions (sorry, an old Bush administration mathematical term referring to "many") of US IT jobs have been absolutely decimated by overseas sourcing.  Oh, baby...stimulate me.

Fri, 11/13/2009 - 03:37 | Link to Comment Anonymous
Fri, 11/13/2009 - 03:42 | Link to Comment alexmat
alexmat's picture

" why not automate more of the government and require that it be done by US IT professionals?"

 

Because:

http://www.berglas.org/Articles/ImportantThatSoftwareFails/ImportantThat...

 

Fri, 11/13/2009 - 08:49 | Link to Comment Anonymous
Fri, 11/13/2009 - 12:02 | Link to Comment Anonymous
Fri, 11/13/2009 - 08:29 | Link to Comment SWRichmond
SWRichmond's picture

Because a great many of the unemployed are construction; while admitting there are too many right now, ballooned by the phony home construction boom, they are normally useful people who actually make things.  Code can be written by a trained monkey in a grass hut with an internet connection.

Fri, 11/13/2009 - 08:43 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

That same hut dweller can also build you a road or a bridge.  The quality will be about the same as the code they write.

Fri, 11/13/2009 - 14:23 | Link to Comment cougar_w
cougar_w's picture

At least here in Cali, construction job moneys that don't go into the pockets of rich developers go to hire low-wage immigrant labor. Most of that money is then sent overseas.

The US middle-class is SO extinct.

Fri, 11/13/2009 - 16:38 | Link to Comment walküre
walküre's picture

You are making a great point.

There's too much government that is too involved and too busy creating new ways to CREATE MORE GOVERNMENT.

No goverment official is ever going to reduce the size of government.

It's us vs. them. Either you're government or you're not. If you're government, you're trying to line up jobs for your friends and family and of course appear to be busy all the time so you don't run out of work.

50% of all government on every level is redundant. Period.

America wouldn't have a tax funding problem if 50% of all staff would get canned, 50% of all buildings be closed and 50% of all government vehicles stopped moving.

Automation has reduced the workforce in every other sector of the economy. Government keeps growing despite automation. Go figure.

Fri, 11/13/2009 - 03:29 | Link to Comment Harbourcity
Harbourcity's picture

Didn't I watch this movie already?  Don't remember it being all that great either.  Except for the part with the woodchipper...

Fri, 11/13/2009 - 08:32 | Link to Comment Anonymous
Fri, 11/13/2009 - 03:47 | Link to Comment Unscarred
Unscarred's picture

I finally found "Hope" that we can all take comfort in...

http://americandigest.org/hope_02-723742.jpg

Fri, 11/13/2009 - 04:31 | Link to Comment Anonymous
Fri, 11/13/2009 - 07:55 | Link to Comment buzzsaw99
buzzsaw99's picture

Yes, but if you listen to their public announcements you are still left in the dark as to true/false, ulterior motives, manipulations, whatever. GS owns the gubmint but they don't divulge anything useful to the general public.

Fri, 11/13/2009 - 04:50 | Link to Comment Anonymous
Fri, 11/13/2009 - 05:10 | Link to Comment Anonymous
Fri, 11/13/2009 - 13:56 | Link to Comment Anonymous
Fri, 11/13/2009 - 05:29 | Link to Comment JuicyTheAnimal
JuicyTheAnimal's picture

.....and then?

 

yeah but...then what?

Fri, 11/13/2009 - 06:23 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Forgot incremental deficit spending, what about incremental failure?

Fri, 11/13/2009 - 06:53 | Link to Comment Careless Whisper
Careless Whisper's picture

Does anyone even believe what GoldmanSachs says?

Fri, 11/13/2009 - 08:50 | Link to Comment Anonymous
Fri, 11/13/2009 - 11:59 | Link to Comment WaterWings
WaterWings's picture

You can believe the opposite of what they say after multiple layers of reverse psychology. If I were explaining it to an 8 year-old I'd say, "I know that you know that I know that you know that you know that I know."

Fri, 11/13/2009 - 07:31 | Link to Comment koaj
koaj's picture

goldman does the lord's work. dont question them

they went long 5k call options on intrade on stimulus passage by march 2010

Fri, 11/13/2009 - 09:40 | Link to Comment 20yearRevolution
20yearRevolution's picture

Blankfein didn't really believe he was doing God's work.  He is just setting up for tax exempt status for the First church of Goldman...imagine the savings!

Fri, 11/13/2009 - 07:38 | Link to Comment Daedal
Daedal's picture

Tax Credits? 40,000 Troops to Afganistan? Looks like the only campaign promises Obama is keeping are those of McCain.

Fri, 11/13/2009 - 08:32 | Link to Comment SWRichmond
SWRichmond's picture

How about that.  Kind of makes you wonder, doesn't it?  Does it really matter who we vote for within the phony left-right paradigm? 

Fri, 11/13/2009 - 08:51 | Link to Comment Anonymous
Fri, 11/13/2009 - 08:33 | Link to Comment Anonymous
Fri, 11/13/2009 - 14:32 | Link to Comment cougar_w
cougar_w's picture

... and the concept was updated to conform with modern reality in "1984"

Fri, 11/13/2009 - 08:27 | Link to Comment Anonymous
Fri, 11/13/2009 - 08:35 | Link to Comment Miles Kendig
Miles Kendig's picture

The crumbs of the corrupt.

Fri, 11/13/2009 - 14:42 | Link to Comment cougar_w
cougar_w's picture

Very true.

But I'm left wondering: If the US economy is 70% driven by consumption patterns, and if those patterns are tied to a healthy middle-class willing to assume huge personal debts, but the middle-class are being ruthlessly parasitized into large scale failure -- then what will the corrupt have to feed on after the middle-class are gone?

Each other? I mean I'm open to that idea, a fair characterization of the European Middle Ages would have been "The rich first ate the poor and then they ate each other." But if I can picture that then surely others can as well and will seek to avoid that outcome.

Right? I mean, don't they have a Plan B once the middle-class is extinct? Won't that be the second half of the Obama administration -- building walls to isolate and preserve the elites? That and set up crude farming communes so the poor can grub out a meager existence and provide local-grown food for the twice-daily celebratory banquettes of the rich. Oh hey I bet there will be stimulus funds for that.

cougar

Fri, 11/13/2009 - 08:36 | Link to Comment Anonymous
Fri, 11/13/2009 - 14:57 | Link to Comment cougar_w
cougar_w's picture

[why isn't our Congress]

The first congress-critter to blink and say "no more spending to prop up the economy" will be the first out the door. Nobody wants to be the one seen as heralding the collpase of the voting middle-class. So they'll keep right on spending -- and getting elected -- while our Rome burns to ashes.

It's an end game. All the rules have changed. Everyone is edging warily toward the exits but talking up a good story so as not to look like a coward, while still being well-positioned for the run to the roof and the waiting choppers that will carry the lucky few to waiting estates in the Cayman Islands.

cougar

Fri, 11/13/2009 - 08:52 | Link to Comment Winisk
Winisk's picture

Chretien, a former Prime Minister of Canada, came into power with the campaign slogans of "Jobs. Jobs. Jobs." and "Putting our fiscal house in order." awhile back.  Seems like this will be the rallying cry for the next round of elections. More stimulus will be on the way. The first bought the positive GDP's, or jobless recoveries. Politicians can probably sell the delusion that more stimulus will bring the jobs back. It won't of course. An economy that is consumer driven is a non-growth strategy.

Fri, 11/13/2009 - 08:52 | Link to Comment JohnKing
JohnKing's picture

mo money

Fri, 11/13/2009 - 08:54 | Link to Comment BennyBoy
BennyBoy's picture

So Goldman has ordered it, so it shall be.

BB

Fri, 11/13/2009 - 09:00 | Link to Comment docj
docj's picture

They gots them a one note clarinet, and they a gonna belt it out till they gots no mo breath.

Fri, 11/13/2009 - 09:08 | Link to Comment Anonymous
Fri, 11/13/2009 - 09:08 | Link to Comment HEHEHE
HEHEHE's picture

Why don't they just start taking the dead Presidents off of our $ and replace them with pictures of past GS CEO's?

Fri, 11/13/2009 - 09:10 | Link to Comment Zippyin Annapolis
Zippyin Annapolis's picture

First stimulus was too small and the second stimulus will be too late for these bozos- (November 2010)--fiscal lag and all that stuff.

Fri, 11/13/2009 - 09:17 | Link to Comment hank_rearden
hank_rearden's picture

what's the timeframe on the secession of texas?

Fri, 11/13/2009 - 09:39 | Link to Comment JohnKing
JohnKing's picture

Texas is a police state. The only reason Perry would secede would be tighten his noose on the citizenry. I used to love Texas for it's independent ways, now it's just creepy (maybe the makings of a C&W song).

A couple of weeks ago, the local paper printed names of El Pasoans with outstanding arrest warrants. 78,000 El Pasoans made the paper! When we compared Austin, same story: 11% of Austin has outstanding arrest warrants. How did that happen? Here are the facts.

http://shapleigh.org/news/1357-from-the-senator-s-desk

 

 

 

Fri, 11/13/2009 - 11:12 | Link to Comment Orly
Orly's picture

I am getting there with you, JohnKing.

Texas used to be a great place to live and raise a family but over the past three years or so, it has felt like a dark cloud of oppression hanging in the air.  I don't know what it is but I don't like it.  Every third Sunday, giant swarms of humongous black helicopters swirl their way east over I-10.  Just what is that about?

Perry is a Bilderberger favourite, so the chances of him relinquishing power to someone other than a complete crony are very small.  Much like Bush handed it over the Perry for guardianship, it looks like Perry is going to pass the mantle on to Hutchinson.

Meanwhile, the clouds get thicker and darker  here in Texas, while the weight of the very sky gets heavier and heavier.  The feeling is surreal, indeed.

One way to go is to defeat Hutchinson.  Vote Libertarian.

Fri, 11/13/2009 - 11:25 | Link to Comment JohnKing
JohnKing's picture

Yep. I think Perry is a foreign agent hell-bent on creating MexAmerica. NAFTA, CFR.. all the usual connections.

Fri, 11/13/2009 - 12:03 | Link to Comment WaterWings
WaterWings's picture

Exactly - lip service. It makes me sick to hear him go on about it with a cheering crowd.

Det. Thorn: Who bought you?
Hatcher: You're bought as soon as they pay you a salary.

- Soylent Green

Fri, 11/13/2009 - 09:37 | Link to Comment Anonymous
Fri, 11/13/2009 - 09:37 | Link to Comment 20yearRevolution
20yearRevolution's picture

As as owner of a construction  company in Washington state in public works, I have been waiting for this "shovel ready" stimulus to show up for over a year.  When it finally showed up here it came in the form of paving projects.  For those of you without a construction background let me tell you how many jobs paving creates...jack shit.  The labor component of paving is around 5 to 10 percent, the rest is all materials.  So you might ask yourself who owns and benefits from those sales...the breakdown is as follows:

Sand and gravel-  while at first glance this may seem like a good locally produced product, all of the pits in the US have more or less been monopolized by a couple of foreign companies.  It used to be an Ausie company, but they sold to cemex a Mexican company.  When I prepare bids anymore I don't even bother getting bids from the few remaining pits around since they are all owned by the same company. As evidence to this  the prices for cement and gravel have not gone down during the recession.  So score one for Mexico.

The next component and final component...drum roll please.  Oil.  I assume I don't need to explain the beneficiaries of oil sales on this site.  Score one for Bentley sales in Saudi.

 

So how bad could it really be?  I have bid a grand total of 2 projects this year, and they were projects of a total duration of less than a week.  The bid breakout is as follows: engineers estimate 21k(small job...what can i say, I was bored).  First bid 22k...thought I had a chance, my bid was 19k.  Next bid was 16k...our new presumed winner.  Final bid...6,900... a minimum 9 to 10k loss.  Now this was an invite only job with only 4 bidders and all of the owners were present for this little crappy job(we are used to a small job being a few hundred thousand and a normal job in the millions.  The majority of jobs this year had 30 plus bidders and most munis have seen records set in this category.  The final prices have come in on average for 40% below engineers estimates which were already revised down for the recession.

 

There is a saying that a local successful developer I know has on his wall..."when the going gets tough, the tough go on vacation."  So where is nice this time of year?  Any suggestions? 

Fri, 11/13/2009 - 09:53 | Link to Comment deadhead
deadhead's picture

Thank you for posting your insights. I appreciate it and imagine others do as well.

 

go to Grand Cayman. Stay at either the Hyatt, Westin, Ritz Carlton.

Fri, 11/13/2009 - 10:09 | Link to Comment MinnesotaNice
MinnesotaNice's picture

That was super interesting... thanks for sharing that!

Fri, 11/13/2009 - 10:29 | Link to Comment Paul S.
Paul S.'s picture

+1

Fri, 11/13/2009 - 10:58 | Link to Comment Screwball
Screwball's picture

Thanks for sharing this 20yearR.  I wish more people on here would do the same.  I find it interesting and informative hearing stories and insights from the wide variety of people and locations we have on here.

Fri, 11/13/2009 - 11:32 | Link to Comment Anonymous
Fri, 11/13/2009 - 11:39 | Link to Comment Anonymous
Fri, 11/13/2009 - 12:04 | Link to Comment WaterWings
WaterWings's picture

Nice name. Jefferson would be proud.

Fri, 11/13/2009 - 15:11 | Link to Comment cougar_w
cougar_w's picture

[Any suggestions]

Washington DC.

Raise some hell.

Fri, 11/13/2009 - 16:54 | Link to Comment walküre
walküre's picture

Thanks for sharing. What a farce. How is a man supposed to feed his family?

I'd consider selling out and moving to Asia.

2x4 home construction is popular and once you get past the government b.s. you've got more work than you can handle. If you have family, leave them in WA until you're established. You obviously got talent and experience which gives you an edge overseas.

Forget the US construction economy. Unless you're into building alternative energy facilities, there's no upside for many years.

Fri, 11/13/2009 - 09:47 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture

Be careful with Goldman's "second stimulus" call. They want to throw you off. The next six employment reports will surprise all of us to the upside, with huge upward revisions to the previous month's figures. You heard it here first, so be ready for upside surprises on the jobs front. Oh, and before I get blasted for my call, just look at increasing profit margins (national accounts), ISM new orders and backlog of orders, and quarterly business investment. Moreover, the surge in temp workers always precedes a hiring boom. Take everything Goldman says with a grain of salt.

Fri, 11/13/2009 - 09:52 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

Yes, they are conniving fucks, arent they ...

Also, I fully agree with you Leo. 

 

Fri, 11/13/2009 - 10:02 | Link to Comment I need more cowbell
I need more cowbell's picture

"you heard it here first"??? Every yappin head on CNBS is spouting the same crap. We shall see.

Fri, 11/13/2009 - 11:31 | Link to Comment Orly
Orly's picture

But in the meantime, trains ride half-full and the Port of Los Angeles sits relatively idle.  I don't see how you can rectify these two points of view.

Besides, as David Rosenberg so eloquently described the other day: "productivity" increases and the reduced-hour workweek would logically be filled first.  His estimate of the jobs overhang for the employees that can be brought back to full time, 40-hour a week work: eleven million.

The surge in new orders and the backlog of orders can easily be filled by the people already employed.  Temp workers may be next, but their time is still quite a way down the road.

Fri, 11/13/2009 - 12:11 | Link to Comment Blunt Instrument
Blunt Instrument's picture

Can't agree with that assessment.  Unemployment rate will flatten over the next few months, but will not drop.  February to April calls will tell the tale.  That's when we'll know if there is hope.  If not, I expect PAINFUL job cuts.  This one will really hurt.

I hope I'm proven wrong.

 

Fri, 11/13/2009 - 17:02 | Link to Comment walküre
walküre's picture

If that were so... the markets would take off even higher unless the government uses the "improving job numbers" as a pretext to raise interest rates at which time of course the whole thing starts cratering.

The layoffs have decreased but there are no new jobs and benefits running out.

The government needs to create some positive spin and positive propaganda especially before the holiday season or people will start taking their anger to the streets.

As long as a man is fed and entertained (distracted), he just might forget about the manipulation and corruption. If a man is hungry and has got nothing else to loose, he will act against whomever he deems responsible for his own misfortune.

Fri, 11/13/2009 - 10:04 | Link to Comment Anonymous
Fri, 11/13/2009 - 15:10 | Link to Comment docj
docj's picture

Oh look, Nancy Pelosi decided to stop by.  Cogent as always, Nan.

Fri, 11/13/2009 - 10:04 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:06 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:13 | Link to Comment Anonymous
Fri, 11/13/2009 - 12:01 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:20 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:23 | Link to Comment Anonymous
Fri, 11/13/2009 - 10:29 | Link to Comment Pat Hand
Pat Hand's picture

I disagree - unemployment continues to increase, albeit at a decelerating pace.  Now, I don't have delusions that there will be zero porkulus, but if the stimulus aims at job creation and succeeds, it will be wildly popular.  Not on this board, of course, but out on Main Street.

It's a big if, of course, but it's a distinct possibility.  A trajectory that gets unemployment back down to some reasonable number by next October will see a big spike in Obama / Dem popularity.

Fri, 11/13/2009 - 11:32 | Link to Comment Anonymous
Fri, 11/13/2009 - 14:38 | Link to Comment Paul S.
Paul S.'s picture

Yes you're right.  Continuing to create asset bubbles just might be wildly popular with Main Street and you might see a big spike in popularity for the Obama/Dems from the American Idol watching/cheeseburger eating demographic (roughly 80% of the population by my estimate).

Fri, 11/13/2009 - 15:21 | Link to Comment cougar_w
cougar_w's picture

Put another way:

The unemployeed are less likely to vote. To get elected, you have to carry the middle-class. Those of us still employeed by election year will be asking who will save the tattered remains of the middle-class?

Whoever convinces the middle-class that they are going to preserve jobs will win the election. Period.

It will have nothing to do with creating jobs. Nobody will be caring about the unemployeed.

It's an end game. You climb over the guy in front of you on the way to the roof and the waiting choppers.

cougar

Fri, 11/13/2009 - 10:32 | Link to Comment jesusonline
jesusonline's picture

More on the "they are conniving fucks" topic

Goldman Pays Junior CDOs Before ‘Junk’ Senior Classes

http://www.bloomberg.com/apps/news?pid=20601110&sid=a_NUiTt__oI4

Fri, 11/13/2009 - 11:06 | Link to Comment Unscarred
Unscarred's picture

Is Goldman reporting this because they wrote the legislation in the first place?

Fri, 11/13/2009 - 11:09 | Link to Comment Anonymous
Fri, 11/13/2009 - 11:33 | Link to Comment Anonymous
Fri, 11/13/2009 - 11:34 | Link to Comment Anonymous
Fri, 11/13/2009 - 12:08 | Link to Comment Mark Beck
Mark Beck's picture

To me, the basic premise that the Government can really create meaningful sustainable employment, with the underlying efficiencies of the private sector, is utter nonsense. First stimulus employment (1/3 goes to jobs) is "seasonal" for most of the country, and beyond this many who receive grants are looking to minimize expenditures on labor. The best grant, for an existing company, is give me money for something I can manage with existing staff.

I guess the entertaining part of this whole thing is how do you justify a 2nd stimulus, when the first unprecedented 787B ARRA2009 did not produce adequate results. Especially, when it was ineffective at quickly creating jobs. Political damage control kicked in, and sentiment changed to; ARRA would show the most productivity in 2010 and 2011. Well please make up your mind, when an investment like this may provide results. I rest my case. 

For many states stimulus helped plug some budget shortfalls as a temporary stop gap measure. I got the impression that state legislators convinced themselves that somehow the stimulus check would arrive indefinitely year after year. I mean why would it stop? its just another revenue stream right?

Obama stated from the White house in regards to the December Jobs Summit;

"to talk about how we can work together to create jobs and get this economy moving again. We all know that there are limits to what government can and should do, even during such difficult times. But we have an obligation to consider every additional, responsible step that we can take to encourage and accelerate job creation in this country.

To prevent making "any ill-considered decisions -- even with the best intentions -- particularly at a time when our resources are so limited. But it's just as important that we are open to any demonstrably good idea to supplement the steps we've already taken to put America back to work. Despite claiming credit for cutting middle class taxes and creating or saving more than 1 million jobs through the $787 billion stimulus plan signed in February,  more is needed to "encourage and accelerate job creation"

 

"The economic growth that we've seen has not yet led to the job growth that we desperately need, This is one of the great challenges that remains in our economy -- a challenge that my administration is determined to meet. Prosperity around the world is no longer as dependent on American consumption and borrowing, but rather more on American innovation and products," the president said.

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Well Mr. President, first of all you really need to drop the jobs saved BS. Please you are insulting my intelligence. Who convinced you to use such a term? He should be fired, and that means you Mr. Summers, if you are awake.

Next explain, why you are unhappy with the recovery that was touted as jobless. When it is, indeed, jobless. You have succeeded, GDP growth through stimulus and joblessness. That, Mr. President was your economic teams strategy, and well I guess, it worked. A political misallocation of resource applied to the wrong problem. 

Mr President could you please provide me with your definition of "the economy". This way I have some understanding why you do not consider responsible fiscal and monetary policy as being critical to its health. The more wealth you squander the less you have for investment. 

Your overall approach does not make sense to me. Its like you are trying to help a thirsty man drink water, and all you have to offer is an empty glass. Then without missing beat, you have the nerve to ask why he died of dehydration. 

Mark Beck

Fri, 11/13/2009 - 17:29 | Link to Comment walküre
walküre's picture

+1000

"Well Mr. President, first of all you really need to drop the jobs saved BS. Please you are insulting my intelligence."

My sentiments exactly. First time I heard it, it gave me a headache. Utter bullshit.

****

Prosperity around the world is no longer as dependent on American consumption and borrowing, but rather more on American innovation and products," the president said.

****

This President has no clue whatsoever. More insults of our intelligence.

What is American innovation in this day and age? What are American products?

Discounting weapons research, military intelligence and everything i-pod.. there's not much there.

 

 

 

Fri, 11/13/2009 - 13:03 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

When year-end squaring ensues, secondary takedowns, and possible stock buy-backs at top o' da market, subside, the pain of the drain might and most probably will, in vengeance, resurface. 

If reality again becomes the tail-risk in the mind of the MSM oscillations can occur at any time.

That view need be balanced by Mr. Dunham seemingly deferring to every 3% move down on the S&P with a whisper campaign of a new non-stimulus plan stimulation so the Nancy Capitalists can be assured of pudding forever.

Political and bankster interests align when green markets help midterm elections.

The market as measured by Main Street is posed to 'go down' more ,that seems assured, however having learned all the appropriate lessons from history the Federales seem determined to solve a crisis brought about not only by debt but also wealth inequality by exacerbating the same.

Fri, 11/13/2009 - 14:14 | Link to Comment WaterWings
WaterWings's picture

"Political and bankster interests align when green markets help midterm elections."

÷

2

=

Political and bankster interests help elections.

 

Fri, 11/13/2009 - 13:46 | Link to Comment Anonymous
Fri, 11/13/2009 - 14:43 | Link to Comment earnyermoney
earnyermoney's picture

I'm looking for Obama to shank the market in Febuary of 2010 to maximize tax revenue from all the people who have been long on this market since March of this year.

Fri, 11/13/2009 - 14:45 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

One simple way to send a signal of seriousness about grappling with the debt problem would be to call this nonsense in Afghanistan for what it is and refuse to send in more blood and treasure.  It's starting to sound like shoring up a corrupt regime is not as popular as it once was, and can't we accomplish our oil babysitting goals from Iraq? That's already bought and paid for.  Although taking away a toy as big as Afghanistan from the kids in the Military-Industrial Complex sandbox will definitely cause some hard feelings. 

Go long stocks and gold until further notice.  It will wax and wane but as long as the QE spigot is on, directly or indirectly, the prices of risk assets will rise.  Period. There will come a day when this is not true, I suppose, but not anytime soon.

Fri, 11/13/2009 - 16:54 | Link to Comment Anonymous
Fri, 11/13/2009 - 17:06 | Link to Comment walküre
walküre's picture

Stimulus cannot create jobs unless government mandates that every employers hires 2 people for the same job and pays them equally. Assistance for the payment through stimulus 2.

It's socialism folks. Wake up.

Fri, 11/13/2009 - 18:16 | Link to Comment tom a taxpayer
tom a taxpayer's picture

 

Another Stimulus bill will unleash the most disgusting, slobbering, pork-a-rama feeding frenzy. One thing every member of Congress is an expert at is dreaming up piggy, tax-wasting earmarks. With unemployment rising and the 2010 election looming, every member of Congress in both parties will be showering juicy, fatty pork and pig slop over their constituents. 

Every pig in America will be slaughtered in the Congressional 2010 pig roast.

 

Fri, 11/13/2009 - 18:48 | Link to Comment DaveyJones
DaveyJones's picture

.

Fri, 11/13/2009 - 19:03 | Link to Comment tom a taxpayer
tom a taxpayer's picture

Judging by the growing mass of people who pay no taxes, it appears millions of folks, wittingly or unwittingly, have signed up for "ISM".

"Tax Foundation economists estimate that in 2004, some 42.5 million Americans (one-third of all filers) filed a tax return but had no tax liability after taking advantage of their credits and deductions."

http://www.taxfoundation.org/research/show/1111.html

"In addition to these non-payers, roughly 15 million individuals and families earned some income last year but not enough to be required to file a tax return. When these non-filers are added to the non-payers, they add up to 57.5 million income-earning people who will be paying no income taxes."

"Even 57.5 million is not the actual number of people because one tax return often represents several people. When all of the dependents of these income-producing people are counted, roughly 120 million Americans – 40 percent of the U.S. population – are outside of the federal income tax system."

http://www.taxfoundation.org/research/show/542.html

Fri, 11/13/2009 - 18:49 | Link to Comment knukles
knukles's picture

ARRA  Pronounced as ERROR with a beautiful southern accent.  

 

A JOBS SUMMIT.  Well of course talk about the crisis confronting society as is the practice of  profesional community organizers.

Talk.

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