This page has been archived and commenting is disabled.

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.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 11/13/2009 - 02:34 | 129436 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 | 129542 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?



Fri, 11/13/2009 - 10:04 | 129595 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 | 129608 berlinjames02
berlinjames02's picture

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


Fri, 11/13/2009 - 02:39 | 129440 mule65
mule65's picture

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

Fri, 11/13/2009 - 03:02 | 129448 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 | 129524 Anonymous
Anonymous's picture

You will not be getting jobs. The stimulus money goes to failing states, the FDIC, Freddie&Fannie, and Puff Daddy's Feed the Kids program cuz Michelle be approvin' yo, and the
Reverend Jessie say's:
Ahh, eeanie meanie a'minie mo, Puff Daddy's program be fo sho.

Fri, 11/13/2009 - 12:12 | 129764 chumbawamba
chumbawamba's picture

+Fried Chicken mutha fucka.

I am Chumbawamba.

Fri, 11/13/2009 - 08:57 | 129553 Anonymous
Anonymous's picture

That is what's wrong.

Even those most devastated are merely posting here about hot it 'really sucks', and 'it would have been nice'...

Where's the outrage? The anger? The violence? The Protests in front of 85 Broad?

I don't feel your pain, but I have been unemployed in the long ago, and I recall I was a hell of lot more outspoken
and insane at the injustice of the situation.

You and other 20% need to take up a much stronger attitude
hopefully accompanied by some with a militia's view to government.

Fri, 11/13/2009 - 10:06 | 129599 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 | 129730 WaterWings
WaterWings's picture

Get a teaching certificate and move to Chicagoland.

Fri, 11/13/2009 - 14:45 | 129953 loki
loki's picture

+1 Trillion

Fri, 11/13/2009 - 03:02 | 129449 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 | 129457 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 | 129458 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 | 129466 Anonymous
Anonymous's picture

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


Fri, 11/13/2009 - 03:42 | 129467 alexmat
alexmat's picture

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




Fri, 11/13/2009 - 08:49 | 129546 Anonymous
Anonymous's picture

computers, like guns, can be misused. This does not mean that all application of computing is bad. To wit, without them, we would not even be having this conversation.

Fri, 11/13/2009 - 12:02 | 129744 Anonymous
Anonymous's picture

Fascinating link. The author's conclusion assumes that bureaucracies cannot be eliminated, and will automatically grow to consume a certain share of GDP. The human race is doomed if we allow that assumption to remain operative, because not only are the old bureaucracies growing like weeds, but we are creating new ones at an increasing rate.

Fri, 11/13/2009 - 08:29 | 129529 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 | 129541 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 | 129929 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 | 130088 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 | 129462 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 | 129532 Anonymous
Anonymous's picture

Yes, we have seen this movie. It was a two-decade epic called "Japan."

But, of course, all characters and events portrayed there are fictional and unrelated to anything having to do with our present circumstances.

Fri, 11/13/2009 - 03:47 | 129468 Unscarred
Unscarred's picture

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

Fri, 11/13/2009 - 04:31 | 129481 Anonymous
Anonymous's picture

GS are not in the game of guesswork.

Fri, 11/13/2009 - 07:55 | 129515 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 | 129484 Anonymous
Anonymous's picture


Fri, 11/13/2009 - 05:10 | 129486 Anonymous
Anonymous's picture

GS is good at rescuing kittens.

Fri, 11/13/2009 - 13:56 | 129891 Anonymous
Anonymous's picture

Yes. Them's good eatin'.

Fri, 11/13/2009 - 05:29 | 129490 JuicyTheAnimal
JuicyTheAnimal's picture

.....and then?


yeah but...then what?

Fri, 11/13/2009 - 06:23 | 129496 Cognitive Dissonance
Cognitive Dissonance's picture

Forgot incremental deficit spending, what about incremental failure?

Fri, 11/13/2009 - 06:53 | 129503 Careless Whisper
Careless Whisper's picture

Does anyone even believe what GoldmanSachs says?

Fri, 11/13/2009 - 08:50 | 129547 Anonymous
Anonymous's picture

You bet. The Bamster, Geithner, Bernanke, all those clued in so they know which way to 'bet' on a sure thing.

Stimulus is timed to 2010 election, to favor the current motley crew tugging on the levers of power for their benefit.

Fri, 11/13/2009 - 11:59 | 129737 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 | 129507 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 | 129579 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 | 129509 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 | 129531 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 | 129548 Anonymous
Anonymous's picture

If you have to wonder then you haven't been paying attention.

Fri, 11/13/2009 - 08:33 | 129533 Anonymous
Anonymous's picture

Even the Caesars knew, two millennia ago, the danger of bringing a hardened army home to a restive populace. Hence the Forever War.

Fri, 11/13/2009 - 14:32 | 129940 cougar_w
cougar_w's picture

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

Fri, 11/13/2009 - 08:27 | 129527 Anonymous
Anonymous's picture

When are people going to get that there is only 1 party...the GS party.

Fri, 11/13/2009 - 08:35 | 129535 Miles Kendig
Miles Kendig's picture

The crumbs of the corrupt.

Fri, 11/13/2009 - 14:42 | 129949 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.


Fri, 11/13/2009 - 08:36 | 129536 Anonymous
Anonymous's picture

Once a spender is in over his head on debt, there is no stopping him because default if the only option. So too with the USA. Now trillions do not shock anyone and the new normal is ever increasing debt and more and more Benny fiat money. Why doesn't the Fed just ask for the Fed governors pictures to be on our currency? Bernanke could be on a new $1,000 bill because when this is over, you will need many of these in your pocket and no fake copper pennies.

The path to fiscal ruin can be surprisingly fast. Change we can believe in has become change we can't believe. If the Chinese are upset about our fiscal policy, why isn't our Congress?

Fri, 11/13/2009 - 14:57 | 129973 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.


Fri, 11/13/2009 - 08:52 | 129549 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 | 129550 JohnKing
JohnKing's picture

mo money

Fri, 11/13/2009 - 08:54 | 129552 BennyBoy
BennyBoy's picture

So Goldman has ordered it, so it shall be.


Fri, 11/13/2009 - 09:00 | 129555 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 | 129558 Anonymous
Anonymous's picture

GS should be shut down. No amount of stimulus can benefit the american economy as much as would the removal of the giant vampire squid from Lady Liberty's jugular.

Fri, 11/13/2009 - 09:08 | 129559 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 | 129560 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 | 129565 hank_rearden
hank_rearden's picture

what's the timeframe on the secession of texas?

Fri, 11/13/2009 - 09:39 | 129577 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.




Fri, 11/13/2009 - 11:12 | 129663 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 | 129681 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 | 129745 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 | 129574 Anonymous
Anonymous's picture

? They..... Me, me, me. (clears throat).

? They told the squid to give back the Gaisha's and he said no, noooo, no! ?

Fri, 11/13/2009 - 09:37 | 129575 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 | 129588 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 | 129602 MinnesotaNice
MinnesotaNice's picture

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

Fri, 11/13/2009 - 10:29 | 129622 Paul S.
Paul S.'s picture


Fri, 11/13/2009 - 10:58 | 129647 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 | 129691 Anonymous
Anonymous's picture

Muchos nachos for relating an on the ground experience. We know the bank robbers are paying themselves.

From Washington you might best be served by a trip to Hilo,
or Maui. I understand the deals from the West Coast are great.

If you don't mind traveling to Florida for pick up of a Windjammer out of the Atlantic, you will be able sail south to visit the French West Indies, and dozens of other islands like Tortola, and by all means take a one day trip if you get to Aruba, to Caracas, to see how the poor really live.

Bon Voyage.

Fri, 11/13/2009 - 11:39 | 129702 Anonymous
Anonymous's picture

I spend most of my time in California and would consider Washington a vacation spot.

Fri, 11/13/2009 - 12:04 | 129748 WaterWings
WaterWings's picture

Nice name. Jefferson would be proud.

Fri, 11/13/2009 - 15:11 | 129998 cougar_w
cougar_w's picture

[Any suggestions]

Washington DC.

Raise some hell.

Fri, 11/13/2009 - 16:54 | 130100 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 | 129581 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 | 129586 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 | 129593 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 | 129688 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 | 129763 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 | 130110 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 | 129596 Anonymous
Anonymous's picture

[[The administration has already promptly forgotten the lessons from the recent elections which were a failure for the Democrats, ]]

Uh, winning three out of three U.S. House races -- races in which Obama is far more of a factor than in state governors' races, particularly when Dem Creigh Deeds in Virginia ran as far AWAY from Obama as he could get and lost by 18 points -- is a failure for the Democrats HOW, exactly?

No, seriously, help me out here.

Fri, 11/13/2009 - 15:10 | 129995 docj
docj's picture

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

Fri, 11/13/2009 - 10:04 | 129597 Anonymous
Anonymous's picture

The second stimulus is being formulated with passage of the health plan in mind. The administration's own numbers show that the health plan will result in the loss of 5.5 million additional jobs due to higher taxes, primarily on small business to pay for this monstrosity. This of course means more debt, more interest expense to pay and likely, even a weaker dollar as a result. The vicious cycle will continue.

Fri, 11/13/2009 - 10:06 | 129598 Anonymous
Anonymous's picture

I'm not sure that you have to have been goldman sachs to come up with this estimate. Put me down for "Duh."

Fri, 11/13/2009 - 10:13 | 129605 Anonymous
Anonymous's picture

A "a resounding vote against incremental deficit spending"? Really? Is that what voters said?

More likely, it was a combination of that from fiscal conservatives, coupled with the disenchantment of progressives who have not gotten any meaningful "change" and decided to stay home.

And wise deficit spending has its place. Believe it or not.

Fri, 11/13/2009 - 12:01 | 129739 Anonymous
Anonymous's picture

"And wise deficit spending has its place. Believe it or not."

Spending for the sake of spending and a photo-op at the Denver Museum of Nature and Science does not have its place, however, particularly when said deficit spending clearly fails to deliver on that which was promised. When the spender is already $10 trillion in the red, any notions of "wise" deficit spending at that point are pretty much irrelevant. Particularly from a President whose previous stint in charge of spending other people's money during Annenberg saw him spending over nine figures with nothing substantive to show for it in the end--at least Obama is nothing if not consistent in this regard.

This stimulus was the "public school board" approach to spending--demand and then throw a bunch of money into the system and expect the mere presence of cash to solve the problem. The administration's goal wasn't to conduct wise deficit spending, it was to make a big splash using eye-popping numbers.

The problem isn't that the stimulus wasn't big enough, as some are claiming--again, with the current debt the number is really quite irrelevant--the problem is that the stimulus was a haphazard melange of poorly targeted spending that's done nothing more than shore up state balance sheets. If they had promoted this as a "State Budget Bailout and 2010 Reelection Bill" it would have been more honest, but where's the sexiness in that?

Fri, 11/13/2009 - 10:20 | 129610 Anonymous
Anonymous's picture

Isn't this actually something like the 4th stimulus? Bush sent out checks as well.

Fri, 11/13/2009 - 10:23 | 129615 Anonymous
Anonymous's picture

Obama was a fad.

Fri, 11/13/2009 - 10:29 | 129621 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 | 129692 Anonymous
Anonymous's picture

"A trajectory that gets unemployment back down to some reasonable number by next October will see a big spike in Obama / Dem popularity."

So the administration is hoping that the country's adopted Cramer's "Getting Back to Even" mindset? LOL--that might indeed be the only thing that saves them.

I do have to wonder what Americans will consider a "reasonable number" at this point, because the U3 has already gone way beyond what the administration predicted it would with the passage of the first stimulus.

I also think Leo's being way too optimistic about the employment numbers being revised to the upside, but we'll see. Job-wise, I've seen stats (I think this was on Calculated Risk at one point) that we are basically back to bubble levels. I really have to wonder just where employment is going to be coming from in a consumer-based economy where people are up to their eyeballs in debt and aren't working. What industries are poised to hire 4 million people and god knows how many part-timers over the next 1-2 years?

There will always be fools who spend beyond their means even in a recession, and people who have defaulted on their mortgage will have extra cash if they decide not to make any more payments until foreclosure, but overall if people aren't working, they aren't going to be motivated to put themselves into a deeper hole. Without that level of consumer spending, the economy isn't going to recover.

Fri, 11/13/2009 - 14:38 | 129947 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 | 130017 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.


Fri, 11/13/2009 - 10:32 | 129627 jesusonline
jesusonline's picture

More on the "they are conniving fucks" topic

Goldman Pays Junior CDOs Before ‘Junk’ Senior Classes

Fri, 11/13/2009 - 11:06 | 129654 Unscarred
Unscarred's picture

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

Fri, 11/13/2009 - 11:09 | 129655 Anonymous
Anonymous's picture

The 2nd stimulus will be the buyout to dismantle Social Security. The 1st stimulus can't even be spent completely until the debt ceiling is raised.

A group of senators (Conrad, Gregg, Bayh, Feinstein, Warner, Lieberman, Voinovich, Sessions) have stated that they will not support an increase of the debt ceiling without a deficit/SS/Medicare/Medicaid commission that is empowered to provide Congress with a single up/down vote on its recommendations.

So, a 2nd "job" stimulus will provide the political cover for Obama support - a low price actually when you consider what drastic cuts in Social Security will save Goldman Sachs.

Fri, 11/13/2009 - 11:33 | 129693 Anonymous
Anonymous's picture

Special request to Tyler and Marla.

First a quote from Zero Hedge :

Quantitative Easing Has Been A Monetary Failure; Persistent Deflation Means More Fed Intervention Coming Soon

"The chart below demonstrates what the implied Fed Fund rate should be today based on the Taylor Rule: a whopping -6.15%!"

This is why I think that the Namke Debt Consolidation Idea would not be inflationary.

Everybody is guessing about things that obviously won't work.

I would appreciate a Zero Hedge brainstorming article to explain what effects the Namke Debt Consolidation Idea would have on employment, national debt, bonds, commodities and other key variables.

Keep in mind : I think that key people at the White House pay close attention to this blog. But getting economic justice requires building consensus. With the summit coming up - it may be a good time to use the Namke Debt Consolidation Idea as a punching bag?

Or would you rather that Goldman designs the ideas?

Thanks in advance.

May all beneficial ideas come true in beneficial ways!

Namke von Federlein

Fri, 11/13/2009 - 11:34 | 129694 Anonymous
Anonymous's picture

Try looking at this from the Banks' point of view.

They've learned that they can successfully hold Congress hostage in order to cover their gambling losses. They successfully blackmailed Congress a year ago last September.

So, what have they done since then? More gambling. Because they know they have absolutely nothing to lose.

The name of the game is to take the American taxpayer for all that he is worth. Congress is ready to help.

The two big questions which impact everyone are:

1) How long can this go on?

2) What will be the effect on the economy next year when a second stimulus is passed?

People here are more knowledgeable than I am about finance. I'd be interested in hearing some insightful opinions about the impact of more stimulus and bailouts on the Economy.

Fri, 11/13/2009 - 12:08 | 129757 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.


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 | 130150 walküre
walküre's picture


"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 | 129825 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 | 129923 WaterWings
WaterWings's picture

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




Political and bankster interests help elections.


Fri, 11/13/2009 - 13:46 | 129879 Anonymous
Anonymous's picture

I am seeing more layoffs, the man is working his remaining workers harder and taking home the profits.

Fri, 11/13/2009 - 14:43 | 129950 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 | 129955 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 | 130099 Anonymous
Anonymous's picture

Why a 2nd. stimulus?? The first one didn't work and unemployment is now 10.2% reported but actually at 17.5%. Get the tax reductions to small business's and things will get going by themselves. Obama......please, please, just go sit in your office, put your feet up and get a bottle. We, the American people, can handle this mess without you screwing it up anymore than you already have.

Fri, 11/13/2009 - 17:06 | 130115 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 | 130197 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 | 130217 DaveyJones
DaveyJones's picture


Fri, 11/13/2009 - 19:03 | 130248 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."

"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."

Fri, 11/13/2009 - 18:49 | 130231 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.


Do NOT follow this link or you will be banned from the site!