Walmart recently disclosed that as many as 15,800 exit signs cannot be accounted for. This wouldn't be big news if these exit signs didn't contain tritium gas, a form of hydrogen which is used for emergency exit signs because of its ability to glow in the dark when the power goes out. What??? How can something with radioactive material be so casually misplaced? Isn't it ironic that when so many are trying to find the exit out of their economic misery in this turbulent of times, exit signs are missing and they are also radioactive. What does this mean? Stay away from the exit?
I sent an article to a friend and received a quite different reaction than what I expected. I originally sent the article to reflect an opinion that was based on logic. However, it became an exchange of whether the writer is pessimistic or realistic. Although the tone of the overall article is dark, he uses well organized examples to defend his points. I didn't think it was pessimistic but rather a realistic vision of what will happen.
Back to the title. I've always considered myself to be somewhere in the middle, neither optimistic nor pessimistic but realistic. Having a label never fit me either and I like to be objective in how I see things and not have it distorted by opinion. However, having lived in the US for over 15 years I've become immune and sometimes repulsed by the overt optimism that goes around and the constant accusations that I am a pessimist because I say what I see.
If there is a 100ml glass and there is 50ml of water in it, it's still going to be 50ml of water no more no less. What difference does it make that it is half full or half empty. Why is it better to be optimistic than realistic? Having hope is a great thing, but not when it is pushed into people's minds. In essence you are trying to change the way someone thinks to match yours, you are pushing that person out of reality. Being optimistic is a good thing especially in these dire times when we need to focus on how to straighten ourselves out. However being optimistic all the time leads to a false sense of hope and a dislocation from reality.
Why do I mention optimism? Often I read articles or watch a video selling that the market has hit bottom and that now is the time to buy if you want to make money...Well, the same thing was said a few months ago and nothing has really changed much, we are still slipping lower in the markets. Before that? Remember when the fundamentals of the economy were sound? People are starting to sell hope and market to people based on hope. There's a problem with this because it means that the average consumer does not have enough knowledge and base their purchasing on people who are interested in selling and not accurately reflecting what the reality of the situation presents. I'm sure some people reading this blog are thinking that I am pessimistic.
The Economist is probably my favorite magazine. There was a cover that went around this summer when the markets started tumbling which surprised me. It was an appropriate headline but I thought it was a little too much for circulation. The cover was a spoof but it might as well have been the cover that week, or even the cover of the year. I bring this topic up because some people are starting to get that feeling again.
The Stimulus passed yesterday and it apparently disappointed most on Wall St. Did 819 billion dollars not suffice or did the package not include enough handouts for everyone? In any case, the board showed red and there were very few winners:
Here is another graph following yesterday's Stimulus now or jobs later blog. Green(July '74), Blue(March'80) and Red(July'81) look like nice V-shaped recoveries and the current Stimulus hopes to emulate this V-shaped recovery. However, the March '80 recovery, as quick as it was, another downturn started only 4 months after returning to peak employment and lasted twice as long as the first one, another 27 months. By most economists' projections, the current Stimulus is not enough for a full recovery. If these economists are correct, we'll recover, hopefully to peak employment, and then start shedding jobs again as the economy will not be stimulated enough. When this money runs out, we'll repeat the W-shaped recovery much like the '80 '81 recession, with the second leg of the W lasting twice as long.
But here's another graph that interests me.
This is the Unemployment data from Bureau of Labor Statistics going back ten years. Looking at this makes me wonder if we really recovered from the Feb '01 recovery? The Feb'01 recession may have reached its previous peak employment, but doesn't look like it accounted for the increase in population as unemployment fails to reach below 4%. What does this mean? I'm not sure, but only time will tell. Perhaps we can look back when our teeths are falling out and talk about the good old times.
I usually try to finish all the food that is on my plate, or at least that's served to me. Lately, I can't seem to shed the pounds, or kilos, especially around my waist so I've started to leave a bit behind. It bothers me that I'm not the only one that leaves food to go to waste. I'm sure most know there is a food crisis going on in the world. Prices going up, export restrictions, GM(genetically modified) crops, lack of rain or too much rain and suspect the general quality of food out there. The worry of our food supply makes me want to go and start a farm...on my balcony first maybe. I wonder how much land is needed to feed a family of four??? I lose confidence that I am even capable of farming my own food. Can you? All I can do is not waste...for now.
American wallets and fridges are emptying out. They say that Americans waste about a quarter of their food that we eat. Here's what it would look like in a month. Imagine not wasting and actually eating all of this stuff a month? Oh, wait...
Many Americans are waiting for the stimulus package to be passed by the senate this week as job losses are starting to show a kind of growth that the economy hopes to gain. In this time of crisis, one would expect a sense of patriotism to reflect the unity to get through the hurdles, or rather the brick walls, that have been laid down. However, the fog is clear now and we can see who is laying those bricks. By no means is this stimulus perfect but we all agree there needs to be one. Most economists will add that the current dollar amount is not nearly enough and more needs to be added. So, it bewilders me that Republicans are interested in denying the passage of the stimulus on account of two percent of the package. When listening to the arguments laid down by these people, it makes you realize the sad state of GOP and their politics...
One senator ridiculed the stimulus by stating that the stacked hundred dollars bills would be 689miles high...or that if we tied the bills end to end, they would go around the earth 39 times...What is this guy selling? I don't mean to be a smartass but wonder if that's around the equator or around the north/south poles?
Another senator reflected about the stimulus in a manner only a Republican can. Actually I like this one as it is quite prophetic. If you spent a million dollars everyday since the birth of Jesus, we would still have change left... I would like to counter that with the fact that the bailout passed this summer is about the same amount as the stimulus.
Going back to jobs and the graph on top, we are looking for a prolonged period of job losses the longer we wait. The first blue line dip reflects the 1990 recession when 1.5 millions jobs were lost at trough and it took 32 months to recover. The second red line dip is the 2001 recession which lost over 2.5 million jobs while taking 48 months to return to peak employment. If these two dips are a clue to how long it will take the economy to start gaining jobs on top of the losses we have amassed, we needed a stimulus a long time ago.
Americans have endured and experienced 8 years of stupid and its economy cannot afford anymore Idiocracy. It's time we start selling smart and stop selling stupid. And no, there are no electrolytes in this stimulus!