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Dr. Doom thinks the worse is yet to come

11/19/2009 | Posted by Anonymous | Edit Post

In an article written for the Daily News, Nouriel Roubini, better known as Dr. Doom predicted that unemployment would be worse next year. From the official jobless rate of 10.2% the NYU economics professor who foresaw the economic meltdown spoke grimly of greater loss of work ---probably now hovering at 17.5% if those who stopped looking for jobs or remained underemployed were included.

“The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.”----Daily News (11/15/09, Roubini, N.)

Roubini suggested that in the coming year the unemployment rate will hover high at about 11%, but it will be far worse in the following two years. Because of a weak labor market, he says the economic growth and recovery will be slow.

The budget deficits will rise accompanied by slowing in the real estate market. Delinquencies on mortgage payments, larger budget deficits and a fall of real estate prices are expected. If these scenarios occur, banks and lending institutions will bear much of the pain.

Roubini’s prescription is for the government to embark on another stimulus---creation of jobs by investing on infrastructure. Giving away unemployment checks is not enough. Those without work must find a way to have one and be productive.

Judging from the falling popularity of Obama, there is doubt if the US president can steer the country to better economic times. As he rounds up his visit to Beijing, China, Obama speaks of a double-dip recession if debt and spending are not controlled. =0=

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Labels: budget deficit, Dr. Doom, economy, joblessness, jobs, Nouriel Roubini, prediction, recession, recovery, Totie Mesia, US debt

US unemployment rate rises further to 10.2% in October

11/06/2009 | Posted by Anonymous | Edit Post

According to the Labor Department that new jobless claims fell to 512,000 last week, the lowest level in 10 months. This was the kind of news we all wanted--- to complement a rosy outlook that the manufacturing sector was on a rebound to usher in the recovery from recession. Yet, signs of recovery was not buoyed by the joblessness report from last month:

“U.S. employers cut a deeper-than-expected 190,000 jobs in October, government data showed on Friday, driving the unemployment rate to 10.2 percent, the highest in 26-1/2 years… Payrolls have declined for 22 consecutive months now, throwing 7.3 million people out of work since December 2007, when the recession started.”--- Reuters (11/06/09)

This new unemployment figure is the highest since 1983. The dismal figure, worse than most economists predicted, comes earlier than expected and it suggests improvement in the economy will not come fast. (Photo Credit: Debtfree.Daniloff) =0=

RELATED BLOG: "Credibility: a big factor in economic recovery" Posted by mesiamd at 11/04/2009

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Labels: Department of Labor, economy, joblessness, labor, recession, recovery, Totie Mesia, unemployment, US

Credibility: a big factor in economic recovery

11/04/2009 | Posted by Anonymous | Edit Post

When Pres. Barack Obama was elected in November last year, Americans and the entire world were quick to embrace a charismatic man with a promise. Expectation was matched by soaring rhetoric and media support that made the prudent among us watchful.

There were quick infusions of capital to rescue the ailing banks, the collapsed housing market, and bankrupt auto industry---- as if the United States could buy its way out to prosperity. Short-lived jubilation came from cash-strapped Americans who believe that government entitlements would solve their money problems. They banked on Pres. Barack Obama who they thought could bring the Harvard magic and his talents to the realities of their household. At their peril, Americans suddenly learned their expectations couldn't be met as painted before the election.

A chorus of approval to Obama’s “changes” later degenerated into public insecurity. Trillions of dollars had to be paid by taxpayers on recovery plans riddled with questionable provisions. Interest groups, political allies, and large companies were direct beneficiaries while the people waited for some windfall that was hard to come by.

For instance, healthcare budget, comprising 16% of the US economy, had ominously ballooned from below $900 billion dollars to an astronomical $1.2 trillion. Many were not happy because this was not what they expected in the onset. The public saw moves to make Americans accept a plan that is very costly---a debatable proposal with hidden and confusing strings attached.

A year into Obama’s presidency, despite hopeful indications that the economy is recovering, millions of Americans are still jobless, the highest ever in 26 years. Financial experts say the recession is going away, but they are quick to qualify that the the future is uncertain and life ahead will be choppy. It's as if they don't want to be blamed if something far worse happens.

Unemployment rate has climbed to 10%. This breaks the psychological confidence of those who believe in the competence of the administration. The budget deficit has gone to the roof, worrying USA’s domestic and international business-partners. How will America be able to pay those trillions of debts from foreign lenders without mortgaging the people's future?

Despite rosy reports of improvements in US manufacturing, consumer spending has been sluggish. This causes markets to lose confidence. Investors have become panicky as the Christmas season is coming. They know tepid business will only delay the financial rebound everybody is wishing for.

“There seems to be lots of uncertainty in the markets," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "I'm very cautious about the U.S. economic figures. It will be very damaging to sentiment if the U.S. unemployment rate crosses 10 percent."

Hong Kong's Hang Seng led Asia's losses, falling 380.13, or 1.8 percent, to 21,240.06 while South Korea's Kospi was down 0.6 percent at 1,549.92. Japan's market was closed for a holiday.

Elsewhere, Australia's S&P/ASX 200 closed down 0.2 percent and Taiwan's market lost 0.2 percent. China's Shanghai index bucked the trend, gaining 1.2 percent to 3,114.23 with sentiment still boosted by a weekend report manufacturing expanded for an eighth straight month in October.

As trading got under way in Europe, Britain's FTSE 100 was off 1.3 percent, Germany's DAX lost 1.4 percent and France's CAC 40 fell 1.5 percent. Stock futures pointed to losses Tuesday on Wall Street. Dow futures were down 49, or 0.5 percent, at 9,686 and S&P Futures dropped 5.9, or 0.6 percent, to 1,033.20." ----Philstar.com (11/02/09)

Aside from the economic front, there is doubt in how Untied States is dealing with the nuclear issue of North Korea and Iran which use deceitful diplomacy to proliferate weapons of mass destruction. With little options, USA is forced to deal with these rogue nations.

Lately, Obama has accepted the reinstatement of Pres. Hamid Karzai, known to have won in a rigged election which left his chief rival withdrawing in protest. Afghanistan, the center of the 911 disaster, is experiencing a resurgence of Taliban activity. Bomb attacks, killing soldiers and civilians are on the rise.

Pres. Barack Obama is ambivalent on his foreign policy in spite of the tough fight US military men are facing lately. He can only promise more US servicemen for troubled Kabul, but their number will be short of the 40,000 top US commander Gen. Stanley McChrystal is asking for to stablize the militant Islamists' lair.

Like in Afghanistan, the Al Qaeda and Taliban threats in Iraq and Pakistan continue to boil with no certainty of how to solve the terrorism problem which brazenly kills scores of innocent victims. Car bombs and suicide bombers continue to bring death and destruction the civilized world finds hard to comprehend.

If Pres. Obama can’t reverse this credibility problem, it will be hard for him to accomplish his election promises. As the public starts to know his liberal and socially progressive agenda with little laudable result, his approval rating (especially among conservatives) has gone low alienating many of the voters who supported his election early on.

His ardent supporters like US ex-president Jimmy Carter blames Obama's floundering support on race--- an assertion that many don't believe. If it is because the president is black that is a problem, how come so many Americans gave him overwhelming mandate in his election?

Obama's style of governance is creating more political divisions that make a bipartisan cooperative work difficult. Many observe the president has the tendency to blame problems on others without facing them squarely. His assistants in Washington seem out of touch with the people they serve. In the meantime, some say the president has become scrawny and fast losing weight. =0=

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Labels: Accountability, Al Qaeda, credibility, deficit, nuclear hazard, politics, recession, recovery, Taliban, terrorism, Totie Mesia, trust

Conflicting economic outlook heightens anxiety of Americans

8/26/2009 | Posted by Anonymous | Edit Post

After Ben Bernanke optimistically declared that there are signs the recession is about to end, on the day of his reappointment as the chairman of the federal reserve, Pres. Obama said the economy is deteriorating. When Obama said that the cost of healthcare will be less, the news was flooded with gloomy forecasts saying otherwise.

The slight improvement of the joblessness reported weeks ago was followed with high umemployment numbers. In town meetings where irate oppositionists gathered to air their frustration. A cadre of optimistic Obama supporters also formed grups to get across their message of the advantages of the healthcare bill, raising the chance of confrontation with those whooppose it. Others who couldn't control their anger accused both sides as rabble-rousers, paid whiners, and representtives of interest groups.

These conflicting messages hadn't help Obama’s administration whose popularity early on was artificially shored by the die-hard elements of partisan media. Majority of Americans wanted him to succeed, but his job approval didn't keep up with the momentum of his leadership. There is confusion and frustration out there. The ex-vice president Dick Cheney complained, the White House has a lot of doubts now.

“…the White House pro jected the budget deficit would be $2,000 bn higher over the next 10 years than it had predicted. Taken with a separate forecast by the independent Congressional Budget Office, the news presented a bleak picture of America’s deteriorating debt position.”----Ft.com (Financial Times, 08/25/09, O’Connor, S; Luce, E.; and Guha, G.)

There is worsening of the economic outlook. There are fears that the budget deficit will put Obama’s reform in peril. The dollar is losing influence in the world market. If Obama doesn’t move fast and continues on his “Harvard” rhetoric without tangible results, the erosion of confidence will continue. As of August 25, 2009, Rasmussen poll indicates 71% of voters believe President Obama’s policies have pushed up the deficit. (Photo Credit: Sporadicity) =0=

RELATED BLOGS: A slow recovery from recession is still a threat according to Dr. Doom Posted by mesiamd at 8/24/2009; Obama’s projected budget deficit jumps from $7.108 trillion to $9 trillion Posted by mesiamd at 8/23/2009

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Labels: economy, forecast, national economic planners, recovery, Totie Mesia

A slow recovery from recession is still a threat according to Dr. Doom

8/24/2009 | Posted by Anonymous | Edit Post

Nouriel Roubini, the economics guru of NYU who accurately predicted the morbid economic meltdown still warns of a double dip recession in spite of the rosy forecast made this week by the chairman of the board of governors of the US Federal Reserve Ben Bernanke--- that there are indicators that the recession is wearing away.

Called Dr. Doom for his precise economic forecasts, Roubini shared his thought-provoking opinion in an article he wrote in Ft. com (Financial Times) on Sunday August 23, 2009 entitled “The risk of a double dip recession is rising.”

Unlike many optimists who want to have a rapid V-shaped recovery, Roubini thinks a U-shaped slow healing from the economic downturn is more likely to occur, probably within a two-year period.

Among the Roubini's reasons for a sluggish recovery are the rising unemployment in US and other parts of the world topping 10% till next year. A crisis in solvency prevents banks to lend and the private sector to invest. Consumers are cutting on expenses. The financial system has still to recover from the damage and losses incurred during the meltdown. Energy and food prices are still rising. There is less profits with high risk of debts and defaults as companies avoid expanding their investments and hiring more workers. (Photo Credit: canoraa) =0=

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Labels: Ben Shalom Bernanke, business, Dr. Doom, economy, financial, Nouriel Roubini, recession, recovery, Totie Mesia

UP Ibalon Bicol

Dr. Doom thinks the worse is yet to come

US unemployment rate rises further to 10.2% in October

Credibility: a big factor in economic recovery

Conflicting economic outlook heightens anxiety of Americans

A slow recovery from recession is still a threat according to Dr. Doom

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