[PRCo] Re: Recessions Depressions

[Phillip Clark Campbell]

Mr.Schneider;


Remember Greenspan's comments about 'irrational exuberance?'  That 
was in reference to the stock market wasn't it.  A good rule of thumb in 
the market is when the Dow stocks yield 6% they are cheap - buy.
When Dow stocks yield 3% they are expensive - sell.
At the time of Greenspan's comments the 30-Dow stocks yielded 'less-than-1%.'
That was a first in history as well.  We had two bubbles this time around
1-stock and 2-real estate.

Yahoo just displayed this news:
http://news.yahoo.com/s/nm/20081215/bs_nm/us_usa_economy_housing
$2-Trillion loss in 'home values.'  When owners have properties reassessed,
much tax base will be lost won't it.  Dominoes are still falling.


http://news.yahoo.com/s/ap/20081213/ap_on_bi_ge/financial_meltdown
"Signs that the recession will be long and severe mounted Friday with a
fresh
round of bad economic news, including plunging sales from
manufacturers to
stores and falling prices that raise fears of
dangerous deflation."


This link to 2nd-defaults on mortgages restructured this year I mentioned before:
http://tinyurl.com/68fnay


Coping in difficult times:
http://tinyurl.com/5nopzw


A URL for zero-interest bonds:
http://tinyurl.com/6ed9ky


http://tinyurl.com/594ho4
"The full scope of the housing meltdown isn't clear and already there
are 
ominous signs of a new crisis — one that could turn out the lights
on malls, 
hotels and storefronts nationwide."


Here is the URL I was looking for - sent by a friend:
http://tinyurl.com/5ntbxr

Directly quoting two portions below:

-1-
"Unemployment: Joblessness hit a five-year high in
September - but that high
is 6.1 percent, drastically different than
the 24.9 percent peak reached in 1933. 
While economists think
unemployment will continue to rise, they predict a 
range of 7 to 8
percent."

-2-

"Jobs
-- In 1929, the unemployment rate was 3.2
percent.
It rose to 8.7 percent in 1930,
15.9 percent in 1931 and
23.6
percent in 1932,
peaking at 24.9 percent in 1933.
"Underemployment" was
significant; about one-third of employed people were
ble to get only
part-time work. Wages fell 42 percent for those who still had jobs."

The article seems to contradict itself doesn't it;  unemployment about 7-8% currently.
They seem to compare it to the ultimate rate in 1933 while ignoring that it reached
that point in stages over 4-5-years.
I was reading the chronological appendix in Lorant's 'Pittsburgh' and while it is
very far from an Econ assessment it does have some interesting comments.
Real problems are indicated - business down near 40% in a couple different years
in Pgh region.  Catholic Priest Father Cox leads fight for hungry - homeless.
In many cases steel investments increased - at least 'plans' for expansion
were proposed but may not have been a reality.  Development of the PCC took
place in the depths of the Depression didn't it and became wildly successful.
Can we make a comparison for today (please change the subject line to reflect
comments?)  Will transportation counter the current trend?  What about
Green Industries?


Phil





----- Original Message ----
> From: Schneider Fred <fwschneider at comcast.net>
> To: pittsburgh-railways at dementia.org
> Sent: Sunday, December 14, 2008 3:18:17 PM
> Subject: [PRCo] Re: Fare Registers - Passenger Counts - Recessions Depressions
> 
> Phillip and I will never agree on everything nor on many things.    
> But he appears to be ahead of the average bear.   He isn't just  
> sitting in front of the TV set watching who is getting voted off the  
> island.  He is reading or watching news and he is remembering it.    
> Read what he has to say.   He did realistically pick up on the T- 
> bills selling at zero interest last week.   He did pick up on car  
> sales down 40 percent.   Some of these indicators are the worst I  
> have ever seen in my life.
> 
> The 1929 crash started because we put too much emphasis into inflated  
> stock values.   The boom would go on forever.   Sooner or later the  
> house of cards had to collapsed.   It did.  I have read that what  
> prolonged the 1929 depression was a lack of available credit.  Those  
> who had money had all the houses, cars, toasters and refrigerators  
> that they could used.   Those who needed such commodities could not  
> borrow the money to stimulate the factories and hire back the workers.
> 
> Fast forward to 2008.   This one started because of over-inflated  
> real estate values.   Like the stock market, it affected a  
> substantial portion of the American public.   And when the crash  
> came, it affected everyone who (1) had a mortgage which a value  
> higher than the level to which there house settled or (2) wanted or  
> needed to sell their house today and move.   Those who have jobs and  
> have paid off the mortgages and don't plan to retire immediately and  
> are not going to be laid off because their company isn't in a  
> precarious financial position may be able to weather the storm.    
> Note next another parallel to 1929:  When the feds tried to pump  
> money into the banking system to increase credit, the banks, already  
> stung once by morgage losses, refused to loan the money.   We still  
> have no credit to get us out of this.   The lady that owns my  
> favorite Chinese restaurant is complaining that here Visa card holder  
> has lowered her credit limit which now places here at a point where  
> she is using up 70% of the available credit line instead of 35% and  
> that makes her credit rating also look bad!   But the banks don't  
> want people using credit.   They don't want to get stung again.
> 
> 
> 
> 
> 
> 
> On Dec 14, 2008, at 3:58 PM, Phillip Clark Campbell wrote:
> 
> >> ----- Original Message ----
> >
> >> From: Schneider Fred 
> >> To: pittsburgh-railways at dementia.org
> >> Sent: Sunday, December 14, 2008 8:01:58 AM
> >> Subject: [PRCo] Re: Fwd: Would Fineview be abandoned today?
> >>
> >>
> >> In 1948 PRC had fare registers and the operator pulled the cord every
> >> time you gave him a transfer or dumped coins in the box.   I
> >> personally never saw an operator screw up.  But I think it was a much
> >> more conscientious world then than it is now.
> >>
> >>
> > Not exactly Mr.Schneider.  Cash fares were rung on the register;
> > transfers were collected and counted at each end of the line  
> > (theoretically.)
> > This was entered into the trip report carried by each operator.
> > But as trolleys kept moving downtown this count was sometimes
> > overlooked wasn't it.  (Remember the tray on the bottom of the  
> > transfer
> > stand for holding the collected transfers?)  Agreed - end result is  
> > 'similar.'
> >
> > Counts were organized toward the result needed then.  Counts today are
> > 'most' (but not exclusively) used to get funding from 'someone'  
> > whether
> > state or fed.  Same happens to schools; absentees reduce funding.  
> > Emphasis
> > on school attendance is then money, not quality of education for  
> > the pupil.
> > When I lived in SF a counter on board said they counted passengers  
> > outbound
> > in the AM rush because count is lower.  This increased 'Fed'  
> > funding relative to
> > service offered because count was low - higher count reduced  
> > funding.  Please
> > note that I am not accepting this as gospel - just relaying what I  
> > heard.  Was it an
> > actual loophole being exploited or was this a sea story?  Don't know.
> >
> >
> > Recessions / Depressions:  It was just recently 'confirmed' that we  
> > are in a recession
> > but many in the public said 'we already knew that.'  Not really -  
> > if we follow the
> > definition it takes time for that to be confirmed.  Newspapers said  
> > we can't be in a
> > depression because unemployment hasn't risen to 1930s era.  What  
> > they ignore is that
> > in the 1930s unemployment did not go from 5% to 30% overnight; it  
> > was spread over
> > several years wasn't it.  I sincerely hope we are not going into  
> > depression but the
> > financial crisis is nowhere near solved and what looms on the  
> > horizon sounds much
> > worse than what we are experiencing.  'Seems' like any funding  
> > directed at auto
> > industry literally prolongs 'life' simply for weeks or a couple  
> > months at best.  When
> > auto industry fails in part or whole it will have serious  
> > consequences for the economy;
> > the trickle down - domino effect will accelerate significantly.
> >
> > Christmas sales for 2007 did not meet expectations did they;  
> > remember that this
> > financial crisis started some time in the last several years.  
> > Thanksgiving weekend
> > 2008 was 'fine' for the most part but that is not expected to  
> > follow through for
> > the rest of the season.  Many have stated that Christmas this year  
> > is for the
> > children only thus implying that people are cutting back.  Many  
> > also live on the old
> > saw of a recession is when the neighbor is out of work but  
> > depression when 'I' am
> > unemployed -- I am employed thus I spend.
> >
> > Auto sales have dropped drastically - as much as 40% for some of  
> > the big-3.
> > Even foreign auto makers are experiencing 12% and more sales drops.
> > Big ticket items are not being purchased.
> > News interviews with retailers reveal sharply curtailed buying this  
> > season; some
> > employees report for work but are sent home because it is slow.  
> > Even here
> > in Pocatello the restaurants are slow, very slow, and Christmas is  
> > usually a
> > busy season for food industry.
> > US T-bills sold last week for 0% - that's Zero-Percent - return,  
> > first time in history.
> > People fear the economic climate like no other time since the 1930s  
> > that they are
> > willing to 'give' their money to the Fed and actually pay to give  
> > it to them in
> > commissions for the transaction - 'presumably' because this is the  
> > safest investment.
> > The Nation, States, Counties, Cities, Local Governments are all  
> > experiencing
> > major funding shortages and are facing many layoffs.  Depreciating  
> > home values
> > only compound the problem going forward as tax revenues will be  
> > reduced thus
> > making for more layoffs and reductions in services.
> > City infrastructures are crumbling and need immediate attention -  
> > sewers, water, roads;
> > this may make for great New Deal employment but money for such  
> > employment
> > comes from the tax base and won't contribute to solving the crisis  
> > but only
> > prolonging and compounding the same as did the previous New Deal.  
> > This means
> > more 'borrowing' by govt. since unemployed don't pay taxes.
> > Was it a Los Angeles news report which stated that many people are  
> > not turning on
> > heaters this season?  Yes, LA is warm relative to the rest of the  
> > nation but winter
> > nights are often / usually in the low 40s.  When did this happen  
> > last?  Can't remember.
> > When the weather warms, when the plants start growing, when the  
> > 'swallows' return
> > home we know that spring and summer is coming - signs of the  
> > season.  What
> > do the above signs portend?
> >
> >
> > Purchases of $5 teddy bears or $40 crockpots at Walmart won't keep
> > the economy going will it.
> >
> >
> > Mr.Schneider said in a recent post (about socialism) that  
> > government issues money.
> > I disagree - money is a store of value and that position has been  
> > held by gold for
> > millenia and by silver to a lesser extent.  Paper money is fiat  
> > money.  People will
> > argue that the value of the money is the workforce behind it.  If  
> > such is the case,
> > who says that slavery is dead?  People holding dollars can then  
> > demand 'from the
> > workforce' a return when they wish to cash those dollars.  Better  
> > minds than ours
> > have made this claim.  There are some who can substantiate a claim  
> > that the 'Fed'
> > is unconstitutional - Richard Russell of La Jolla - in the business  
> > for nearly 60-years.
> >
> > On top of all this the world has been in a competitive devaluation  
> > of currencies for
> > the last 5-decades - when money is cheap then exports increase so  
> > it is possible
> > to sell to the 'world.'  Each country is purposely devaluing  
> > currency to become
> > seller to the world  --  world leaders are selling selves and  
> > country down the drain.
> >
> >
> > And life goes on - or will it.
> >
> >
> > Phil