Double Dip Reality

Not surprisingly, all of the reports for the leading economic indicators are gloomy. Unemployment claims are up, new home sales are down 30% and manufacturing is coming to a halt. All signs point to the double dip scenario, which most economists denied until now. However, there is no denying the direction and size of the numbers. New claims for job benefits jumped by 13,000 to a seasonally adjusted 472,000, the highest level since March, and analysts expect the unemployment rate to edge up slightly tomorrow.

Also, since the recession, the jobless have enjoyed an extra 72 weeks of benefits over and above the 26 normally given. Democrats want to vote to extend them past the 98 week mark, but Republicans are fighting them tooth and nail since they want the extension funded from the remaining stimulus funds. Of course, Democrats want to pile the price tag onto the debt as "emergency funds." This gridlock allegedly troubles economists who say we need to provide jobless benefits so the unemployed can spend the government money and "stimulate growth." It really worries me to think top economists are counting on unemployment benefits to pull us out of the recession. How much can a $400/week unemployed individual stimulate the economy? I expect this type of stupidity from Nancy Pelosi (http://www.foxnews.com/politics/2010/07/01/pelosi-unemployment-checks-best-way-create-jobs/), but from economists?

To make matters worse, the housing market is still plummeting. New home sales fell 30% in May as tax credits expired and the pool of those with the ability to obtain credit shrank. Most analysts expect another 8 to 10% drop in housing prices, which is likely to be followed by more foreclosures.

The industrial sector's growth also slowed in the U.S. as well as in 16 other countries tied to our currency.

Hypocrisy is Sh*tty

I'm fed up with these self-righteous, hypocritical, demagogic politicians.  Listening to the members of the Permanent Subcommittee on Investigations question Goldman Sachs executives today made me feel the utmost sympathy for the Wall Street titans, and given the nature of the emails authored by those on the hot seat, that is some feat. Specifically, subcommittee members continuously referred to an email where a Goldman executive referred to the securities he was selling as "sh*tty." 

So, what does that email prove?  It proves that, like all the other guys at all the other banks, Goldman executives knew they were selling a product that had a high likelihood of imploding. What does that have to do with the fraud case against Goldman, which they were hailed in to discuss? NOTHING. In fact, to be sure, the actual litigation claims Goldman Sachs misled investors by failing to disclose that a hedge fund named Paulson & Co., which was shorting the U.S. mortgage market, helped the CDO manager select securities to include in the portfolio involved in the SEC suit. To that end, the self-nicknamed "Fabulous Fab"

Tourre, the 31-year-old at the heart of this mess, stated that he indicated to investors that Paulson was interested in taking a short position on the deal. 

So, as everyone knew from the beginning, this suit was about political grandstanding and not punishing law-breakers. No one would argue that these guys, or any others that were involved in the CDO mess, have great character, but at least they're not devoid of character and hypocritical. As the clown court was attending to its fake business today, Reid was counting the money he received Sunday night at a dinner in New York sponsored by Roger Altman, who is now chairman of Evercore Partners, the “most active investment banking boutique in the world.” (See http://www.politico.com/news/stories/0410/36389_Page3.html ). And everyone knows Obama received $1 million directly from Goldman Sachs during his campaign. And I'm not saying it's a partisan thing.  In the 2008 election cycle, $89,221,944 was given to Democrats and $68,022,536 to Republicans and so far for the midterm election season, Democrats have received $21,513,828 and $12,867,315 has gone to Republicans. (See http://www.cnn.com/2010/POLITICS/04/21/democrats.wall.street/index.html?hpt=Sbin). It must be infuriating to be ignorantly and indignantly questioned  by people after you line their pockets and send them on their way to do your bidding in Washington.