For Most Cities, Recession Has Arrived
Nice depiction of where the pain is being felt most:
click for ginormous version
This is obviously having a political effect:
click for ginormous version
Sources:
For Most Cities, Recession Has Arrived
BILL MARSH
NYT, October 4, 2008
http://www.nytimes.com/2008/10/05/weekinreview/05marsh.html
Economic Unrest Shifts Electoral Battlegrounds
ADAM NAGOURNEY and JEFF ZELENY
NYT, October 4, 2008
http://www.nytimes.com/2008/10/05/us/politics/05map.html
Sunday, October 05, 2008 | 07:00 PM | Permalink
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Comments
It will be hard to find any blue states after the rout.
Quoting Sarah Palin, "Can we talk about Afghanistan? We’re fighting terrorists and spreading democracy and building schools and we will win in Afghanistan also."
Good grief. I don't know what she wants me to do: Salute, genuflect, or start the wave.
Posted by: Winston Munn | Oct 5, 2008 7:30:37 PM
I'm in metro-new york where I'm "in trouble" and still "growing" -- where will the insanity end ?
Posted by: Paul Griffith | Oct 5, 2008 7:33:57 PM
McCain is toast.
The whole bailout debate, and McCain’s support of it, has hurt him.
It’s not just the economy per se, but also the fact that the worse the economy gets, the greater the resistance to the Iraq war becomes. Moreover, McCain’s support of the bailout bill undermines his message of fiscal conservatism.
Posted by: D.L. | Oct 5, 2008 7:41:22 PM
From a political perspective, what does Bush have to lose by telling Bernanke to drop the funds rate by 100 b.p. next week?
Posted by: D.L. | Oct 5, 2008 7:50:29 PM
I'm in Orlando, supposedly not yet in recession. But I can tell you, if the new Whole Foods in my neighborhood is any indication, we ARE in serious recession; every time I go to that store, I'm there by myself. One checkout person. Scary.
And I agree with other comments: Palin going on about terrorism is totally tone-deaf at a time when the fiscal roof is caving in.
Posted by: Scott | Oct 5, 2008 7:52:01 PM
"From a political perspective, what does Bush have to lose by telling Bernanke to drop the funds rate by 100 b.p. next week?"
That might panic the markets, as 100 b.p. would signal panic on the Fed's part.
Posted by: Scott | Oct 5, 2008 7:59:02 PM
McCain/Palin = Unstable/Unable
Obama/Biden in a landslide !
Posted by: km4 | Oct 5, 2008 8:10:39 PM
Most states will turn red in a matter of weeks. A lot of retails which depend on the holiday season is going to find it tough-going as many consumers are surviving on credit cards.
With interest rates going up and limits dropping, the credit card debacle is the next mess about to rock the economy.
Posted by: jeflin | Oct 5, 2008 8:10:44 PM
All you need to know about John McMaverick is who he nominated to be his VP.
That alone is enough to disqualify him despite any other good thing he may have ever done, real, imaginary or otherwise!
Posted by: Bob A | Oct 5, 2008 8:25:13 PM
Took a stroll thru Best Buy today. I was practically tackled by the sales jockey's at least 4 or 5 times. Nobody buying anything no traffic.
On the other hand Wal-Mart was full.
Small Business currently taking losses will start to throw in the towel saving whatever assets they have left.
Hell.. bad earnings will be good news compared to what we are currently enduring.
Posted by: mrkcbill | Oct 5, 2008 8:32:45 PM
It amazes me that New York City, the epicenter of a cratering economy is only "At Risk For Recession." It seems like all of those high paying jobs that have been disappearing for a year would have impacted the city a little bit.
Posted by: matt | Oct 5, 2008 8:33:20 PM
Now you know why Buffett bought a large stake in a manufactured home builder (they used to be called trailers) about 3 years ago.
Posted by: AGG | Oct 5, 2008 8:37:42 PM
Credit deflation is national and now going global at high speed, no hiding in any safe American market..
Posted by: ron | Oct 5, 2008 8:38:59 PM
I'm still one of those undecideds and trying to decipher Barack's economic strategy. What is his plan to turn this around? Please correct me if I'm wrong, but I mainly see a lot of social spending. What is he going to do to get the markets functioning again?
Posted by: Jay | Oct 5, 2008 8:49:51 PM
My favorite graph of the day, found over at FiveThirtyEight:
Graph: http://farm4.static.flickr.com/3081/2914876415_c366c97da5_o.png
From this discussion thread: http://www.fivethirtyeight.com/2008/10/why-it-probably-wont-work.html
Notice how both candidates' favorability/unfavorability ratings strongly correlate for the entire year...until just a couple of weeks ago, when they diverge wildly. Economy, hmmmm....
If economic issues remain at the top of the news over the next few weeks -- and I think we're all counting on a wild rollercoaster ride of economic news for a while -- then I think we're definitely going to see a wave of Blue State voters in a month.
Posted by: mhigh | Oct 5, 2008 8:56:21 PM
you left out the rurual areas like Vermont,
the shanties of Virginia, slums of miami, etc
that have been in a deppression since 1980
Posted by: rickrude | Oct 5, 2008 8:57:17 PM
Jay,
Getting the markets functioning is not the job of government.History shows whatever they try usually makes it worse.The one positive thing they can do, cut spending, is not to be expected from either Party. Particularly with our current circumstances.
Posted by: Automated Robot | Oct 5, 2008 9:01:17 PM
Posted by: matt | Oct 5, 2008 8:33:20 PM
matt,
remember that NYC was host to waay EURO spending earlier this Summer..
+ benefits from 'substitution effects' of 'Cained Peep wanting to Va-Kay, but not wanting to get Caned by going to EURODisney..
Posted by: Mark E Hoffer | Oct 5, 2008 9:02:34 PM
and hey Jay.. don't you think it would help if more than 20% of the population believed the President had a clue?
Posted by: Bob A | Oct 5, 2008 9:10:59 PM
Automated Robot, Bob, thanks, interesting points. Hopefully the extent of Obama's plan is not simply - that he has a clue. I'm just having a hard time seeing him, together with Pelosi and Reid, being a plus economically. Not sure what I'm missing.
Posted by: Jay | Oct 5, 2008 9:23:55 PM
Jay,
Don’t sweat the details, nobody knows what we will need to do yet. Just vote for the smartest guy. We will need all the brainpower we can get.
IMO, McCain’s strongest suit is foreign relations, certainly not economics and domestic policy. More importantly, his judgement is whacked. What kind of judgment did he demonstrate by picking Palin, whom he had only met once for 15 minutes and who has turned out to be a dingbat? That’s not the person I want guiding us through a financial crisis and severe recession or possible depression. And that’s not the person I want in charge of our military, especially when we are already in the middle of a phantom war where, if you are so inclined (as I think he is) you can see terrorists everywhere, just like McCarthy and others saw communists behind every tree in the 1950’s. No, that’s too dangerous a scenario for me to vote for.
Posted by: KJ Foehr | Oct 5, 2008 9:34:50 PM
@Jay
"I'm still one of those undecideds and trying to decipher Barack's economic strategy. What is his plan to turn this around?"
Jay, I can't tell you what Obama has in mind but I'm pretty sure I can describe the Palin Plan.
Sarah Palin: "John McCain is a maverick, so we'll sit down together and decide what is and should be the mavericky thing to do and then we'll get goin' on it like a couple of mavericks givin' a shout out to Joe Six-Pack and his kids sittin' there on the couch at home and watchin' us right this minute." Wink, wink. "You bethcha."
Posted by: Winston Munn | Oct 5, 2008 9:35:39 PM
The recession areas is the least of our troubles right now.
Asia is taking a dive and this could well be a sign for U.S. markets this week.
The Market realizes that over 50% of the $700B bailout will eventually go to buying back 'bad dollars with good dollars' from overseas banks and institutions. These CDO and CDS holders are none U.S. investors that are being bailed out with U.S. tax dollars.
The bottom line is that in one fell swoop we have increased our trade deficit by at least $350B. This is what happens when you bail out non U.S. investors. The chain reaction is that asset values at home go down and then these same institutions, now armed with 'good dollars', come back and buy U.S. assets at depressed prices.
Essentially, Paulson has sold out to the European banks, though few actually make the connection. This is his way of making good on his promises to the European investors that bought the CDO's and CDS's while he was at GS. I find it unbelievable that I am the only one connecting the dots.
Some estimates put the NON U.S. holding positions at around 80% of all outstanding debt, meaning that as much as 80% of the $700B will end up going to overseas investors. To date, I have no way of assessing the estimates as banks (such as CS) have not disclosed their holdings.
Let's keep a cool head about this and scrutinize every deal that Paulson makes using the $700B. Assuming the above is the entire game plan (perhaps there are a few twists yet to be unveiled), we can still mitigate the damage. Gaining press coverage and traction by calling the foul when it becomes more transparent is the key.
At first I didn't think that Paulson would do such a 'criminal act' (harsh, but this is how I now see it). The deceit is almost perfect, however, if he tries to purchase the "bad overseas dollars" directly, it will become too obvious. The CDO's and CDS's will have to be transfered from a European investor back home to a U.S. holder and then sold / swapped with Paulson.
One thing that we (the public) have going for us is that being that these are public funds as opposed to private money (publicly held corporations would be categorized as private as well), we can demand full disclosure. We will probably have to fight (injunctions, class action etc.) for Paulson to comply. Naturally, the information should be made public as a matter of proper procedure. Don't hold your breath! I can tell you now, this is not going to be the case. Paulson has already announced that he is creating another level of opacity, calling in private companies to manage the 'disbursements', that will slow down the disclosure process.
If it turns out otherwise and I totally misread the sequence of events, I apologize.
Saul C. Sterman
CEO
CrossProfit
Posted by: Saul Sterman | Oct 5, 2008 9:35:56 PM
Jayman, I have your back. What are these other flame throwers talking about anyway? If Bush was popular, and we deregulated some more and cut taxes tomorrow, then, by golly, our problems would be solved and McFalin would be President. Wow, wow and wow.
I do love how Team Maverick has dusted off the old "My Opponent is a Terrorist/Surrender Monkey" Republican Playbook to strike fear in the hearts of voters who have other more pressing issues on their minds like maybe living in a tent city in a couple of years.
Posted by: Reno Dino | Oct 5, 2008 9:48:08 PM
Interesting how the economies growing vs. recession correlate almost perfectly with how psychotic housing prices are.
Posted by: Faustin | Oct 5, 2008 10:06:32 PM
