"The group’s Business Cycle Dating Committee, the semi-official arbiter of these things, defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators."
While analysts have been all but certain that a recession has been underway for months, there has been some debate over exactly when it began. Last winter, employers started cutting jobs and growth slowed significantly,"
says the washington post, just 2 month after blaming all the troubles on bankers.
if we date "last winter" as strting around halloween, which is what iwas seeing, then 3 mortgage payments later an accelerating process of failure to service derivatives begins to make the sytem weak. and by summer, with key end-payers in increasing trouble, the insurers of the derivatove packages get into serious trouble, and 3 months later things begin to be undeniable, and lehman bros, and aig "take the fall" for the fact that american industry was losing jobs while the number of people needing them stayed constant, a wave front briefly stabilised by migrant workers leaving–sometimes with "help"–but nonetheless, fewer and fewer ways for the end payer to make a payment, leading the banking industry to diog deeper and deeper into the risk pool to find cash flow, thereby making the collapse all th larger.
This left the "media" free to blame banks for predatory lending, when the systemic culprit was merely an avbsence of need for goods and services, caused in part by improvements in qulaity in goods, extending their life cycle.
(Most readers here wll not be able to recall cars needing a "valve job" or (if ur a brit) a "de-coking" every 10-20 thousand miles, then onto 50,000 miles, and onto the unibody rysting away without the head ever coming off on many cars. they will not recall 100,000 miles being the "life" of a reliable car, which then fell into a spiral of changing ownership faster ad faster as those who could choose nothing but the risk/reward profile of a "$50 roller".)
Change these odds? Undertake a way to create "meaningful" jobs, ad let the results filter up into mortgage derivativs stability, bank profits, investment safety? Get 4.5 million cars off the road–fast–and >>replace them<< and add another 2.5 million cars a year to the "tuna can" part of the cycle. At the sae time, repair bridges, overpasses, bottlenecks and safety hazards that cuase fuel to be wasted. This gives reduced oil dependece as pure profit. Improved air qualuty gives lower health care costs, and quality of life as pure profit. It makes taking risk in "green" vehicles worth taking both by the end consumer and the angel investor.
Inother words: let’s stop placing blame and begin finding solutions.
Posted under finance
This post was written by admin on December 1, 2008
