web analytics

MEANWHILE, IN THE LAND OF THE FREE

By Pete Moore On February 6th, 2013

After cutting jobs when the last inflationary boom went bust, Home Depot has announced that it will be hiring more than 80,000 people this spring. Some jobs are temporary, but many will become permament.

The Bernanke-manipulated housing boom is on big time. Mind how you go.

42 Responses to “MEANWHILE, IN THE LAND OF THE FREE”

  1. There’s no housing boom, but there is pent up demand in a seasonal business which in the Northeast includes a lot of repairs to be done.

  2. and not one job will be over 28hrs a week

  3. And all the goods are made in China.

  4. no only half…

  5. Home Depot did fairly well here when housing was crushed since much of their sales go for home maintenance things, sales that happen anyway.

    In the spring, they sell a lot of gardening and home improvement items, as everyone gets their small projects started. This year, there will be a continued Sandy bump in sales as there is still a lot of repair.work to be done.

    Again, this bump in hiring happens every year with them. Its a little higher this yeat only because of pent up demand and a slightly improved economy which has also aided auto sales.

    http://m.nbcnews.com/business/auto-sales-rise-higher-gas-prices-aging-vehicles-spur-demand-977855

    Its no boom, but the Fed has skillfully avoided a hard crash that would have crushed us all, and they are to be applauded for that.

  6. //Again, this bump in hiring happens every year with them//

    Very often these increases are due to a lack of alternatives elsewhere; people tend to invest more in their homes when things are too uncertain in the general property market and stock markets, etc.

    But, still, every improvement is to be welcomed, as you say.

  7. They are all printing money now, US, Japan, Euro-land and of course UK. And the UK has appointed a money-printer as the next governor of the Bank of England:

    “Mr Carney, who is still six months away from taking the reins at the BoE, would not commit to taking specific measures to boost economic growth, but said it was clear “full monetary stimulus” was required to help the economy.”

  8. I have a sneaky suspicion that the ” money printers ” know what they’re doing, and that the gold purists don’t.

    Just a hunch.

  9. I have a sneaky suspicion that the ” money printers ” know what they’re doing…

    Of course they know what they’re doing, but it’s not for the benefit of the public.

  10. Avoiding a global depression – a real depression, not the current sluggish economy – which some here would have welcomed – is most assuredly in the interests of the public.

  11. Phantom –

    Jim Rogers – Bernanke has never been right

    Jim Rogers knows better than you, and you’re just as wrong as Bernanke, but then you’re never interested in knowing anything. The money printers don’t know what they’re doing, they’re doing the only thing they know.

    Iceland’s economy isn’t sluggish, it’s rapidly improving as I said it would – yes I did, don’t argue.

    It’s rapidly improving because they told the bankers to get lost, prosecuted the bankers and politicians who tried to stitch them up, burned the parliament building and let capitalism work instead of submitting before the rule of crony corporatists.

  12. Sure Phantom – but this is the real world for many people:

    http://www.businessinsider.com/americans-live-on-the-edge-of-financial-ruin-cfed-report-2013-2

    A sobering new report by the Corporation for Enterprise Development shows nearly half of U.S. households (132.1 million people) don’t have enough savings to weather emergencies, or finance long-term needs like college tuition, health care and housing.

    We’re not just talking about people who living people the poverty line, either. Plenty of the middle class have joined the ranks of the “working poor,” struggling right alongside families scraping by on food stamps and other forms of public assistance.

    More than one-quarter of households earning $55,465-$90,000 annually have less than three months of savings.

    And another quarter of households are considered net worth asset poor, “meaning that the few assets they have, such as a savings account or durable assets like a home, business or car, are overwhelmed by their debts,” the study says.

  13. Iceland is a microstate with a population that is 12.7% of that of Brooklyn NY.

    I speak of real countries, not Iceland, not the Isle of Man, none of that malarkey.

    In 2008 or so you and a lot of the gold bugs said that a depression was preferable to intervention, according to the iron laws of something. Such a depression would have caused much greater poverty in the west than we have now, and it would likely have led to collapse in the poor world.

    You were ignored, and properly so. Let the adults run this.

    And yes, Rogers is a seriously smart guy. But that doesn’t mean that he is always right either.

  14. Allan

    I said that yesterday, when Patty made the comment that anyone who had to declare bankruptcy over medical costs was irresponsible.

    I’ve said it dozens and dozens of times here – there are many working poor in the US. I know some of them. It’s no fun.

    They would not be helped by making things much worse, by allowing a collapse to occur. They would be greviously harmed if we allowed a depression to happen. It would be beyond irresponsible.

  15. Phantom –

    So what that Iceland has a small population? The idea that the nature of money, credit, debt and economics chages according to population size doesn’t hold up, I’m afraid.

    Yes, it would have been preferable to have had the short, sharp recession which our economies were crying out for instead of drawn out economic pain arising from wrong-headed attempts to fight ecnomies which were trying to correct themselves. I said that these acts would draw out the pain and that’s precisely what’s happening.

    Don’t argue with me, congratulate me on being right yet again.

  16. Well Phantom – just think how bad things would have been had it not been for the great efforts made by Bernanke, Dimon et al to stave off the consequences of financial irresponsibility. This sentence is of course utter nonsense, but it’s the core of your argument. The Benankes and Dimons caused the problems which millions of us (but not you) have to deal with.

  17. What did Dimon do personally that you disapprove of?

  18. I’ve been mulling over this comment below because it almost takes the breath away and I’ll explain why further below. Unsurprisingly, it’s from Phantom:

    Iceland is a microstate with a population that is 12.7% of that of Brooklyn NY.

    I speak of real countries, not Iceland, not the Isle of Man, none of that malarkey.

    In my industry, there are huge structures offshore set on the seabed in depths of over 1000ft (google images Troll Draugen). These strutures aren’t just put there – huge studies are carried out and one of the main components is modelling. Models of the proposed designs are made and tested in the labs under simulated conditions such as wind, wave, soil conditions, seismics etc. to test behaviour of the structure with all swcale factors noted. This modelling works otherwise we wouldn’t do it, so for Phantom to write the above indicates profound and irreversible ignorance. No intelligent man need be ignorant of any subject for long but a refusal to take lessons on-board is almost a mental illness.

  19. Iceland has ten Vikings, a few horses and a singing walrus living there.

    What did Jamie Dimon do wrong.

  20. Phantom – I’m sure that we discussed Dimon a few months ago and you disengaged under the weight of evidence being brought to show that Dimon would be a criminal in any theatre of activity – except banking. Dimon was the CEO of JP Morgan Chase when it did things like this as a matter of policy:

    http://topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html

    Foreclosures helped accelerate the fall of property values, helping to spur more foreclosures. The losses they created brought the financial system to the brink of collapse in the fall of 2008. The steep recession that followed led to even greater homeowner delinquencies, as homeowners who lost their jobs often lost their homes. Tens of millions of others found themselves in homes worth less than their mortgages, unable to sell or refinance.

    All told, roughly four million families lost their homes to foreclosure between the beginning of 2007 and early 2012.

    In late 2010, evidenced emerged that the foreclosure process may have been deeply tainted by sloppy recordkeeping, cut corners and possible fraud, epitomized by high-profile cases of “robo-signing’’ — cases in which foreclosures took place based on forged or unreviewed documents. More than 40 state attorneys general began investigations into foreclosure abuse, and worries about the legal fallout from the scandal led to a sharp slowdown in the rate of foreclosure filings and of repossessions in 2011.

    In February 2012, government authorities and five of the nation’s biggest banks — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners.

    Note that in October 2011, JPMorgan Chase was ranked the No. 1 bank in the US. However, in May 2012, the company’s reputation was severely tarnished when it was disclosed that one of the bank’s trading groups had suffered “significant” losses in risky credit investments. Jamie Dimon, the company’s chief executive, initially estimated losses at $2 billion, but that figure grew to around $6.25 billion.

  21. The fact that the trading groups lost money is of no concern to we in the public – it is of great concern to Chase shareholders. Dimon was ” fined ” by the Chase board when his bonus was cut. He was responsible for what happened on his watch – the buck does stop with him – but he didn’t make those trading errors.

    A lot of the ” Chase ” misdeeds in the mortgage area were actually done by Washington Mutual Bank, before Chase acquired that institution in 2008 –not under Jamie Dimon’s watch.

    Blame Dimon for what he did do, not for what WaMu did before he bought them, under US govt pressure during the financial crisis

  22. Phantom, why not examine what a micro-state did in response to the financial collapse? Particularly the steps they implemented that have turned out well for their economy and general populace.

    Obviously the scale is not the same nor are the global implications, but why dismiss their successful measures out of hand? We could learn from other nations when they handle a particular crisis or integral public item (education comes to mind) better than we do.

  23. Phantom, why not examine what a micro-state did in response to the financial collapse?

    WHAT!?? Do you really expect him to come close to that? The question is good and relevant but ask it of someone who can think.

  24. On the Home Depot topic, as has already been noted, the company hires seasonally, lays off as a matter policy, pays minimum wage and sports pretty brutal work conditions for floor and warehouse staff according to one relative of mine who worked there a few years back.

    The biggest problem we have in this country is too many of these low-wage, part-time retail related jobs and not near enough semi-skilled, full-time, living wage positions.

  25. The Icelandics were very clever, and the British were complete imbeciles.

    The Icelandics showed favoritism to their own nationals by compensating them for losses in their own deposits, but didn’t compensate British or other foreign nationals who had deposited in the Icelandic banks.

    The British compensated their own citizens for deposits made in non British banks and they then thought that the Icelanders would reimburse them according to European laws. Even if the British saw that to be true, this was the dumbest thing that anyone ever did – I said so at the time, here. The British who had invested in dodgy banks should have suffered the consequences in full.

    The Icelandic actions were pretty damned smart in retrospect. A teeny tiny country can get away with things that a big country, whose banks are more important, cannot.

  26. to clarify

    Even if the Brits thought that the Icelanders would reimburse them in time, why front the money, when there was no legal or moral obligation to do so?

  27. Phantom thinks just fine, Allan. He simply has a different perspective, as do you.

    One of the things I actually admire about you Allen is your consistent doggedness of providing links and data supporting your positions. That’s a good thing.

  28. The Icelandic actions were pretty damned smart in retrospect. A teeny tiny country can get away with things that a big country, whose banks are more important, cannot.

    And so are there any aspects of their actions that could be applied to improve our system?

  29. Phantom – why should Icelandic citizens be liable for the corporate losses of banks in Iceland? Why should Britons be liable for the gambling losses of private banks incorporated in the UK?

  30. I’m not sure.

    The US actually did let Lehman Brothers fail, an institution that would probably be bigger than the Icelandic banks that were allowed to fail.

    The Icelandics stiffed the majority ( was it a majority ? ) of their depositors who were foreigners, while the US banks have mainly US depositors. If the US did a similar thing – stiffing foreigners– it wouldn’t mean much.

    The US did its own things almost as stupid as what the British did, but in reverse. When they seized AIG, reimbursed some of AIG’s trade counterparties, including European banks and Goldman Sachs, at 100 cents on the dollar, when they were not going to get anything of the sort otherwise. The US govt could have offered them 50-75 cents on the dollar, and they’d have been happy to get it. Had they done so, a lesson would have been learned, and AIG ( then govt owned ) would have been worth more.

  31. Allan 1121

    Citizens should not be liable for corporate losses of banks. They are not as a rule. The only time the govt should consider assuming those liabilities to any extent is if they think that the alternative would be a damaged economy.

    It is a dangerous business, and one with great potential for moral hazard. As a general rule, you don’t want to do it. But this is not a perfect world, and there are no absolutes in it, not in this field anyway.

  32. Phantom – one of the great features of genuine capitalism is that whenever a company fails through misadventure, another takes advantage of the opportunity to take the place of the fallen company in the market. It is a natural mechanism and capitalism is the natural system of man’s commercial activities. However, when companies get so big that they take control of government and use government’s control of taxation revenues to cover the losses of those companies (the banks), then the natural mechanism of capitalism is stopped and its replacement is robber-corporatism. This is now the system of commerce in the US, UK and everywhere except Iceland.

  33. Has Iceland enacted legislation to prevent this type of problem in the future?

    It seems our regulations are still pretty weak tea.

  34. In 2008, there was such a crisis of confidence that there was no way that anyone was going to just step right up and do everything that the largest US and European institutions were doing for all their depositors and counterparties. Wasn’t gonna happen.

    In time of extreme crisis, you don’t stick to every rule in the rule book. You save the economy. If we had let them all fail, the lights could well be off in your house now, and you and many of us unemployed, and you’d be cursing the government for ” not doing anything ”

    The Icelandics did their own cronyism by bailing out their own citizens while telling the Brits who had deposited there to take a hike.

    There are iron laws to physics. Economic life is messy. The governments did the right thing in 2008, no question about it.

  35. D

    Doesn’t matter. No foreigner will invest ten cents in an Iceland bank in the next 100 years. Their deposits will all be local from now on.

  36. I’m asking purely out of ignorant curiosity, Phantom.

    When this whole mess collapsed, I wrote in favor of the bailouts on my site as it seemed the most sensible course of action considering the dire alternatives.

  37. I remember that you said that, incl a specific comment about AIG.

  38. Was it a bad comment? I don’t recall.

  39. No you said that you thought that AIG was involved in many things in the economy apart from the normal stuff that people would thin of, indicating support for its bailout I think or at least non opposition to it.

  40. That sounds about right.

    It’s a complex issue and I was struggling to find the best information available to make a somewhat informed opinion. Not that I did, because what the fuck all do I know on this convoluted topic?

  41. Daphne –

    As far as I know Iceland hasn’t instituted new laws. As part of the European Economic Area it has EU laws and Basel II and all the millions of other laws and regulations our “free markets” are saddled with.

    Contrary to what Phantom would have you believe, Iceland banking sector grew very large. It was 10 times the size of the economy in 2008 and pulling in deposits from abroad at a rapid rate.

    What the Icelandic people did was insist that no-one be bailed out. It was survival for them because the debts were so great and they would never have been able to meet the debts. And why should people be liable for banking debts anyway? They’re just firms. You’re not liable for the debts of a plumbing firm in Austin, and banks are no more special.

    Now listen to this: many British local authorities had invested taxpayers money in Icelandic banks and the bust blew the lid off of it. Gordon Brown (then PM) wanted the Icelandic people to pay the money back, they said no, so Gordon Brown invoked so called anti-terror legislation to freeze all Icelandic assets in Britain. We know, he’s an idiot.

    Anyway, what the heroic Icelandic people did, in a nutshell, is prosecute bankers, prosecute politicians (including the PM), they burned the parliament to prevent it meeting and caving in to foreign threats and they continually voted “get stuffed” when referendums asked them if they wanted to bail out the banksters.

    All in all, very few countries have suffered an economic crash on the scale that Iceland did in peacetime, but now the economy is on the up because the people haven;t been saddled with vast debts by government on behalf of their banking pals.

  42. “In time of extreme crisis, you don’t stick to every rule in the rule book. You save the economy. If we had let them all fail, the lights could well be off in your house now ..”

    Rubbish.

    It was Hoover and FDR “saving” the economy which guaranteed recession became depression until 1945.

    Your greatest depression was over within a year and the economy righted itself, because government did nothing. Look, recessions are natural reactions to inflated economies. They need to happen to liquidate malinvestments caused by monetary inflation. For as long as central banks print up money, busts will always follow the manipulated booms.

Leave a Reply

You must be logged in to post a comment.