[quote=ewmayer;209622]Today is Day [B]1143[/B] since the start of the global financial crisis, and there have been [B]0[/B] related criminal convictions.[/quote]It would be handy for comparison to find out how long after the 1980s S&L crisis started were the first related criminal convictions in that case. I'll ask at the library where one might find that.

Photoshop Humor: "Machine Gun Timmy" Geithner
 

[QUOTE=cheesehead;209642]It would be handy for comparison to find out how long after the 1980s S&L crisis started were the first related criminal convictions in that case.[/QUOTE]

The Wikipedia entry on [url=http://en.wikipedia.org/wiki/Savings_and_loan_crisis]the S&L crisis[/url] doesn`t seem to have any links about criminal convictions resulting therefrom, but some of the description of things which led to the crisis sound vaguely familiar:
[quote]In response to these complex economic conditions, thrift managers came up with several [b]innovations, such as alternative mortgage instruments[/b] and interest-bearing checking accounts, as a way to retain funds and generate lending business. Such actions allowed the industry to continue to record steady asset growth and profitability during the 1970s even though the actual number of thrifts was falling. Despite such growth, there were still clear signs that the industry was chafing under the constraints of regulation. This was especially true with the large S&Ls in the western US that yearned for additional lending powers to ensure continued growth. Despite several efforts to modernize these laws in the 1970s, few substantive changes were enacted.[3]

In 1979, the financial health of the thrift industry was again challenged by a return of high interest rates and inflation, sparked this time by a doubling of oil prices. Because the sudden nature of these changes threatened to cause hundreds of S&L failures, [b]Congress finally acted on deregulating the thrift industry[/b]. It passed two laws, the Depository Institutions Deregulation and Monetary Control Act of 1980 and the Garn–St. Germain Depository Institutions Act of 1982. [b]The deregulation not only allowed thrifts to offer a wider array of savings products, but also significantly expanded their lending authority[/b]. These changes were intended to allow S&Ls to "grow" out of their problems, and as such [b]represented the first time that the government explicitly sought to increase S&L profits as opposed to promoting housing and homeownership. Other changes in thrift oversight included authorizing the use of more lenient accounting rules[/b] to report their financial condition, and the elimination of restrictions on the minimum numbers of S&L stockholders. Such policies, combined with an overall decline in regulatory oversight (known as forbearance), would later be cited as factors in the later collapse of the thrift industry. [3][/quote]

------------------------------------

Rumor has it that administration-spanning Wall Street megadouchebag Larry Summers may [url=http://www.zerohedge.com/article/gasparino-reporting-larry-summers-may-soon-be-out]soon be out[/url]. Welcome as that news would be, I can`t help thinking of a (humorous) line Stephen Colbert gave at April 2006 White House Correspondents’ Association Dinner, Washington, D.C ... the context then was the bogging-down of the war in Iraq, but the theme applies well to the current adminisration`s incompetent handling of the economic crisis:

[i]"And then you write, ‘Oh, they're just rearranging the deck chairs on the Titanic.’ First of all, that is a terrible metaphor. This administration is not sinking. This administration is soaring. If anything, they are rearranging the deck chairs on the Hindenburg!"[/i]

-----------------------------------

[b]Tim Geithner: Long-Lost Weaselly Bastard Son of TV`s Elliott Ness?[/b]

Slightly tangential ... was watching an old episode of The Untouchables last weekend, and it suddenly occurred to me that Terrible Timmay G over at Treasuray looks kinda like he could be a snot-nosed weaselly little bastard son of Robert Stack. Anyone else see a resemblance there?

The ZeroHedge user who goes by the handle "Cognitive Dissonance" [see the comments section of the above article] was kind enough to provide a photoshop illustrating what I mean (the URL here, along with the general quality of his posts to ZeroHedge article comments tells me that CD may be a writer for Salon.com):

[url=http://static.open.salon.com/files/j_geithner_ness_final1234385209.jpg]Timmay "Gangster" Geithner[/url]

Here`s a local copy of the above image, in case the link goes dead:

New College Graduates To Be Cryogenically Frozen
 

[url=http://www.theonion.com/articles/new-college-graduates-to-be-cryogenically-frozen-u,17034/]New College Graduates To Be Cryogenically Frozen Until Job Market Improves[/url]
[quote]WASHINGTON—In a bold new measure intended to address unemployment among young professionals, lawmakers from across the political spectrum agreed on legislation Tuesday to subsidize the cryogenic freezing of recent college graduates until the job market recovers.

The bill, expected to swiftly pass in both houses, would facilitate the subzero preservation of any graduate of a two- or four-year educational institution. Sponsors of the initiative said that with the national unemployment rate at just under 10 percent, it only made sense for young job-seekers to temporarily enter a state of supercooled stasis.

"Finding employment is extremely difficult for today's college graduate," Sen. Kay Bailey Hutchison (R-TX) said. "Our current economy offers few options for the millions of young men and women desperate to join the workforce."

"Were we to freeze these graduates at the height of vigor and ambition, however, there's a chance we could revive them during a more prosperous time," Hutchinson continued. "When the economy finally bounces back—10, 20, even 30 years from now—we'll have an entire generation thawed out and ready to contribute."[/quote]
[i]My Comment:[/i] "...Until the Job Market Thaws" might be a better descriptor...of course that might take until hell freezes over, which means liquid nitrogen futures may be a good investment here.

I feel sorry for those who are graduating this year with degrees in civil engineering, construction management, or other construction-related degrees. They picked those degrees either in their senior year of high school, their first year of college, or early in their sophomore year of college. Those years - 2005, 2006, and 2007 - were the peak of the housing bubble, and many of them were tricked into thinking that the construction frenzy would never end. By the time the real estate collapse became clear, it was too late for most of them to change their majors. Those graduating in earlier years at least have work experience if they get laid off, and those graduating in later years can see that construction-related majors will be hazardous to their job prospects.

Unemployment in the construction industry is now at 27%, three times higher than the national average and higher than the unemployment rate during 1933, the worst part of the Great Depression:

[url]http://www.forconstructionpros.com/online/Construction-News/Construction-Unemployment-Rate-Hits-27-percent/4FCP15312[/url]

Irish Banks Need $43Billion on ‘Appalling’ Lending
 

[url=http://www.bloomberg.com/apps/news?pid=20601087&sid=aiI8N1UP2rFM&pos=1]Irish Banks Need $43 Billion on ‘Appalling’ Lending[/url]: [i]Ireland’s banks need $43 billion in new capital after “appalling” lending decisions left the country’s financial system on the brink of collapse.[/i]
[quote]The fund-raising requirement was announced after the National Asset Management Agency [b]said it will apply an average discount of 47 percent on the first block of loans it is buying from lenders[/b] as part of a plan to revive the financial system. The central bank set new capital buffers for Allied Irish Banks Plc and Bank of Ireland Plc and gave them 30 days to say how they will raise the funds.

“Our worst fears have been surpassed,” Finance Minister Brian Lenihan said in the parliament in Dublin yesterday. “Irish banking made appalling lending decisions that will cost the taxpayer dearly for years to come.”

Dublin-based Allied Irish needs to raise 7.4 billion euros to meet the capital targets, while cross-town rival Bank of Ireland will need 2.66 billion euros. Anglo Irish Bank Corp., nationalized last year, may need as much 18.3 billion euros. Customer-owned lenders Irish Nationwide and EBS will need 2.6 billion euros and 875 million euros, respectively.

The asset agency aims to cleanse banks of toxic loans, the legacy of plunging real-estate prices and the country’s deepest recession. [b]In all, it will buy loans with a book value of 80 billion euros ($107 billion), about half the size of the economy[/b]. Lenihan said the information from NAMA on the banks was “truly shocking.” [/quote]
[i]My Comment:[/i] Yes, dear, there really are two Is in "PIIGS" ... Now see, here in the good ole US of A, we handle this sort of thing in a much more bank-friendly manner - instead of actually examining the banks` loan portfolios in detail and negotiating an appropriate (hence steep) haircut, we just let Banana-Republic Bennie B over at Da Fed pay whatever he thinks is "fair value" for over $1 trillion of this toxic garbage, and thanks to the vaunted "independence" of the Fed (not from its bank owners - from any kind of accountability), we don`t know what is in the presumably-garbage MBS the Fed has purchased, nor what it paid relative to "book value", nor who it bought them from. No worries, ignorance is bliss, all that.

BTW, the Fed`s 15-month long MBS purchasing orgy officially ends today ... how much ya wanna bet that private buyers don`t come flooding back in (as the Fed hopes will happen), eager to overpay Fed-style, i.e. that mortgage rates spike in the coming months, leading to yet another leg down in housing stats, and - since the Fed's entire strategy centers on reflating some vestige of the late, great house-price bubble - another round of "quantitative easing" and more MBS buying by Uncle Feddie. Addiction is such a bitch.

Don't you worry Ernst. This is still extremely bank friendly. And more importantly, developer friendly. All the guys who were recipients of these appalling loans can now rest easy in the knowledge that the party that received massive political donations from them will now decide if and when and how much of their loans to collect.

After 18 months, this is still only about half of the problem. There is probably another 50 billion that the government will have to put in. Ireland is a good candidate for sovereign default before 2020.

New Revenue Sources for Cash-Strapped States
 

[b]Cash-Strapped States Use Traffic Fines as "Alternative Revenue source"[/b]

Here's an example from my neck of the woods:

[url=http://www.mercurynews.com/top-stories/ci_14821297?nclick_check=1]Traffic tickets can cost hundreds[/url]: [i]Drivers are getting sticker shock from fees and penalties piled on top of fines. Gary Richards explains where the money is going[/i]
[quote]When Sgt. Eddie Chan makes traffic stops, the San Jose officer makes it a point never to tell drivers how much their ticket will cost. He's afraid they'll go ballistic.

Fines on traffic tickets have surged in the past five years as the state has added fees and penalties that can raise the cost of most infractions into the hundreds of dollars. Running a red light: $446. Driving solo in the car-pool lane: $445. Speeding at 81 mph on most freeways: at least $331. Ignoring a "don't walk" sign: $173.

And for moving violations, tack on an extra $50 if you go to traffic school to keep your record clean.

Even fix-it tickets that once cost nothing to resolve, like a broken headlight, now run $25.

Why the fine inflation? Lawmakers are seeing traffic tickets as a relatively easy source of revenue in tough times, and add-on fees are being used to fund services that may have nothing to do with traffic violations, like collecting criminals' DNA.[/quote]
[i]My Comment:[/i] And which criminals' DNA is being collected? Wait , don't tell me, let me guess ... that of traffic violators?


[b]Friday Humor, Slightly Delayed[/b]

...due to a snowstorm in the Sierra Nevada, or something:

[url=http://www.theonion.com/articles/department-of-labor-spends-40-billion-to-create-on,2727/]Department Of Labor Spends $40 Billion To Create One Amazing New Job[/url]
[quote]WASHINGTON—In an effort to stimulate economic growth and boost the confidence of the American workforce, the federal government has allocated $40 billion to create one unbelievably mind-blowing new job, Labor Secretary Hilda Solis announced Monday.

The position, which will require the selected applicant to relocate to a sprawling, white-sand-beach facility on St. John in the U.S. Virgin Islands, will begin immediately after the employee is hired. In addition to a $500,000 annual salary, Solis said that the job also includes 12 weeks of paid vacation, a generous pension, bimonthly bonuses for adequate attendance totaling more than $2 million a year, a company rocket pack, and full health benefits.

"After carefully surveying the current employment landscape, it has become evident that generating a single, incredible new job is the most effective course of action," Solis said. "Rather than place 2 million Americans in unfulfilling, dead-end careers, we feel that giving one citizen the opportunity to contribute to the study of multiple orgasms in a controlled hot-tub environment will ultimately yield the most lasting change."

Solis stressed that the new job will "not be a handout," and that the chosen worker will be expected to put in long hours riding a Jet Ski while taste-testing a variety of new microbrewed craft beers. Though the new employee will not report to an immediate superior, he or she will be required to submit monthly progress reports pertaining to an ongoing trampoline-and-bottle-rockets public works project.[/quote]
[i]My Comment:[/i] Additional details about the specific requirements of this high-profile position are in the rest of the article. As to the kinds of go-getters likely to apply, well, there may soon be some underpaid, unappreciated [url=http://globaleconomicanalysis.blogspot.com/2010/04/seattle-trash-collectors-make-average.html]Seattle garbage workers[/url] looking for new challenges.

L.A. Almost Out Of Cash
 

[url=http://globaleconomicanalysis.blogspot.com/2010/04/la-to-shut-down-city-departments-in.html]Los Angeles Could Run of Cash By May 5th[/url]
[quote]Los Angeles Mayor Antonio Villaraigosa called Tuesday for all city agencies -- except for police, other public safety and revenue-generating departments -- to close for two days a week starting April 12 because of the city's continuing budget crisis.[/quote]
[i]My Comment:[/i] Not exactly the kind of Cinco de Mayo event LA was hoping for ... the years of reckless spending and oh-so-typical public-employee salary-bloat insanity are detailed in Mish`s summary and the associated linked articles.

In world-economic news, Greek debt yield spreads hit new records again today, indicating that the bond markets indicate a Greek default (absent a massive bailout from the EU) is highly likely by end of the year ... Greek banks are having their sources of overnight funding (repo lines) pulled, so Greece is rapidly moving into Lehman-Brothers-style full-blown-death-spiral-liquidity-crisis mode.


[b]An Exercise In Economic Extrapolation: "Every Local Minimum Is Also A Global Minimum"[/b]

The paradigm-smashing ELMIAAGM hypothesis is offered without all that tedious and unnecessarily distracting proofy-stuff by your friendly local (that is, global) neighborhood cabal of "most economists": There was a wonderful and highly convincing "robust v-shaped recovery is in full swing, bitches!" chart on the front page of Sunday`s SJ Mercury News ... alas, it`s not in the online version posted here. But it consisted of a downward-plunging curve of total silicon Valley jobs on the past 2 years, followed by a big fat upward-sloping red "prediction" curve, even though everything to the right of the current [strike]local[/strike] global minimum was mere prediction based on extrapolation from "past recessions":

[url=http://www.mercurynews.com/news/ci_14788767]Bay Area jobs market won`t recover until 2015, forecast says[/url]
[quote]Battered by the Great Recession, the Bay Area won`t fully recover the jobs it has lost until 2015, according to a forecast prepared for the Mercury News and its sister papers, leaving tens of thousands of workers struggling to find permanent employment.

Such a prolonged slump will take a heavy toll on the region, keeping home sales depressed, squeezing Bay Area retailers and leaving the overall economy jittery for years.

"It does have the potential to be the most durable period of unemployment since World War II," said Jon Haveman, a founding principal of Beacon Economics, the San Rafael-based firm that prepared the forecast.

And the social costs have civic leaders and others concerned, as the ranks of the unemployed put a strain on tight budgets for job retraining, social services and other safety net programs when the state and cities are already in a financial bind.

From the time employment peaked in early 2008, to the end of 2009, the Bay Area`s core counties — including Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara — have lost 251,000 jobs out of a work force of nearly 3 million people.

Beacon`s forecast, which tried to determine when the Bay Area would replace those lost jobs, is in line with the views of a wide range of economists, who say it will take the region years to regain its economic footing, although it will begin to add some jobs this year. Beacon prepared the forecast by modeling how the jobs market had rebounded from previous recessions and factoring in assumptions about how different sectors of the region`s economy will act in the future to arrive at an estimate of the pace of this recovery.[/quote]
[i]My Comment:[/i] I`m guessing that the "previous recessions" used as reference points by the above-mentioned research firm do not including the clearly irrelevant data points in the 1929-1942 interval.
[quote]The forecast indicates that the Bay Area`s recovery will be about on pace with the state`s, which should regain its pre-recession job levels after 2015, according to a projection from the California Legislative Analyst`s Office. But Beacon`s numbers suggest the Bay Area will lag — though only slightly — the rest of the country, with the firm estimating a recovery in the national jobs market by the final quarter of 2014. On Friday, the government reported that the nation`s employers added workers at the fastest pace in three years, a sign, according to some economists, that the U.S. had turned a corner in its struggle to recover its lost jobs.

The recovery around the Bay Area will be uneven, according to Beacon`s forecast. It will take longer in the East Bay, where the economy was most dependent on housing construction and manufacturing. Silicon Valley and San Francisco should recover faster. But for years to come, there will be large numbers of people either out of work or working fewer hours than they want.

However, it appears that the bottom has been reached.[/quote]
See, the nifty curve we prepared - whose resemblance to the famous "hockey stick" graphs of the global warming field is purely coincidental - proves that!
[quote]In Silicon Valley, hiring continues for certain types of highly skilled positions, or in hot fields. For example, National Semiconductor of Santa Clara has 40 openings for analog chip designers, marketers and engineers. "We`re starting to grow once again," said Ed Sweeney, National`s vice president for worldwide human resources. "We expect to see continued growth in the coming quarters."[/quote]
...And those ****40 JOB OPENINGS!!!****, once filled - assuming Nat Semi doesn`t decide to offshore them, which of course could happen without notice, due to a lack of [strike]highly-qualified applicants willing to work for peanuts, on top of the usual complete lack of job security[/strike] qualified applicants, will clearly make a massive dent in the quarter-million-jobs-lost-since-start-of-the-recession statistic. Heck, throw in literally dozens of job openings at hot companies like Apple and Google and ignore the 5,000 just-vanished manufacturing jobs (which will drag another 20,000-25,000 total jobs down with them) resulting from the shuttering of the NUMMI plant in Fremont, and things are looking pretty darn "recoveryish".
[quote]And cleantech is showing signs of life. "We`re hiring people as fast as we can find them," said Peter Rive, chief operating officer and co-founder of SolarCity in Foster City, which installs solar panel systems. SolFocus in Mountain View, a high-efficiency solar cell maker, has 70 openings at its valley headquarters.

"We`re in this kind of contradictory situation where things are starting to move, and yet there will be some people who are still looking for work three or four or five years from now," said Stephen Levy of the Center for Continuing Study of the California Economy in Palo Alto.[/quote]
why, there`s nowt contradictory about it, my skeptical friend ... things are indeed "starting to move" for several hundreds of folks who stand to get jobs in high-tech and clean-tech in the coming year, and yet there will be some - perhaps upward of a few hundred thousand such "unmotivated losers" - people who are still looking for work three or four or five years from now.

IMF Girds Itself | Feigned-Outrage Theater: WaMu
 

[url=http://www.imf.org/external/np/sec/pr/2010/pr10145.htm]IMF Executive Board Approves Major Expansion of Fund’s Borrowing Arrangements to Boost Resources for Crisis Resolution[/url]
[quote]The Executive Board of the International Monetary Fund (IMF) today approved a ten-fold expansion of the Fund’s New Arrangements to Borrow (NAB) and the transformation of the Fund’s premier standing credit arrangement into a more flexible and effective tool of crisis management. The NAB will be increased by SDR 333.5 billion (about US$500 billion) to SDR 367.5 billion (about US$550 billion), representing a major increase in the resources available for the Fund’s lending to its members.[/quote]
[i]My Comment:[/i] Now why would the IMF need to 10-tuple their emergency lending capacity, do you think? Perhaps there`s a [url=http://www.zerohedge.com/article/imf-prepares-global-cataclysm-expands-backup-rescue-facility-half-trillion-contribution-glob]sovereign-default shopping spree[/url] they`re planning in the not-too-distant future. But I`m sure U.S. taxpayers will be pleased to discover that their present and future prospects of prosperity are being bled to not only bail out insolvent U.S. firms - that always did strike me as a bit selfish and xenophobic - but now also insolvent European governments. (And hey, no reason to stop with Europe).


[url=http://online.wsj.com/article/SB10001424052702303828304575180403574689576.html]Senate Probe Finds Washington Mutual Ignored Warnings[/url]
[quote]WASHINGTON–Officials at the failed banking operations of Washington Mutual Inc. securitized substantial volumes of risky, [b]fraudulent[/b] loans in the run-up to the financial meltdown despite repeated internal warning signs, according to a Senate probe.

The Senate Permanent Subcommittee on Investigations found that problems lending at the Seattle thrift grew so chronic and severe that one mortgage insurer warned it would stop writing coverage for loans generated by one of Washington Mutual's highest-volume offices in California. Internal auditors and federal regulators also were heavily critical of the bank's deficient lending and securitization practices, according to the subcommittee.
...
Washington Mutual, which at one time was the sixth-largest depository institution in the U.S., became the biggest bank failure in U.S. history when it was seized in September 2008 and sold to J.P. Morgan Chase & Co.
...
The subcommittee has obtained documents showing that "at a critical point Washington Mutual [b]included loans in its securities because they were likely to suffer a high rate of default, and they failed to disclose that to the buyers[/b]," Sen. Levin said. "[b]They also allowed loans that had been identified as fraudulent to be sold to buyers, again without alerting buyers when the fraud was discovered[/b]."

Tuesday's hearing also will include former mortgage and securitization executives, risk officers and auditors.

The documents to be disclosed on Tuesday also reflect that [b]employees routinely fabricated lending documents[/b]. "One Sales Associate admitted that during that crunch time some of the Associates would 'manufacture' asset statements…and submit them to the" loan processing center, according to one document. "She said the pressure was tremendous… since the loan had already [been] funded."

Some of the worst problems occurred in high-volume loan offices in the California cities of Montebello and Downey. [b]A year-long internal investigation found fraud rates of 58% and 83% in those offices. The results were reported to the bank's head of home loans[/b]. Yet despite some personnel actions, no meaningful change occurred in problem lending, the investigation concluded.[/quote]
[i]My Comment:[/i] Nice to see the MSFM are finally starting to use the F-word (fraud) in coverage of this ... not that any of the F-sters is ever going to see the inside of a jail cell, or (gasp!) be forced to repay any of the ill-gotten gains, or anything. After all, high-financial crime only leads to punishment in parts of the world which are not [url=http://www.zerohedge.com/article/banana-republic-no-bananas]banana republics[/url].

The new clothes of the emperor
 

[QUOTE=ewmayer;211651]But I`m sure U.S. taxpayers will be pleased to discover that their present and future prospects of prosperity are being bled to not only bail out insolvent U.S. firms - that always did strike me as a bit selfish and xenophobic - but now also insolvent European governments. (And hey, no reason to stop with Europe).[/quote]Isn't the biggest insolvent country the USA itself ? It can spend as it does because those (countries, institutions,and people) that have a lot of capital in dollars stand to lose to much if the dollar is reassessed at its true value (that of the paper it is printed on, minus the cost for recycling that paper ;-) The debt of European (and third world) countries is little compared to the cumulated trade deficit of the USA. All except a negligible part of the tremendous "wealth" "created" by the financial economy is just a lot of bubbles, some of which burst periodically. The emperor is naked.

Jacob

[QUOTE=S485122;211695]Isn't the biggest insolvent country the USA itself ? It can spend as it does because those (countries, institutions,and people) that have a lot of capital in dollars stand to lose to much if the dollar is reassessed at its true value (that of the paper it is printed on, minus the cost for recycling that paper ;-) The debt of European (and third world) countries is little compared to the cumulated trade deficit of the USA.[/QUOTE]

Of course the U.S. is the biggest insolvent nation of them all - although if you sum up the current-account deficits (honestly reckoned, which very rarely occurs) for Europe the total figure will not lag far behind that of the U.S.

But as the old folk wisdom goes, the first thing to do when you find yourself deep in a hole is to stop digging. Throwing even more money - whether borrowed or created out of thin air by the miracle of inflationary hidden taxation - at insolvent institutions and nations is the equivalent of switching to a bigger shovel.

--------------------------------

[url=http://www.nytimes.com/2010/04/13/world/europe/13europe.html?ref=world]French and German Ties Fray Over Greek Crisis[/url]
[quote]PARIS — France and Germany traditionally have been the “motor” of the European Union, but relations between the two countries are badly strained over the Greek debt crisis, which is just the latest example of a new German willingness to resist the demands of Europe and assert its self-interest under Chancellor Angela Merkel.

[b]“There has been a tectonic shift in the way Germany acts in Europe,”[/b] said Ulrike Guérot, a senior research fellow with the European Council on Foreign Relations. Germans, she says, are “talking of behaving ‘normally’ now, like the others, and that means nationally.”[/quote]
[i]My Comment:[/i] A "tectonic" or "Teutonic" shift? It`s all Greek to me...BTW, yield spreads on Greek debt continue to skyrocket as the bond markets continue to call the EU leaders` jawboning bluffs - the latest "lending facility announcement" last weekend would require all EMU members to agree, and multiple member-nation parliaments to further sign off on the deal - a highly unlikely happenstance, and Greece may find itself having to choose between unacceptably harsh IMF-style austerity or "strategic default", with the latter probably looking more acceptable all the time.


[b]Deadbeat Home-Squatters Help Boost U.S. Retail Sales[/b]:

[url=http://www.bloomberg.com/apps/news?pid=20601103&sid=avxlYX3VlcZo]Retail Sales in U.S. Rise, Inflation Stays Contained as Recovery Quickens[/url]: [i]Americans heartened by an improving job market flocked to shopping malls and auto showrooms in March, raising the odds of a durable economic recovery.[/i]
[quote]Retail sales increased 1.6 percent last month, more than anticipated and the biggest gain in four months, according to figures from the Commerce Department issued today in Washington. Another report showed consumer prices rose 0.1 percent.

Stocks climbed for a fifth day after the reports signaled the expansion is broadening without stoking inflation, and results at JPMorgan Chase & Co. and Intel Corp. beat estimates. Federal Reserve Chairman Ben S. Bernanke told lawmakers today the world’s largest economy still faces “significant restraints,” indicating policy makers will keep interest rates low in coming months.

“What we’re seeing now is the consumer take part in the recovery,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “The Fed’s not taking the punch bowl away quite yet,” because inflation is “very tame,” he said.

In testimony before the Joint Economic Committee of Congress, Bernanke said recent data indicated a “moderate economic recovery in coming quarters,” while weak construction and still-high unemployment remained impediments to faster growth.[/quote]
[i]My Comment:[/i] Ah yes, the "nascent and fragile recovery" has now been upgraded to "the possible durable recovery". Bloomberg`s definition of an "improving job market" is quite interesting ... let`s do a quick rundown of the math:

- Roughly 8 million jobs lost in the Great Recession to date;
- Roughly 3 million new jobs [url=http://www.nytimes.com/2010/04/13/opinion/13herbert.html?ref=opinion]needed to be created in that time[/url] in order to keep up with population growth;
- While the huge jobs losses have apparently ended (though this does not preclude a 2nd wave, due to coming mass layoffs of public employees at the state and municipal level, and a likely 2nd wave of foreclosures as banks run out of room to "extend and pretend" on nonperforming mortgage loans), the U.S. is still not creating any net jobs, despite nearly a trillion dollars of government [strike]waste[/strike] stimulus spending;
- Last month`s jobs figures were helped by hiring for the 2010 census, an effect which will only last a few more months.

Couple the above far-less-than-even-mediocre jobs picture with [url=http://globaleconomicanalysis.blogspot.com/2010/04/small-business-optimism-very-low-and.html]unprecedented malaise in small-business sentiment[/url] (small business being the engine which creates over half the real productive jobs in America), and I doubt "Americans heartened by an improving job market" have as much to do with the better-than-expected retail sales numbers as "Americans whose bottom line has been helped by not having made a mortgage payment on their doomed-to-foreclose home in over a year" - Karl Denninger does some back-of-the-envelope math about that [url=http://market-ticker.denninger.net/archives/2194-Oh,-So-The-Recovery-Is-About-Delinquency.html]in a post today[/url]. I`d have quite a bit more money available to spend, too, if I were a government-sanctioned housing deadbeat. But even the halcyon days of underwater-home-squatting-while-waiting-for-the-bank-to-foreclose-and-finally-book-the-loss must draw to a close eventually, and I suspect the time is nigh at hand. In the meantime, if you`re one of those Americans who is either feeling heartened or flush with cash from not paying that annoying "mortgage" thingie, CNBC suggests you put your cash to work [url=http://www.zerohedge.com/article/company-no-equity-value-most-actively-traded-stock-market#comments]buying stock in bankrupt monoline insurers[/url]. All we need now for final confirmation that the peak of this latest Fed-sponsored asset bubble is near is for a spate of news stories about people seeking their fortunes by daytrading stocks, just like we saw at the height of the dotcom nuttiness. "My cabdriver this morning recommended I load up on Ambac shares", that sort of thing.