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Thursday, January 6, 2011

Economists generally are Know-Nothings

Everyone in the financial and political world is feeling hopeful that unemployment numbers tomorrow released by the Bureau of Labor Statistics will be lower than last month.   The reason I exclude everyday people from this list of the stupidly 'hopeful' is because if you're a normal person living a normal life, you know the national unemployment situation is still bad regardless of whether it drops a tenth of 1 percent or not.

Now the basis for all this optimism is economists' predictions.

1/6/11- CNN/Money survey: Job hiring outlook brightens in new year-- "Economists are raising their forecasts for employment growth, as various job readings are suggesting that the long-awaited hiring boom may finally be here ...  Economists surveyed by CNNMoney are predicting a gain of 150,000 jobs"

Maybe they'll be correct..  But let's look at their track record of the past month...

Housing

12/16/10-  Strong week for economy raises optimism for 2011 (AP) -- "Buoyed by a string of hopeful government reports on layoffs, factory production and consumer spending, economists are predicting that hiring and even housing will pick up in 2011 and make it a better year after all... Even the beleaguered housing market is looking a little better. Housing starts rose slightly in November after two months of declines"

Yet...

12/23/10-  Economists: It could be years before home sales reach healthy level despite 3rd increase in 4 months (AP) -- "Economists say it could take at least two years or longer to return to a more normal level for sales of around 6 million units a year.  "The housing market is still flat on its back, but there are signs that it is starting to pick itself up," said Mark Zandi, chief economist at Moody's Analytics. "Even with the improvements we expect, next year will still be a very weak market."

And...

12/24/10- Economists See Slower Housing Recovery (Real Estate Recovery Watch) -- "The recovery of housing prices will take at least four more years, according to a monthly survey of 110 leading economists and real estate experts, significantly longer than previously estimated."


Shopping

1/6/11- Shoppers won't lose energy in 2011, economists say (AP) -- "Shoppers' holiday-season splurge was likely a preview of what's to come in 2011, and economists say it should embolden companies to expand and hire.. Economists say the tax cuts approved by Congress, a rising stock market, a slow but steady rise in hiring and banks' growing willingness to lend will sustain shoppers' spending.  "I don't think consumers are going to suffer a hangover after Christmas," says Mark Zandi, chief economist at Moody's Analytics. "They are going to hang tough and spend more aggressively in 2011." "

Yet...

1/6/11- December retail sales show shoppers still wary (Reuters) -- "Any lingering notion that Americans are back to their free-spending ways was debunked on Thursday as many mainstream retailers reported disappointing December sales.  While some store chains cited a blizzard that hit the East Coast after Christmas, investors seemed more concerned that December sales showed that consumers have still not returned to spending habits seen before the financial crisis hit in 2008 and will continue to be frugal... Now that Christmas is over, consumers, whose spending accounts for about 70 percent of the U.S. economy, are putting their wallets away.  Unemployment is still hovering just below 10 percent, and efforts by Americans to pay down high household debt loads are limiting their ability to shop as often as they once did."

And..

12/29/10- Economists and consumers worry about the future (SchaeffersResearch.com)-- "Economists aren't the only ones worrying about the state of the U.S. recovery. The Conference Board reported today that its consumer confidence index fell to a reading of 52.5 in December, from an upwardly revised 54.3 in November. According to Lynn Franco, director of the Conference Board's consumer research center, "Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious." "



Overall Recovery

12/23/10- Experts Citing Rising Hopes for Recovery (NY Times) -- "Eighteen months after the recession officially ended, the government’s latest measures to bolster the economy have led many forecasters and policy makers to express new optimism that the recovery will gain substantial momentum in 2011.  Economists in universities and on Wall Street have raised their growth projections for next year. Retail sales, industrial production and factory orders are on the upswing, and new claims for unemployment benefits trending downward.

Yet...

12/30/10- Economists' Optimism for 2011 Begins to Fade (TheAtlantic) -- "A new survey indicates that a consensus of economists working at financial firms are more pessimistic about 2011 than they were at mid-year. Members of the Securities Industry and Financial Markets Association's Economic Advisory Roundtable forecast that U.S. economic growth will grow at subdued rate of 2.8 percent in 2010 and 2.6 percent in 2011. This outlook is weaker than at mid-year, when the Roundtable predicted growth rate of 3.3 percent and 3.1 percent in 2010 and 2011, respectively. While there was some belief that a rebound in job growth and consumer and business confidence could jump start a stronger growth pace, concerns over fiscal policy, continued weakness in housing and mortgage markets, European sovereign debt concerns, regulatory uncertainties, and fiscal problems are significant risks to the downside."



~  Economists do not know what they are talking about when it comes to the recession. They know Nothing!  They could not predict the housing crash or ferocity of job losses afterwards, and they can not predict with any consistency, if and when there will be a real and sustained recovery.  So they grasp at straws.  And spew out optimistic forecasts to a corporate controlled media Hungry to put positive information out to the public about the contrived "recovery".

You the reader know more about the current economy than these economists.  You live in the real world.  You're either unemployed or working but constantly fearful your job will be gone.  You are trying to live on a budget and whatever you did for Christmas is not indicative of your real shopping habits.  You know prices are going up- food, gas, healthcare,etc.., wages lowering or stagnating and your home value deteriorating in front of your eyes.  And even if your life is perfect, you have friends and/or family who are having a rough time of things..

I'm afraid the constant onslaught of economic Lies from the mainstream media will Never stop...

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