The Past Week: August 2-8, 2009 (Detroit’s Middle Class Faces Hunger; Accelerating Bank Failures; Eustace Mullins/FOEM’s Site)

~~By InsightAnalytical-GRL

I’ve been bogged down all week. And yesterday I spent 3 hours online for a seminar involving financial cycles.  Plus, I’ve been working a on meandering piece that will go up next week and have a few more things I’m working on.

But, here are a couple of tidbits that I ran across this week:

First, the middle class is starting to feel the pangs of hunge. CNN coughed up the story:

Hunger hits Detroit’s middle class

snip

In this recession-racked town, the lack of food is a serious problem. It’s a theme that comes up again and again in conversations in Detroit. There isn’t a single major chain supermarket in the city, forcing residents to buy food from corner stores. Often less healthy and more expensive food.

As the area’s economy worsens –unemployment was over 16% in July — food stamp applications and pantry visits have surged.

I know there’s been talk about reclaiming blighted urban lands in places like Flint, MI and turning it back to a natural state and for food production. Apparently, the good citizens of Detroit aren’t waiting around for that as urban gardens are springing up on abandoned property.

Detroiters have responded to this crisis. Huge amounts of vacant land has led to a resurgence in urban farming. Volunteers at local food pantries have also increased.

But the food crunch is intensifying, and spreading to people not used to dealing with hunger. As middle class workers lose their jobs, the same folks that used to donate to soup kitchens and pantries have become their fastest growing set of recipients.

more

What will they do in the winter when the gardens die?

***

Wonder how the banks are really doing?  Here’s a view of reality from Jeff Nielson’s Instablog:

Accelerating U.S. bank-failures refute “recovery” hype

With 69 failed banks already this year, bank failures are already on course to exceed the number of failures in 2008 by 400%. However, if they continue accelerating, that increase could easily rise to 500% or 600%.

Meanwhile, despite raising the size of its bribes to take over these failed companies, the FDIC is seeing less bidders step up to bid on these companies. It’s “insurance fund” will be nearly completely exhausted when the pending failure of Texas-based Guaranty Bank takes place – forcing it to tap into a $200 billion “line of credit” from the insolvent U.S. Treasury. Does this sound like an economy which is “recovering”?

He continues with a good overview of housing, consumer credit, business credit, and the bailout as a whole.  It won’t make you happy…

***

I’ve added a new link to the Financial blog roll–a wealth of information here!!

DollarDaze

***

Finally, a while back American Lassie wrote a post on Eustace Mullins titled Eustace Mullins’ “Secrets of the Federal Reserve”: Read About what Ezra Pound Called “The Great Betrayal”. We had a comment this week that led us back to FOEM’S Site (Friends of Eustace Mullins Society). There are recent pictures of the man himself; he’s alive and kicking!

THE PAST WEEK

Forget the Mainstream Media “Business Analysts”: Economics Prof Explains Obamanomics and Conducts Experiment That Proves His Point

The Past Week: July 26-August 1, 2009 (Inflation vs. Deflation; CNBC Ratings Plunging; Wind Turbines; Perpetuum Jazzile and Simulated Rain)

The Past Week: July 4-11, 2009 (Where We Are Now re: The Economy-Robert Reich, Nouriel Roubini, Robert Shiller, Chris Martenson)

~~By InsightAnalytical-GRL

Well, we’ve managed to actually post enough this week to have a formal “Past Week” column!

Money has been on my mind as I unwound a few positions in the stock market this week as things are stalling before what might be a plunge.  This is quite a relief…my stress level dropped immediately! These were mostly mutual funds we bought 10+ years ago, so we still came out ahead in spite of the huge drop in March.

However, we have to be vigilant about the future. Preservation of what we all have, hedging against inflation and a collapsing dollar…you know the drill!

So here are a couple of things on the subject of the economy that I came across this week. The first is by Robert Reich; next is a video from Bloomberg.com.

If you’re wondering what Robert Reich is thinking lately, check out his personal blog.  (Reich is a staunch supporter of  a public healthcare option and  urges supporters to get active to get  Obama  to “do the right things” in a recent post titled “What Can I Do?“).

Here’s his latest post about the state of the economy:

When Will The Recovery Begin? Never.

The so-called “green shoots” of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. On one side are the V-shapers who look back at prior recessions and conclude that the faster an economy drops, the faster it gets back on track. And because this economy fell off a cliff late last fall, they expect it to roar to life early next year. Hence the V shape.

snip

The reason is asset values at bottom are so low that investor confidence returns only gradually.
That’s where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market.

But Reich doesn’t belong to either camp:

In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped.

Reich forsees a “new economy”:

My prediction, then? Not a V, not a U. But an X. This economy can’t get back on track because the track we were on for years — featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere — simply cannot be sustained.

The X marks a brand new track — a new economy. What will it look like? Nobody knows. All we know is the current economy can’t “recover” because it can’t go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin. More on this to come.

Then there is this video from Bloomberg on the subject of “Where We are Now,” which features Robert Shiller (his website here), the economist’/housing forecaster from Yale and New York University’s Nouriel Roubini.

At Roubini’s site, RGE Monitor, there is also a link to the video and a breakdown of key sections with their time.  The discussion is titled:

Roubini on a Bloomberg Panel: Recession will Last Another Six Months and the Recovery will be Shallow

The key points I jotted down from Roubini  are that in the short term (1.5 years) there will be deflation and by the end of 2010 we’ll be seeing inflation. Frankly, I thought the discussion was more pessimistic than the title suggests!

Of course, over at ChrisMartenson.com, there is continuing analysis of all this plus a longer term view of the direction we’re going in presented in The Crash Course and what we can do about it.

***

THE PAST WEEK

*By Kenosha Marge

Saturday, July 11, 2009: One Year Anniversary of “Peak Oil Day” Makes it a MUST to Watch “The Crash Course”

*NOW, NOW…THERE, THERE…LITTLE VOTER

200,000 Hits!…Some of the Stories that Made it Happen: Obama’s Handwriting; Nation of Nincompoops, Obama’s Associates; Sharia Finance; The Fed; Reality Check from Chicago

July 4, 2009: Tea Party in New Mexico Shares Day with Muddy “Rainbow Gathering”

About Sarah Palin…