And every day there seems to be a few more who begin to believe in an anthropogenic credit crunch...
E.g.,
Capital Strike?
Joseph A. Palermo
February 3, 2009
After the huge infusions of tax dollars into the private banking industry one would think there would be money available for banks to start lending and begin the process of economic recovery. With real estate prices plummeting there are thousands of safe and profitable projects in the pipeline that banks are choosing to choke off. I know people who invest in commercial real estate in the Sacramento area and they tell me banks are not even lending for risk-free projects. The whole thing is beginning to smell like a "capital strike," a process whereby financial interests conspire to make an economy "scream" when they don't like which way the political winds are blowing...
http://www.huffingtonpost.com/joseph-a-palermo/capital-strike_b_163506.html
REVIEW & OUTLOOK
JANUARY 31, 2009
A Capital Strike
Yesterday's fourth quarter GDP report came in less awful than expected at a 3.8% decline at an annual rate, but take no solace from that. The decline in the economy would have hit 5% if not for a buildup in inventories that won't be sold any time soon. American consumers and investors are on strike until they see some assurance that the worst is over -- and Washington's tower of babble isn't helping on that or any other score...
http://online.wsj.com/article/SB123336321034435421.html
Doug Henwood wrote:
> [This is the same gang that CGE pressed into service a month ago to
> argue there's no credit problem.]
>
> AIER
> American Institute for Economic Research
>
> Richard Ebeling of AIER is available to talk about what the new
> unemployment numbers (released tomorrow) mean for the economy, and how
> we aren’t as bad off as many indicate. If you would like to interview
> Mr. Ebeling, please let me know. Thanks - Sonia
>
> MEDIA ADVISORY
>
> For Immediate
> Release
> Contact: Sonia Blumstein
> Feb. 5, 2009
> New Unemployment Numbers Released Friday, Feb. 6
>
> NOT THE WORST JOB MARKET SINCE WWII,
> DESPITE OBAMA’S ASSERTIONS TO THE CONTRARY
>
> GREAT BARRINGTON, MA—
>
> WHAT: On Friday, February 6, the latest unemployment numbers
> will be released by the U.S. Department of Labor.
>
> Obama has already called this the worst job market since WWII. But a
> look at the facts reveals quite a different story.
>
> According to a recent American Institute for Economic Research (AIER)
> report (available by request), in percentage terms, the job losses of
> 2008 were less severe than those reported during the recessions of 1949,
> 1954, 1958, 1961, 1975, and 1982.
>
> If we lost another 470,000 jobs or more in January, which AIER believes
> is a possibility, then the job losses in this episode would be as bad as
> they were, percentage-wise, in only 1961.
>
> To match the worst percentage declines recorded during the other
> historical episodes, Friday's new numbers would have to show a
> year-over-year decline since last January of 7 million jobs (to match
> the 1949 recession); 4.6 million (1954 recession); 3.6 million (1975);
> and 3.7 million (1982).
>
> “This is not to deny the seriousness of the rapid decline of jobs.
> Exaggerating job losses, however, erodes consumer, business and investor
> confidence, which has a negative effect on our economy and can be used
> to justify extraordinary and expensive policy responses to
> not-so-extraordinary employment cycles,” says AIER’s Richard Ebeling.
>
>
>
> WHO: Richard Ebeling, Ph.D., is a Senior Fellow at AIER, a
> think tank founded 75 years ago during the Great Depression on the
> campus of MIT.
>
> WHEN: Available immediately.
> CONTACT: Sonia Blumstein, 205.620.2087 (o), 202.213.0379 (c) or
> Sonia at PRoactiveSolutionsInc.net
>
> # # #
>
>
> ___________________________________
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