Punchinello’s Chronicles

June 4, 2009

Everything’s Fixed…Again!

Filed under: Surely a Jest? — Punchinello @ 3:30 pm
Tags: , , , ,

The week following the bankruptcy of General Motors, everyone is jumping and clapping, celebrating the end of the major recession. Life is grand, life is good, and everything is now fixed. The recession is over, according to various stories all over the news. One example comes from Bloomberg.com, a leading financial news organization:

June 4 (Bloomberg) — Fewer American workers filed claims for jobless benefits last week, signaling that the worst phase of the employment slump has passed.

Initial applications for unemployment insurance fell by 4,000 to 621,000 in the week ended May 30, in line with forecasts, figures from the Labor Department showed today in Washington. Another Labor report showed worker productivity rose more in the first quarter than previously estimated.

Greater efficiency is contributing to an improvement in profits that will likely lead to fewer job cuts in coming months, analysts said. Companies such as United Technologies Corp. are among those that have slashed payrolls to control labor costs and boost earnings, a step that may help get the economy out of the worst recession in half a century.

“Employers are far advanced in the pace of job cuts,” said John Herrmann, president of Herrmann Forecasting in Summit, New Jersey. Firings “should slow materially” in coming months, he said.

The claims report also showed the number of people collecting unemployment insurance fell to 6.74 million in the week ended May 23 from 6.75 million the prior week. It was the first decrease in almost five months, breaking a string of 17 consecutive records.
(Full story … )

Note that in only the month of May, another 621,000 people filed for unemployment! Yes, that’s 4,000 fewer than “forecast” (predicted). That’s six-tenths of one percent. And the decline is only from “forecast” numbers. Now, only 0.01 million fewer people are going on unemployment, but “analysts predicted” a bit more.

Thank goodness we “only” have 6.74 MILLION people on unemployment this week! Let’s all take the money we’ve been storing in savings accounts and put it back in the markets. By gosh, that’ll get the economy moving again, right?

For whom?

We should also consider that we’ve been hearing about 600,000 jobs PER MONTH being lost for many months. Not just one month.

Then we hear that productivity is rising. How do we know? What measures that supposed increase in productivity? We hear that greater “efficiency” is making for better profits, but does that mean profits are going up because companies don’t have to pay as many people to work?

The report mentions (in passing) that companies have “slashed payrolls.” But that’s excellent news for the Wall Street investors, bankers, and financial gurus. The fewer people we have working, the more “efficient” are the companies making profits for their shareholders.

Yup, it’s all fixed! Things are getting back to hunky-dory. Life is beautiful. It’s party time again. Just like the Roaring ’20s, back in 1920, prior to 1929.

I’d like to know how suddenly the entire world economy is fixed. Particularly, only 3 days after one of the largest companies in modern history declared bankruptcy. Citicorp, one of the world’s largest banks is about to be taken over by the US government. We’re losing half a million jobs PER MONTH, with unemployment rising and rising. California is bankrupt, Michigan is bankrupt. New York is in serious financial trouble, and states around the country are showing massive deficits.

But everything is just fine. We’re doing great! The recession is over! No problems, right? Not according to Wall Street. The DOW continues upward, with investors all excited about the end of a troubled time. Gold is moving closer to $1,000 per ounce, with the US dollar dropping in value every day. But everything is just fine.

It’s a mystery!

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