Oil may not be in the infinite supply the world would like (for say $1/gallon in the U.S. good ole' days); however, the world downturn underway is the result of overcapacity. Worldwide (esp. the U.S.) we have too many houses, too many autos, too many electronic manufactures, too many over-leveraged first world/U.S. consumers, too much urban sprawl - it's not a running low/not producing sufficient resources problem.
Curious, as you've a well polished blog on economics, do you expect we'll see regular 100K+ job losses in payrolls this year? Also, do you think Q3 GDP preliminary released late Oct (prior to the election) will go negative?
bah. You want to see a real horror story, come to Lansing, MI. 20% vacancy for CRE. Only viable businesses are liquor stores, buffet restaurants. Roads barely drivable. Big hole in the ground where the old GM plant used to be.
Welcome to the greater depression coming soon to a state near you
So a local hobbyist with little or no formal education/training in engineering develops a cheap working electric car. And Ford, GM and Chrysler can't produce one? What gives?
I'm thinking of calling him and asking him to make one for me.
I think if you expensed out the true cost of producing and then recycling/getting rid of the batteries, it would still be cheaper.
And if you had really appropriate batteries, I assume the savings would be more. And a lightweight body.
Maybe this is all about the popcorn. Or the razor blades. That is, the real profits for the dealerships that is, is in the cost of repairs, not selling cars. Electric cars, virtually no repairs, hence no profits.
Instead of hybrids which are heavy as hell, why not use carbon fiber bodies. Then use small diesel engines and viola 80mpg and great performance. Cheaper than batteries entire IC engine and electric engine plus other misc crap.
Anonymouse - "Polished?" I wouldn't call it that. I wouldn't call anything I do polished.
We lost 235,000 jobs overall in third quarter 2007 BED survey Q3 and I expect job losses to continue. Retail and finance are heavily impacted segments, and autos continue to be a drag. According to FUT, which is a strong predictor, job losses have slowed to the "creeping" level. But I expect them to uptick again in third and fourth quarter due to energy-related pinches in consumer spending and consequent tightness in business spending. However we are picking up on some insourcing because of the weakening dollar, and that is preventing mfrg from falling through the floor.
However will the official stats show it? Probably not really until 2009. We've already notched up job losses of over 1.5 million, and one hardly sees it in official figures because so many of them were jobs held by illegals.
Q3 GDP should be negative. Will it be? Some major portions of official GDP figures come from imputed figures which are distorted by bad jobs figures.
Right now it looks like the trough will be in second quarter 2009. Q408, Q109 and Q209 should all show negative GDP.
The major inputs moving the economy are an interesting mix of negatives and positives, with the negatives larger than the positives.
My estimate for total job losses through the end of 2009 is about 3.5 million, but it will look much less because of the illegal replacement effect and the first wave of boomer retirements.
Also, losses of jobs to recently arrived sole immigrants don't hit the economy nearly as hard, because such workers have traditionally exported the bulk of their income rather than spending it here. Job losses among more established immigrant communities with families, etc, inflict much more damage.
There is also a replacement effect with older workers coming back into the workforce.
What I have is recession starting in Q3 07, followed by a negative Q4 07 and a marginally negative Q1 08, with an uptick into positive territory at Q2, followed by a mildly negative Q3, a more negative Q4, and then two negative 09 quarters. The shift of the US economy into services has shifted recognition of downturns a bit later.
I believe energy spot prices are due to take quite a downturn, and how quickly that occurs and flows through to the consumer is a major uncertainty area in my projections.
What actual GDP shows is quite questionable. There is a very interesting article on the topic up at BEA's website (long, pdf). I quote from page 213 on measuring GDP: One simple measure is how close the extrapolations of the quarterly and annual estimates come to the benchmark estimates that are derived from the comprehensive economic census. For the last five benchmark revisions of GDP, which correspond to the census years 1982, 1987, 1992, 1997, and 2002, the nominal level of GDP was revised an average of 1.1 percent, and the growth rate between benchmark years was revised an average of 0.26 percentage point.
It's worth noting that the benchmark revisions have mostly been up.
So a local hobbyist with little or no formal education/training in engineering develops a cheap working electric car. And Ford, GM and Chrysler can't produce one? What gives?
-suecris
Both of these guys took an old junker bike and converted them to all electric using cheap lead-acid batteries. You can only get 20-30 miles or so on a charge, but that will do for a lot of simple trips. Expect to see a lot more of this sort of thing in the future.
The scary thing about this of course is that whatever happens in the UK seems to be washing ashore in the USA about a year later. So far their housing bust has presaged ours and Northern Rock set the stage for IndyMac.
"The scary thing about this of course is that whatever happens in the UK seems to be washing ashore in the USA about a year later." We had bad floods in the summer of 2007: have you chaps had any flooding this year?
Whiners. It's all in their heads.
In the last few weeks, seems like the press has undergone a big change in sentiment.
we should double the number of politicians in D.C. you know, more minds to tackle the problem...
Sounds like they need more power to do something about the situation they caused.
deficits:
not to worry, we owe it to ourselves
Bah! British Horror movies are tame. You ever see a British zombie movie? The zombies all walk around saying "Tea...Tea". Pathetic.
Gimme some of that ol 'merican horror. Chainsaws, machettes and machine guns...Whoot!
Cheers,
Stinky, don't lobbyists add more value?
Oil may not be in the infinite supply the world would like (for say $1/gallon in the U.S. good ole' days); however, the world downturn underway is the result of overcapacity. Worldwide (esp. the U.S.) we have too many houses, too many autos, too many electronic manufactures, too many over-leveraged first world/U.S. consumers, too much urban sprawl - it's not a running low/not producing sufficient resources problem.
THIS IS A D-E-F-L-A-T-I-O-N-A-R-Y EVENT
I'm still waiting for the theory explaining how our financial woes are caused, somehow, by global warming.
Anonymouse,
"THIS IS A D-E-F-L-A-T-I-O-N-A-R-Y EVENT"
'Course it is. Now calm down lad, or you'll have yourself an aneurism. Here have a pint and a shot. It'll all come out in the wash.
Cheers,
Misean,
Lefty Liquors is closed. First time in history! I think Elvis jacked the place last night.
Anonymouse,
Bye the bye that'll be 5 quid...Dollars...ahem...yes, don't like them much myself sir. Call it 20 then.
Cheers,
Aren't they getting overexcited about a recession? "Horror movie?"
Anonymouse,
"Lefty Liquors is closed. First time in history! I think Elvis jacked the place last night."
If E did that he's a decomposing corpse. I'll check the news feeds.
Cheers,
MaxedOutMama,
Curious, as you've a well polished blog on economics, do you expect we'll see regular 100K+ job losses in payrolls this year? Also, do you think Q3 GDP preliminary released late Oct (prior to the election) will go negative?
Appreciate your thoughts.
bah. You want to see a real horror story, come to Lansing, MI. 20% vacancy for CRE. Only viable businesses are liquor stores, buffet restaurants. Roads barely drivable. Big hole in the ground where the old GM plant used to be.
Welcome to the greater depression coming soon to a state near you
Mouse-Misean
Glad to hear bout this here deflation. Shoot, I'll just sit on my cash and it will buy more tomorrow.
Lookin foreward to 79c bread and dollar ground charles er chuck.
So, the Brits will cut rates and then the EU.
Let the competitive devaluations begin. Bugger er begger thy neighbor. This is soooo 70's.
Ross,
You left out the best part... you'll get those prices....
......but you won't have a job!
OT - I've been stewing about this all day:
O'Fallon, IL Man Converts Pick-Up Truck to Battery Power | ksdk.com | St. Louis, MO
So a local hobbyist with little or no formal education/training in engineering develops a cheap working electric car. And Ford, GM and Chrysler can't produce one? What gives?
I'm thinking of calling him and asking him to make one for me.
Greenspan as Dr. Evil, Bernanke as Minnie Me
Didn't someone say something about reigning in hell versus being in taxpayer heaven?
Ross,
Yes...the price of a loaf of bread is more important than say...the price of a house. Several hundred thousand dollars...or bread.
I did hear a funny Motel 6 commercial which described driving 60 mph with a 20 mpg car cost in excess off $12/hour.
But that's as maybe.
Cheers,
Wingeing Poms . . . . disgusting. How about returning the real estate they stole in Northern Ireland?
I think if you expensed out the true cost of producing and then recycling/getting rid of the batteries, it would still be cheaper.
And if you had really appropriate batteries, I assume the savings would be more. And a lightweight body.
Maybe this is all about the popcorn. Or the razor blades. That is, the real profits for the dealerships that is, is in the cost of repairs, not selling cars. Electric cars, virtually no repairs, hence no profits.
Instead of hybrids which are heavy as hell, why not use carbon fiber bodies. Then use small diesel engines and viola 80mpg and great performance. Cheaper than batteries entire IC engine and electric engine plus other misc crap.
Anonymouse - "Polished?" I wouldn't call it that. I wouldn't call anything I do polished.
We lost 235,000 jobs overall in third quarter 2007 BED survey Q3 and I expect job losses to continue. Retail and finance are heavily impacted segments, and autos continue to be a drag. According to FUT, which is a strong predictor, job losses have slowed to the "creeping" level. But I expect them to uptick again in third and fourth quarter due to energy-related pinches in consumer spending and consequent tightness in business spending. However we are picking up on some insourcing because of the weakening dollar, and that is preventing mfrg from falling through the floor.
However will the official stats show it? Probably not really until 2009. We've already notched up job losses of over 1.5 million, and one hardly sees it in official figures because so many of them were jobs held by illegals.
Q3 GDP should be negative. Will it be? Some major portions of official GDP figures come from imputed figures which are distorted by bad jobs figures.
Right now it looks like the trough will be in second quarter 2009. Q408, Q109 and Q209 should all show negative GDP.
The major inputs moving the economy are an interesting mix of negatives and positives, with the negatives larger than the positives.
My estimate for total job losses through the end of 2009 is about 3.5 million, but it will look much less because of the illegal replacement effect and the first wave of boomer retirements.
Also, losses of jobs to recently arrived sole immigrants don't hit the economy nearly as hard, because such workers have traditionally exported the bulk of their income rather than spending it here. Job losses among more established immigrant communities with families, etc, inflict much more damage.
There is also a replacement effect with older workers coming back into the workforce.
What I have is recession starting in Q3 07, followed by a negative Q4 07 and a marginally negative Q1 08, with an uptick into positive territory at Q2, followed by a mildly negative Q3, a more negative Q4, and then two negative 09 quarters. The shift of the US economy into services has shifted recognition of downturns a bit later.
I believe energy spot prices are due to take quite a downturn, and how quickly that occurs and flows through to the consumer is a major uncertainty area in my projections.
What actual GDP shows is quite questionable. There is a very interesting article
on the topic up at BEA's website (long, pdf). I quote from page 213 on measuring GDP:
One simple measure is how close the extrapolations of the quarterly and annual estimates come to the benchmark estimates that are derived from the comprehensive economic census. For the last five benchmark revisions of GDP, which correspond to the census years 1982, 1987, 1992, 1997, and 2002, the nominal level of GDP was revised an average of 1.1 percent, and the growth rate between benchmark years was revised an average of 0.26 percentage point.
It's worth noting that the benchmark revisions have mostly been up.
So a local hobbyist with little or no formal education/training in engineering develops a cheap working electric car. And Ford, GM and Chrysler can't produce one? What gives?
-suecris
There are a lot of people experimenting with electric motorcycles out there right now:
YouTube - Plug-in electric vehicles are the future! Homebuilt Cycle
YouTube -
Both of these guys took an old junker bike and converted them to all electric using cheap lead-acid batteries. You can only get 20-30 miles or so on a charge, but that will do for a lot of simple trips. Expect to see a lot more of this sort of thing in the future.
As to U.S. dollar deflation, I like to make a simple calculation.
CA deficit ($700 billion) + expected fiscal deficit (~$500 billion) = increased dollar money supply.
Losses incurred via write downs and other = 1.x trillion.
I then add the dollar zone money supply expansion (China, ME and other pegged currencies).
If this results in a negative number then we are likely in deflation. I don't think we are even close.
Once the Renmimbi declines against the dollar then things just might get very interesting.
RE,
But in your calculations, don't you have to include the deflationary effects of things liked canceled/reduced HELOCs and credit cards?
No, I am not including credit just money.
The scary thing about this of course is that whatever happens in the UK seems to be washing ashore in the USA about a year later. So far their housing bust has presaged ours and Northern Rock set the stage for IndyMac.
What's next?
I thought credit was money.
It is a matter of leveling the playing field. The deflationists generally use either M1, M2 or the Austrian TMS.
The issue is to attempt to quantify money in the economy that is available for just about immediate use in exchange.
Sorry I should have said "The deflationists generally use either M1, M2 or the Austrian TMS to argue their case".
They stay away from M3 like the plague.
"The scary thing about this of course is that whatever happens in the UK seems to be washing ashore in the USA about a year later." We had bad floods in the summer of 2007: have you chaps had any flooding this year?