Economic News Articles in the Great Recession — Archive for the week of 02-19-2012
The biggest news to hit the economy during the past week was the impact of the Iranian conflict on oil prices. The news today is that the escalating price of oil is beginning to weigh down on the stock market’s rally. At the beginning of the year, I predicted that “an uptick in the Iranium reaction would shoot up the cost of oil either by choking supply or using more of it in war or simply triggering speculation.” A little over a week ago, we had that little uptick as Iran started choking off supply of Iranian oil to some parts of Europe. That sent the global price of oil soaring over the past week, and news this weekend was that some areas of the U.S. will soon see $5 per gallon gasoline — the highest price the nation has ever known.
All that was not even from a cutoff of Middle East oil supply by warring acts in the Persian Gulf, but merely a peaceful curtailing of Iranian supply to one region of the world in response to sanctions placed on Iran. What this demonstrates is that the Iranium Reaction has the power to impact the global economy, regardless of whether any war with Iran takes place. My ongoing prediction from this point forward should be easy for anyone to make: global tensions with Iran will continue to escalate and will continue to drive the price of oil up on speculation, which will adversely affect the cost of everything.
The other news of greatest interest to me was that the U.S. job figures that everyone else ballyhooed about last month were distorted. Clues are that February will demonstrate a significant rise in the unemployment rate that dwarfs any decrease reported in January. I am always ready to point out how overly zealous the world’s economic gurus are to lap up any hint of good news and turn it into false predictions of economic recovery. I am equally ready to point out how ready most of the world is to listen to them because they say what people want to hear, versus speaking reality.
- We are far from real recovery, as we have done nothing that actually solves our problems. We have merely tried to resolve a debt problem by taking out vastly greater amounts of debt. We have done that to buy ourselves time away from the pain of recovery. This political avoidance of a solution has transcended party lines around the world.
As for the euro crisis, the news about Greece is too boringly predictable to reiterate.
So, now, the news…
Economic indicators seen in the news this week
- Gallup Finds Unemployment Climbing to Nine Percent in February In spite of all the clamor last week about job gains, Gallup sees this present indicators MUCH differently. Unemployment is now back to a rapid rise, and “underemployment measures show a sharp deterioration in job market conditions since mid-January.”
- Opinion: Job Growth Actually Down January’s job growth was actually due to statistical restructuring caused by incorporation of 2010 census data. Real unemployment went up. Long-term unemployment even worse. Moreover, jobs that were added were mostly in part-time or poor-paying jobs.
- U.S. home sales up 4.3 percent to 1-1/2 year-high Inventory of homes on the market fell to a 7-year low as home sales rose, but prices were down 2% from a year ago. SOME say this is a sign housing is off the floor. [I say, “Watch out for the rush of foreclosures now that the gov’t let banks off easy.
Economic predictions / forecasts that made news headlines
- Gold to rise much higher in this decade, do not sell it: Jim Rogers “Throughout history when you have people printing money and debasing currency, the way to protect yourself and to make money is to own real assets…. Everybody is now loosening the money supply, printing money.” War with Iran would push gold up more.
Euro crisis updates as the Great Recession goes viral
- European & U.S. stocks fall as investors fret over Greece Investors remained uninspired by Greece’s bailout deal and expressed disappointment about data showing business activity in the region unexpectedly slowed. Investors also expressed “serious reservations” about Greece’s ability to follow through.
- For Greece, a Bailout; for Europe, Perhaps Just an Illusion “I don’t want to be a Cassandra, but the idea that it’s over is an illusion,” said Kenneth Rogoff, professor of economics at Harvard. “I am amazed by the short-term psychology in the market.”
- Greece rushes to pass bailout laws amid protests Thousands of protesters angry at punishing spending cuts poured into Athens as Greek lawmakers rushed to pass laws required by Europe to secure a Greek bailout. Fitch downgraded Greece on the bond swap scheme, as it defaults on half of Greece’s debt.
- Greek Rescue Leaves Europe Default Risk Alive While Europe got its heads together for the moment, Bloomberg cautioned, “Greece will soon risk violating the terms of its second bailout in three years…. Greece may again fail to deliver amid a fifth year of recession, looming elections and unrest.”
The Iranium Reaction as it makes and shakes the news
- Iran seeks to boost nuclear work in bunker As Israel sees it, the move to deep, highly reinforced facilities heightens the threat. The time when Iran’s alleged efforts to build a bomb will become immune to military intervention is fast approaching, creating pressure to attack soon.
- Iranian scientist’s goal: To annihilate Israel Wife of assassinated Iranian nuclear scientist says her husband’s “ultimate goal was the annihilation of Israel.” She also underlined that her spouse loved any resistance figure who was willing to fight the “Zionist regime.” She told him he would be a mar
- Khamenei strategist: ‘Iran must attack Israel by 2014’ Ayatollah Khamenei’s strategist releases document providing legal, religious justification for annihilation of Jewish people. Reports of the document began to circulate the internet this week.
- Oil price hits eight-month high on Iran-Israel war fears Tensions with Iran have pushed oil above $121 a barrel. Vitol, the world’s largest independent oil trader, warned about the risk of a record price spike: The likelihood of an Israeli air strike has increased and is likely to push oil to $150 a barrel.
- Oil Rises in Longest Rally in Two Years as Iran Spurs Supply Concerns Oil climbed for a seventh day, the longest streak of advances since January 2010, as escalating tension with Iran threatens supplies and on signs of a global economic recovery. “The bulls have the oil market by the throat.”
- U.S. concerned Israel’s Defense Minister is pushing for Israeli attack on Iran Numerous visits to Jerusalem by senior U.S. officials this week reflect growing concern in Washington over possibility of Israeli attack on nuclear sites in Iran. Americans are particularly worried about the hawkish line Defense Minister Barak is taking.
- U.S., Russian warnings against Iran strike will not affect Israel’s decision Foreign Minister Avigdor Lieberman said in an interview on Wednesday that Israel will not bow to U.S. and Russian pressure in deciding whether to attack Iran. “It is not their business.”
- UN Inspectors Return From Iran Talks With No Way Forward IAEA officials left Iran when denied access to a military base where Iran may be developing nuclear weapons. The UN Security Council demanded Iran open this facility to investigation after a report that raised suspicion of nuclear warhead development.
U.S. government moves (and blunders) in articles about the economy
- Obama unveils corporate tax plan to close loopholes, lower rate to 28 percent Officials pitched the drop from 35% as a way to keep businesses from relocating out of the U.S. “This reform is fully paid for, and it won’t add a dime to the deficit.” Taxes on oil companies would rise due to elimination of corporate welfare.
Other economic updates / miscellaneous economic news articles
- Mass Resignation: Why Are So Many Key Financial Figures Stepping Down? Is the resignation of 9 leaders of massive banks in 11 days coincidence? High level resignation is normally reserved for … those who have made a big mistake, expect big trouble soon, or who don’t want to deal with a past mistake coming home to roost.
- Reality Check: Chris Martenson Editorial on the Lies We Tell Ourselves “Of all the challenges that catch my eye right now, the one most worrisome is the shredding of our national narrative to the point that it no longer makes any sense whatsoever…. Our actions are guided by the stories we tell ourselves.”