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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

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

U.S. government moves (and blunders) in articles about the economy

Other economic updates / miscellaneous economic news articles

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