Op-Ed: Go Tell It On the Bloomberg- America on the rocks

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Maybe there’s a good reason for this “possible recession” jingle, but it’s not obvious. The sedation level on the finance news is now becoming ridiculous. The US public is getting fairy tales, told by things you’d bury if you found them at the bottom of your garden.

“Insipid” is a barely adequate description of the coverage. Not everybody’s an economist, but blatant bull is blatant bull, and these guys are supposed to know that. Bloomberg apparently aren’t inclined to book a berth on the “Everything’s Wonderful, Soft Landing” Titanic just yet.

This is an example from Bloomberg of some actual financial reporting. It’s not good news, but at least it tells a real story:

“Consumer credit increased by $6.9 billion to $2.52 trillion, the Fed said today in Washington. In December, credit gained $3.7 billion, less than a previously reported increase of $4.5 billion. The figures don't include borrowing secured by real estate, such as home-equity loans.

People once dependent on home-equity financing are turning to other forms of short-term financing after the collapse in subprime mortgages made it harder to qualify for loans. Personal income in January rose at a slower pace than inflation, and credit card usage in January rose for a second straight month.

"There's not much gas left in the tank,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "In the early stage of a recession, consumers tend to rely on credit cards to see them through the hard times.''”

Bit different, isn’t it? No “possible recession” claptrap. These are top of the line information sources getting a word in.

That situation described in the article is one of the symptoms people have been looking for. The added demand on credit is a real indicator, not some vague reference to “market sentiment”.

Nor is there any political agenda being served. This is hard data, it’s clean, and it has some relevance. No spin, no ideological diarrhea.

I have no idea how, let alone why, the American public can tolerate the amount of pure drivel being produced by major media on the economy.

Same article:

“It was the second-biggest January increase in revolving credit in the past decade, a period in which that category of borrowing averaged $3.2 billion for the first month of the year. Revolving debt is the kind that's capped at a designated amount and on which periodic payments are made.

Earlier today, the Labor Department said the U.S. lost jobs in February for the second consecutive month, adding to evidence the economy is already in a recession. Payrolls fell by 63,000, the most in five years, after a revised decline of 22,000 in January.

The central bank's Federal Open Market Committee is scheduled to meet to discuss interest-rate policy March 18, and economists anticipate the central bank will again lower its benchmark lending rate.”

Synopsis: the credit and labor markets are getting hit, hard, and the Fed has a teaspoon to stir the economic pot.

Interest rates are the standard methodology of an ideas-starved economic paradigm. Since monetarism raised its micro-brained head, interest rates, like leeches in the Dark Ages, have been the answer and cause of everything.

The result of this mentality is the dog’s brunch of crashing edifices we are now seeing.

I pause here for an expression of opinion of monetarism:

“Post-fecal utterances from the dead.”

The whole concept is 30 years out of date, pre-globalization. No museum would touch it.

Bloomberg also did an in depth piece on the jobs situation:

“The weakening labor market, combined with lower home prices, higher fuel bills and a global credit squeeze, may force consumers to further reduce spending. Minutes before the figures were released, the Federal Reserve said it will expand two short- term auctions this month to $100 billion in an effort to address a deepening credit crisis. Traders anticipate the central bank will also cut interest rates again.”

(See also cgull’s piece on DJ about the job losses for the breakdown.)

Translation: Grandfather can’t hang himself in the barn, because they foreclosed, but he’s working on it.

There’s also a good "cultural contrast" piece about pay for the geniuses who’ve been presiding over the economic slapstick:

“"There seem to be two different economic realities operating in our country,'' said Henry Waxman, a California Democrat and chairman of the House Oversight and Government Reform Committee. ``Most Americans live in a world where economic security is precarious. But our nation's top executives seem to live by a separate set of rules.''”

If you never want to have to think about eating again, read that one. Again, no euphemisms. Thank you, Rep. Waxman, for the epigram. Let’s hope it’s not as much of a eulogy as it looks.

This is the standard of reporting that should be hitting the Presidential elections. Not “robes”, “delegate follies” or Rent A Hack.