The Herald reprints on page one of its Friday's edition a bizarre AP "report": "Bumps ahead-- but worst of recession could be over". In the fourth paragraph down, the conditional "could" is jettisoned for certainty without any supportive documentation: "With unemployment rising it will be at least several months before the country's economic engine pops into a growth gear." Give me a break. Statements like this give astrology a good name. And, what "growth gear" would be driving the economy?
The production home builders, whose platted subdivisions in South Florida have been abandoned by the thousands, leaving communities hollowed out and home values under water? Take a look at the other good news story in the Herald today, in the business section: "New city to run on solar power." In that article, here is what the developer admits: "... all of the plans are contingent on the real-estate economy recovering, but he believes the green aspects of he project will entice many who will bypass traditional developments now in foreclosure." We are into a scavenger economy; where in the absence of demand and jobs the shiniest new toys will get the limited attention of the next tranche of consumers, following the last tranche that can't get credit because they are all scarred by bankruptcy.
The rest of the AP story fills back in the conditional aspect of the recovery ('seems', 'caution', 'maybe', and 'reasonably confident') and pins its optimism like this: "History shows that the jobless rate moves higher well after a recession has ended." But this is not an ordinary, plain vanilla recession and the media is complicit in failing to "mark to market" that reality.
Where is the manufacturing base to lift the economy? When businesses restock inventory, whose manufacturing plants will benefit, and, won't it be from a far lower level of consumption?
I mean, someone at AP or The Miami Herald has to have an idea in their head?
The article goes on: oh, by the way, tax cuts in the Obama plan, $400 per worker and $800 per couple, or "about $13 a week less withheld from paychecks starting around June" will stimulate the economy: just the way the Bush tax cuts did? What does $13 buy you? I was standing in line at the CVS pharmacy the other day, while a guy in front of me nearly went postal over the cost of his prescription, that jumped from $10 to $44 dollars. The pharmacist's hand was moving to the alarm button before the man walked off, muttering to himself.
The rest of the article is cloaked with uncertainty. Mid-2010. Far from certain. Asking people to believe the shape of the economy is a "Nike swoosh". The other sound of swoosh: that would be equity vanishing down a black hole. Even owners of McClatchy could understand that.
2 comments:
There's always a side note in these attempt to feel good stories by the Herald.....They just don't want to make their developer advertisors mad and that's a shame because I bet Eye on Miami has a better following than the Herald! And, speaking of developers, I lost my coffe when I read about a new public offering being under written by Bank of America "$14,400.000 Tax exempt bonds" for Atlantic Housing Partners. The project is called Fairview Cove Phaee 1 & 2 in Tampa, FL. Now, if I didn't know how badly the Hillsborough County condo market is tanking, this wouldn't be such a shock - a shock, but not a huge one. I cannot imagine, with the over saturated market, why any one would take on such a project. The second shocker is because the project is being dupped "affordable housing" they somehow got the tax exempt status. It may only be my imagination, but isn't there a ton of affordable, vacant housing there already?
I want them to define affordable.
Because a $125,000 house with taxes and the proper insurance still is going to run a person nearly $1300 a month. That is not affordable to a household with 4 people, making 65k and with 2 kids in aftercare, so the parents can work. Don't forget the special assessments for the homeowners associations to cover defaults.
By the way, the 13 a week less will evaporate in the coming year when the new tax charts kick in. Because we will paying taxes at 1 dollar income rather than 150.
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