Publish to Newswire
Add an EventFrom the Open-Publishing Calendar
From the Open-Publishing Newswire
Indybay Feature
As the Economy Crumbles
Summarizing the shitty economic news of the week
Issue #3 - Monday, February 17, 2003
As the Economy Crumbles features selected news summaries with links to further information about the lousy economic trends affecting many of us. The rose-colored rhetoric, hype and spin from economists, bureaucrats, PR flacks and analysts emanating from Wall Street and the financial media requires a skeptical mind and a well-functioning bullshit detector.
Issue #3 - Monday, February 17, 2003
As the Economy Crumbles features selected news summaries with links to further information about the lousy economic trends affecting many of us. The rose-colored rhetoric, hype and spin from economists, bureaucrats, PR flacks and analysts emanating from Wall Street and the financial media requires a skeptical mind and a well-functioning bullshit detector.
1. Prospects of an Oil Shock
2. Climbing Gas and Energy Prices
3. Record Homeless
4. War, Deficit & the Economy
5. Birth, School, Work, Death
6. Jobs? What Jobs?
7. Slump, Fall, Decline
8. Going Bankrupt
9. Run for the Hills!
10. European Woes Continue
-------------------------------------
1. PROSPECTS OF AN OIL SHOCK
Venezuela and Iraq Enhance the Prospects of an Oil Shock (Gulf War II is Unlikely to be a Repeat of Gulf War I)
http://www.prudentbear.com/internationalperspective.asp
"The combined effect of Venezuelan and Iraqi disruptions has the potential to be the biggest shock in oil market history, even allowing for offsetting supply increases by other players." - Jim O'Neill, Goldman Sachs -- From the intro: “There is still a widespread belief that the market is amply supplied with crude, that the U.S. will fight a war that will go as easily as the first Gulf War or Afghanistan, that foreign oil companies will invest and Iraqi oil production will soar after the 101st Airborne sorts out Saddam Hussein. But capacity utilisation in global oil is almost as high as it has ever been. Crude oil inventories are lower relative to consumption than at any time in recent decades.”
FROM: Prudent Bear, 11 Feb
Nigeria Oil Workers Launch Strike
http://www.guardian.co.uk/worldlatest/story/0,1280,-2407095,00.html
Nigerian oil workers on Saturday launched an indefinite strike that could shut down crude exports in the world's sixth largest oil exporter. The strike over pay and working conditions comes as the threat of war in Iraq and a prolonged strike in Venezuela have pushed oil prices to two-year highs. Half of Nigerian exports go to the United States.... Nigeria produces close to 2 million barrels of oil a day, more than 95 percent of which is pumped by joint ventures between the government and major oil companies.
FROM: Associated Press, 15 Feb
Nigeria oil union says set for total strike Monday
http://biz.yahoo.com/rm/030216/energy_nigeria_strike_1.html
The world oil markets faced a turbulent week ahead as Nigeria's white-collar oil union PENGASSAN said on Sunday it had fully mobilised for a "total" indefinite strike targeted at exports. The Department of Petroleum Resources (DPR) branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called the strike on Saturday after talks with government over pay arrears and autonomy collapsed. Union leaders said the strike's impact will be obvious on Monday, when employees of the regulatory agency which supervises tanker loadings at Nigeria's main export terminals and import of refined products at jetties, will have completely withdrawn their services, disrupting exports. The strike has raised supply fears in global crude oil markets which are already tense at the prospect of a war against major exporter Iraq. "The mobilisation has been completed and we are set for total strike tomorrow," Paul Ekele, DPR PENGASSAN branch chairman told Reuters. "Today, our members are supposed to have all withdrawn from drilling rigs, export terminals, jetties and depots."
FROM: Reuters, 16 Feb
Nation's Oil Supply Drops to 28-Year Low
http://news.yahoo.com/news?tmpl=story2&cid=530&ncid=530&e=3&u=/ap/20030212/ap_on_bi_ge/oil_worries
The nation's oil supply dropped another 4.5 million barrels last week, leaving inventories the lowest since 1975 and below what the industry considers necessary for smooth operation. The Energy Department said Wednesday crude stocks were at 269.8 million barrels, just below the lower end of an inventory range needed to assure enough oil is available for efficient refinery operation.
FROM: Associated Press, 12 Feb
Oil Supply Fears Underpin High Prices
http://www.nytimes.com/reuters/business/business-markets-oil.html
Oil prices climbed to two-year highs Wednesday, fueled by worries that the U.S. drive for military force against oil exporter Iraq, despite opposition from key allies, could exacerbate already tight supplies. Expectations that a blast of Arctic weather had further eaten away at wafer-thin winter fuel stocks in the United States also underpinned oil prices, which are little more than $5 below peaks in the build-up to the 1991 Gulf War. The International Energy Agency, the industrialized world's energy watchdog, heightened fears of a supply crunch with a report showing that spare capacity from the top oil producers might not be sufficient to cover a disruption of Iraq's supply.
FROM: Reuters, 12 Feb
Venezuelan Oil Output May Languish After Strike Ends
http://smartmoney.com/bn/ON/index.cfm?story=ON-20030214-000127-0255
Despite a recent rebound in production, Venezuela's oil industry is expected to remain hobbled indefinitely even after the current strike is settled, Friday's Wall Street Journal reported. This could leave global petroleum markets vulnerable in the event of war with Iraq and increase the prospect of further gasoline-price increases. Industry experts and striking workers said Venezuela's state oil concern, Petroleos de Venezuela SA, is unlikely to restore more than two-thirds of its prestrike output this year.
FROM: Dow Jones, 14 Feb
Crude Oil Approaches $37 a Barrel
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20030214/bs_dowjones/200302141439000580
Crude-oil futures closed in on $37 a barrel and settled at a fresh 29-month high Friday, as traders saw war with Iraq growing more likely, despite a report to the United Nations Security Council that Baghdad has shown progress in cooperating with weapons inspections.
FROM: Dow Jones, 14 Feb
Asia will be caught off-guard if oil crisis hits: energy experts
http://business-times.asia1.com.sg/sub/premiumstory/0,4574,72519,00.html?
With the threat of imminent war in Iraq, another major oil crisis 'may already be in the making' and Asia is not well prepared for it, with stockpiles averaging only 30 days' supply, energy experts warned at a symposium here yesterday .... The repercussions of such a crisis in any one country would quickly spread throughout the region, he said. IEEJ president Yoshiro Sakamoto, meanwhile, warned of the danger of a possible divergence of interest between Japan and the US if Washington should decide to attack Iraq without 'full' UN support. In that case, there could be an 'explosion of anti-American sentiment', he suggested.
FROM: Business Times, 13 Feb
Iraq war could cause world recession
http://biz.yahoo.com/rm/030216/economy_germany_iraq_1.html
One of Germany's top economic advisers said a lengthy war with Iraq could plunge the world economy into recession with the price of oil shooting up to 100 dollars a barrel, according to a newspaper report on Sunday.... He said the "worst case" scenario would be a long war in Iraq that could spread widely in the region that would render the oil fields in Iraq and the bordering countries useless. Subsequent terrorist attacks were also part of this scenario.
FROM: Reuters, 16 Feb
Canada Gas Production Seen Falling 2%-4% - Lehman Bros
http://www.dowjones/20030212/bs_dowjones/200302121558000997
Canadian natural gas production could fall by 4% this year on deteriorating economics for drilling in the West, and geophysical challenges in offshore East Coast, investment brokers Lehman Brothers said Wednesday. The drop will coincide with a 500 million cubic feet a day decrease in natural gas exports to the U.S., the monthly report said.
FROM: Dow Jones, 12 Feb
2. CLIMBING GASOLINE AND ENERGY PRICES
Gas jumps 11 cents over 2 weeks
Survey: Higher prices caused by hikes for crude, heating oil
http://www.msnbc.com/news/870645.asp?0si=-
Gasoline prices jumped nearly 11 cents per gallon over the past two weeks, an industry analyst said Sunday. The average weighted price for gasoline nationwide, including all grades and taxes, was about $1.63 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. Gasoline cost about $1.52 a gallon on Jan. 24, the date of the last survey.
FROM: Associated Press, 10 Feb
US gasoline price at 20-month high, diesel at record
http://www.forbes.com/markets/newswire/2003/02/10/rtr875432.html
The average U.S. gasoline pump price jumped eight cents a gallon over the last week to its highest level in 20 months, while the price truckers paid for diesel fuel hit a record, the government said Monday.
FROM: Reuters, 10 Feb
Gas prices could go above $2
http://www.usatoday.com/money/economy/2003-02-10-oil_x.htm
Gasoline prices could zoom past $2 a gallon some places this spring, regardless of whether the USA goes to war with Iraq. Already, U.S. prices are the highest in 20 months as oil traders worry that war would halt Iraqi production and create shortages.
FROM: USA Today, 11 Feb
Gas goes above $2 a gallon
http://www.usatoday.com/money/markets/2003-02-13-gas-prices_x.htm
Well. Three days after issuing a warning that gas prices could pass $2 a gallon in some places this spring, USA Today reports that gasoline has already surpassed the $2 a gallon mark in at least 15 urban areas and another 7 metro areas with highs of $1.99 could surpass the $2 mark by Friday (Feb 14). The story admits the $2 barrier has been broken faster than expected.
FROM: USA Today, 14 Feb
Stage is set for all-time gas-price high
http://cbs.marketwatch.com/news/story.asp?guid=%7B83B99AF7%2DDEC3%2D4F59%2DB089%2D18D2D236CD87%7D&siteid=mktw
Tight supplies and strong demand for gasoline along with troubles in Iraq and Venezuela could lead to a record spike at the pump this year. "A stalemate with Iraq coupled with lingering problems in Venezuelan energy production could very well cause U.S. consumers to pay the highest gas prices on record this spring," said Geoff Sundstrom, a spokesman for the American Automobile Association.
FROM: CBSMarketWatch, 15 Feb
As oil prices rocket, high diesel costs pinch truckers
http://www.usatoday.com/money/markets/2003-02-13-oil_x.htm
U.S. supplies of crude oil hit 28-year lows last week, the government reported Wednesday, while diesel-fuel prices hit a near-record high, prompting some truckers to say they'll have to park their rigs and get other jobs because they're making no money. "Guys are parking their trucks right now because of the cost of fuel," says long-haul trucker Paul Sasso of Edgewater, Fla. "We negotiate our contracts on a 2- or 3- (percentage) point margin, and it's not like a grocery store where you can go re-mark the price," he says.
The truckers' complaint is an eerie echo of the 1974 independent truckers strike to protest high diesel prices during the first U.S. fuel crisis. The National Guard was called out to prevent violence, and food and fuel supplies were disrupted in some areas.
FROM: USA Today, 13 Feb
California Power Prices May Surge on Northwest Hydro Drought
Source
California electricity prices may surge this summer, reaching levels last seen during the state's power crisis two years ago, as drought in the Pacific Northwest limits hydroelectric generation. The lack of snow and rain means flows will be at least 25 percent below normal at Columbia River dams, based on a forecast from the Bonneville Power Administration, the federal agency that controls more than a third of the hydropower used in Washington, Oregon, Idaho and western Montana. Some meteorologists are forecasting even lower flows. ``Hydro is going to be a disaster this year,'' said Jim Duncan, head of research for energy trading at ConocoPhillips, the third largest U.S. oil company. A lack of hydropower could contribute to a repeat of the ``out of control'' prices experienced in California in 2000 and 2001, Duncan said.
FROM: Bloomberg, 17 Feb
3. RECORD HOMELESS
Record numbers swamp New York City’s homeless shelters
"We are not animals, we are human beings"
http://www.wsws.org/articles/2003/feb2003/home-f15.shtml
Some somber personal stories and dire statistics about how the crumbling economy is affecting the most vulnerable in our society. The intro: “The record growth of homelessness in New York City is the starkest indication of the deep social crisis and the yawning gap between wealth and poverty in the US financial and corporate capital. According to the city’s Department of Homeless Services, the number of people flooding municipal shelters is the highest since records were first kept 20 years ago. For December 2002, an average of 38,039 people stayed in municipal shelters each night, an increase of 25 percent in only one year. The recent cold spell has only swelled what was already a flood of people into the city’s shelter system. This included 16,633 children, fully 44 percent of the shelter population, while another 13,439, or 35 percent, were adults in families. Families constitute the fastest growing segment of the homeless population, and the number sleeping in shelters has doubled in the last four years alone.”
FROM: World Socialist Web Site, 15 Feb
More Children in New York City Are Homeless, Report Finds
http://www.nytimes.com/2003/02/14/nyregion/14CHIL.html
The number of homeless children in New York City has increased sharply over the last decade. Even with the boom economy of the late 1990's, the percentage of children living in poverty rose, and more than half a million children in the city are now impoverished.
FROM: New York Times, 14 Feb
4. WAR, DEFICIT & THE ECONOMY
Real Reasons for the US Invasion: Military Solution to an Economic Crisis
http://www.rupe-india.org/34/military.html
Lengthy but interesting piece that explains the three primary reasons for the planned US attack on Iraq. They are: securing US oil supplies; maintaining dollar hegemony; and using oil as a weapon. A few brief excerpts: The US’s grand strategy, while portending tremendous upheaval and suffering for the rest of the world, thus has its logic. It is a pattern familiar to students of imperialism—a declining imperialist power relying on military power and possession of colonies to make up for its ebbing economic strength…. The US needs to suppress the mass and political forces that are struggling against it in these diverse regions. To meet this need there is a massive hike in US spending to train foreign militaries—which had already risen steeply during the 1990s (by 1999 US Special Operations Forces were carrying out joint exercises with 152 countries). “It’s like the counter-insurgency era all over again,” a US Congressional aide is quoted as saying, referring to the Vietnam war era.... The growing military assaults by the US are giving rise to a worldwide protest movement that is in some ways without precedent. It is also giving rise to the anger of greater and greater sections of people. Ironically, the single strong point of the US—its awe-inspiring high-tech military might—has not been able to deliver it a thoroughgoing success even in Afghanistan. Rather, its puppet ruler rules just the capital city and that too with the help of foreign troops and US bodyguards, amid growing anti-American sentiment. The anti-US forces are having such obvious success that even Time magazine (18/11/02) carried a piece titled: “Losing control? The US concedes it has lost momentum in Afghanistan, while its enemies grow bolder.” … The US military juggernaut is still geared to knocking down targets that stand in place, but has a poor record against guerrilla resistance or mass upsurges…. The political costs of a deeper recession are not to be forgotten. Indeed, the entire build-up of a vast domestic machinery of repression—under the name of the Office of Homeland Security and the USA PATRIOT Act—and the whipping up of chauvinism, xenophobia, racism and fascistic sentiments are in preparation for the possible resistance at home.”
FROM: Research Unit for Political Economy (R.U.P.E.)
Growing criticism of Bush budget deficit
http://www.wsws.org/articles/2003/feb2003/econ-f11.shtml
There are increasing fears that the Bush administration’s budget will cause major problems for the US and global economy. The article says: “The major concern in economic and financial circles within the US and internationally is that together with the ever-widening balance of payments deficit, the growing budget deficit could lead to a financial crisis. The latest estimate is that the current account deficit for 2002 will reach close to $500 billion, or 4.7 percent of gross domestic product. This means that the US net foreign debt for the year 2002 will reach a record high of $2.8 trillion, equivalent to 27 percent of US GDP. The financing of this debt requires a flow of foreign capital into the US of around $2 billion a day.” It goes further to say: “Consideration of the inherent risks posed by the worsening US financial position points to one of the key factors behind the resort to militarism. The drive to establish an American empire, starting with the war against Iraq and the seizure of its oil resources, represents an attempt to resolve economic problems by other, that is, military, means.”
FROM: World Socialist Web Site, 11 Feb
Economists attack Bush's 'madness'
Joseph Stiglitz: Bush package simply won't work
http://news.bbc.co.uk/2/hi/business/2747153.stm
More than 400 economists, led by 10 Nobel prize winners, have criticised President George W Bush's economic policy in the US press. In a full-page advertisement in the New York Times newspaper, the economists said that proposed tax cuts would not help the economy in the short term. They also said the planned cuts would benefit rich people the most. Nobel laureate Joseph Stiglitz told the BBC's World Business Report that Mr Bush's plans were "fiscal madness, fiscal irresponsibility".
FROM: BBC, 11 Feb
The Bush budget: blueprint for a right-wing assault on the working class
Part 1 - http://www.wsws.org/articles/2003/feb2003/budg-f11.shtml
Welfare for the wealthy: the Bush tax plan
Part 2 - http://www.wsws.org/articles/2003/feb2003/budg-f12.shtml
Bush budget targets the poor
Part 3 - http://www.wsws.org/articles/2003/feb2003/budg-f13.shtml
The Bush budget: subverting Medicare and Medicaid
Part 4 - http://www.wsws.org/articles/2003/feb2003/budg-f14.shtml
Bush budget plan attacks public education
Part 5 - http://www.wsws.org/articles/2003/feb2003/budg-f15.shtml
A five-part series of articles on the social implications and political significance of the Bush administration’s fiscal 2004 budget plan. A detailed analyses of the budget’s tax proposals, its impact on programs benefiting the poor, its implications for the federal Medicare and Medicaid health insurance programs, and its consequences for public education.
FROM: World Socialist Web Site, 11-15 Feb
5. BIRTH, SCHOOL, WORK, DEATH
Bethlehem Steel Retiree Benefits in Peril
http://www.nytimes.com/aponline/business/AP-Bethlehem-Steel-Retirees.html
AP reports: “Some of them went to work in the blast furnaces when they were just 18, then spent half a lifetime handling molten slag and inhaling steel dust in some of the most dangerous jobs on earth. But for the tens of thousands of Bethlehem Steel workers who stuck it out, retirement brought a rich reward: a hefty pension and a lifetime of almost free health care for themselves and their families.” No longer. Bethlehem Steel announced it wants to terminate health and life insurance benefits for 95,000 retired workers and their dependents.
FROM: Associated Press, 10 Feb
Pension crisis may be worst in history
http://seattletimes.nwsource.com/html/businesstechnology/134633417_pensions13.html
Think your pension and benefits are safe? Think again. As the stock market decline forces companies to spend millions shoring up their pension funds, some workers are bracing for possibly the biggest wave of cuts to retirement benefits in 20 years …. The pension crisis is shaping up to be the worst in history. Nationwide, corporate pension funds last year were an estimated $240 billion to $300 billion short of what they're committed to pay retirees, and that gap is growing. Shortages for state- and city-government pension programs could be another $350 billion, said Stephen Nesbitt of Wilshire Associates, an investment adviser in Los Angeles.
FROM: Seattle Times, 13 Feb
Wal-Mart takes hits on worker treatment
http://www.usatoday.com/money/workplace/2003-02-09-wal-mart-cov2_x.htm
There's more to Wal-Mart than bare-bones pricing and a familiar yellow smiling face. The megaretailer is also getting an unwelcome reputation for the way it treats its employees. At the pinnacle of its success, the company is fending off critics who say Wal-Mart discriminates against women, underpays workers and uses illegal tactics to kill unionization efforts. Never before has the retail empire, founded in 1962, come under such blistering attack.
FROM: USA Today, 10 Feb
6. JOBS? WHAT JOBS?
A Crush of Applicants
http://www.nytimes.com/2003/02/10/opinion/10HERB.html?th
Opinion column by Bob Herbert on the massive traffic jam caused by people desperate for jobs. Mr. Herbert writes: “Rumors that job applications for a Ford assembly plant would be accepted at a community college had swept through several of the city's neighborhoods. Chicagoans by the thousands responded, turning out in bitterly cold weather for a shot at gainful employment. The first arrivals showed up well before dawn. By 7 a.m. more than 2,000 people had lined up outside Truman College, and the hopefuls kept coming throughout the morning. They shivered, and tears from the cold ran down some of their faces. It was like a scene out of the Depression. The rumors were false.”
FROM: New York Times, 10 Feb
Sour economy hitting West Coast states hard
http://www.heraldnet.com/Stories/03/1/29/16434049.cfm
West Coast states are being battered by the ailing economy, leading the country again in high unemployment rates last month, while the Dakotas and Nebraska posted the lowest jobless rates. The new data, released Tuesday by the Labor Department, shows that the jobs outlook in much of the country remains bleak.
FROM: Associated Press, 10 Feb
7. SLUMP, FALL, DECLINE
Retail sales drop
http://money.cnn.com/2003/02/13/news/economy/retail_sales/index.htm
U.S retail sales were sluggish in January, the government said Thursday, dragged down by a drop-off in automobile sales. The Commerce Department said retail sales fell 0.9 percent to $306.6 billion in January after growing 2 percent in December. Excluding sales of autos and auto parts, however, retail sales rose 1.3 percent after rising 0.2 percent in December.
FROM: CNN Money, 13 Feb
U.S. chain store sales flat latest week-report
http://biz.yahoo.com/rf/030211/economy_retail_btm_2.html
U.S. chain store sales were unchanged last week as a shaky economic recovery kept consumers at home, a report said on Tuesday. U.S. chain store sales were flat in the week ended Feb. 8, after a 0.9 percent decline in the preceding week, the Bank of Tokyo-Mitsubishi and UBS Warburg said in a joint report. Sales compared to last year rose 0.6 percent, compared with a 2.7 percent year-on-year growth rate reported in the previous week. "Sales were generally below plan," the report said.
FROM: Reuters, 11 Feb
Major slump for UK record industry
http://news.bbc.co.uk/1/hi/entertainment/music/2743833.stm
The British record industry has experienced its biggest sales decline in decades, the BBC has learned. Figures out this week will show sales of CDs and other recorded music were down almost 4% last year, says the British Phonographic Industry (BPI). It is understood the figures will reveal the biggest downturn in a single year since the birth of the CD market in the early 1980s.
FROM: BBC, 10 Feb
Big Music's Broken Record
http://www.businessweek.com/technology/content/feb2003/tc20030213_9095_tc078.htm
It's the busy season for number-crunchers at the Recording Industry Association of America (RIAA). By the end of February, the industry trade association will release new statistics on what it says is a dizzying two-year decline in CD sales. The latest figures, from the first six months of 2002, show a 7.2% slide in CD sales from 397 million to 369 million. Revenues fell 5.1%, to $5.2 billion. Full-year sales for 2002 are said to be just as dismal -- if not worse.
FROM: Business Week, 13 Feb
U.S. consumer sentiment hits 9-1/2 yr low in Feb.
http://biz.yahoo.com/rf/030214/economy_consumers_sentiment_4.html
U.S. consumers are anxious about the nagging threat of war in Iraq and the economic outlook, with a mid-month survey showing sentiment eroding to a 9-1/2-year low. The University of Michigan's preliminary February consumer sentiment index fell to 79.2, its lowest since September 1993, from 82.4 in January, market sources who have seen the report said on Friday. That was below expectations for 81.2.
FROM: Reuters, 14 Feb
Consumer Confidence Falls To A 25-Mo. Low On War, Iffy Economy
http://news.yahoo.com/news?tmpl=story2&cid=1471&ncid=1471&e=7&u=/ibd/20030211/bs_ibd_ibd/2003_02_11_feature
With a possible war looming and an unsteady economic recovery under way, Americans' economic confidence in February fell to its lowest level in 25 months. The IBD/TIPP Economic Optimism Index fell 2.4 points to 50.0 in February. The index is now below its level of 53.9 in March 2001, the month the recession started. The poll of 900 adults was taken Feb. 3 to Feb. 9. A reading above 50 means optimism; below that, pessimism. At 50, it's neutral. "The downward spiral started in June 2002, and since then the index has slid seven out of nine months," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner. "Two of the index's three components have fallen below 50," he said. "The index and its components look very much like they did at the start of the last recession, perhaps indicating we're on the brink of a second recession.
FROM: Investor’s Business Daily, 12 Feb
Massachusetts: Consumer confidence dives
http://www.boston.com/dailyglobe2/044/business/Consumer_confidence_dives+.shtml
Consumer confidence in Massachusetts plunged in January to levels not seen since the deep recession of the early 1990s, MassInsight Corp. reported yesterday, evidence of continuing weakness in the state's economy. There was little good fiscal news reported during an economic forum yesterday in which analysts concluded the downward pull of a nationwide economic stall has hit the state's major industries, technology and financial services, particularly hard. They also reported that the state's tax-revenue forecasts continue to be revised downward, the job market continues to shrink, and there are few signs of the full recovery in business investment that would be required to end the doldrums. The quarterly consumer confidence index fell 15 points, from 78 in October to 63 last month, returning to ranges not seen since 1992 and 1993. A year ago, the index stood at 107. FROM: Boston Globe, Feb 13
Australian Consumer Confidence in February Falls 7.8%
Source
Australian consumer confidence fell to a 21-month low in February, suggesting retail spending will slump, slowing economic growth as exports fall and a drought cuts crop and milk production. The confidence index fell 7.8 percent from January to a reading of 99.7, according to a survey by Westpac Banking Corp. and the Melbourne Institute. A reading below 100 indicates most consumers are pessimistic about the outlook for the 12-month low in January, a report from the National Australia Bank Ltd. showed yesterday.
FROM: Bloomberg, 11 Feb
Mortgage demand at 11-month low
http://money.cnn.com/2003/02/12/news/economy/mortgage_apps.reut/index.htm
U.S. mortgage rates fell to record lows last week, but mortgage applications -- particularly those for buying homes -- also declined, a trade group said Wednesday. Applications for mortgages to purchase homes fell 11.4 percent, reaching their lowest level since the week of March 15, 2002, the Mortgage Bankers Association of America said. Applications to refinance also fell, but by only 2.7 percent, and to a level still about 50 percent higher than the weekly average for 2002, a record-setting year for refinancing volume.
FROM: Reuters, 12 Feb
8. GOING BANKRUPT
Bankruptcies at Record High in 2002
http://www.forbes.com/business/newswire/2003/02/14/rtr880514.html
U.S. bankruptcy filings climbed to a record level in 2002, a U.S. court administrative agency said on Friday, as job losses and the weak economy hurt the finances of more people. The number of individuals and businesses asking courts for relief from their debtors rose 5.7 percent from 2001 to 1.58 million, the Administrative Office of the U.S. Courts said in a statement. Bankruptcy experts have said recently that greater availability of credit and the sluggishness of the U.S. economy are causing more people to seek legal protection from their creditors. Bankruptcy lawyers and scholars say they have noticed more repeat filings and younger and older filers than in the past. Many of these filers have levels of credit card debt that experts say would have been unimaginable 10 years ago. Another expanding category of bankruptcy is among people who exhaust their finances paying bills for a serious illness in the family, experts say.
FROM: Reuters, 14 Feb
Debt Collection a Struggle in Slow Economy
http://abcnews.go.com/wire/Business/reuters20030215_64.html
The U.S. debt collection industry is facing an uphill battle as more debt-heavy Americans struggle to keep up with their car payments and credit card bills. Credit card companies and other lenders likely will be saddled with more losses in 2003 from rising bad loans. Americans are poised to file bankruptcy in record numbers this year, surpassing the all-time high of 1.5 million in 2002, according to the American Bankruptcy Institute. Blame it on massive layoffs, a three-year stock slump, rising fuel prices and a looming U.S. war with Iraq.
FROM: Reuters, 15 Feb
Subprime lenders hit hard by struggling economy
http://www.dallasnews.com/sharedcontent/dallas/business/stories/021403dnbusamericredit2.15f2c.html
Like many in its industry, Fort Worth-based auto finance company AmeriCredit Corp. is being battered by the economic slowdown, as loan delinquencies and defaults keep rising. The company, which lends to consumers with spotty credit, on Thursday detailed myriad reasons for its plan to cut 1,000 jobs and shut 60 percent of its branch offices, including a bigger-than-expected fourth-quarter loss, falling cash flow and lower used-car prices.... In the subprime sector of the credit card industry, the charge-off rates for subprime borrowers approaches 19 percent, nearly three times the average, according to Fitch Ratings. "The slowing economy has taken a toll on the performance of subprime lenders," said George French, deputy director for policy at the FDIC. "Subprime mortgage loan performance appears to have deteriorated notably since the recession began in March 2001. This deterioration has far outpaced the modest increase in prime mortgage delinquencies."
FROM: Dallas Morning News, 14 Feb
Retirees Losing Benefits From Bankruptcy
http://www.miami.com/mld/miamiherald/business/5165503.htm
The nation's persistent economic slump and rash of corporate scandals that have drained cash from pension plans and 401(k) accounts are eating into yet another piece of retirees' livelihood: their health benefits. Thousands of retired workers who were promised lifetime health care coverage by their former companies have lost those benefits as a growing list of firms have folded or been sold.
FROM: Associated Press, 12 Feb
9. RUN FOR THE HILLS!
Run for the Hills?
http://www.guerrillanews.com/globalization/doc1042.html
Hugh Hendry of Odey Asset Management thinks we could be in for “the greatest bear (falling) market ever.” One lasting anything up to two decades. In that scenario US policy makes more sense. Keep the oil cheap, run the deficit high, let the dollar fall. Bail out the US economy with giant subsidy from the US taxpayer to the major elite industries, arms and oil. Maybe through the odd war here and there. Let the dollar devalue, (as Soros predicted: BBC July 2002) over the next few years. Another dose of classic Austrian monetarism or Im-alright-Jackism, depending on phrasing. It will be dog eat dog par excellence. On a grand scale. To stop the US economy nose diving into the floor someone else will have to pay.
FROM: Guerrilla News Network, 12 Feb
Foreign Investors Dog-Tired of Wall St.
http://abcnews.go.com/wire/Business/reuters20030214_695.html
A few choice excerpts: "Wall Street's latest worry is the slumping dollar. It's a nightmare situation that could spark a massive exit by foreigners from U.S. stocks and bonds.... Bankers and economists at the World Economic Forum held in Davos last month warned of the risk of continued dollar turbulence, citing among other things the poor outlook for the world's biggest economy.... The betting is that the dollar, after dropping in 2002 more on a trade-weighted basis than in any other year since 1987, still has not bottomed out.... The exodus of offshore money from U.S. assets is already underway, spurred by such depressing factors as disappointing earnings, a struggling economy and the hangover from corporate scandals.... A further depreciation of the currency is sure to accelerate the run, which in turn could set into motion a chain reaction: the more the dollar continues to take a thrashing, the greater the incentive to sell stocks, thereby putting more strain on the currency and, in turn, again, on stocks."
FROM: Reuters, 14 Feb
Steady Growth Forecast, Provided Everything Goes Exactly As Planned
http://www.newsday.com/business/printedition/ny-bzecon153131208feb15,0,1357914.story?coll=ny-business-print
The United States, which struggled through a stop-and-go recovery last year, should see the economy steadily gain strength in 2003, a panel of prominent economic forecasters said Friday. But that outlook from the National Association for Business Economics came with an important caveat - that any U.S. war with Iraq ends quickly.... The forecast reflects an expectation that tensions with Iraq will be resolved by the middle of the year. However, O'Neill said the obvious downside to the forecast was if a war is longer or more disruptive to global oil supplies than currently expected.... A new CBS-New York Times poll said public confidence in the president's ability to handle the economy is at the lowest level since he took office, with just 38 percent approving and 53 percent disapproving. Six out of 10 said the state of the economy is bad, the lowest measure in this poll in a decade.
FROM: Newsday, 15 Feb
Shellshocked venture capitalists
http://www.latimes.com/business/la-fi-wrap11.1feb11,1,1738285.story?coll=la%2Dheadlines%2Dbusiness
Still hurting from the dot-com massacre, shellshocked venture capitalists in 2002 curtailed their fund-raising for future investments to a 21-year low, new data show. The latest figures provided another sobering reminder of how far venture capitalists have fallen in just a few years.
FROM: Los Angeles Times, 11 Feb
Some fear war rally won't show
http://www.usatoday.com/money/markets/us/2003-02-11-war-mart_x.htm
Long-suffering investors have been able to find some solace in predictions that a U.S. attack against Iraq will clear away some of the uncertainty weighing on the market, allowing stocks to rally again. Not so fast. While it's true that war has typically been bullish for the stock market, a growing number of traders and strategists worry that a war rally is so widely anticipated that it might not happen at all.
FROM: USA Today, 11 Feb
10. EUROPEAN & JAPANESE WOES CONTINUE
Poor German output data add to recession fears
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1042491663958&p=1012571727204
German industrial output fell sharply in December, reinforcing fears that the eurozone's largest economy is close to its second recession in little over a year. The finance ministry said on Monday that output fell 2.6 per cent month-on-month, offsetting November's rise and dragging the year-on-year rate down to 0.6 per cent. It was the sharpest monthly drop since February 1999, and comes hard on the heels of last week's bigger than expected decline of 4.1 per cent in industry orders for December.
FROM: Financial Times, 10 Feb
Euro growth forecast revised downward… again
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1042491691484&p=1012571727189
The European Central Bank is set to lower its projection for eurozone growth further amid signs that its latest forecasts, published barely 10 weeks ago, are already out of date…. In December, the ECB cut its growth estimate for this year to 1.1-2.1 per cent (1.6 per cent midpoint), a full percentage point lower than its forecast of 2.1-3.1 per cent made in June last year. It also projected lower inflation. Most private sector economists think even this growth projection is unattainable in the current weak global environment and are forecasting eurozone GDP growth of less than 1 per cent this year. Mr Vanhala's comments came as official figures showed German industrial output falling at its fastest rate for four years, reinforcing fears that the eurozone's largest economy is teetering on the brink of renewed recession. The bigger than expected 2.6 per cent drop in output in December follows a week of dismal German data - weak retail sales, collapsing industrial orders, rocketing unemployment and falling confidence.
FROM: Financial Times, 10 Feb
France: strikes, protests mount against plant closings and pension cuts
http://www.wsws.org/articles/2003/feb2003/fran-f11.shtml
A report on the worsening economic situation in France. Layoffs, plant closings, and government pension-cutting efforts have provoked a wave of strikes and protests.
FROM: World Socialist Web Site, 11 Feb
French firms slash production
http://news.bbc.co.uk/2/hi/business/2751993.stm
Fears of renewed recession in Europe have been stoked by news that French firms have turned in their worst monthly performance for five years. Output from French factories was 1.7% lower in December than the month before, French statistics agency INSEE announced. Coming on top of equally dire numbers for German industrial production, the fear is that the tentative economic recovery in Europe is over.
FROM: BBC, 12 February
Bank of England cuts growth forecasts
The bank says house price rises could fall significantly
http://news.bbc.co.uk/2/hi/business/2752281.stm
The Bank of England (BoE) has warned that a possible war with Iraq has put further pressure on an already troubled economy. That means that prospects for economic growth are now much weaker than when forecast in November. The Bank also predicted the house price boom would cool considerably in the next two years and that any improvement in business and consumer confidence would be very gradual.
FROM: BBC, 12 February
Bleak outlook for Japan's economy
http://news.bbc.co.uk/2/hi/business/2770239.stm
The sluggish Japanese economy is unlikely to recover for some time, the Bank of Japan has said. On Monday, the central bank maintained a gloomy outlook in its report on the state of the Japanese economy in February. "Economic activity remains flat amid substantial uncertainty about the outlook for the economy," the Bank of Japan said. Meanwhile, separate research showed that corporate bankruptcies fell in January for the first time in two months, but the debts of such companies increased to the highest for any January in the post-war era.
FROM: BBC, 17 Feb
AS THE ECONOMY CRUMBLES is compiled by Visualize Economic Collapse
Feedback / suggestions to:
economiccollapse [at] comcast.net
Previous issues are available at:
http://www.infoshop.org/inews/stories.php?topic=71
2. Climbing Gas and Energy Prices
3. Record Homeless
4. War, Deficit & the Economy
5. Birth, School, Work, Death
6. Jobs? What Jobs?
7. Slump, Fall, Decline
8. Going Bankrupt
9. Run for the Hills!
10. European Woes Continue
-------------------------------------
1. PROSPECTS OF AN OIL SHOCK
Venezuela and Iraq Enhance the Prospects of an Oil Shock (Gulf War II is Unlikely to be a Repeat of Gulf War I)
http://www.prudentbear.com/internationalperspective.asp
"The combined effect of Venezuelan and Iraqi disruptions has the potential to be the biggest shock in oil market history, even allowing for offsetting supply increases by other players." - Jim O'Neill, Goldman Sachs -- From the intro: “There is still a widespread belief that the market is amply supplied with crude, that the U.S. will fight a war that will go as easily as the first Gulf War or Afghanistan, that foreign oil companies will invest and Iraqi oil production will soar after the 101st Airborne sorts out Saddam Hussein. But capacity utilisation in global oil is almost as high as it has ever been. Crude oil inventories are lower relative to consumption than at any time in recent decades.”
FROM: Prudent Bear, 11 Feb
Nigeria Oil Workers Launch Strike
http://www.guardian.co.uk/worldlatest/story/0,1280,-2407095,00.html
Nigerian oil workers on Saturday launched an indefinite strike that could shut down crude exports in the world's sixth largest oil exporter. The strike over pay and working conditions comes as the threat of war in Iraq and a prolonged strike in Venezuela have pushed oil prices to two-year highs. Half of Nigerian exports go to the United States.... Nigeria produces close to 2 million barrels of oil a day, more than 95 percent of which is pumped by joint ventures between the government and major oil companies.
FROM: Associated Press, 15 Feb
Nigeria oil union says set for total strike Monday
http://biz.yahoo.com/rm/030216/energy_nigeria_strike_1.html
The world oil markets faced a turbulent week ahead as Nigeria's white-collar oil union PENGASSAN said on Sunday it had fully mobilised for a "total" indefinite strike targeted at exports. The Department of Petroleum Resources (DPR) branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called the strike on Saturday after talks with government over pay arrears and autonomy collapsed. Union leaders said the strike's impact will be obvious on Monday, when employees of the regulatory agency which supervises tanker loadings at Nigeria's main export terminals and import of refined products at jetties, will have completely withdrawn their services, disrupting exports. The strike has raised supply fears in global crude oil markets which are already tense at the prospect of a war against major exporter Iraq. "The mobilisation has been completed and we are set for total strike tomorrow," Paul Ekele, DPR PENGASSAN branch chairman told Reuters. "Today, our members are supposed to have all withdrawn from drilling rigs, export terminals, jetties and depots."
FROM: Reuters, 16 Feb
Nation's Oil Supply Drops to 28-Year Low
http://news.yahoo.com/news?tmpl=story2&cid=530&ncid=530&e=3&u=/ap/20030212/ap_on_bi_ge/oil_worries
The nation's oil supply dropped another 4.5 million barrels last week, leaving inventories the lowest since 1975 and below what the industry considers necessary for smooth operation. The Energy Department said Wednesday crude stocks were at 269.8 million barrels, just below the lower end of an inventory range needed to assure enough oil is available for efficient refinery operation.
FROM: Associated Press, 12 Feb
Oil Supply Fears Underpin High Prices
http://www.nytimes.com/reuters/business/business-markets-oil.html
Oil prices climbed to two-year highs Wednesday, fueled by worries that the U.S. drive for military force against oil exporter Iraq, despite opposition from key allies, could exacerbate already tight supplies. Expectations that a blast of Arctic weather had further eaten away at wafer-thin winter fuel stocks in the United States also underpinned oil prices, which are little more than $5 below peaks in the build-up to the 1991 Gulf War. The International Energy Agency, the industrialized world's energy watchdog, heightened fears of a supply crunch with a report showing that spare capacity from the top oil producers might not be sufficient to cover a disruption of Iraq's supply.
FROM: Reuters, 12 Feb
Venezuelan Oil Output May Languish After Strike Ends
http://smartmoney.com/bn/ON/index.cfm?story=ON-20030214-000127-0255
Despite a recent rebound in production, Venezuela's oil industry is expected to remain hobbled indefinitely even after the current strike is settled, Friday's Wall Street Journal reported. This could leave global petroleum markets vulnerable in the event of war with Iraq and increase the prospect of further gasoline-price increases. Industry experts and striking workers said Venezuela's state oil concern, Petroleos de Venezuela SA, is unlikely to restore more than two-thirds of its prestrike output this year.
FROM: Dow Jones, 14 Feb
Crude Oil Approaches $37 a Barrel
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20030214/bs_dowjones/200302141439000580
Crude-oil futures closed in on $37 a barrel and settled at a fresh 29-month high Friday, as traders saw war with Iraq growing more likely, despite a report to the United Nations Security Council that Baghdad has shown progress in cooperating with weapons inspections.
FROM: Dow Jones, 14 Feb
Asia will be caught off-guard if oil crisis hits: energy experts
http://business-times.asia1.com.sg/sub/premiumstory/0,4574,72519,00.html?
With the threat of imminent war in Iraq, another major oil crisis 'may already be in the making' and Asia is not well prepared for it, with stockpiles averaging only 30 days' supply, energy experts warned at a symposium here yesterday .... The repercussions of such a crisis in any one country would quickly spread throughout the region, he said. IEEJ president Yoshiro Sakamoto, meanwhile, warned of the danger of a possible divergence of interest between Japan and the US if Washington should decide to attack Iraq without 'full' UN support. In that case, there could be an 'explosion of anti-American sentiment', he suggested.
FROM: Business Times, 13 Feb
Iraq war could cause world recession
http://biz.yahoo.com/rm/030216/economy_germany_iraq_1.html
One of Germany's top economic advisers said a lengthy war with Iraq could plunge the world economy into recession with the price of oil shooting up to 100 dollars a barrel, according to a newspaper report on Sunday.... He said the "worst case" scenario would be a long war in Iraq that could spread widely in the region that would render the oil fields in Iraq and the bordering countries useless. Subsequent terrorist attacks were also part of this scenario.
FROM: Reuters, 16 Feb
Canada Gas Production Seen Falling 2%-4% - Lehman Bros
http://www.dowjones/20030212/bs_dowjones/200302121558000997
Canadian natural gas production could fall by 4% this year on deteriorating economics for drilling in the West, and geophysical challenges in offshore East Coast, investment brokers Lehman Brothers said Wednesday. The drop will coincide with a 500 million cubic feet a day decrease in natural gas exports to the U.S., the monthly report said.
FROM: Dow Jones, 12 Feb
2. CLIMBING GASOLINE AND ENERGY PRICES
Gas jumps 11 cents over 2 weeks
Survey: Higher prices caused by hikes for crude, heating oil
http://www.msnbc.com/news/870645.asp?0si=-
Gasoline prices jumped nearly 11 cents per gallon over the past two weeks, an industry analyst said Sunday. The average weighted price for gasoline nationwide, including all grades and taxes, was about $1.63 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. Gasoline cost about $1.52 a gallon on Jan. 24, the date of the last survey.
FROM: Associated Press, 10 Feb
US gasoline price at 20-month high, diesel at record
http://www.forbes.com/markets/newswire/2003/02/10/rtr875432.html
The average U.S. gasoline pump price jumped eight cents a gallon over the last week to its highest level in 20 months, while the price truckers paid for diesel fuel hit a record, the government said Monday.
FROM: Reuters, 10 Feb
Gas prices could go above $2
http://www.usatoday.com/money/economy/2003-02-10-oil_x.htm
Gasoline prices could zoom past $2 a gallon some places this spring, regardless of whether the USA goes to war with Iraq. Already, U.S. prices are the highest in 20 months as oil traders worry that war would halt Iraqi production and create shortages.
FROM: USA Today, 11 Feb
Gas goes above $2 a gallon
http://www.usatoday.com/money/markets/2003-02-13-gas-prices_x.htm
Well. Three days after issuing a warning that gas prices could pass $2 a gallon in some places this spring, USA Today reports that gasoline has already surpassed the $2 a gallon mark in at least 15 urban areas and another 7 metro areas with highs of $1.99 could surpass the $2 mark by Friday (Feb 14). The story admits the $2 barrier has been broken faster than expected.
FROM: USA Today, 14 Feb
Stage is set for all-time gas-price high
http://cbs.marketwatch.com/news/story.asp?guid=%7B83B99AF7%2DDEC3%2D4F59%2DB089%2D18D2D236CD87%7D&siteid=mktw
Tight supplies and strong demand for gasoline along with troubles in Iraq and Venezuela could lead to a record spike at the pump this year. "A stalemate with Iraq coupled with lingering problems in Venezuelan energy production could very well cause U.S. consumers to pay the highest gas prices on record this spring," said Geoff Sundstrom, a spokesman for the American Automobile Association.
FROM: CBSMarketWatch, 15 Feb
As oil prices rocket, high diesel costs pinch truckers
http://www.usatoday.com/money/markets/2003-02-13-oil_x.htm
U.S. supplies of crude oil hit 28-year lows last week, the government reported Wednesday, while diesel-fuel prices hit a near-record high, prompting some truckers to say they'll have to park their rigs and get other jobs because they're making no money. "Guys are parking their trucks right now because of the cost of fuel," says long-haul trucker Paul Sasso of Edgewater, Fla. "We negotiate our contracts on a 2- or 3- (percentage) point margin, and it's not like a grocery store where you can go re-mark the price," he says.
The truckers' complaint is an eerie echo of the 1974 independent truckers strike to protest high diesel prices during the first U.S. fuel crisis. The National Guard was called out to prevent violence, and food and fuel supplies were disrupted in some areas.
FROM: USA Today, 13 Feb
California Power Prices May Surge on Northwest Hydro Drought
Source
California electricity prices may surge this summer, reaching levels last seen during the state's power crisis two years ago, as drought in the Pacific Northwest limits hydroelectric generation. The lack of snow and rain means flows will be at least 25 percent below normal at Columbia River dams, based on a forecast from the Bonneville Power Administration, the federal agency that controls more than a third of the hydropower used in Washington, Oregon, Idaho and western Montana. Some meteorologists are forecasting even lower flows. ``Hydro is going to be a disaster this year,'' said Jim Duncan, head of research for energy trading at ConocoPhillips, the third largest U.S. oil company. A lack of hydropower could contribute to a repeat of the ``out of control'' prices experienced in California in 2000 and 2001, Duncan said.
FROM: Bloomberg, 17 Feb
3. RECORD HOMELESS
Record numbers swamp New York City’s homeless shelters
"We are not animals, we are human beings"
http://www.wsws.org/articles/2003/feb2003/home-f15.shtml
Some somber personal stories and dire statistics about how the crumbling economy is affecting the most vulnerable in our society. The intro: “The record growth of homelessness in New York City is the starkest indication of the deep social crisis and the yawning gap between wealth and poverty in the US financial and corporate capital. According to the city’s Department of Homeless Services, the number of people flooding municipal shelters is the highest since records were first kept 20 years ago. For December 2002, an average of 38,039 people stayed in municipal shelters each night, an increase of 25 percent in only one year. The recent cold spell has only swelled what was already a flood of people into the city’s shelter system. This included 16,633 children, fully 44 percent of the shelter population, while another 13,439, or 35 percent, were adults in families. Families constitute the fastest growing segment of the homeless population, and the number sleeping in shelters has doubled in the last four years alone.”
FROM: World Socialist Web Site, 15 Feb
More Children in New York City Are Homeless, Report Finds
http://www.nytimes.com/2003/02/14/nyregion/14CHIL.html
The number of homeless children in New York City has increased sharply over the last decade. Even with the boom economy of the late 1990's, the percentage of children living in poverty rose, and more than half a million children in the city are now impoverished.
FROM: New York Times, 14 Feb
4. WAR, DEFICIT & THE ECONOMY
Real Reasons for the US Invasion: Military Solution to an Economic Crisis
http://www.rupe-india.org/34/military.html
Lengthy but interesting piece that explains the three primary reasons for the planned US attack on Iraq. They are: securing US oil supplies; maintaining dollar hegemony; and using oil as a weapon. A few brief excerpts: The US’s grand strategy, while portending tremendous upheaval and suffering for the rest of the world, thus has its logic. It is a pattern familiar to students of imperialism—a declining imperialist power relying on military power and possession of colonies to make up for its ebbing economic strength…. The US needs to suppress the mass and political forces that are struggling against it in these diverse regions. To meet this need there is a massive hike in US spending to train foreign militaries—which had already risen steeply during the 1990s (by 1999 US Special Operations Forces were carrying out joint exercises with 152 countries). “It’s like the counter-insurgency era all over again,” a US Congressional aide is quoted as saying, referring to the Vietnam war era.... The growing military assaults by the US are giving rise to a worldwide protest movement that is in some ways without precedent. It is also giving rise to the anger of greater and greater sections of people. Ironically, the single strong point of the US—its awe-inspiring high-tech military might—has not been able to deliver it a thoroughgoing success even in Afghanistan. Rather, its puppet ruler rules just the capital city and that too with the help of foreign troops and US bodyguards, amid growing anti-American sentiment. The anti-US forces are having such obvious success that even Time magazine (18/11/02) carried a piece titled: “Losing control? The US concedes it has lost momentum in Afghanistan, while its enemies grow bolder.” … The US military juggernaut is still geared to knocking down targets that stand in place, but has a poor record against guerrilla resistance or mass upsurges…. The political costs of a deeper recession are not to be forgotten. Indeed, the entire build-up of a vast domestic machinery of repression—under the name of the Office of Homeland Security and the USA PATRIOT Act—and the whipping up of chauvinism, xenophobia, racism and fascistic sentiments are in preparation for the possible resistance at home.”
FROM: Research Unit for Political Economy (R.U.P.E.)
Growing criticism of Bush budget deficit
http://www.wsws.org/articles/2003/feb2003/econ-f11.shtml
There are increasing fears that the Bush administration’s budget will cause major problems for the US and global economy. The article says: “The major concern in economic and financial circles within the US and internationally is that together with the ever-widening balance of payments deficit, the growing budget deficit could lead to a financial crisis. The latest estimate is that the current account deficit for 2002 will reach close to $500 billion, or 4.7 percent of gross domestic product. This means that the US net foreign debt for the year 2002 will reach a record high of $2.8 trillion, equivalent to 27 percent of US GDP. The financing of this debt requires a flow of foreign capital into the US of around $2 billion a day.” It goes further to say: “Consideration of the inherent risks posed by the worsening US financial position points to one of the key factors behind the resort to militarism. The drive to establish an American empire, starting with the war against Iraq and the seizure of its oil resources, represents an attempt to resolve economic problems by other, that is, military, means.”
FROM: World Socialist Web Site, 11 Feb
Economists attack Bush's 'madness'
Joseph Stiglitz: Bush package simply won't work
http://news.bbc.co.uk/2/hi/business/2747153.stm
More than 400 economists, led by 10 Nobel prize winners, have criticised President George W Bush's economic policy in the US press. In a full-page advertisement in the New York Times newspaper, the economists said that proposed tax cuts would not help the economy in the short term. They also said the planned cuts would benefit rich people the most. Nobel laureate Joseph Stiglitz told the BBC's World Business Report that Mr Bush's plans were "fiscal madness, fiscal irresponsibility".
FROM: BBC, 11 Feb
The Bush budget: blueprint for a right-wing assault on the working class
Part 1 - http://www.wsws.org/articles/2003/feb2003/budg-f11.shtml
Welfare for the wealthy: the Bush tax plan
Part 2 - http://www.wsws.org/articles/2003/feb2003/budg-f12.shtml
Bush budget targets the poor
Part 3 - http://www.wsws.org/articles/2003/feb2003/budg-f13.shtml
The Bush budget: subverting Medicare and Medicaid
Part 4 - http://www.wsws.org/articles/2003/feb2003/budg-f14.shtml
Bush budget plan attacks public education
Part 5 - http://www.wsws.org/articles/2003/feb2003/budg-f15.shtml
A five-part series of articles on the social implications and political significance of the Bush administration’s fiscal 2004 budget plan. A detailed analyses of the budget’s tax proposals, its impact on programs benefiting the poor, its implications for the federal Medicare and Medicaid health insurance programs, and its consequences for public education.
FROM: World Socialist Web Site, 11-15 Feb
5. BIRTH, SCHOOL, WORK, DEATH
Bethlehem Steel Retiree Benefits in Peril
http://www.nytimes.com/aponline/business/AP-Bethlehem-Steel-Retirees.html
AP reports: “Some of them went to work in the blast furnaces when they were just 18, then spent half a lifetime handling molten slag and inhaling steel dust in some of the most dangerous jobs on earth. But for the tens of thousands of Bethlehem Steel workers who stuck it out, retirement brought a rich reward: a hefty pension and a lifetime of almost free health care for themselves and their families.” No longer. Bethlehem Steel announced it wants to terminate health and life insurance benefits for 95,000 retired workers and their dependents.
FROM: Associated Press, 10 Feb
Pension crisis may be worst in history
http://seattletimes.nwsource.com/html/businesstechnology/134633417_pensions13.html
Think your pension and benefits are safe? Think again. As the stock market decline forces companies to spend millions shoring up their pension funds, some workers are bracing for possibly the biggest wave of cuts to retirement benefits in 20 years …. The pension crisis is shaping up to be the worst in history. Nationwide, corporate pension funds last year were an estimated $240 billion to $300 billion short of what they're committed to pay retirees, and that gap is growing. Shortages for state- and city-government pension programs could be another $350 billion, said Stephen Nesbitt of Wilshire Associates, an investment adviser in Los Angeles.
FROM: Seattle Times, 13 Feb
Wal-Mart takes hits on worker treatment
http://www.usatoday.com/money/workplace/2003-02-09-wal-mart-cov2_x.htm
There's more to Wal-Mart than bare-bones pricing and a familiar yellow smiling face. The megaretailer is also getting an unwelcome reputation for the way it treats its employees. At the pinnacle of its success, the company is fending off critics who say Wal-Mart discriminates against women, underpays workers and uses illegal tactics to kill unionization efforts. Never before has the retail empire, founded in 1962, come under such blistering attack.
FROM: USA Today, 10 Feb
6. JOBS? WHAT JOBS?
A Crush of Applicants
http://www.nytimes.com/2003/02/10/opinion/10HERB.html?th
Opinion column by Bob Herbert on the massive traffic jam caused by people desperate for jobs. Mr. Herbert writes: “Rumors that job applications for a Ford assembly plant would be accepted at a community college had swept through several of the city's neighborhoods. Chicagoans by the thousands responded, turning out in bitterly cold weather for a shot at gainful employment. The first arrivals showed up well before dawn. By 7 a.m. more than 2,000 people had lined up outside Truman College, and the hopefuls kept coming throughout the morning. They shivered, and tears from the cold ran down some of their faces. It was like a scene out of the Depression. The rumors were false.”
FROM: New York Times, 10 Feb
Sour economy hitting West Coast states hard
http://www.heraldnet.com/Stories/03/1/29/16434049.cfm
West Coast states are being battered by the ailing economy, leading the country again in high unemployment rates last month, while the Dakotas and Nebraska posted the lowest jobless rates. The new data, released Tuesday by the Labor Department, shows that the jobs outlook in much of the country remains bleak.
FROM: Associated Press, 10 Feb
7. SLUMP, FALL, DECLINE
Retail sales drop
http://money.cnn.com/2003/02/13/news/economy/retail_sales/index.htm
U.S retail sales were sluggish in January, the government said Thursday, dragged down by a drop-off in automobile sales. The Commerce Department said retail sales fell 0.9 percent to $306.6 billion in January after growing 2 percent in December. Excluding sales of autos and auto parts, however, retail sales rose 1.3 percent after rising 0.2 percent in December.
FROM: CNN Money, 13 Feb
U.S. chain store sales flat latest week-report
http://biz.yahoo.com/rf/030211/economy_retail_btm_2.html
U.S. chain store sales were unchanged last week as a shaky economic recovery kept consumers at home, a report said on Tuesday. U.S. chain store sales were flat in the week ended Feb. 8, after a 0.9 percent decline in the preceding week, the Bank of Tokyo-Mitsubishi and UBS Warburg said in a joint report. Sales compared to last year rose 0.6 percent, compared with a 2.7 percent year-on-year growth rate reported in the previous week. "Sales were generally below plan," the report said.
FROM: Reuters, 11 Feb
Major slump for UK record industry
http://news.bbc.co.uk/1/hi/entertainment/music/2743833.stm
The British record industry has experienced its biggest sales decline in decades, the BBC has learned. Figures out this week will show sales of CDs and other recorded music were down almost 4% last year, says the British Phonographic Industry (BPI). It is understood the figures will reveal the biggest downturn in a single year since the birth of the CD market in the early 1980s.
FROM: BBC, 10 Feb
Big Music's Broken Record
http://www.businessweek.com/technology/content/feb2003/tc20030213_9095_tc078.htm
It's the busy season for number-crunchers at the Recording Industry Association of America (RIAA). By the end of February, the industry trade association will release new statistics on what it says is a dizzying two-year decline in CD sales. The latest figures, from the first six months of 2002, show a 7.2% slide in CD sales from 397 million to 369 million. Revenues fell 5.1%, to $5.2 billion. Full-year sales for 2002 are said to be just as dismal -- if not worse.
FROM: Business Week, 13 Feb
U.S. consumer sentiment hits 9-1/2 yr low in Feb.
http://biz.yahoo.com/rf/030214/economy_consumers_sentiment_4.html
U.S. consumers are anxious about the nagging threat of war in Iraq and the economic outlook, with a mid-month survey showing sentiment eroding to a 9-1/2-year low. The University of Michigan's preliminary February consumer sentiment index fell to 79.2, its lowest since September 1993, from 82.4 in January, market sources who have seen the report said on Friday. That was below expectations for 81.2.
FROM: Reuters, 14 Feb
Consumer Confidence Falls To A 25-Mo. Low On War, Iffy Economy
http://news.yahoo.com/news?tmpl=story2&cid=1471&ncid=1471&e=7&u=/ibd/20030211/bs_ibd_ibd/2003_02_11_feature
With a possible war looming and an unsteady economic recovery under way, Americans' economic confidence in February fell to its lowest level in 25 months. The IBD/TIPP Economic Optimism Index fell 2.4 points to 50.0 in February. The index is now below its level of 53.9 in March 2001, the month the recession started. The poll of 900 adults was taken Feb. 3 to Feb. 9. A reading above 50 means optimism; below that, pessimism. At 50, it's neutral. "The downward spiral started in June 2002, and since then the index has slid seven out of nine months," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence, IBD's polling partner. "Two of the index's three components have fallen below 50," he said. "The index and its components look very much like they did at the start of the last recession, perhaps indicating we're on the brink of a second recession.
FROM: Investor’s Business Daily, 12 Feb
Massachusetts: Consumer confidence dives
http://www.boston.com/dailyglobe2/044/business/Consumer_confidence_dives+.shtml
Consumer confidence in Massachusetts plunged in January to levels not seen since the deep recession of the early 1990s, MassInsight Corp. reported yesterday, evidence of continuing weakness in the state's economy. There was little good fiscal news reported during an economic forum yesterday in which analysts concluded the downward pull of a nationwide economic stall has hit the state's major industries, technology and financial services, particularly hard. They also reported that the state's tax-revenue forecasts continue to be revised downward, the job market continues to shrink, and there are few signs of the full recovery in business investment that would be required to end the doldrums. The quarterly consumer confidence index fell 15 points, from 78 in October to 63 last month, returning to ranges not seen since 1992 and 1993. A year ago, the index stood at 107. FROM: Boston Globe, Feb 13
Australian Consumer Confidence in February Falls 7.8%
Source
Australian consumer confidence fell to a 21-month low in February, suggesting retail spending will slump, slowing economic growth as exports fall and a drought cuts crop and milk production. The confidence index fell 7.8 percent from January to a reading of 99.7, according to a survey by Westpac Banking Corp. and the Melbourne Institute. A reading below 100 indicates most consumers are pessimistic about the outlook for the 12-month low in January, a report from the National Australia Bank Ltd. showed yesterday.
FROM: Bloomberg, 11 Feb
Mortgage demand at 11-month low
http://money.cnn.com/2003/02/12/news/economy/mortgage_apps.reut/index.htm
U.S. mortgage rates fell to record lows last week, but mortgage applications -- particularly those for buying homes -- also declined, a trade group said Wednesday. Applications for mortgages to purchase homes fell 11.4 percent, reaching their lowest level since the week of March 15, 2002, the Mortgage Bankers Association of America said. Applications to refinance also fell, but by only 2.7 percent, and to a level still about 50 percent higher than the weekly average for 2002, a record-setting year for refinancing volume.
FROM: Reuters, 12 Feb
8. GOING BANKRUPT
Bankruptcies at Record High in 2002
http://www.forbes.com/business/newswire/2003/02/14/rtr880514.html
U.S. bankruptcy filings climbed to a record level in 2002, a U.S. court administrative agency said on Friday, as job losses and the weak economy hurt the finances of more people. The number of individuals and businesses asking courts for relief from their debtors rose 5.7 percent from 2001 to 1.58 million, the Administrative Office of the U.S. Courts said in a statement. Bankruptcy experts have said recently that greater availability of credit and the sluggishness of the U.S. economy are causing more people to seek legal protection from their creditors. Bankruptcy lawyers and scholars say they have noticed more repeat filings and younger and older filers than in the past. Many of these filers have levels of credit card debt that experts say would have been unimaginable 10 years ago. Another expanding category of bankruptcy is among people who exhaust their finances paying bills for a serious illness in the family, experts say.
FROM: Reuters, 14 Feb
Debt Collection a Struggle in Slow Economy
http://abcnews.go.com/wire/Business/reuters20030215_64.html
The U.S. debt collection industry is facing an uphill battle as more debt-heavy Americans struggle to keep up with their car payments and credit card bills. Credit card companies and other lenders likely will be saddled with more losses in 2003 from rising bad loans. Americans are poised to file bankruptcy in record numbers this year, surpassing the all-time high of 1.5 million in 2002, according to the American Bankruptcy Institute. Blame it on massive layoffs, a three-year stock slump, rising fuel prices and a looming U.S. war with Iraq.
FROM: Reuters, 15 Feb
Subprime lenders hit hard by struggling economy
http://www.dallasnews.com/sharedcontent/dallas/business/stories/021403dnbusamericredit2.15f2c.html
Like many in its industry, Fort Worth-based auto finance company AmeriCredit Corp. is being battered by the economic slowdown, as loan delinquencies and defaults keep rising. The company, which lends to consumers with spotty credit, on Thursday detailed myriad reasons for its plan to cut 1,000 jobs and shut 60 percent of its branch offices, including a bigger-than-expected fourth-quarter loss, falling cash flow and lower used-car prices.... In the subprime sector of the credit card industry, the charge-off rates for subprime borrowers approaches 19 percent, nearly three times the average, according to Fitch Ratings. "The slowing economy has taken a toll on the performance of subprime lenders," said George French, deputy director for policy at the FDIC. "Subprime mortgage loan performance appears to have deteriorated notably since the recession began in March 2001. This deterioration has far outpaced the modest increase in prime mortgage delinquencies."
FROM: Dallas Morning News, 14 Feb
Retirees Losing Benefits From Bankruptcy
http://www.miami.com/mld/miamiherald/business/5165503.htm
The nation's persistent economic slump and rash of corporate scandals that have drained cash from pension plans and 401(k) accounts are eating into yet another piece of retirees' livelihood: their health benefits. Thousands of retired workers who were promised lifetime health care coverage by their former companies have lost those benefits as a growing list of firms have folded or been sold.
FROM: Associated Press, 12 Feb
9. RUN FOR THE HILLS!
Run for the Hills?
http://www.guerrillanews.com/globalization/doc1042.html
Hugh Hendry of Odey Asset Management thinks we could be in for “the greatest bear (falling) market ever.” One lasting anything up to two decades. In that scenario US policy makes more sense. Keep the oil cheap, run the deficit high, let the dollar fall. Bail out the US economy with giant subsidy from the US taxpayer to the major elite industries, arms and oil. Maybe through the odd war here and there. Let the dollar devalue, (as Soros predicted: BBC July 2002) over the next few years. Another dose of classic Austrian monetarism or Im-alright-Jackism, depending on phrasing. It will be dog eat dog par excellence. On a grand scale. To stop the US economy nose diving into the floor someone else will have to pay.
FROM: Guerrilla News Network, 12 Feb
Foreign Investors Dog-Tired of Wall St.
http://abcnews.go.com/wire/Business/reuters20030214_695.html
A few choice excerpts: "Wall Street's latest worry is the slumping dollar. It's a nightmare situation that could spark a massive exit by foreigners from U.S. stocks and bonds.... Bankers and economists at the World Economic Forum held in Davos last month warned of the risk of continued dollar turbulence, citing among other things the poor outlook for the world's biggest economy.... The betting is that the dollar, after dropping in 2002 more on a trade-weighted basis than in any other year since 1987, still has not bottomed out.... The exodus of offshore money from U.S. assets is already underway, spurred by such depressing factors as disappointing earnings, a struggling economy and the hangover from corporate scandals.... A further depreciation of the currency is sure to accelerate the run, which in turn could set into motion a chain reaction: the more the dollar continues to take a thrashing, the greater the incentive to sell stocks, thereby putting more strain on the currency and, in turn, again, on stocks."
FROM: Reuters, 14 Feb
Steady Growth Forecast, Provided Everything Goes Exactly As Planned
http://www.newsday.com/business/printedition/ny-bzecon153131208feb15,0,1357914.story?coll=ny-business-print
The United States, which struggled through a stop-and-go recovery last year, should see the economy steadily gain strength in 2003, a panel of prominent economic forecasters said Friday. But that outlook from the National Association for Business Economics came with an important caveat - that any U.S. war with Iraq ends quickly.... The forecast reflects an expectation that tensions with Iraq will be resolved by the middle of the year. However, O'Neill said the obvious downside to the forecast was if a war is longer or more disruptive to global oil supplies than currently expected.... A new CBS-New York Times poll said public confidence in the president's ability to handle the economy is at the lowest level since he took office, with just 38 percent approving and 53 percent disapproving. Six out of 10 said the state of the economy is bad, the lowest measure in this poll in a decade.
FROM: Newsday, 15 Feb
Shellshocked venture capitalists
http://www.latimes.com/business/la-fi-wrap11.1feb11,1,1738285.story?coll=la%2Dheadlines%2Dbusiness
Still hurting from the dot-com massacre, shellshocked venture capitalists in 2002 curtailed their fund-raising for future investments to a 21-year low, new data show. The latest figures provided another sobering reminder of how far venture capitalists have fallen in just a few years.
FROM: Los Angeles Times, 11 Feb
Some fear war rally won't show
http://www.usatoday.com/money/markets/us/2003-02-11-war-mart_x.htm
Long-suffering investors have been able to find some solace in predictions that a U.S. attack against Iraq will clear away some of the uncertainty weighing on the market, allowing stocks to rally again. Not so fast. While it's true that war has typically been bullish for the stock market, a growing number of traders and strategists worry that a war rally is so widely anticipated that it might not happen at all.
FROM: USA Today, 11 Feb
10. EUROPEAN & JAPANESE WOES CONTINUE
Poor German output data add to recession fears
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1042491663958&p=1012571727204
German industrial output fell sharply in December, reinforcing fears that the eurozone's largest economy is close to its second recession in little over a year. The finance ministry said on Monday that output fell 2.6 per cent month-on-month, offsetting November's rise and dragging the year-on-year rate down to 0.6 per cent. It was the sharpest monthly drop since February 1999, and comes hard on the heels of last week's bigger than expected decline of 4.1 per cent in industry orders for December.
FROM: Financial Times, 10 Feb
Euro growth forecast revised downward… again
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1042491691484&p=1012571727189
The European Central Bank is set to lower its projection for eurozone growth further amid signs that its latest forecasts, published barely 10 weeks ago, are already out of date…. In December, the ECB cut its growth estimate for this year to 1.1-2.1 per cent (1.6 per cent midpoint), a full percentage point lower than its forecast of 2.1-3.1 per cent made in June last year. It also projected lower inflation. Most private sector economists think even this growth projection is unattainable in the current weak global environment and are forecasting eurozone GDP growth of less than 1 per cent this year. Mr Vanhala's comments came as official figures showed German industrial output falling at its fastest rate for four years, reinforcing fears that the eurozone's largest economy is teetering on the brink of renewed recession. The bigger than expected 2.6 per cent drop in output in December follows a week of dismal German data - weak retail sales, collapsing industrial orders, rocketing unemployment and falling confidence.
FROM: Financial Times, 10 Feb
France: strikes, protests mount against plant closings and pension cuts
http://www.wsws.org/articles/2003/feb2003/fran-f11.shtml
A report on the worsening economic situation in France. Layoffs, plant closings, and government pension-cutting efforts have provoked a wave of strikes and protests.
FROM: World Socialist Web Site, 11 Feb
French firms slash production
http://news.bbc.co.uk/2/hi/business/2751993.stm
Fears of renewed recession in Europe have been stoked by news that French firms have turned in their worst monthly performance for five years. Output from French factories was 1.7% lower in December than the month before, French statistics agency INSEE announced. Coming on top of equally dire numbers for German industrial production, the fear is that the tentative economic recovery in Europe is over.
FROM: BBC, 12 February
Bank of England cuts growth forecasts
The bank says house price rises could fall significantly
http://news.bbc.co.uk/2/hi/business/2752281.stm
The Bank of England (BoE) has warned that a possible war with Iraq has put further pressure on an already troubled economy. That means that prospects for economic growth are now much weaker than when forecast in November. The Bank also predicted the house price boom would cool considerably in the next two years and that any improvement in business and consumer confidence would be very gradual.
FROM: BBC, 12 February
Bleak outlook for Japan's economy
http://news.bbc.co.uk/2/hi/business/2770239.stm
The sluggish Japanese economy is unlikely to recover for some time, the Bank of Japan has said. On Monday, the central bank maintained a gloomy outlook in its report on the state of the Japanese economy in February. "Economic activity remains flat amid substantial uncertainty about the outlook for the economy," the Bank of Japan said. Meanwhile, separate research showed that corporate bankruptcies fell in January for the first time in two months, but the debts of such companies increased to the highest for any January in the post-war era.
FROM: BBC, 17 Feb
AS THE ECONOMY CRUMBLES is compiled by Visualize Economic Collapse
Feedback / suggestions to:
economiccollapse [at] comcast.net
Previous issues are available at:
http://www.infoshop.org/inews/stories.php?topic=71
Add Your Comments
Comments
(Hide Comments)
SF--last friday of every month
Sacramento--1st friday of every month
Berkeley--2nd friday of every month
Car culture is going down.
Ride your bike.
Boycott oil.
http://www.criticalmasshub.com/
Sacramento--1st friday of every month
Berkeley--2nd friday of every month
Car culture is going down.
Ride your bike.
Boycott oil.
http://www.criticalmasshub.com/
We are 100% volunteer and depend on your participation to sustain our efforts!
Donate
$135.00 donated
in the past month
Get Involved
If you'd like to help with maintaining or developing the website, contact us.
Publish
Publish your stories and upcoming events on Indybay.
Topics
More
Search Indybay's Archives
Advanced Search
►
▼
IMC Network