How a Jobless "Recovery" Costs You... Quietly

This is sort of it
but you have to throw in the Fed
and a ton of T-bills
(thanks to WC Varones for the edit. and "dirty Fed" FTW shhhh)

I have survived the financial crisis in California (still no zombies) for this long and am happy to report that things really aren't that bad. Muni went up on July 1st and will be going up again on January 1st, 2010 but they are now giving you the option to get a non-BART Fast Pass (for $5 more than we paid in December for a normal Fast Pass). I assume this was the least bad of the bad options. In July, it went from $45 to $55. Next month, non-BART monthly passes will be $60, Fast Passes with unlimited BART rides through San Francisco will be $70. Technically, next month's fare hike is a $15 increase considering the "option" of BART as opposed to the "benefit" of it implied.

But everything is under control, right? Camels are $5 - $7 a pack depending on which sketchy smoke shop likes you on Polk St (suck it, Gavin, don't you think San Francisco is cash only for a reason?) but having just returned from Illinois where I bought one for $10 (rip off I know), I'll take it. Housing prices have not normalized, this is one hell of a bubble up here and it's going to take more than a little deleveraging to get Bay Area real estate back to "normal", whatever the hell that is. I've lived here 10 years, the concept of "normal" housing here is less realistic than the concept of Sasquatch. I'm over it. Minimum wage is nearly $10 in the city - which you cannot possibly live off of - so there's that but unless we fall into the ocean, the local economy is permanently tipped to a delusional ditch that we can never really crawl out of. Oh well.

Where was I? OMGObama's PR time can shove all of the prettypretty bullshit they would like in our faces (including their puppy playing for 3 hours in the snow, bah) but reality is an entirely different ballgame. Uh hello, Arizona? As WC Varones pointed out on that post, California is in worse shape, neither he nor I are really in the position to point fingers at other states' deficit problems, California has always been screwed first.

Unemployment will not get better any time soon, the talking heads have repeatedly expressed as much. They can't keep all of the balls in the air at the same time, if you know what I mean, and unfortunately in this case, they can't seem to even get this particular ball in the air at all. Our misguided friends in Washington feel extending unemployment benefits is the solution, as if keeping the dope fiend on the morphine drip indefinitely is the way to solve this crisis. Of course they think that, Ben Bernanke is standing by on the corner of 20th and Constitution just waiting for Timmy to swing by, roll down his window, and ask "how much, baby?"

Apparently Zimbabwe Ben, in all of his economic rocket science wisdom, missed the very first class of Economics 101 which dictates there is no such thing as a free lunch. Hell, I was hungover for that one in high school and even I remember.

The advanced money laundering operation will eventually bring the money right back to their own pockets and here I'll show you their easy system. Ready?

1. Keep interest rates as low as possible for as long as possible. Hello, have you read an FOMC statement in the last, uh, year? Remember December, this is the anniversary of ZIRP and we've been there since. That is cheap fucking money, people and Zimbabwe Ben loves to provide it. Greasing up the banks, that brings us to our next step.

2. Banks borrow cash at superlow rates and use it to buy T-bills. (Or, if you watch very closely, you see "The Bank" make its own cash and use its own superlow rates to buy T-bills but that's kind of like trying to outsmart the shell game hustlers on an F-Market, you just aren't quick enough to catch them)

3. Debt problem solved! At least someone is buying Treasurys! It's not like those wacky fucking Chinese want to touch them anymore!

But that's the federal version and we all know Ben Bernanke's magical press doesn't have an unlimited amount of ink. Can the states get bailed out before it does?

What, you didn't think we were done, did you?

Small business owners should be scared to death of the uncertainties (my own excluded I hope). What good does a tax credit for job creation do if they're sucking it out from the other end in the form of higher unemployment taxes?

Business Week (Why This Business Owner Isn't Hiring in 2010):

Right now the Administration is proposing income taxes that are still equivalent to the rates during the Clinton era. I'm not sure how long this is going to last before the rates start going up. And I'm reading that many states are quietly raising their unemployment taxes. Some experts are estimating that state unemployment taxes could double or even triple in the next year or two.Is an increase in the Federal Unemployment Tax rate on the horizon? One expert thinks so.

Yeah, that sounds like a wonderful plan. Why don't they just print it and then immediately stuff it in their own pockets instead of sending it out there and then taking it back? I'm baffled.

Obama is out of time
. He can only put this one off for so long.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


W.C. Varones said...

There. I fixed it for you

LMFAO WCV. Literally. At my desk laughing my fucking ass off as we speak.



Anonymous said...

Well, it is now February 2010. All is now right with the world. The Saints have won the Super Bowl. GDP showed stupendous growth in the final quarter of 2009. Unemployment dipped below 10%.

What a relief. There for a while, I thought we were going to go through some very real pain. Praise the Lord for OMGObama.