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Teachers Now Getting The Pink Slips

The myth of the recession-proof job continues to be exposed. Police officers, firefighters— now teachers.

From the Wall Street Journal’s Alex Frangos today:

In a sign of how severe the employment downturn is getting, even schoolteachers, an occupation once viewed as recession proof, are feeling the pain.

Education jobs grew steadily in recent years amid rising enrollment and government efforts to reduce class sizes. Now the increase in teaching positions has leveled off as school districts struggle with budget pressures. The demographic bulge caused by children of baby boomers — the so-called echo boom — has also begun to wane.

Los Angeles Unified School District laid off 2,500 teachers this spring. Broward County, Fla., Ms. Frommer’s district, cut 400 school jobs. Rochester, N.Y., laid off 300 teachers.

Other districts have avoided cuts by negotiating pay reductions and enacting furloughs and hiring freezes. In June, education jobs actually ticked up 0.5% nationally to just under 3.1 million on a seasonally adjusted basis. But the number of education-related jobs has declined in six of the past 12 months, according to the Bureau of Labor Statistics.

That contrasts with annual growth of about 3% over the past 15 years in the education field. In the past year, education jobs have grown at about half that rate. Most in demand are teachers in math, science and special education. College instructors have also been in high demand.

Many of the layoffs came in June as teachers prepared to say goodbye to their students for summer. Union and state rules require schools to give teachers notice before the end of the school year if their jobs won’t be there in the fall.

Frangos added that younger instructors have been the ones getting most of the pink slips:

Because contracts often require that those with the least seniority be laid off first, the brunt of lost jobs has been borne by younger teachers.

Think the news of school layoffs are deterring young adults from trying to enter the teaching field? Think again. Frangos noted:

Despite headlines about teacher layoffs, more young people are going back to school to obtain their teaching certificates.

I wish aspiring teachers the best of luck, as it sounds like they’ll need it.

pink-slips

Source:

“Even ‘Recession Proof’ Schoolteachers Feel Pinch of Employment Downturn”
Alex Frangos
Wall Street Journal, July 3, 2009

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U.S. Housing Price Forecast: Double-Digit Percentage Decline Still Ahead

“Housing rebound still fragile; St. Louis sales down 16% from May ‘08”

-St. Louis Post-Dispatch, June 23, 2009

“Option ARMs reset threatens housing rebound”

-Seattle Times, June 27, 2009

“Housing rebound continues, barely”

CNN Money.com, July 1, 2009

From headlines like these, I apparently slept through the U.S. housing bottom. Then again, maybe not. From Reuters today:

U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said.

Meyer issued her forecast two days after the Standard & Poor’s/Case-Shiller Home Price Indexes showed for April an 18.1 percent year-to-year decline, compared with 18.7 percent in March, in the rate of home price declines in 20 major U.S. metropolitan areas.

The indexes have tracked the prices of U.S. single-family homes since 1987.

“While the early signs of improvement are in place for housing, the market will likely remain out of balance for some time, given the flood of foreclosures,” Meyer wrote.

“Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession.” Home prices have fallen 32.6 percent from their peak three years ago, S&P/Case-Shiller said.

On that basis, they would need to fall another 11 percent for an overall 40 percent peak-to-trough decline. Further declines could imperil metropolitan areas that have yet to experience the worst of the nation’s housing slump.

According to S&P/Case-Shiller, New York was the only major market to have above-average, month-over-month housing price declines in both March and April and also have a below-average decline for the year ended in April.

Home prices in that market fell 12.5 percent from a year earlier. The Denver area had the smallest drop, 4.9 percent.


300x250 RealtyTrac

Bloomberg’s Oshrat Carmiel talked more about the Manhattan residential real estate market today. Carmiel wrote:

Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.

The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989.

“The standstill that existed after Lehman Brothers has been broken, and it was the sellers that cried uncle,” Pamela Liebman, chief executive officer of New York-based property broker the Corcoran Group, said in an interview.

Values are falling broadly in Manhattan for the first time in the almost four-year U.S. housing recession, with declines now seen in co-operatives and condominiums of every size and price. Private-sector employment in the city dropped by 91,200 jobs, or 2.8 percent, in the 12 months through May as Wall Street losses and asset writedowns topped $1.4 trillion.

The price of studio apartments declined 16 percent from a year ago to a median of $405,000, according to Miller Samuel. One-bedrooms dropped 17 percent to $650,000 and two-bedrooms fell 23 percent to $1.27 million. Three-bedroom units fell 37 percent to $2.35 million and four-bedrooms plummeted 47 percent to a median of $3.92 million.

Wake me when the housing bottom arrives, please.

Sources:

“US Home Prices Seen Falling 40% Overall: Analyst”
Reuters, July 2, 2009

“Manhattan Apartment Prices Drop as Lehman Hits Home (Update1)”
Oshrat Carmiel
Bloomberg, July 2, 2009

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Luck Be A Lady In This Labor Market?

Back on May 22, I wrote the following:

America’s labor force has been hit hard by this recession. Especially the guys. From Reuters’ Ed Stoddard earlier in the week:

One statistic that stands out in America’s recession-stung economy is the unemployment rate for adult men: in April for the second month in a row it surged ahead of the national average to 9.4 percent versus 8.9 percent for all workers. The jobless rate for adult women was 7.1 percent.

The latest numbers don’t show much improvement in the unemployment rate gap between men and women. From MarketWatch’s Andrea Coombes today:

The current recession is hitting workers in just about every industry, but men are taking a much bigger hit than women.

The 2.3 percentage-point gap between men’s June unemployment rate of 10.6% and women’s 8.3% rate is near the highest it’s ever been since records started being kept in 1948. The gap first hit 2 percentage points in March this year and the 2.5 percentage-point gap in May was the highest ever.

The overall unemployment rate rose to 9.5% in June, from 9.4% in May. The economy lost a higher-than-expected 467,000 jobs in June.

“The gap between female and male unemployment has never been as large as it is now,” said Sophia Koropeckyj, an economist with Moody’s Economy.com.

It’s not hard to see why. Two male-dominated industries — construction and manufacturing — account for about half of the some 6 million jobs lost since the recession started in December 2007 and both industries started shedding jobs before that.

“Every industry is contracting, but these industries have taken the brunt,” Koropeckyj said. Given that men account for 87% of workers in manufacturing and 71% in construction, it’s not surprising that men’s unemployment rate is rocketing past women’s rate.

The only two private-sector industries to show a net increase in jobs from the start of the recession through May are health care and education — and women workers are highly concentrated in both.

Health care logged a net gain of about 542,000 jobs from December 2007 through May, and private education showed a net gain of about 102,000 jobs in that period.

Eighty-one percent of health-care workers are women, and 61% of workers in private education are women, Koropeckyj said. Also, government has shown a net job gain of 259,000 in that period, and 57% of government workers are women.

Frank Sinatra, “Luck Be A Lady” (1966)
YouTube Video Link

Source:

“Recession hits men harder”
Andrea Coombes
MarketWatch, July 2, 2009

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Broader Measure Of Unemployment Hits 16.5% In June

Earlier today, the Labor Department announced the U.S. unemployment rate rose to 9.5%, a 26-year high. Nonfarm payrolls shrank by 467,000. Could America’s labor woes possibly be any worse?

You bet.

This morning, Phil Izzo of the Wall Street Journal’s “Real Time Economics” blog wrote:

As job losses accelerated in June, the unemployment rate ticked up 0.1 percentage point to 9.5%, the highest level since August 1983.

But another more comprehensive gauge of unemployment also continued to tick up. The government’s broader measure, known as the “U-6″ for its data classification, hit 16.5% in June, 0.1 percentage point higher than March.

The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs. The index had posted a 0.6 percentage point jump in May. The pace of increase has begun to mirror the rise in the headline rate after soaring at higher pace earlier this year, possibly signaling that more workers are starting to look for jobs again.

Though the pace may be moderating, the figure still is the highest since the Labor Department started this particular data series in 1994. It’s also above a discontinued and even broader measure that hit 15% in late 1982, when the official unemployment rate was 10.8%. (That data series goes back to the 1970s.)

Painting an even bleaker picture, Izzo added:

Many forecasters expect the official unemployment rate to top 10% by the end of this year. The two indexes have begun to move closer in tandem as improving sentiment amid widespread talk of “green shoots” of recovery were bringing job seekers back to the market. However, this month that trend appears to be reversing as the participation rate declined.

Meanwhile, the number of long-term unemployed continues to rise, with 4,381,000 out of work for over 27 weeks, up from 3,948,000 last month. If those job seekers continue to be discouraged and stop looking for work they won’t be counted in the headline unemployment number. However, the broader jobless rate would move higher, and could easily top 18%. For people in this group, comparisons to the Great Depression (when 25% of Americans were out of work) may not look so wild even if overall economic activity is holding up better.

Source:

“Broader Unemployment Rate Hit 16.5% in June”
Phil Izzo
Wall Street Journal (Real Time Economics Blog), July 2, 2009

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Hotel Loan Defaults Double In Second Quarter

“Luxury hotel boom: denver and colorado’s mountain resorts build to suit upper-upper upscale occupants.”

-ColoradoBIZ, July 1, 2006

“The stage is set for Nashville hotel boom as indicators favor expansion”

-Nashville Business Journal, January 19, 2007

“In Las Vegas, Too Many Hotels Are Never Enough”

-New York Times, April 24, 2007

“NYC Hotel Boom Could Help Ease Room Shortage”

-CBS 2 (New York City), December 16, 2007

“Tulsa enjoys hotel boom”

-The Journal Record (Oklahoma City), January 2, 2008

From Bloomberg’s Nadja Brandt and Dan Levy today:

As many as one in five U.S. hotel loans may default through 2010 as the recession means companies are spending less on travel and perks, according to University of California economist Kenneth Rosen.

The value of hotel properties in default or foreclosure almost doubled to $17.3 billion in the second quarter through June 24 from $9 billion at the end of the first quarter, data compiled by Real Capital Analytics Inc. show. The New York-based research firm, which began tracking distressed commercial property in November, expects hotel defaults to increase by as much as $2 billion this quarter, said analyst Jessica Ruderman.

“Hotels without question will have the highest foreclosure rate of any commercial real estate sector,” said Rosen, who runs a real estate hedge fund with $310 million in assets and is chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley.

Hotel owners are defaulting as room rates and property values tumble and the securitized mortgage market that fueled an 88 percent gain in U.S. commercial prices from 2001 to late 2008 is dormant.

Luxury hotel revenue fell 28 percent in April from a year earlier and has dropped for 12 straight months, according to Smith Travel Research Inc. in Hendersonville, Tennessee. The 29 percent decline in March was the biggest since October 2001.

A third of the $8.6 billion in securities backed by hotel loans due in 2010 are at risk of defaulting, data compiled by credit-rating firm Realpoint LLC in Horsham, Pennsylvania, show.

hotel-sign

Guerrilla marketing?

Source:

“Hotel Loan Defaults Double as Recession Cuts Travel (Update2)”
Nadja Brandt, Dan Levy
Bloomberg, July 1, 2009

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Trouble Ahead For ‘Recession-Proof’ Luxury Market?

Looks like the U.S. luxury market, which kept chugging along throughout 2008, may finally be derailed. From the Chicago Tribune’s Sandra Jones on June 21:

When do you know that the economy is on the mend?

When the wealthy start spending again. And the rich aren’t expected to start digging into their Birkin bags anytime soon.

The luxury market, historically resilient to economic downturns, is forecast to drop an unprecedented 10 percent this year, according to a June report from Bain & Co. The Boston-based firm predicts purveyors of luxury goods won’t experience a full recovery until 2012.

Keeping an eye on the spending of the rich is a favorite American pastime. But it is also key to the economic recovery, said Ron Kurtz, president of the American Affluence Research Center.

The richest 10 percent of U.S. households account for as much as 50 percent of consumer spending, according to the center’s calculations, based on Federal Reserve Board data. Consumer spending, in turn, accounts for about 70 percent of gross domestic product.

“The affluent market is a leading indicator of what’s to come,” said Kurtz. “Given their losses in the value of their homes, investment and savings that they have experienced over the past two years, the affluent are likely to be conservative spenders until these losses have been largely recovered.”



Some ask if there is something else causing rich Americans to pull back on spending. Jones wrote:

One school of thought is the notion that well-heeled shoppers are holding back because they are self-conscious about their wealth in the midst of a deep recession, a trend pundits label “luxury shame.”

The American Affluence Research Center found that 90 percent of the most affluent households have always avoided ostentatious consumption and are “careful spenders and aggressive savers.” Their spending habits aren’t expected to change anytime soon.

The center’s spring 2009 survey found that 68 percent of the respondents have no plans to make any of the following major expenditures in the next 12 months: a car, cruise, boat, new home, vacation home or a home remodel project. That is a record high, as well as a marked jump from 53 percent in spring 2008 and 36 percent in spring 2005.

While the recession was well under way in 2008, luxury spending held up until the financial markets collapsed last fall.

As a result, writes Jones:

Now, glitzy shopping streets from Madison Avenue to Rodeo Drive to Oak Street are dotted with empty storefronts and sale signs…

empty-storefronts

Source:

“Luxury spending likely to drop 10 percent for 2009”
Sandra M. Jones
Chicago Tribune, June 21, 2009

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Signs Of The Time, Part 49

annoyed-sign

One of the bigger fallacies I’ve heard over the years, when it comes to job “security,” has been that first responders, meaning sworn police officers and firefighters, are never laid off.

Mind you, I don’t want them to go anywhere else. However, the fact is, their ranks are being trimmed by the new economic reality.

Back in 2005, I was working in the back office of some fire department in the Chicago suburbs when one of the fire officers passed along an article he thought I might be interested in reading. It was about how municipalities might soon be using private fire departments and their personnel instead of public sector employees. Already well aware this was no longer just a possibility but a reality by then, I asked the fire prevention bureau secretary what she thought of such talk. She looked me square and the eye and adamantly declared that it will never happen. Period.

I wonder if the fact that her husband was a firefighter with another suburb had anything to do with her position on this matter.

Anyway, the sad fact is, first responders, like any other profession, can and will be given pink slips when times are tough and the money is drying up.

If you have any doubts, Google “firefighters laid off” and “police laid off” and read the results.

With your FREE My Monster Account, you can: Set up job search agents and have your dream job emailed to you!

Anyway, here’s just one more example demonstrating how bad the situation is getting. Reuters’ Scott Malone wrote yesterday:

The oldest U.S. mounted police unit is going the way of the Pony Express, brought down by a tough economy and a budget crisis in Boston.

The unit’s 10 officers on horseback are a common sight at major Boston parks and historic sites, frequently photographed by tourists and deployed primarily for crowd control.

But after 150 years, police officials said they need to eliminate the mounted unit, a move city officials estimate will save some $700,000 for a city budget that has been strained by a 19-month long U.S. recession that has hammered tax revenue.

The 10 officers and their supervisor will be reassigned within the department, Police Commissioner Edward Davis said in a note to staff, while the 10 civilian staffers who cared for the animals will be laid off.

Source:

“Oldest U.S. mounted police unit gets budget axe”
Scott Malone
Reuters, June 29, 2009

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Several States Face Midnight Budget Deadline

Talk about coming down to the wire. Reuters’ Jim Christie wrote this evening about how several states are trying to approve budgets for the new fiscal year— before midnight tonight. Christie said:

California prepared on Tuesday to resort to issuing IOUs as the giant but cash-strapped U.S. state struggled to approve a new budget in time for the new fiscal year that begins on Wednesday.

The IOUs, which are notes promising payment to vendors and local agencies, or shutting down some public services, are among measures that California and other states may have to rely on as they contend with staggering budget gaps caused by the U.S. recession.

Several U.S. states are due to start their fiscal years on July 1 with budget talks at an impasse. California, the most populous state, is especially hard hit.

The Golden State, hit by a leap in unemployment and a crash in property values, is suffering its worst tax revenue fall since the Great Depression and faces a $24.3 billion budget deficit.

“It’s been a sort of perfect storm, of a very deep recession hitting us and exposing the weakness of depending on revenue sources sensitive to economic cycles,” labor lobbyist Barry Broad said.

Fixing the massive budget gap “is going to require pain. That’s the only way out of it,” added Jack Pitney, a professor of government at Claremont McKenna College.

California Governor Arnold Schwarzenegger insists on deep spending cuts. But Democrats who run the Legislature want tax increases that Schwarzenegger and fellow Republicans oppose.

Lili Ladaga of Yahoo! News also talked about California’s woes this afternoon, and wrote:

If the political wrangling over the budget isn’t resolved by midnight tonight, Californians will be feeling the pain on every level, big and small. Just a few of the proposed spending cuts:

— State employees will be forced to take another day of unpaid leave a month, in addition to the two days leave they were forced to take starting in December. (NYT)

— Funding for the Bureau of Narcotics Enforcement will be slashed by $20 million. The “little-known unit” has played a key role in several of the state’s high-profile cases: The bureau’s agents helped arrest Scott Petersen for the murder of his wife and unborn child, and their investigation led to charges in Anna Nicole Smith’s overdose death. (AP)

— 80 percent of state parks would be closed, 25 in the Bay Area alone, including several beaches along the peninsula. Park visitors spend an estimated $2.6 billion a year in and near state parks, but closing the parks would save only .26 percent of the $24 billion deficit. (SF Chronicle)

— Education funding would be reduced by $5.3 billion. School districts have already laid off 30,000 employees. Class sizes are expected to surge from 20 to 30 students and many after school programs, arts and music classes will be cut. A national education survey conducted this year ranked California 47th in per-student spending. (AP)

— Gov. Schwarzenegger is proposing to eliminate the state’s $1.3 billion welfare program. Frank Mecca, the head of the County Welfare Directors Association of California, tells Time, “California could become the only state in the First World without subsistence benefits for poor children.”




Christie also talked about how other states are dealing with their budget deadlines. He wrote:

As California officials readied their IOUs, Ohio Governor Ted Strickland on Tuesday signed a seven-day interim spending plan that buys lawmakers more time to craft a two-year budget.

“It is troubling that Senate Republicans are still refusing to say what they would do to fill the budget gap. Because of this, I have no other option but to sign a temporary budget that only delays the inevitable hard choices before us,” Strickland, a Democrat, said in a statement.

Meanwhile, Indiana appeared to be on course to avert a government shutdown at midnight. A vote on a compromise budget was heading for a vote on Tuesday, according to John Schorg, a spokesman for Democrats who control the House.

Republican Governor Mitch Daniels has said safety services, such as state police and prisons, will continue to operate should there be a shutdown, while other services would stop.

Illinois lawmakers could send Governor Pat Quinn legislation to sell $2.23 billion of shorter-term general obligation bonds to ease spending cuts in a budget they passed late last month. Proceeds from the bonds would fund part of a fiscal 2010 pension payment, freeing up money in the budget.

But Quinn, who has claimed the Legislature’s budget has a $9.2 billion shortfall, appeared to be holding out for a balanced spending plan to avoid drastic cuts in social services spending. He has been pushing for an income tax increase.

Pennsylvania’s lawmakers were stuck on Governor Edward Rendell’s plan to raise the income tax rate, possibly pushing negotiations past the midnight deadline.

Sources:

“Cash-strapped states up against budget deadlines”
Jim Christie
Reuters, June 30, 2009

“California on the brink”
Lili Ladaga
Yahoo! News, June 30, 2009

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Quotes For The Week

quotes.jpg

I read a funny piece on Bloomberg.com this morning about reactions to the overuse of the phrase “green shoots” as it relates to a potential U.S. economic recovery…

“These may be the two most overused and annoying words of my investment career… Every possible sign of a recovery is anointed with the phrase.”

-John Mauldin, president of Arlington, Texas-based Millennium Wave Advisors

“Turning into daffodils.”

-Jim O’Neill, chief economist at Goldman Sachs Group

“Housing is still a drag on the economy… It may be green shoots, but they are growing slowly. It’s moss.”

-David Coard, head of fixed-income trading in New York at Williams Capital Group

“We’re not seeing them… I had a cataract operation in my left eye about a month ago and I thought, maybe now I’ll be able to see some green shoots.”

-Warren Buffett

“People talk a lot about these green shoots… I see more yellow weeds than green shoots.”

-Nouriel Roubini, professor of economics at New York University and chairman of RGE Monitor

“It is more a comment on the human condition and the innate need for optimism.”

-David Rosenberg, chief economist and strategist at Toronto-based Gluskin Sheff & Associates

Bloomberg’s Matthew Benjamin added the following in regards to Rosenberg:

A substitute phrase may also be needed if the U.S. economy slows down again later this year, said Rosenberg, the former chief North American economist at Merrill Lynch & Co.

“We will not very likely see ‘brown manure’ as the catchy horticultural replacement to green shoots,” he said.

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Survivalists No Longer On The Fringe

Some time ago, I learned about a work of fiction that dealt with survival during a full-scale socioeconomic collapse… in America. Intrigued, I picked up James Wesley, Rawles’ Patriots: A Novel of Survival in the Coming Collapse last weekend. Some of you may have already heard of Rawles, who is also the editor of SurvivalBlog.com, the Internet’s most popular blog on family preparedness. I’m still working on the book (about to begin Chapter 20), but if asked what I thought about it so far, I would say “frightening.” So much so, that the day after I began reading the book, I sat around thinking to myself, if the kind of scenario which Rawles conjures up ever materializes, we are screwed. With a capital S. What scenario is that, you might ask? From the back cover:

America faces a full-scale socioeconomic collapse in the near future. The stock market plummets, hyperinflation cripples commerce and the mounting crisis passes the tipping point. Practically overnight, the fragile chains of supply and high-technology infrastructure fall, and wholesale rioting and looting grip every major city.

Not much of a stretch, considering the “progress” we’ve already made in bringing about something like this.

Even though the book is scary, it’s also gripping, hard to put down, and incredibly-detailed, especially when it comes to survival equipment and techniques.

Speaking of survivalists, I came across a piece by the Arizona Republic’s Ryan Randazzo that you might find interesting (hat tip Michael Panzner at When Giants Fall). Randazzo wrote Tuesday:

As the recession lingers, some Phoenix-area residents are shifting attention from their financial troubles, including falling home values and shrinking retirement savings, to stockpiling food and ammo.

They worry the economic turmoil could lead to skyrocketing inflation, food scarcity, even violence. To prepare, they are forming social-networking groups to discuss how to store grains, purify water, plant gardens and, if needed, shoot guns.

“Most of us feel that if things do get better, it will be a long way out,” said Jeff Rodriguez, a 26-year-old software engineer from Glendale. “I want to have some preparations in place.”

The economy has him thinking a lot more about things like where his food comes from, how much cheap oil is left in the world and how people in the blazing-hot Valley would survive a major economic failure.

He has carefully prepared a 12-row, 384-square-foot garden, stores a ton and a half of grain in his home, and is considering buying pygmy goats or chickens.

He also has researched solar electricity and a rainwater-collection system.

He is far from alone. Rodriguez belongs to a local network of like-minded people who include retirees, young mothers and successful professionals.

These people are joining thousands nationwide who are studying survival tactics far from the backwoods bunkers associated with “survivalists.”

At least two survival-related groups have formed in since December, and groups with varying outlooks and politics have sprouted nationally from Kentucky to New York.

Of course, it’s not unheard of for mainstream groups to prepare for emergencies. The Mormon Church, which reports 13.5 million members worldwide, has long counseled self-sufficiency and encourages families to keep a prudent supply of food on hand.

Disasters such as hurricanes and 9/11, and even perceived troubles like the Y2K bug, always increase interest in survivalism. The men behind the counters at U.S. Surplus Corp. in Phoenix see a crush of new customers every time tragedy strikes.

The newbies stand out from the military personnel and outdoor enthusiasts who stop in for rugged clothing, rations or canteens.

“They are the ones trying to fix up a cave to live in,” store manager Gary Pickering said. “They are asking a lot of questions and buying things they normally wouldn’t, like water purification tablets.”

Sales at the store haven’t slid with the rest of the economy, officials said. Preparing for a disaster makes sense only if people actually know how to use the equipment they are buying, said Cody Lundin, who runs a survival-skills school in Prescott and authored two books on the subject.

He says people should learn to care for themselves in case of emergency whether a disaster is pending or the economy is tanking.

Last year was among the best ever for his school, although it’s not always clear what motivates people to sign up.

“I’m seeing an influx of people simply calling to inquire what I think about stuff,” Lundin said. “They are probing the waters because they are getting freaked out.”

Professional counselor Rita Archambault said her East Valley clinic is treating more people with anxiety over the economy.

“I have not seen so much concern about the economy in my entire life,” she said.

If planting a garden, raising poultry or stockpiling ammunition makes people feel better about their situation, good for them, she said.

“If you are not hurting anybody and you are reducing your anxiety, what harm is there?” Archambault said.

The only danger is if people get so obsessed that they neglect their job or family, she said.

It’s not surprising that many of the people preparing for tough times are educated professionals, said Heidi Wayment, a social-psychology professor at Northern Arizona University who has researched disasters and anxiety.

“To understand the huge potential crisis that could come from economic collapse, you have to be educated,” Wayment said. “I wouldn’t say these people are crazy – far from it.”

Source:

“Survivalism grows popular in Valley”
Ryan Randazzo
Arizona Republic, June 23, 2009

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Related Post

From our sister blog Investorazzi.com this morning:

“Warren Buffett Warns Of Problems With Inflation, Dollar”

What we’re doing raises the profitability significantly of very significant inflation down the road. Not this year, next year, maybe the year after, but we have taken actions, and they were appropriate actions, to fight the war we were in that started with a vengeance last September. In taking those actions, we’ve applied medicine dosages to a patient that’s never been done before except in wartime. And it will have consequences. And nobody knows exactly what they will be and nobody knows how effective we will be draining a system that we’ve been flooding. But the probability of significant inflation has really gone up.”

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Quote For The Week

quotes.jpg

Marc Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report, appeared on the Alex Jones Show this past Tuesday. Dr. Faber, also known as “Dr. Doom” by the press, is famous for advising his clients to get out of the U.S. stock market one week before the October 1987 crash and for predicting the current financial crisis. The Swiss-born investment adviser told Jones and his listeners:

Basically, we had two systems until the end of the 1970s in the world. Essentially, free market capitalism— the market economy— and the planning economy. And, as you know, under communism and socialism, central planners totally failed with their policies to create sustainable economic growth. And if you traveled to Russia in 1980 or to China in 1980, these countries were really impoverished. And, the U.S., in particular, today is moving towards an interventionist policy of the government moving into the economy and trying to fix the economy left, right, and center. In the extreme case, you would go essentially to the planning economy. But it’s not going to happen right away. But, basically, the more the government has an influence in the economy, and intervenes in the economy, the current crisis is not the failure of free markets, it’s the failure of government intervention. One of the big interventions was obviously Fannie Mae and Freddie Mac which essentially had cheaper access to funds and the banking system. These were the big bankruptcies in America, in terms of size, and also other regulatory— the intervention into the money market and the supplies of money by the Federal Reserve post 2001, also, as I had just mentioned, created a problem. It’s not that the free market had failed, it’s the interventions by the government that failed. And now, these failed policies are even enlarged, and that is where I have a problem with the current economic policy makers

So, I think we will have high inflation, and at the same time, I think what we will eventually have, is some kind of social unrest, because I can’t believe that people will be fooled forever, by what you call crony capitalism…

It can go on for quite some time, and make things much worse. But, my view would be that within the next 5 to 10 years, when the public realizes that the economy does not improve, and possibly, in my opinion, actually deteriorate, and be faced with higher taxes, which may not be obvious but they will happen because of the large deficits, then at that stage I think there will be a social revolution, or some kind of social revolution, or the next thing the government will do to distract, or distract the attention of the people from bad economic conditions, they’ll start a war somewhere…

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Too Much Hopium?

If Washington, in its regulatory mood these days, wants to clamp down on something, it might want to take a good look at Hopium.

You’d be tempted to think the U.S. financial system and markets were back to “normal” after listening to what some had to say to the financial media today.

From Bloomberg’s Jeff Kearns:

“The market has run out of fantastic reasons to sell,” said Stephen Wood, who helps manage $136 billion as chief market strategist for North America at Russell Investments in New York. “Those Armageddon, Great Depression, worst-case scenarios being priced in a few months ago are now a low probability, and the recovery reflects that.”

“We think we’re in a recovery stage and there’s a lot of government support for growth,” said Hayes Miller, who helps manage $33 billion at Baring Asset Management Inc. in Boston. “When summer is over and we all come back in the fall we’re going to be seeing some positive economic news.”

Positive, or less-worse news? And from CNBC:

Federal Reserve Chairman Ben Bernanke deserves to be reappointed, because he did a great job in saving the US banking system from collapsing, Jack Welch, author of “Winning” and “Straight from the Gut,” told CNBC Thursday.

“I think he saved the system, I think he’s a national hero,” Welch said. “I think Bernanke seems to be a guy operating on a clear intellectual framework. This guy’s done a hell of a good job.”

ben-bernanke

“Abracadabra!”
Source: Inner City Press

I’m not so sure I’d like to watch a baseball game with Mr. Welch. He’d be calling the outcome of the game while it was still in the early innings.

Sources:

“U.S. Stocks Gain as Data Boosts Optimism Economy Is Recovering”
Jeff Kearns
Bloomberg, June 18, 2009

“Reappoint Bernanke, He’s a ‘National Hero’: Welch”
CNBC, June 18, 2009

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David Walker: Obama’s Tax Pledge ‘Ridiculous Promise’

“Let me tell it to you straight. The. Math. Politicians. Sell. Does. Not. Work. And if we don’t start dealing with the truth soon, this country could face dire consequences.”

-David M. Walker, Comptroller General of the United States, October 2007

Before I closed shop late last night, I stumbled on the following from Bloomberg’s Brian Faler and Nicholas Johnston:

President Barack Obama said he is “confident” that he won’t have to raise taxes on most Americans to close the budget deficit as long as the economy picks up steam.

“One of the biggest variables in this whole thing is economic growth,” the president said in an interview with Bloomberg News at the White House. “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes.”

Obama has repeatedly said he would keep his campaign pledge to cut taxes for 95 percent of working Americans while rolling back tax breaks for households making more than $250,000 a year.

“I’m confident that we don’t have to raise taxes on ordinary working families,” he said.

Now, many will argue the U.S. President still needs to build up his “street credibility” on economic matters. It remains to be seen if President Obama, despite his vast experience in other areas, can grasp the multitude and degree of the financial difficulties at hand.

That being said, consider what someone who’s already achieved “street cred” has to say about the Obama campaign pledge to cut taxes for the “ordinary working families.”

The person I’m referring to here is David M. Walker, former Comptroller General of the United States (nation’s chief accountant), former head of the U.S. Government Accountability Office (GAO), and current President and CEO of The Peter G. Peterson Foundation.

I’ve been following Mr. Walker’s career for quite some time now. Back on June 20, 2007, I wrote:

The tremendous financial burden brought on by entitlements also frightens David Walker, who is basically the nation’s accountant-in-chief. Walker is touring the United States through the 2008 elections, and according to Bloomberg, is “talking to anybody who will listen about the fiscal black hole Washington has dug itself, the ‘demographic tsunami’ that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government.” His speaking tour includes economists and budget analysts from across the political spectrum. The message they are conveying is that if the U.S government continues to conduct business as usual in the coming years, the national debt ($8.8 trillion as of today) could reach $46 trillion or more, adjusted for inflation.

I added on February 26, 2008:

On February 15, David M. Walker, Comptroller General of the United States, announced his resignation as head of the U.S. Government Accountability Office (GAO). Since November 9, 1998, Walker has served as the nation’s chief accountability officer, leading the GAO in its mission to help improve the performance and accountability of the federal government for the benefit of the American people. Back on February 15, Richard Cowan wrote in Reuters that:

Walker repeatedly urged Congress to waste no time in reforming massive government programs, such as health care for the elderly, which will grow significantly as the U.S. population ages.

“The picture I will lay out for you… is not a pretty one and it’s getting worse with the passage of time,” the blunt-talking Walker told Congress more than once.

Despite those warnings, Congress and the White House have yet to begin cooperating on how to tackle the huge growth in health care and retirement benefit costs…

Yesterday, Bill Donoghue from MarketWatch had this to say about Walker’s departure:

Facing indifference on the Hill and unrealistic spending promises, Walker is resigning with five years still remaining in his term to head the newly formed Peter G. Peterson Foundation. Peterson, senior chairman of The Blackstone Group and Commerce secretary in the Nixon administration, has pledged an astounding startup budget for the foundation of $1 billion.

That money will attack what the foundation considers “the most substantial economic, fiscal and other sustainability challenges of our current age” — including federal entitlement programs, health care, unprecedented trade and budget deficits, low savings rates, mounting foreign debt, soaring energy consumption, an uncompetitive educational system, and the proliferation of nuclear warfare materials. Maybe Congress will listen this time.

The departing Comptroller General told Reuters:

As Comptroller General of the United States and head of the GAO, there are real limitations on what I can do and say in connection with key public policy issues, especially issues that directly relate to GAO’s client — the Congress.

My new position will provide me with the ability and resources to more aggressively address a range of current and emerging challenges facing our country.

MarketWatch’s Donoghue lamented:

This sounds to me like the ultimate sell signal on America…

When the nation’s best-informed watchdog resigns and few are acting on his recommendations on his “Fiscal Wake-Up Tour,” it’s time to reconsider over-optimistic domestic stock investments and look elsewhere, or bet against the U.S. market.

So, what is this dedicated public servant saying these days?

This past Monday, Mr. Walker appeared on CNBC’s “Squawk Box” and said the following about the Obama campaign pledge to cut taxes for 95 percent of working Americans:

His pledge to not raise taxes on people making less than $250,000 was totally unrealistic, especially given $1.8 trillion-plus deficits, and growing structural deficits going forward…

It was a ridiculous promise. I don’t know why he made it. Politicians are good at making these type of promises during campaigns. Anybody that passed basic math would have known that you cannot end up dealing with our structural problems in our deficits without having more revenues.


David M. Walker Interview
CNBC Video Link

Sources:

“Obama Says ‘Robust’ Growth Will Prevent Tax Increases (Update1)”
Brian Faler, Nicholas Johnston
Bloomberg, June 16, 2009

David Walker Interview
CNBC, June 15, 2009

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