Sherman’s News and Editorials

According to statistics from BLS.gov,
non agriculatural payroll employment increased by about one hundred and fifty thousand in May, while the unemployment
rate was unchanged at around 4.5 percent, the Bureau of Labor Statistics of the United States
Department of Labor reported today.  The health care & food service industries both managed to adde jobs,
while employment declined in the manufacturing sector, unfortunately.  Meanwhile, the average hourly earning rate amanged to rise by
6 cents, or 0.3 percent, in May.
In the same month, employment in general was unchanged at some 145.9 million, and the em-
ployment-population ratio held firm at around 63%.  The civilian labor force also
was the same, at 152,000,000, while the labor force participation rate
stayed at 66%.  Both the employment-population ratio and labor force
participation rate were down by 0.4% since the end of 2006.
Earning rates are important, but to get a wider perspective you should of course also
take a look at the inflation numbers, since inflation dicates spending power of that earned income.
According to Newsmax online, the MoneyNews publication as well as the Financial Intelligence Report, the dollar has been inflated recently - despite claims that the official CPI is “low”
I do not know if this claim is actually tru, but that was the report.
But whether these reports are true or not, I tend to view inflation a big threat to America’s global strength, and most importantly our wealth as American citizens.
I mean, if you get a 5% raise, but inflation jumps 10%, who really benefits from this. I also find that fact that our manaufacturing base shrunk (yet again)
to be truly troubling, especially in light of the recent reports that so many manufacturing jobs have gone to China and India in recent years.
While this may save some corporations some money and add a few nickels to investor’s dividends, it seems to me that this is bad for the long term economic health of the country.

Real Estate and Housing Market Mixed Signals?

According to a recent article bythe excellent Associated Press journalist Martin Crutsinger, the real estate market in general and the house market specifically
has been giving off a lot of confusing mixed signals as of late…….

For example, sales of new house increased last month (o4) by the largest amount in some fourteen odd years, and yet the median price of a new house actually dropped by the most sizeable amount on record. These rather odd indicators
have seemingly left no clear picture as to whether or not the the country’s housing slump is finished. Real estae sellers and buyers a like are still quite wary
in this unpredictable atmosphere….
This is due to the fact that while sales of new one-family houses increased by some 16.2 percent in April,
the actual average price of a new house sold last month fell to $229,100, a record 11.1 percent decrease from the prior month!
Sales fell particularly in the Midwest, which saw a substantial four percent drop-off rate.
The country’s economy as whole cooled down in the first quarter of 2007 to an annual adjusted growth rate of merely 1.3%, which is the weakest rate in 4 years, while the big slump in housing continued to weigh on the economy’s overall performance.

In a story reported by Yahoo news by Hope Yen of the Associated Press,

it was reported that Congressional leaders on Thurs. demanded that the Veterans Affairs secretary explain why hefty bonuses were given to senior department officials involved in creating a budget which came up some billion dollars short and jeopardized our veterans’ health care.

In fact, as AP reported, the chairman of the House Veterans’ Affairs subcommittee on oversight, said he would hold hearings to investigate after it was reported that budget officials at the Veterans Affairs Department received bonuses ranging up to thirty three thousand dollars a piece.

Sen. Daniel Akaka,  aDemocrat from the state of Hawaii, and who heads the Senate Veterans’ Affairs Committee, stated that the payments pointed to an improper “entitlement for the most centrally located or well-connected staff.” He has sent a letter to VA chief Jim Nicholson asking what the department plans to do to get rid any bonuses based on such blatant favoritism.

He is quoted as saying, “These reports point to an apparent gross injustice at the VA that we have a responsibility to investigate,” said Mitchell, D-Ariz. “No government official should ever be rewarded for misleading taxpayers, and the VA should not be handing out the most lucrative bonuses in government as veterans are waiting months and months to see a doctor.”

This almost sounds like the case of wall street titans getting massive bonuses despite huge losses to investors, or corporate ceo’s getting incredibly lush retirement packages after heavy losses and downsizing.

Sorry to have to bring you more bad news, but In a St.Petersburg Times editorial entitled ‘The Real estate slowdown is coming home across area’,
journalist CHUIN-WEI YAP stated in his April 16, 2007 article that, sadly, sales are still down and the glut of unsold homes is way up, which is contradicting the optimists who predicted that the market would turn around by the spring 2007.

Only 2 years ago, 1 in 2 homes sold in any particular month. But today, the same period would see 1 in 20 sell.
He also reports that a new vocabulary is emerging in the real estate market, referring to terms such as “short sale,” which means a seller getting less from his home sale than what he owes
 in loans; and “home staging,” which means the art of dressing up a home to look model-pretty just so a buyer might take another look at it.
….”Foreclosures have more than doubled,” states one Linda Pichler, vice president of business development for Consumer Credit Counseling Service of Central Florida.
Let us hope that this recent trend of negative news does not continue for very much longer.

At this time, the United States is the top economic power in the world, followed by Japan, Germany, China and France, respectively.Will another nation eventually overtake the U.S. in this role? It has been speculated by some that China is destined to take the top spot in terms of economic GDP if it can continue its bustling double digit economic growth. This is possible, but there are several factors to consider.

A double digit growth rate generally only happens to a younger, growing economy. When a national economy matures, it generally settles into a 2-3% annual GDP growth rate. That is about what we see in the U.S. and many western European nations, for example. In recent years Ireland grew at a double digit growth rate but has since settled to a more modest growth rate.

The same may happen with China. Obviously, if it can continue such a high growth rate it will eventually overtake the U.S in this regard, but it will have to maintain this rate for some time. Since the U.S. economy is larger to begin with, China and other rival economies must sustain a considerable larger GDP growth margin in order to catch up.

But there are other factors involved as well. One is current trend of trade blocks, such as that of NAFTA. If you were to include Canada (a member of the Group of Eight leading Industrialized economies) with a huge economy in it’s own right), Mexico (nearly ninety million consumers and very rich in natural resources such as Oil, Gold and Silver), and the various Central American nations which are seeking membership, this bloc would me much more difficult to catch up to in terms of market size and total GDP. In addition, there is a push in some circles for the FTAA (Free Trade Area of the Americas) which may one day include all nations in North and South America.

For that matter, the combined European Union is already a much larger economy than that of the U.S. The EU has some 450 million highly educated consumers compared to about 300 million in the United States, and it is adding new countries at swift pace. In any case, it should be noted that a number of top economists predicted back in the 1970’s that both Japan and the Soviet Union would overtake the U.S. economy.

This of course did not happen, due to bank mismanagement in the former case and political dismantling in the latter. As i write this article, Yahoo news reported that ‘China’s stock market plummeted from record highs as investors took profits when concerns arose that the Chinese government may try to temper its ballooning economy by raising interest rates again or reducing more of the money available for lending.

The Shanghai Composite Index tumbled 8.8 percent to close at 2,771.79, its biggest decline since it fell 8.9 percent on Feb. 18, 1997. Since Chinese share prices doubled last year as investors poured money into the market after the completion of shareholding reforms, trading in Shanghai has been very volatile.’ It is certainly possible that China could eventually be the top economy, but wise economic policies will probably be a biggest long term factor of whether or not this occurs.

Have any of you ever suffered from Blogging burnout? If you run several weblogs, as I do, you likely have experienced this occurance at one time or another, It is very disconcerting when this happens, and at least with me, it is normally triggered when some error happens with Wordpress or if I somehow manage to accidentally lose all of my work, It really sucks when that happens, it is demoralizing as hell. This phenomenom happened to me recently when I tried to achive a very ambitious self imposed deadline for writing fresh cont3ent for all of my blogs….but I went to the gym and got out of the house for a while and now I feel a lot better. In fact I am fairly fresh now…..so it is back to work for me, writing, writing and more writing!