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Obama’s Unemployment Analysis – A Bubble-Pipe Dream?

Frame By Frame

Frame by frame, death by drowning
in your own in your own
analysis.
Step by step, die by numbers
in your own in your own
analysis…
King Crimson

Below is a chart from CalculatedRisk, one of my favorite spaces. It depicts the expectations Obama’s team is using when they created this year’s budget. You can read the team’s “Economic and Budget Analysis” by clicking that link (64 pages pdf). The blue line is the historical unemployment and the red line is the Obama projection. (Click the chart to see the original – it’s much clearer.)

Obama 2010 Budget Unemployment Forecast

The beauty of this is the way it’s presented. The forecast is for an average over the year. So for 2010, the unemployment rate can keep increasing for the next 5 months before anyone can say the estimates are off. And even then, the point could be argued all the way into December.

Bubble Bubble, Toil and Trouble

Looking back over the peaks in that chart I see and remember the things that ‘turned it around’ – In 2003 the housing boom was just getting really fueled up after the tech crash, in 1992 the Tech boom was just powering up after the S&L crisis was cleaned up. In 1982 the Reagan team had just remodeled the financial markets, aka, “Reaganomics”. In 1975 we had just come off the gold standard for our currency, allowing the Federal Reserve to print as much cash as they wanted.

You can argue the particulars of each instance, but I think I’ve got it down to its simplest form. Each time there was a crisis, our government turned to some form of credit inflation to produce employment. In each of the times I described it worked. The numbers are right there on that chart.

So why am I so certain it won’t work this time? Because each of those times, jobs were created by easy money in the form of cheap loans. For the last 4 decades, that’s what they’ve been doing – blowing bubbles made of different kinds of credit. They were using debt to create a false appearance of prosperity, a bubble. Each time the bubble burst, a new one was formed somewhere else.

This last bubble was a real doozy, too. To actually get it to work, they had to create loans (they like to call them ‘Financial Instruments’) which were literally impossible to pay off, then present them to the public as cheap cheap cheap (my brother steals it and I sell it), somehow forgetting to mention the suicidal nature of actually signing one of these things. I’m not condemning them (at the moment) for that, it’s just a fact and I’m stating it because it leads to the next thought…

They had to create those liar loans to get the less wealthy in a debt because the more wealthy middle class and rich were already tapped out on their credit.

With that in the front of my mind I have to ask: What kind of credit bubble do they think is possible to inflate that will create jobs this time?

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February 2nd, 2010 Posted by Jon | Scary Stuff, Uncategorized | Leave a Comment

WHO Raises Phase to 5 – Pandemic Imminent

Don’t Panic

Below is the current statement from the World Health Organization.

Ladies and gentlemen,

Based on assessment of all available information, and following several expert consultations, I have decided to raise the current level of influenza pandemic alert from phase 4 to phase 5.

Influenza pandemics must be taken seriously precisely because of their capacity to spread rapidly to every country in the world.

On the positive side, the world is better prepared for an influenza pandemic than at any time in history.

Preparedness measures undertaken because of the threat from H5N1 avian influenza were an investment, and we are now benefitting from this investment.

For the first time in history, we can track the evolution of a pandemic in real-time.

I thank countries who are making the results of their investigations publicly available. This helps us understand the disease.

I am impressed by the work being done by affected countries as they deal with the current outbreaks.

I also want to thank the governments of the USA and Canada for their support to WHO, and to Mexico.

Let me remind you. New diseases are, by definition, poorly understood. Influenza viruses are notorious for their rapid mutation and unpredictable behaviour.

WHO and health authorities in affected countries will not have all the answers immediately, but we will get them.

WHO will be tracking the pandemic at the epidemiological, clinical, and virological levels.

The results of these ongoing assessments will be issued as public health advice, and made publicly available.

All countries should immediately activate their pandemic preparedness plans. Countries should remain on high alert for unusual outbreaks of influenza-like illness and severe pneumonia.

At this stage, effective and essential measures include heightened surveillance, early detection and treatment of cases, and infection control in all health facilities.

This change to a higher phase of alert is a signal to governments, to ministries of health and other ministries, to the pharmaceutical industry and the business community that certain actions should now be undertaken with increased urgency, and at an accelerated pace.

I have reached out to donor countries, to UNITAID, to the GAVI Alliance, the World Bank and others to mobilize resources.

I have reached out to companies manufacturing antiviral drugs to assess capacity and all options for ramping up production.

I have also reached out to influenza vaccine manufacturers that can contribute to the production of a pandemic vaccine.

The biggest question, right now, is this: how severe will the pandemic be, especially now at the start?

It is possible that the full clinical spectrum of this disease goes from mild illness to severe disease. We need to continue to monitor the evolution of the situation to get the specific information and data we need to answer this question.

From past experience, we also know that influenza may cause mild disease in affluent countries, but more severe disease, with higher mortality, in developing countries.

No matter what the situation is, the international community should treat this as a window of opportunity to ramp up preparedness and response.

Above all, this is an opportunity for global solidarity as we look for responses and solutions that benefit all countries, all of humanity. After all, it really is all of humanity that is under threat during a pandemic.

As I have said, we do not have all the answers right now, but we will get them.

Thank you.

Don’t panic – just remember this: in a universe like this you need to ALWAYS know where your towel is.

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April 29th, 2009 Posted by Jon | Need2No, Scary Stuff | Leave a Comment

H1N1 Swine Flu Map

Pandemic Alert

IMPORTANT UPDATE

29 April 2009 — Based on assessment of all available information and following several expert consultations, Dr Margaret Chan, WHO’s Director-General raised the current level of influenza pandemic alert from phase 4 to 5. She stated that all countries should immediately activate their pandemic preparedness plans. At this stage, effective and essential measures include heightened surveillance, early detection and treatment of cases, and infection control in all health facilities.

UPDATE:

27 April 2009 — The Emergency Committee, established in compliance with the International Health Regulations (2005), held its second meeting on 27 April 2009. The Committee considered available data on confirmed outbreaks of A/H1N1 swine influenza in the United States of America, Mexico, and Canada. The Committee also considered reports of possible spread to additional countries. On the advice of the Committee, the WHO Director-General has raised the level of influenza pandemic alert from the current phase 3 to phase 4. The change to a higher phase of pandemic alert indicates that the likelihood of a pandemic has increased, but not that a pandemic is inevitable.

Thanks to WikiProtest.com for mashing this map together.

For another look, including migration paths and dates of infection for the entire planet, check out the map at Live.com.

From the CDC website:

CDC is working very closely with officials in states where human cases of swine influenza A (H1N1) have been identified, as well as with health officials in Mexico, Canada and the World Health Organization. This includes deploying staff domestically and internationally to provide guidance and technical support. CDC has activated its Emergency Operations Center to coordinate this investigation.

Laboratory testing has found the swine influenza A (H1N1) virus susceptible to the prescription antiviral drugs oseltamivir and zanamivir and has issued interim guidance for the use of these drugs to treat and prevent infection with swine influenza viruses. CDC also has prepared interim guidance on how to care for people who are sick and interim guidance on the use of face masks in a community setting where spread of this swine flu virus has been detected. This is a rapidly evolving situation and CDC will provide new information as it becomes available.

There are everyday actions people can take to stay healthy.

* Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash after you use it.
* Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hands cleaners are also effective.
* Avoid touching your eyes, nose or mouth. Germs spread that way.

Try to avoid close contact with sick people.

* Influenza is thought to spread mainly person-to-person through coughing or sneezing of infected people.
* If you get sick, CDC recommends that you stay home from work or school and limit contact with others to keep from infecting them.

…

There is no vaccine available at this time…

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April 27th, 2009 Posted by Jon | Need2No, Scary Stuff | 2 comments