Knowledge is cool.: "Stimulus may be working"

Cranky Pants Warning: I am working at the library right now and it's 86 degrees inside. Our air conditioning is broken and I am not amused. Not cool. Literally, not cool, man. Hence the heat has made my mood foul. This blog is a product of that foul mood. My apologies in advance.

My Google Reader was jam packed today with over a thousand news bits and Internet treats for my review. I foolishly decided to look through the past few days of business news. Wow, what a total bummer.

First, a Wall Street Journal article basically wrapped up the terrible economic climate here in the United States:

Unemployment rose sharply and payrolls shrank for the fifth consecutive month. The economy news came on a day that oil surged to record prices, the dollar weakened and the Dow Jones Industrial Average plunged nearly 400 points. The deteriorating job numbers led markets to scale back the odds that the Federal Reserve will boost short-term interest rates this fall to ward off inflation.

From this article, I also learned a new term - "misery index." This is the sum of the unemployment and inflation rates. The index is at the highest level since the early 1990s. There are many more gloomy details in the article, however, there was one, tiny bit of positive news:

Service-sector employment, by contrast, gained 8,000 jobs last month. That reflects continued strength in education, health services and hospitality industries, offsetting losses in business and professional services and retail trade.

The next article I read was called Consumer debt jumps $8.9 billion. While analysts knew that the amount of consumer debt would rise, they didn't expect it to be so bad. They expected the debt to rise by $7 billion when in actuality it rose by $8.9 billion. I discovered another term: "revolving credit." Revolving credit is an account on which payment is any amount less than the total balance and the remaining balance carried forward is subject to applicable finance charges. Basically, credit card debt is revolving credit. Fixed payments - student and car loans - sharply increased, making up $8.7 million of the $8.9 billion consumer debt accumulated.

In the investing world, securities ratings practice will hopefully be getting a makeover. This is very necessary as investors were buying securities under false pretenses. Here's a snippet from an article entitled Bond-rating agencies agree to reforms:

With the old model, many investors purchased a security they believed to be safe because they had pristine AAA ratings, but in fact many of the assets were of poor quality. Critics and lawmakers have long argued that the rating industry did not adequately warn investors about the risks involved with mortgage investments.

As you can imagine, this blog doesn't get any happier at any point. There's just too much bad stuff happening in the economy. It's rather strange that people are still hesitant to call this a recession when it clearly is. For example, if we weren't in a recession, why would Americans be $1.7 TRILLION dollars poorer or barely surviving on credit cards?

And finally, while we sit here and struggle, it's interesting to hear what world leaders think. For example Russian President Dmitry Medvedev criticized the U.S. for being economically egotistical. He says Russia has the answer for the mess that the U.S. has created. Shoot, at this point, I think we should accept assistance and advice from any place we can get!

Our fearless leader, however, is sort of on another planet. While plowing through all these articles predicting the wrath of economic crisis, I found that the president thinks that his stimulus package "might" be working. Well, isn't that just swell? From article 'Stimulus may be working' - Bush:

The government's $168 billion stimulus package, passed in February, began getting tax rebate checks to people last month and helped to energize shoppers. "We're beginning to see signs that the stimulus may be working," Bush said at the Department of Housing and Urban Development.

OK, so did anyone let the president know that Americans are $1.7 TRILLION dollars poorer? Does he not see that his little, bitty $168 billion stimulus package isn't going to be used for SHOPPING!? It's going to be used to SURVIVE: to buy food and gas, to pay the mortgage or rent - not to go on a shopping spree. So out of touch, this guy.

Feel free to read more about all this stuff. Here's the articles I read through: