Tuesday, November 18, 2008

Depression Watch: October Wholesale Prices Plunge Record 2.8 Percent

This is catastrophic news. We're sinking. And it's clear the politicians are clueless as to what to do. Barack Obama is busy picking his cabinet when he should speaking to the American people and telling them what he will do. This "there is only one President" nonsense sounds good but does nothing to solve the crisis. He needs to act NOW. He needs to give his "you have nothing to fear but fear itself" now, not wait until his inauguration.

As for the media, it needs to give us nonstop reporting on the disaster on our hands. As I speak the news is about what the Democrats will be doing about Senator Lieberman. Who cares? We have a 9-11 type tragedy here. Why aren't we acting accordingly.

Wholesale prices drop is the worst since records began being kept!!

Wholesale prices plunged a record amount in October as energy prices fell by the largest amount in 22 years.

The Labor Department says wholesale prices dropped by 2.8 percent in October, the biggest one-month decline on records that go back more than 60 years. The previous record holder was a 1.6 percent fall in October 2001, the month after the terrorist attacks.

The overall decline in the department's Producer Price Index was bigger than the 1.8 percent drop analysts had expected. However, core inflation, which excludes energy and food, was not as well-behaved, rising by a bigger-than-expected 0.4 percent.

You say this is not such bad news since it means primarily a drop in energy prices. Then look at production.

U.S. industrial production rose more than forecast in October as refineries and oil rigs restarted operations in the Gulf of Mexico following shutdowns caused by Hurricanes Gustav and Ike.

The 1.3 percent increase in production at factories, mines and utilities followed a revised 3.7 percent drop in September that was the biggest since 1946, the Federal Reserve said today. Excluding the effect of the storms and a strike at Boeing Co., output would have shrunk about 0.7 percent in October and September, the Fed said.

The deepening credit crisis coupled with weakening global demand is forcing companies to cut back on investments for heavy machinery and manufactured goods. Today's report showed output of automobiles, computers, furniture and metals all dropped.

``Manufacturing is going south in a very big way,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``Export demand is falling apart, and domestic demand has already fallen apart.''

The reality is that the economy is collapsing on all fronts. Such massive drops are not good for the economy. It creates more fear and less incentive to invest by the private sector.

The greatest victims of the greed of big business, and the failure of government to curb their abuses, are the people:
USDA reported today that 36.2 million Americans, including 12.4 million children, are food insecure. The Study paints a stark picture of the pervasiveness of hunger in our nation. But Feeding America, the nation's leading hunger-relief organization, warns that the actual number of Americans forced to skip meals and survive without adequate nutrition is even greater today, prompting a national appeal for help in feeding hungry men, women and children.

"It is important to note that the USDA numbers released today are 2007 figures and do not take into account the unprecedented economic crisis that our country is currently facing," said Vicki Escarra, president and CEO of Feeding America. "While the numbers reported are tragic, our network typically experiences trends as direct service providers before they are officially reported. We believe that this is just the beginning of a downward trend and we expect things to get worse before they get better."