Crash Survival Zone

Look around your house. There are probably books you never read, CDs you never listen to, and DVDs you never watch. Wouldn’t it be great if you could trade them in for something new you’d enjoy? You can. Swaptree.com is here to help. The site lets users barter goods they’re willing to part with for something they want. There’s a staggering amount of stuff ready for the swapping: Swaptree currently has about 2.5 million items listed for trade, and the number of users doubles every four months.Trade books, music, dvds or games that you own for thousands of items that you want all for free.

Simply list the books, CDs, DVDs, and video games you have. Choose the items you want to receive. Then just swap your items through the mail.

Swaptree’s trading engine instantly shows you the many thousands of items you can receive in return for the items you are trading.

Swaptree makes mailing your item easy by allowing you to print a perfect postage label right from your computer. There’s no worrying about stamps, weights, or visits to the post office.

Swaptree

The recession is nearing its end. At least, it seems to be. A generally improving trend in the economic data has forecasters saying the downturn will turn into an upturn sometime between early this summer (the optimistic view) and late next winter (the pessimistic one).

But here’s my assessment: So what? A recession is defined by the Business Cycle Dating Committee of the National Bureau of Economic Research, the semiofficial arbiter of such matters, as a “significant decline in economic activity spread across the economy.” It’s certainly better for economic activity to be increasing rather than decreasing, but the focus on whether the economy is in recession or not can miss a lot. “I don’t care about what the dating committee says. I’m concerned about longer-term issues,” says Yale economist Robert Shiller. “We are in for an extended period of subnormal economic growth.” Mohamed El-Erian, chief executive officer of bond-investing giant Pimco, has popularized a catchier if less informative phrase for what we’re in for: “the new normal.”

Defining the parameters of this new normal is not something that can be done with pinpoint precision. I started paying attention to the news (and subscribing to Time) during another period of economic turmoil, the late 1970s, and soon became convinced that I would never know a world in which gas was affordable, inflation wasn’t in double digits and jobs were anything but scarce. Then the 1980s and ’90s happened. So there is a danger in extrapolating present conditions to the future–and the U.S. economy has a wonderful penchant for surprising us all to the upside. But here are five areas where it seems reasonable to venture a guess as to what the immediate future will be like:

…more…

Time

Home prices are likely to fall for the next year, then stabilize, with a rebound in 2012 as the overall economy takes off again

Americans have not seen a boring housing market since the last millennium. You know—the average, ordinary kind of market where supply just about matches demand, prices are steady, and real estate ceases to be a topic of daily conversation. Instead, we’ve had six years of upside craziness followed by three years of downside terror. Now we’re in a tug-of-war between those who think we’ve finally found a bottom and those who are convinced that the overhang of unsold homes is going to push prices considerably lower.

…more…

Business Week

By Dean Baker

As every backcountry hiker recognizes, you must first know where you are before you can figure out how to get to where you want to be. While it is important to know where we want to go, progressives often badly misunderstand where we are now.

Specifically, much of the anger of progressives is wrongly focused on the market, as though the market is the source of the troubles in the world. Progressive publications have featured endless diatribes against “market fundamentalism,” implying that the strict devotion to market principles is the core problem that we must counter.

In fact, the market is not the problem. The market is a tool, like the wheel. It makes as much sense to attack the market as it does to attack the wheel.

The problem is in how the market has been structured. The right has used its control of the government to structure the market in ways that redistribute income upward and produce many other bad outcomes, like poverty in the developing world and global warming.

…more…

ZNet

By Brad DeLong

Let me make five points to eliminate or refute, or at least to fight against or lay down a marker that there is, well, call it “confusion” about what the right state of the American macroeconomy should be.
My first point is that over the past six months the economy has been a severe disappointment. Output and employment have fallen much faster than people were projecting last December. Romer and Bernstein (2009) projected at the very start of this year that unemployment in the U.S. would reach a peak of 7.9% in the summer of 2009. But unemployment now in mid-June is about 9.7%, with 10% baked in the cake and the possibility existing that it might go much higher. The signs that the cliff-dive of employment has come to an end are very few. The level of new unemployment claims is still consistent with a rapidly-collapsing labor market nationwide.

Six months ago a net federal fiscal stimulus of about $1 trillion — $400 billion each year for about 2.5 years — seemed appropriate: that seemed to balance the benefits of filling-in the hole in aggregate demand without running too great a risk of triggering worrisome inflationary fever further down the road. Now the hole in aggregate demand is greater than was thought likely last December–about twice as great–and the likelihood of heightened future inflation is less. Thus if it was appropriate to set a $1 trillion federal fiscal stimulus in motion last December given what we knew then, if we had known then what we know now it would have been appropriate to set a roughly $2.4 trillion fiscal stimulus–$800 billion for 3 years–in motion back then.

My first point is thus that the Obama administration’s federal fiscal stimulus programs are on the low side of what is appropriate by a substantial margin: this is the largest economic downturn since the Great Depression and the standard tools of expansionary monetary policy are tapped out and broken right now.

…more…

Seeking Alpha

By Alan S. Blinder

Some people with hypersensitive sniffers say the whiff of future inflation is in the air. What’s that, you say? Aren’t we experiencing deflation right now? The answer is yes. But, apparently, for those who are sufficiently hawkish, the recent activities of the Federal Reserve conjure up visions of inflation.

The central bank is holding the Fed funds rate at nearly zero and has created a mountain of bank reserves to fight the financial crisis. Yes, these moves are unusual, but these are unusual times. Concluding that the Fed is leading us into inflation assumes a degree of incompetence that I simply don’t buy. Let me explain.

First, the clear and present danger, both now and for the next year or two, is not inflation but deflation. Using the 12-month change in the Consumer Price Index as the measure, inflation has now been negative for three consecutive months.

…more…

NY Times

By William Greider

The most disturbing thing about Barack Obama’s call for financial reform was the way in which the president falsified our predicament. He tried to make it sound as though everyone was implicated in the financial breakdown and therefore no one was really to blame. “A culture of irresponsibility took root from Wall Street to Washington to Main Street,” Obama explained. “And a regulatory system basically crafted in the wake of a 20th century economic crisis–the Great Depression–was overwhelmed by the speed, scope and sophistication of a 21st century global economy.”

That is not what happened, to put it charitably. Unlike some other presidents, Obama is much too intelligent not to know this. The regulatory system was not overwhelmed by historic forces. It was systematically gutted and dismantled by the government in Washington at the behest of the banking interests. If Obama wants details, he can consult his economic advisors–Summers-Geithner–who participated directly as accomplices in unwinding the prudential rules and regulations. Cheers were led by the Federal Reserve with heavy lifting by both political parties.

The president’s benign version of events reminds me of what compliant politicians and opinion leaders said after the war in Iraq they had endorsed turned disastrous. “Hey, we were all fooled.” If Obama were to tell the truth now about what went wrong in the financial system, he would face a far larger political problem trying to clean up the mess. Instead, he has opted for smooth talk and some fuzzy reforms that effectively evade the nasty complexities of our situation. He might get away with this in the short run. Congress doesn’t much want to face the music either. But Obama’s so-called reform is literally “kicking the can down the road,” as he likes to say about other problems. In the long run, it will haunt the country because it fails to confront the true nature of the disorders.

…more…

Nation

Louis Licata has shelved plans to hire three more employees for his Cleveland law firm. Jeannie Macone, of Florida, is cutting back on inventory for her trinket and home décor business. In Ohio, Patrick Allen has slashed employee travel and begun paying cash for work dinners with clients of the marketing firm that he started from scratch.

A crackdown on credit limits by card companies is squeezing the nation’s 27 million small businesses, exacerbating the problems brought on by a stagnant economy.

Owning a small business has always been a challenge — half wind up failing within the first few years. But the financial crisis has dealt them a one-two punch, as big banks cut the credit card lines that many entrepreneurs were forced to lean on when a once-abundant supply of loans dried up.

…more…

NY Times

The stock market’s damage has already been done. And if you’re one of those people near or already in retirement, you already know you’re going to have to work longer, save more or spend less.

But what should you do right now with the money you have left? Should you wade back into the stock market, if you bailed out when the market was plunging? Or if you watched your investments drop and then recover a little in the last few months, should you just hold on? What happens if the market doesn’t fully recover for a long time? (That happened in Japan in the ’90s.)

This economic downturn has been steep enough and frightening enough to undermine the idea that the stock market, over time, will always deliver. So a lot of investors have retreated to a more conservative stance.

The wisdom of that move is debatable. The investment industry warns that becoming too defensive is costly in the long run. Its argument goes something like this: People are living longer, retirement may last 25 or 30 years and stocks are supposed to protect you from the ravages of inflation. And since stocks tend to outpace most investments over long periods of time, the industry says, your savings will do all right in the end.

But some people are no longer comfortable with that logic. There’s even a new study that contends holding stocks over long periods of time may be riskier than previously thought.

…more…

NY Times