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Pundits are desperately looking for positive signs for the national economy, but San Diego can't offer any. The lead indicators of the San Diego economy, compiled by Alan Gin of the University of San Diego, continue the dismal drumbeat. The number for February was 103. That compared with 105.8 for January, 108.1 for December and 110.6 for November. This February's 103 was down from 124.4 in February of last year and 139.2 in February of 2007. This February, all the individual components were negative: building permits, initial unemployment claims, stock prices, consumer confidence, help wanted advertising, and the national economy. National numbers have recently been slightly better -- for example, retail sales and housing numbers have been better than expected. Those numbers, combined with Treasury Secretary Geithner's bribing of Wall Street to take toxic assets off banks' books without any risk, have helped ignite a stock market rally. However, the really important national numbers remain gloomy. The Labor Department reported today (March 26) that the number of people collecting state unemployment benefits for the most recent week jumped by 122,000 to a record 5.56 million, seasonally adjusted. Nearly 15% of the workforce is unemployed, underemployed, or discouraged from job-hunting. The U.S. economy contracted at a 6.3% annual rate in 2008's fourth quarter, the most violent contraction since 1982 and the third largest in 50 years. The current quarter is expected to shrink by an annual rate of 5.1%. That means the economy would contract by more than 4% for two straight quarters for the first time since 1947. Commentators, looking for ways to explain the recent stock market rally, thought the 6.3% plunge was encouraging because economists expected worse.

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Comments

SDXpat March 26, 2009 @ 5:25 p.m.

"The Labor Department reported today (March 26) that the number of people collecting state unemployment benefits for the most recent week jumped by 122,000 to a record 5.56 million, seasonally adjusted."

Holy cats!!

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Don Bauder March 26, 2009 @ 9:35 p.m.

Response to post #1: Yes, the employment market is looking decidedly grim. It will probably look bad right into 2010. Best, Don Bauder

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paul March 27, 2009 @ 9:36 a.m.

Yeah, we better get right on all those new tax increases so the few working people left can pay for all the unemployment payments and the increased bureaucracy to handle them. That ought to help the economy get moving.... :(

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Don Bauder March 27, 2009 @ 11:25 a.m.

Response to post #3: The big bucks today go for corporate welfare -- bailing out banks, auto and insurance companies, e.g. -- and not for transfer payments such as unemployment compensation. But admittedly, there are plenty of abuses in transfer payments. Best, Don Bauder

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Anon92107 March 28, 2009 @ 2:27 p.m.

Darn Don, I thought that if I simply went away and left you alone you would fix San Diego, but your Blog just keeps documenting the precipitous decline of “gloomy” and “dismal” San Diego with columns like this one.

Since my last post S&P ranked California bonds in last place, lower than Louisiana making them sewer grade, while San Diego politics had already been characterized as sewer grade by Donna Frye in National Geographic, it would seem that things just could not get any worse, again.

In this brave new world of instant worldwide communications available for everyone to participate in solving problems together with, why can’t we use this new technology to end the U-T era where Mayors like Sanders can continue to shove San Diego further into the sewer until even New Orleans looks refreshing in comparison?

After all, President Obama just got elected using the latest information and participation technologies to maximize his chances for success, so why can’t we fix San Diego using the same methods?

Or to put forth another solution, when is The Reader going to buy out and fix San Diego’s greatest source of sewage --- the U-T so you can fix San Diego at last?

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SurfPuppy619 March 28, 2009 @ 3:41 p.m.

If the SD Reader bought the UT we could put Don in charge-if he would want to undertake such a train wreck!

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Don Bauder March 28, 2009 @ 4:25 p.m.

Response to post #5: Obama used new technologies and promised change, but then he appointed the same old mistake-prone hacks to key economic positions: Larry Summers, who preached for repeal of Glass-Steagall and opposed regulation of derivatives; Tim Geithner, who consults with the wrongheaded Robert Rubin all day; Mary Schapiro, who has been cozy with Wall Street crooks for years. That's not progress. Best and welcome back, Don Bauder

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Don Bauder March 28, 2009 @ 4:29 p.m.

Response to post #6: The U-T has been bought by a Beverly Hills private equity group which has put a Canadian press lord, whose company is in trouble, in charge. So I am on the outside looking in. That's where I was when I worked for the U-T, and I never had any desire to be one of those on the inside. Best, Don Bauder

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Anon92107 March 29, 2009 @ 11:40 a.m.

Response to post #7:

Picky, picky, picky, just proves that no one can meet everyones' expectations, hopes and dreams in America today.

But regardless of start-up considerations, it will be results that count, so settle down until Obama has a chance to make things really happen in the right direction again after eight years of sabotage of America by Bush-Cheney and their puppet GOP in congress, and Wall Street.

That is to say, during the last eight years the republicans have exceeded some of bin Laden's most deranged nightmares for America and it will take several miracles to undo their post-9/11 sabotage of American Democracy and American Capitalism.

Never forget that the GOP gave a whole new meaning to "With friends like the GOP, who needs terrorists?"

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Don Bauder March 29, 2009 @ 2:11 p.m.

Response to post #9: Don't think that: 1. I would have ever voted for Obama's opponent and his sled-dog VP; or 2. That I have given up on this administration. I just wish that Obama would have chosen some new faces. These are the same old hacks that proselytized for the ditching of Glass-Steagall and barred the regulation of derivatives. They were WRONG, WRONG, WRONG and should not be entrusted with high appointive office again. These were monstrous mistakes that drove the world's economy to the edge. It may still go over the edge.Best, Don Bauder

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SurfPuppy619 March 29, 2009 @ 3:43 p.m.

I have high hopes for Obama, and still do. Having said that he has definitely made some rookie mistakes.

I think we finally are seeing the bottom, and light at the end of the tunnel after that.

I predict a slow moving, at a snails pace, economy through the end of 09, into the first and probably 2nd quarter of 10, and that will be the turning point.

It is just a guess, but my guess is as good as anyone elses.

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Don Bauder March 29, 2009 @ 4:31 p.m.

Response to post #11: The bad news on unemployment will continue well into 2010. The economy may start showing some modest improvement in the second half of this year. For some time, I have been predicting that the market will make a sprint beginning in the second half, closing the year at 9,000 on the Dow. But I don't think the current rally is likely to be the one I have been looking for. It should peter out by late spring or early summer or perhaps well before that. And I think 2010 will bring more woes that will dent the market -- this time, inflation. But I agree with you: who knows? Best, Don Bauder

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valueinvestingisdead March 29, 2009 @ 8:09 p.m.

San Diego has no jobs thus real estate will continue to plunge. The most shocking thing is how much traffic has dropped during rush hour. The city stands the chance of dying. I know people with rentals that cannot be rented for vacations or weekends. There are zero job openings at anything that pays a decent wage. City is in a heap of trouble. Don't forget that it is the hotbed of option rate ARMS. Another plunge of 30% in the Carlsbad-Encinitas area is likely. Oceanside has already seen the plunge.

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SurfPuppy619 March 29, 2009 @ 9:04 p.m.

San Diego has no jobs thus real estate will continue to plunge. The most shocking thing is how much traffic has dropped during rush hour. The city stands the chance of dying.

You have not seen a dead city until you have seen DT Detroit recently.

Shocking;

http://www.time.com/time/photogallery/0,29307,1882089_1850973,00.html

I went to grad school in Michigan and went over to Detroit a few times, and it is a disaster. This was a few years back-and it has gotten worse.

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Don Bauder March 30, 2009 @ 8:10 a.m.

Response to post #13: Yes, San Diego was the king of exotic mortgages. Now it's paying the price as people who went for teaser rates have to ante up to the higher rates or face foreclosure. North County is being hit particularly hard. San Diego does have one thing: great climate. So people will continue to pay excessive prices for homes, despite only moderate incomes. Best, Don Bauder

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Don Bauder March 30, 2009 @ 8:18 a.m.

Response to post #14: Yes, Detroit is a disaster area. I have never lived there. I have lived in Cleveland, which is also a mess. From an economics perspective, the two cities are similar. Detroit was mostly autos and auto parts. Cleveland was hardgoods: steel, metal fabrication of various kinds including auto parts, etc. Foreign competition has walloped those industries, just as it has walloped Detroit. Both cities were based on manufacturing; it is disappearing. There was a superb story in the NY Times Sunday Magazine a couple of weeks ago about housing in Cleveland, and how speculators from the outside, including California, are exploiting the woes. Best, Don Bauder

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valueinvestingisdead March 30, 2009 @ 1:19 p.m.

Reply to #15 Miami has a great climate and it hasn't prevented it from completely collapsing in price. That argument doesn't work anymore. There is some truth but if you cannot find a job, any job, then people won't move there unless rich.

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SurfPuppy619 March 30, 2009 @ 1:36 p.m.

Miami has a great climate and it hasn't prevented it from completely collapsing in price. That argument doesn't work anymore. There is some truth but if you cannot find a job, any job, then people won't move there unless rich.

By valueinvestingisdead

VIID, you are on th emoney.

CA has seen a net migration OUT of the state for the first time in 50 years.

If the economy does not improve then the sunshine won't make any difference whatsoever.

The key to housing, the economy, the health of this city, state and country comes down to one word/issue; JOBS.

No jobs, no growth, no economic expansion.

So,it's that simple really-jobs.

The last 30 years of exporting our manufacturing base has now come home to roost.

I predict GM is in BK within 6 months. I also predict the state of MI collapses.

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Don Bauder March 30, 2009 @ 1:40 p.m.

Response to post #17: You are correct: it is jobs that creates in-migration. I do think that San Diego's climate is superior to Miami's. Gawd, it gets hot down there! Wet hot. But I do think San Diego's near-perfect climate is a factor in people paying too much for homes compared to their incomes. San Diego and Miami are among the cities with the biggest plunge in real estate values from each's respective peak. More data on that will come out tomorrow (March 31). Best, Don Bauder

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SurfPuppy619 March 30, 2009 @ 1:48 p.m.

I know the people here will be able to relate to this graphic I just came across;

http://www.geocities.com/runners_edge/1td.html

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Don Bauder March 30, 2009 @ 4:39 p.m.

Response to post #21: Here's how old I am: I can remember these visual representations of how much a million is. Then a billion. Now a trillion. If the Fed keeps printing money at a prodigious pace, you will have to update the graphic to a quadrillion. Best, Don Bauder

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