“Dashed Hopes”: Economy Tanking Worse Than Expected

H/T Pat Dollard.

*No picture of Dufus 1 and Dufus 2* You want to see a picture of the two heroes go to Dollard's.

WASHINGTON (AP) — The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.

The Commerce Department’s report, released Wednesday, dashed hopes that the recession’s grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.

Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.

In the January-March quarter consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 percent growth rate was the strongest in two years.

Still, the consumer rebound was swamped by heavy spending cuts in virtually every other area.

Businesses cut spending on home building, commercial construction, equipment and software, and inventories of goods. Sales of U.S. goods to foreign buyers plunged as they retrenched in the face of economic troubles in their own countries. Even the government trimmed spending. It was the first time that happened since the end of 2005.

The sharp cuts underscore the toll the housing, credit and financial crises — the worst since the 1930s — are having on the country. The recession, which began in December 2007, has taken a big bite out of national economic activity and snatched 5.1 million jobs.

To cushion the impact of the downturn, the Federal Reserve has slashed a key bank lending rate to a record low near zero and rolled out a string of radical programs to spur lending. The Fed at the end of its two-day meeting Wednesday is expected to keep its key rate near zero and probably hold it there well into next year.

President Barack Obama is counting on his $787 billion stimulus of tax cuts and increased government spending on big public works projects to help bolster economic activity later this year. The administration also has put forward programs to rescue banks and curb home foreclosures — big negative forces weighing on the economy.

Even in the face of Wednesday’s weaker-than-expected report, some analysts stuck to predictions that the economy would shrink less in the current April-June period — at a pace of 1 to 2.5 percent — as Obama’s stimulus begins to take hold. Those analysts also continue to hope the economy would start to grow again in the final quarter of this year.

“The recession was bad in the first quarter but won’t be as bad going forward,” said John Silvia, chief economist at Wachovia. “I don’t think this lessens the expected pattern that the economy will be entering a recovery by the end of this year.”

However, the recent outbreak of the swine flu, which started out in Mexico and has spread to the United States and elsewhere, poses a new potential danger. If the flu stifles trade and forces consumers to cut back further, those negative forces would worsen the recession.

Before the flu outbreak, Fed Chairman Ben Bernanke said the recession could end this year if the government succeeds in stabilizing the shaky financial system and getting banks to lend again.

In recent weeks, Bernanke and his colleagues had cited “tentative signs” of the recession easing in some consumer spending, home building and other reports. Finance officials from the U.S. and other top economic powers meeting here last week also saw some hopeful signs for the global economy.

Fresh glimmers of hope emerged in the U.S. Tuesday. The Conference Board’s Consumer Confidence Index rose far more than expected in April, jumping more than 12 points to 39.2, the highest level since November. And a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record.

However, in the first quarter there was much weakness in those areas and others.

Spending on home building fell at a 38 percent annualized rate, the most since the second quarter of 1980. Businesses cut spending on equipment and software at a 33.8 percent pace, the most since the first quarter of 1958. Inventory reductions shaved 2.79 percentage points off overall first-quarter economic activity.

U.S. exports plunged at a rate of 30 percent, the biggest drop since the first quarter of 1969, reflecting the crimped appetite of struggling foreign buyers. The government also cut spending 3.9 percent, the most since the end of 1995.

Even if the recession were to end this year, the economy will remain feeble and unemployment will keep climbing, government officials and analysts say.

The jobless rate is now at a quarter-century high of 8.5 percent and is expected to hit 10 percent by the end of this year. It will probably rise a bit higher in early 2010 before starting to slowly drift downward. Still, the Fed predicts unemployment will stay elevated into 2011, and economists don’t think it will return to normal — around a 5 percent jobless rate — until 2013.

More layoffs were announced this week. General Motors Corp. laid out a massive restructuring plan that includes cutting 21,000 U.S. factory jobs by next year. Clear Channel Communications Inc., the largest owner of U.S. radio stations, said it’s cutting 590 jobs in its second round of mass layoffs this year amid pressure from the recession and evaporating advertising budgets. And bearings and specialty steels maker Timken Co. indicated it will cut about 4,000 more jobs by the end of this year after earlier suggesting about 3,000 jobs already had been targeted.

Elsewhere, construction equipment maker Bobcat Co. told nearly 250 workers at its two North Dakota plants they will be laid off indefinitely, executive search firm Heidrick & Struggles International Inc. announced plans to cut more jobs and reduce bonuses and salaries, and Lockheed Martin Corp. said it’s cutting 225 jobs at a plant in upstate New York.

Related from a comment at Dollard's; http://www.sec.gov/news/press/2009/2009-90.htm

Ponta Negra is marketed out of the office of Paradigm Global – a fund of hedge funds OWNED & CONTROLLED by HUNTER BIDEN and JAMES BIDEN (son & brother of VP JOE BIDEN respectively).

Holder Makes An Admission

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TERRORISTS WILL LIKELY
BE RELEASED IN THE USA

OBAMA ADMINISTRATION FINALLY ADMITS
THE TRUTH ABOUT TERRORISTS IN GITMO

As shocking as it seems to those of us who understand the threat that Islamic terrorism poses to Americans, the Attorney General in the Obama Administration finally admitted that they are considering RELEASING TERRORIST IN THE UNITED STATES!

Attorney General Eric Holder is about to say “WELCOME TO AMERICA” to as many as 240 terrorist detainees currently being held safely and securely in Guantanamo Bay on the island of Cuba where they pose no threat to American security.

"People who can be released, there are a variety of options that we have, among them is the possibility that we would release them into this country," he said with a straight face!

Please make a contribution today to help fight Obama’s dangerous
agenda to close Gitmo and bring terrorists to America!

The left-wing culture that wants to blame America for everything wrong in the world is in power today in Washington D.C. They honestly believe that America has done something to bring on this hatred from terrorists who want to wipe us off the map and end freedom in the world.

Why can’t they understand that this is a war against terrorism? This isn’t about better law enforcement; this is an actual war against militant crackpots that want us all dead or living under a barbaric and wrong interpretation of their religion.

But now President Obama has ordered the Detention Facility at Guantanamo Bay, Cuba, to be closed, and the Administration is trying to figure out what to do next. They ended the military trials that would have convicted and executed some of these ruthless murderers.

So now Holder has admitted that some detainees could be tried in U.S. courts and even released onto U.S. soil as legal immigrants if the new Obama administration cannot convict them in a U.S. courtroom, where they will have more opportunities to take advantage of the system. You can bet the ACLU lawyers will be there looking for legal loopholes to put these terrorists back on the streets and killing Americans again.

We have to show the Obama Administration we don’t want terrorists tried in American courts where they can have the same rights and privileges as an American citizen. We have to show Obama we don’t want any one of them set loose on American soil.

MAKE A DONATION TO HELP US MAKE SURE THIS CATASTROPHE NEVER HAPPENS!

Move America Forward has been warning for months that this was the terrifying but very real possibility, but this is the first time a member of Obama’s administration has been so flatly honest with the American people about that prospect. Yet, there was barely a mention in the liberal U.S. media that covers up everything they can.

This could happen any time! And that means the potential of one of these jihadists and their ACLU LAWYER somehow working the system to get them off the hook and freely walking on American soil is now a very real and imminent possibility! How would you like to see this character living in your neighborhood?

Keep Terrorists like this one, Khalid Sheik Mohammed (the alleged mastermind of 9/11 and the man who allegedly beheaded U.S. journalist Daniel Pearl , where he belongs – LOCKED UP IN GITMO and NOT on trial in a U.S. COURT – with the same rights as US citizens!

The danger of this happening, no matter how unthinkable it sounds, is REAL AND IMMINENT! Terrorists could be tried in US Courts and end up on the streets of America in a matter of days.

Please join us in creating a public backlash against this possibility, as we have to show the Obama Administration that we are totally against ANY TERRORISTS being allowed in the U.S. We must be willing to TAKE ACTION TO STOP IT!

The first step is helping Move America Forward spearhead this grassroots rebellion against this policy of Obama’s administration! Please make a donation today to keep this movement going.

As Americans, we can never allow terrorists to plot a dangerous attack on our soil ever again…if such a thing occurred, how could we live with ourselves knowing we could have done more to try and stop it? Even if the Obama’s administration is resolved to ignore the possibility of these threats WE CANNOT! Please make a contribution NOW!

Did You Know? Move America Forward is now on Facebook, Twitter, and YouTube! Join Today!
Facebook - Join our Group!	Twitter- Hit "Follow"	YouTube - Hit "Subscribe"

Go Figure???

Cross posted from ThreatsWatch.org.... go check them out by clicking here

Cognitive Dissonance

Can You Explain $900M To Rebuild Hamas' Home Turf While Pakistan Ops Are Short Funding?

By Steve Schippert | February 23, 2009

What on Earth is the administration doing announcing plans to give $900 Million in aid to rebuild Hamas' Gaza Strip while our own Defense Department's Security Development Plan for the Federally Administered Tribal Areas of Pakistan "faces a shortfall of approximately $167.5 million, about 73 percent of its funding goal for fiscal year 2009," according to a GAO report?

Did we not just witness the American president heading up a "Fiscal Responsibility Summit"? With fiscal responsibility in such high demand, one must forget entirely the nearly $1 trillion in irresponsibly distributed 'stimulus' already signed into commitment and the half-trillion dollar supplemental spending bill being presented this week. In a less than three week span, the two spending packages together would instantly represent a more than 10% increase in the national debt accrued over this nation's entire history. Yet when it comes to Defense and National Security, seemingly the only budgets eyed for any significant spending cuts, critical operations and initiatives expect to be short changed and starved of funds.

The Department of Defense's Security Development Plan for the Federally Administered Tribal Areas of Pakistan, like the administration's $900 million Gaza aid plan, is directed at the heart of a terrorist haven. But the DoD initiative is directed at curtailing and/or cutting off terrorists from narcotics funding and undermining their stranglehold on and, to the degree that it exists, popular support of the local populations there. An alternative.

The Administration's Gaza reconstruction gift contains none of these counterterrorism dynamics. Not a one. There is but one ultimate distributor in Gaza: Hamas. The Obama administration can claim that "the aid would not go to Hamas but that it would be funneled through nongovernmental organizations," but the fact of the matter remains that the Hamas terrorist organization that dominates Gaza stands to gain from every penny. It most certainly will not be hindered. That equation is nowhere in the calculus.

Dumping $900 million dollars into foolish Gaza reconstruction affords the distributors of all goods and services in Gaza both tangible assets (through the redirection of their funds elsewhere, such as arms, rockets and munitions) as well as the re-consolidation of political power and image rehabilitation. Many Gazans actually blamed Hamas - not Israel - for the wrath incurred in January. This action undermines that intangible shift and affords Hamas recovery from a humiliating wrath of domestic criticism.

This is not a cry from this writer to end all foreign aid. Far from it. But it is a vociferous cry to reconsider the foolishness of assisting Hamas to any degree - let alone to the tune of nearly a billion dollars - in reconstructing Gaza after Hamas' incessant rocket attacks on Israeli cities and towns finally drew the wrath of the Israeli Defense Forces. Would we rebuild Japan with Tojo still in place, or Germany under a surviving Hitler? And would we send them nearly $1 billion while our own economy is incessantly being described as "the worst crisis since the Great Depression"?

And most importantly, would we do this while our own operations are short funding, where our own troops are at ever-increasing risk?

The answer is clearly, no we would not. At least not then. But today, under an Obama administration, the answer is apparently "Yes we can."

Our own generals requested 30,000 troops in order to roll out a new strategy and fight terrorists in Afghanistan and they got but 17,000 committed. Our efforts to combat al-Qaeda's narcotics money tree and undermine their popular support in Pakistan are expected to be short-funded $167.5 million with no redress in sight, yet the commitment is already made to spend $900 million of your tax dollars rebuilding Hamas' home turf.

Make sense of that.