California Economy

[denverite]

I thought a discussion on the negative feedback loop was in order and came across this informative link while doing research. The information contained, while not addressing the economic feedback loop directly, contains very timely and pertinent data. They don’t get into the feedback loop, but the Piggs are more than smart enough to fill in those effects. IMHO, it is worth a read if you are interested in current California economic conditions.

I guess the mantra “everything is related” really speaks to the problem.

Here is the link, I hope.
http://feedproxy.google.com/DrHousingBubble-HowILearnedToLoveSocal

[EconProf]

A great in-depth description of why California’s problems are going to get a lot worse. Negative feedback loops galore, in housing, employment, foreclosures, fiscal deterioration, and more.
What the author doesn’t fully include, which makes the problems even worse, are time lags. Since there is a period between the economic deterioration and the accumulation and publication of data showing same, and then a further lag between several months of data and the public and politicians’ recognition of it, and then a further action lag (policy changes, consumer belt-tightening, etc), the chain of time lags will make the downtrend deeper and longer than now believed.

[EconProf]

A great in-depth description of why California’s problems are going to get a lot worse. Negative feedback loops galore, in housing, employment, foreclosures, fiscal deterioration, and more.
What the author doesn’t fully include, which makes the problems even worse, are time lags. Since there is a period between the economic deterioration and the accumulation and publication of data showing same, and then a further lag between several months of data and the public and politicians’ recognition of it, and then a further action lag (policy changes, consumer belt-tightening, etc), the chain of time lags will make the downtrend deeper and longer than now believed.

[EconProf]

A great in-depth description of why California’s problems are going to get a lot worse. Negative feedback loops galore, in housing, employment, foreclosures, fiscal deterioration, and more.
What the author doesn’t fully include, which makes the problems even worse, are time lags. Since there is a period between the economic deterioration and the accumulation and publication of data showing same, and then a further lag between several months of data and the public and politicians’ recognition of it, and then a further action lag (policy changes, consumer belt-tightening, etc), the chain of time lags will make the downtrend deeper and longer than now believed.

[EconProf]

A great in-depth description of why California’s problems are going to get a lot worse. Negative feedback loops galore, in housing, employment, foreclosures, fiscal deterioration, and more.
What the author doesn’t fully include, which makes the problems even worse, are time lags. Since there is a period between the economic deterioration and the accumulation and publication of data showing same, and then a further lag between several months of data and the public and politicians’ recognition of it, and then a further action lag (policy changes, consumer belt-tightening, etc), the chain of time lags will make the downtrend deeper and longer than now believed.

[EconProf]

A great in-depth description of why California’s problems are going to get a lot worse. Negative feedback loops galore, in housing, employment, foreclosures, fiscal deterioration, and more.
What the author doesn’t fully include, which makes the problems even worse, are time lags. Since there is a period between the economic deterioration and the accumulation and publication of data showing same, and then a further lag between several months of data and the public and politicians’ recognition of it, and then a further action lag (policy changes, consumer belt-tightening, etc), the chain of time lags will make the downtrend deeper and longer than now believed.

[kev374]

I’m generally a bear but I also make real life observations. As of now I cannot see any significant impact on consumer spending. Infact, restaurants and shops are busier than any other time I have ever seen. The data I am hearing does not seem to align with what is going on in reality. Every single time I have been to a restaurant this week, it has been packed full with long waits. If we are in a downward spiral and consumer sentiment is low then I simply cannot see how people are spending so much.

I would imagine that eating out is the first thing to be curtailed if consumers are feeling the pinch but just the opposite, the crowds have not been bigger.

[kev374]

I’m generally a bear but I also make real life observations. As of now I cannot see any significant impact on consumer spending. Infact, restaurants and shops are busier than any other time I have ever seen. The data I am hearing does not seem to align with what is going on in reality. Every single time I have been to a restaurant this week, it has been packed full with long waits. If we are in a downward spiral and consumer sentiment is low then I simply cannot see how people are spending so much.

I would imagine that eating out is the first thing to be curtailed if consumers are feeling the pinch but just the opposite, the crowds have not been bigger.

[kev374]

I’m generally a bear but I also make real life observations. As of now I cannot see any significant impact on consumer spending. Infact, restaurants and shops are busier than any other time I have ever seen. The data I am hearing does not seem to align with what is going on in reality. Every single time I have been to a restaurant this week, it has been packed full with long waits. If we are in a downward spiral and consumer sentiment is low then I simply cannot see how people are spending so much.

I would imagine that eating out is the first thing to be curtailed if consumers are feeling the pinch but just the opposite, the crowds have not been bigger.

[kev374]

I’m generally a bear but I also make real life observations. As of now I cannot see any significant impact on consumer spending. Infact, restaurants and shops are busier than any other time I have ever seen. The data I am hearing does not seem to align with what is going on in reality. Every single time I have been to a restaurant this week, it has been packed full with long waits. If we are in a downward spiral and consumer sentiment is low then I simply cannot see how people are spending so much.

I would imagine that eating out is the first thing to be curtailed if consumers are feeling the pinch but just the opposite, the crowds have not been bigger.

[kev374]

I’m generally a bear but I also make real life observations. As of now I cannot see any significant impact on consumer spending. Infact, restaurants and shops are busier than any other time I have ever seen. The data I am hearing does not seem to align with what is going on in reality. Every single time I have been to a restaurant this week, it has been packed full with long waits. If we are in a downward spiral and consumer sentiment is low then I simply cannot see how people are spending so much.

I would imagine that eating out is the first thing to be curtailed if consumers are feeling the pinch but just the opposite, the crowds have not been bigger.

[kewp]

Great find!

Yes, people in usually bad at understanding negative feedback loops. The current economic crisis reminds me of some of the problems with climate models and global warming; as the earth is warming much faster than anyone anticipated again due to not taking into account negative feedback loops.

I agree that time lags are a huge issue. I’ve said for the last year that October ’08 would be a watershed month for our economy. Why? It was six months past the peak of subprime ARM resets. Ergo, that is about when the shockwave would hit the financial markets. I think many, many folks are going to be deeply surprised at the breadth and depth of the downturn over the next few years.

Re: casual observations.

I’ll disagree. I live in Hillcrest and it seems much less busy than usual for this time of year. Highway traffic also seems light and I park closer to the entrance at CostCo everytime I shop there. Plus they only have a few registers open and I still don’t have to wait long at all.

[kewp]

Great find!

Yes, people in usually bad at understanding negative feedback loops. The current economic crisis reminds me of some of the problems with climate models and global warming; as the earth is warming much faster than anyone anticipated again due to not taking into account negative feedback loops.

I agree that time lags are a huge issue. I’ve said for the last year that October ’08 would be a watershed month for our economy. Why? It was six months past the peak of subprime ARM resets. Ergo, that is about when the shockwave would hit the financial markets. I think many, many folks are going to be deeply surprised at the breadth and depth of the downturn over the next few years.

Re: casual observations.

I’ll disagree. I live in Hillcrest and it seems much less busy than usual for this time of year. Highway traffic also seems light and I park closer to the entrance at CostCo everytime I shop there. Plus they only have a few registers open and I still don’t have to wait long at all.

[kewp]

Great find!

Yes, people in usually bad at understanding negative feedback loops. The current economic crisis reminds me of some of the problems with climate models and global warming; as the earth is warming much faster than anyone anticipated again due to not taking into account negative feedback loops.

I agree that time lags are a huge issue. I’ve said for the last year that October ’08 would be a watershed month for our economy. Why? It was six months past the peak of subprime ARM resets. Ergo, that is about when the shockwave would hit the financial markets. I think many, many folks are going to be deeply surprised at the breadth and depth of the downturn over the next few years.

Re: casual observations.

I’ll disagree. I live in Hillcrest and it seems much less busy than usual for this time of year. Highway traffic also seems light and I park closer to the entrance at CostCo everytime I shop there. Plus they only have a few registers open and I still don’t have to wait long at all.

[kewp]

Great find!

Yes, people in usually bad at understanding negative feedback loops. The current economic crisis reminds me of some of the problems with climate models and global warming; as the earth is warming much faster than anyone anticipated again due to not taking into account negative feedback loops.

I agree that time lags are a huge issue. I’ve said for the last year that October ’08 would be a watershed month for our economy. Why? It was six months past the peak of subprime ARM resets. Ergo, that is about when the shockwave would hit the financial markets. I think many, many folks are going to be deeply surprised at the breadth and depth of the downturn over the next few years.

Re: casual observations.

I’ll disagree. I live in Hillcrest and it seems much less busy than usual for this time of year. Highway traffic also seems light and I park closer to the entrance at CostCo everytime I shop there. Plus they only have a few registers open and I still don’t have to wait long at all.

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