Epain Homes

As a logical consequence of the prolonged economic downturn it appears that participation in the federal food stamp program is on the rise.

In fact, household participation has been climbing so steadily that it has far surpassed the last peak set as a result of the immediate fallout following hurricane Katrina.

The latest data released by the Department of Agriculture shows that, on a year-over-year basis, household participation has increased a whopping 25.25% while individual participation, as a ratio of the overall population, has increased 22.83%.

The August results confirm that participation is continuing to climb dramatically, likely as a result of the recent jump in total unemployment, driving the nominal benefit costs up an astounding 62.61% on a year-over-year basis to $4,853,114,719 for the month.

Looking at the last chart that plots the total unemployment rate (unemployment rate of all traditionally unemployed workers plus all marginally attached and part time workers) and the population adjusted individual program participation rate normalized since 2005, one can plainly see that program participation would be expected to continue its surge.

The following charts provide a simple comparison between the big stock bounce that occurred in the wake of the DOW crash of 1929 and the bounce we are seeing today in the S&P 500 index.

The method of alignment was simple… take the first definitive up trading day off the bottom of the preceding bear market low and set that as the start of the series… then simply re-base both series to a value of 100 so that they can be compared side-by-side.

The lower bar chart plots the cumulative percentage change since the start of each bounce.

The S&P 500 is up over 44% in a little over 160 trading days… an historically aggressive run with an obvious note of mania to it… and wholly comparable to… even far stronger than… the price movement seen in the 1930s-era DOW rally.

At this point for the 30s-era DOW, the bull-run was over as the bear trend resumed in earnest… today though the Bull is seriously on the move… how long will this boom last?

Only time will tell… But for now, let’s continue to keep a watchful eye…

Today, CNBC’s Steve Liesman nearly had a coronary while announcing the latest ISM manufacturing data, suggesting that the employment index breaching 50 could “change the calculus” for Friday’s employment situation report… the markets reacted with a customary frenzy ebullient bullish buying.

But… the employment index appears more than likely to be simply “juiced” by the government’s historic stimulus efforts.

Looking at the following Blytic chart (click for fullscreen player) you can see that in the past several recessions, the manufacturing employment index did not signal expansion until well into the post-recession period with a minimum of 5 months of down trending unemployment.

Given the circumstances, it is more likely that manufacturing swung into expansion as a result of the cash for clunker “autos and homes” programs and resultant dynamics and not organic economic expansion.

The math is trivial… Recovery.gov states that the American Recovery and Reinvestment Act has already “created or saved” 640,329 jobs as a direct result of $52.1 billion of funds (a.k.a. your tax dollars) payed out in “contracts, grants and loans”.

So… $52.1 billion divided by 640,329 = $81,364 per each job “saved or created”.

Here is a nice image widget that you can embed in your favorite web page in order to keep track of the governments costly shenanigans … Ill updated it as the stats at recovery.gov are updated.

I’m no Warren Buffet but I thought I heard somewhere that in business it’s a good idea to try and make it as easy as possible for your customers or clients to pay your bills. I know we’re always thinking about this issue with our monthly client statements whether it means accepting credit cards, sending statements via e-mail, allowing Internet bill pay, or just including a self-addressed stamped envelope so all a client has to do is write a check and drop it in the mail. You’d be amazed at what a difference just enclosing an envelope and $.42 stamp did for speed of client payments.

And then there’s the Cook County Treasurer’s Office…

We represent the Estate of a gentleman who died within the last 6 months or so who owned a home in Cook County. There’s upwards of $800,000 in this Estate working it’s way through probate court and no surprise the home has yet to sell. And we need to pay the 2007 Second Installment tax bill. But for whatever reason my client, the executor of the Estate, who has had the decedent’s mail forwarded to his house hasn’t gotten the tax bill.

Well, the Treasurer will not let us pay the bill unless we have an original tax bill coupon included with the check. They don’t want our money! A check with a PIN and address and for the specific amount listed as due on the Website isn’t enough…they want their coupons!

So I’ll be stopping by the Treasurer’s Office tomorrow as part of my Daley Center morning and ordering a duplicate tax bill copy at the County Administration Building.

Why is the coupon so important? Isn’t it the tax revenue they’re after?