재미있는 블로그로 불면증

에서 게리 실링 참고 다음과 같은 Frontline Mauldin되었다 전달 존으로 들어 생각하고 있습니다. 요한은 처음부터 끝에 포함된 짧은 메모를. - 에드.

난 비행기 (다시금) 취리히에서 마요르카, 내가 유럽과 남미 파트너들과 만나에, 오전 재미가 있고, 전에 덴마크와 런던으로 향하고 진정해. 미친 서두 내 책 (즉 나중에 더 완료)와 정신없이 바쁠 일정 이번주 내내, 난 시간이 편지를 쓰고 없었어요. 하지만, 난 손 최상에 당신을 떠나지 않을 공포. 닥터 게리 실링는 기꺼이 그가 미국에서 또 다른 경기 침체의 위험에 보이는 자신의 9 월 편지를, 응결하기로 합의했습니다.

나는 앞으로 매월 초에 개리의 최신 편지를 받고 기대합니다. 나는 종종 그것을 밖으로 인쇄하고 떨어져 내 책상에서 자신의 생각을 읽는 몇 가지 좋은 시간을 보내고 도보로. 그는 내 "-"애널리스트 읽을 수 있어야합니다 중 하나입니다. 난 항상 뭔가를 아주 유용하고 통찰력 배웁니다. 나는 감사하고 그 사람이 가지고 나를 너와 함께 이것은 공유하자입니다.

편지를한다면 그의 관심이 당신은, 자신의 웹사이트가 새롭게 단장됩니다되는 아래,하지만 당신은 좀 더 많은 정보를 쓰기 위해 수 있습니다 insight@agaryshilling.com . 당신은 (2백75달러에 가입하십시오) 원한다면, 당신은 888-346-7444에 전화하실 수 있습니다. 당신이 그것에 대해 생각에 전선의 읽고 그들에게, 당신은 추가로 1 개월에 가입하게됩니다. 그리고 지금,하자 게리를 켜십시오.

- 존 Mauldin

로 게리 실링

투자자의 태도가 갑자기 최근 몇 개월에 반대했습니다. 지난 3 월 하순으로, 대부분의 주식 년의 긴 강력한 상승을 번역으로, 외화, 1 년 이전에 강력한 경제 성장으로 시작했다 상품과 재무부 채권의 약점 - "브이"복구할 수 있습니다.

그 결과, 투자자가 올해는 일찍 그 빠른 일자리 창출과 소비자 신뢰의 복원이 소매 지출을 박차 거라 생각 했어요. 그들은 또한, 강력한 수출 성장도 경제 안정화 추진의 주택 부문의 증거를 부흥하는 방법을주는 것을 보았다. 자본 지출이 이끄는 하이테크는 힘이 다른 지역했습니다, 많은 사람들이 믿었다.

그렇게 빨리

하지만 재미있는 플래시 웹사이트, 또는 너무 재밌 플래시 웹사이트 것은 슈퍼 충전 용량 - 긴장 성장 도중에 일어난. 지난 4 월, 투자자는 유로의 하락으로 올해 초에 인도에 있던 유로존 금융 위기, 글로벌 성장에 심각한 위협이되는지 시작했다. 주식 (표 1), 상품 및 떨어졌다 재무부 채권은 반등하고 달러 장미 퇴각. 그것은 결국, 이들 4 개 시장 중에서 하나의 큰 무역이므로 아래뿐만 아니라 측면에까지 그들의 행동은 서로 놀라운되지 않습니다.

또한, 투자자는 미국 경제의 건강과 2007 년 12 월 시작된 위대한 불황에 두 번째 수영에 대한 전망에 대해 걱정하기 시작했다. 도망가 려던 1조달러 주변의 거대한 2009 회계 연도 자극, 정부의 생명 유지 장치에서 실행되었다 경제의 재발을 위협하고. 신규 주택 구입자에 대한 8천달러 세금 환불은 4 월 30 일 만료되었습니다 주택 판매 드롭 다음에있을 년 11 월 2009 년 활동의 증가로 올해는 일찍에서만 향후 판매에서 빌린 만료 이전했다. 수출에 대한 전망은 부정적 강력한 벅과 유럽의 경제 축 쳐지고, 그리고 현재 ""중국의 "그만 -"통화와 재정 정책을 가지의 단계를 중지 시켰죠. 높은 실업과 나머지 지난 봄, 투자자들은 회계 자극이 모두 소진되었습니다대로 소비자 지출 주저하면 것이다 마세요 시작했다.

Deleveraging

경제의 투자 전망은 지난 5 개월 동안 반전했지만, 현실은 그렇지 않을 수도있다. 좋은 삶과 1980 년대 초반에 대규모 금융 활용과 과도한 부채, 세계 금융 부문에서 처음으로, 1970 년대의 시작과 미국 소비자들간에 1980 년대 초반에 의해 연료 시작되었다 빠른 성장. 그 활용은 co.kr에서 주식 거품이 1990 년대 후반에 점 하나를 클릭한 후 주택 거품 추진. 하지만 지금은 그 두 섹터 delever하고 그 과정에서 정부와 중앙 은행들의 채무를 전송하는 강요되고있다.

이 deleveraging 아마도 10 년 이상 걸릴 것입니다 - 그리고 그것은 좋은 소식. 땅이 충당하기 위해 정말 대단합니다 그것이 1 년 또는 2 년, 주요 경제 우울증을 1930 년대보다 더 경험이있다면 통과 것이다. 이 deleveraging 및 기타 세력 느린 경제 성장과 수년 동안 아마 디플레이션 발생합니다. 일본은 보여주었다로서, 이들은 어려운 조건이 통화와 재정 정책 오프셋입니다.

글로벌 금융 부문과 미국 소비자의 투기장의 deleveragings는 실질적이고 지속하고 있습니다. 가계 부채가 다운 374,000,000,000달러 2008 년 2 분기 이후입니다. 신용 카드 및 기타 회전 부품뿐 아니라 자동차 및 학자금 대출을 포함하는 비 회전 조각이 모두 감소입니다. 총 사업 채무 아래로 상업 및 산업용 대출을 낙하에 의해 목격됩니다.

한편, 연방 정부의 부채는 5,800,000,000,000달러부터 2008년 9월 30일에 8,800,000,000,000달러에 8 월 하순에서 폭발했다. 이 동요의 인플레이션의 의미에 대해 많은 걱정하지만, 현실은 그 공공 부채는 단순히 개인 부채를 교체했다. 연방 정부 적자가 leaped이 소비자와 기업 회계 자극은 민간 부문의 약점을 대체 목표로하면서, 어떤 연방 세수를 curtailed, retrenched는 버섯이 있습니다.

4 실린더

우리의 2010년 5월 통찰에서 전형 후 2 차 세계 대전 경제 회복에 나와있는대로, 4 실린더 화재가 recessionary 진흙의 경제적 차량을 밀어 다시 밖으로 경제 성장의 고속도로로. 현재는 단지 하나 - 재고 청산 종료 - 상당한 전력을 발생합니다. 다른 3 - 고용 증가, 소비자 지출 증가와 주택 건설에 부흥 - 최상의 스퍼터링 수 있습니다.

재고 사이클

역사적으로, 경기 침체로 경제 활동의 감소의 주요 주식에 대한 초과 재고 계정의 청산. 비즈니스 사이클 봉우리 주변, 제조 업체의 매출, 도매 및 소매하지만 약하게 그들의 관리자는 그 여부가 상승 추세에있는 사업의 주요 떨어뜨 리거나 그냥 가벼운 수영의 시작 말할 수 없어 시작합니다. 그래서 그들은 하향 추세까지 생산과 주문을 절단이 지연 단단히 설정됩니다. numerators, 인벤토리, 상승 및 denominators, 판매, 가을로 한편, 재고 - 판매 비율의 도약. 그 생산과 주문 필수적으로 삭감하게하고 그 과정에서 경제적인 하향 추세를 향한 추진력을 얻습.

그것도 큰 불황에 사건이었다. 우리의 관점에서, 정말 2007 년 초반 서브 프라임 모기지 주택의 붕괴, 그리고 시작 후 월가 그 여름 6 월에 두 베어 스턴 즈의 헤지 펀드의 파열과 전파. 하지만 이러한 금융 거부가, 그리고 경기 침체는 생산에 의해 측정 고용과 소비, 물건과 경제의 nonfinancial 서비스 부문에 의해 주도되고있다. 경기 침체는 공식적으로 2007년 12월 때까지 시작되지 않았습니다 그래서.

소비자가 파업 이동

또한, 그것은 2008 년말까지 그런 뜻이 아니라 주택 담보의 붕괴 주택 가격은 (표 2), 정리 해고를 (표 3)가 소비자 대출의 건조 단축으로 소비자를 몰고 상승 nosedived 있습니다. 하지만 그들은 갑자기 2008 년 지난 4 개월 동안 구매자의 파업에 갔다 결과는 도약 재고 - 판매 비율있었습니다. 따라서, 인벤토리에있는 상처가 원치 않는 주식 없애 멀리 떨어진 이후 2 차 세계 대전 시대의 가장 큰을했다.

재고 청산의 감소는 경제 성장 2009 년 하반기에 시작하는 열쇠되었습니다. 작년 3 분기에, 그것은 1.6 % 연간 실질 GDP 비율 증가와 4 분기의 5.0 %를 사전의 58 %의 66 %를 차지했다. 올해 1 분기에 재고 - 건물은 실질 GDP의 3.7 % 연간 속도 증가와 2 분기에 1.6 %의 증가의 36 % 중 67 %를 맡았습니다. 총, 지난 4 분기, 재고 스윙은 실질 GDP의 3.0 % 증가의 58 %를 제공했습니다.

재고가 계속됩니다 과대 광고 여부에 대한 경제는두고 봐야 알겠죠. 6대로 소매점에 대한 재고 - 판매 비율은 하향 추세에 반환했으나 도매업 추세 여전히 위의였다 특히, 제조 업체. 또한, 그것도 한 가지 불필요한 재고의 청산을 완료했지만 다른가 현저히 그들을 재건하는. 후자는 아마도, 그리고 경제 엔진의 실린더 의미있는 다른 3 가지 방법으로 그것을 제공하지 않습니다 판매 강도가 경제의 다른 지역에서 발생이 필요합니다. 정반대. 그것은 소비자가 절감하다 계속한다면 실망 최근 소매 판매가 죽이지 수 있습니다 불필요한 물건과 상인이 갇혀있다가 나타납니다.

취업 Lags

이후 2 차 세계 대전의 경기 침체에서 1,990에서 1,991 사이 하락은 급여 고용의 바닥 가까이 낮은 지점으로 전체적인 비즈니스 감소에 오기 전에는 급속한로 뒤를이었다 (표 4) 리바운드. 경기 침체 가벼운 1,990에서 1,991 사이, 심지어 2001 얕은 그러나, 고용 시장의 약점에 대한 경제 회복 1 년 넘게으로 남아 있었다. 같은 사실이 이번에는, 많은 사람들이 믿는대로 경제 몰락 7 월 2009 년 종료 가정이다. 뭐가 바뀐 거죠?

그것은 1990-1991 년과 2001 downturns 약한 않았기 때문에 비록 약한 직업 복구에 얕은 경기 침체의 결과는, 위대한 불황은 확실히 작업 (표 4)의 관점에서 아니었되지 않습니다. 더 많은 가능성이 설명은 세계화, 1980 년대, 미국의 사업을 적극적으로, 인건비를 포함한 모든 비용 절감을 위해 강제로 시작, 국내외 공급 업체에 아웃소싱하여 추진하고 있습니다 생산성과 고용 curtailing. 이것은 특히 지난 10 년 서울에서 맛보는되었습니다.

잡스는 영원히 사라

2007 년 말 이후 가장 큰 고용 손실에도 불구하고, 이러한 작업의 대부분은 반환하지 않을 수 있습니다. 7700000 그물 nonfarm 작업 2007년 12월 7 월 올해 사이에 제거 중 86 %는 건축, 제조, 도매 및 소매 무역, 금융, 레저 및 서비스업있었습니다. 이들 여섯 분야 nonfarm payrolls의 44.5 %를 7 월에, 절반만큼 그들의 손실 정도 밖에 차지했다. 또한 그 산업 분야에서 일자리 손실이 그들을 다른 분야에 따라 서비스 및 고용 손실을 양산. 홈 건물은, 예를 들어, 가전 제품, 가구, 가정용 가구 및 주택 소유자 보험의 생산에 박차를 고용하고 수익을 지원하는 주 및 지방 고용을 제공합니다.

주택 공사가 어떤 의미 부흥을 보여줍니다 전에 우리가 과거 인사이트에서 설명한대로 다음 달 업데이 트됩니다 초과 주택 재고의 거대한 다가오다 감안할 및 추가 가격 인하를 결과로, 그것은 년이 될 것입니다. 마찬가지로, 재정적 그리고 굉장히 많이 비어있는 상업용 부동산 수년 동안 새로운 건설과 일자리 문제가 억제됩니다.

재고주기가 최근 몇 달 동안,하지만 제조업 고용을 안정어요 인벤토리 관련 바운스가 끝난 12 월 2007 년 아마 더 큰 숫자가 될 게있다면 이후 2 백만 제조 작업 놓쳤습니다. 상품 생산은 해외로 이동하고 있습니다. - 직업 및 소비자 단축 생산성 생산은 계속 감소하고 디플레이션 소비자 내구재 소비를 줄이기 나갈 것입니다. 특히 소매 무역 도매 25 년 소비자 대출과 지출 파티 이제 절약 행위는 (표 5)에 의해 대체와 압박을 받고 계속됩니다. 그 단축뿐만 아니라 영구적인 비즈니스 지출 억제 레저 및 서비스업에 일자리를 저능아 나갈 것입니다.

재무 활동 작업 2009년 3월 3 월 월가 2010 부흥과,하지만 안정된 많은 증권 시장에서 최근 약점의 가능성이 연기가 더 정리 해고와 보너스 인하로 이어질 것입니다. 연방 정부, 자연스럽게 추가했습니다 사람, 2007년 12월 262,000대로 그것은 약한 경제에 대한 응답으로 확대 때문이다. 그러나 주 정부는 균형과 지방에서 크게 교육 시정촌을 128,000 6,000 잘라.

근면한 비용 절감

경기 침체가 2007 년 12 월, 특히 인건비를 시작한 이후 미국의 비즈니스가 부지런히 비용을 절단했다. 최근 조사에 따르면 성인의 절반은 정리 해고의 일부 조합, 임금 및 혜택 인하에 의해 영향을받은 휴가를 보여줍니다 무의식과 임시 작업에 무의식적인 교대. 많은 이들이 그들의 이전 상태로 복원되지 않을 수 있습니다. 이러한 정리 해고만큼 새로운 일자리를 자주 이전보다 적게 지급됩니다 찾으려면 행운.

1,000여 근로자와 주요 고용주의 약 20 %가 절단 또는 401 (k를 제거) 계획 기여를 침체 중에 있지만 절반은 지금까지 그들을 복원하는 데 실패했습니다. 그 500 명 이하의 직원과 절단 기부, 오직 36 %가 향후 12 개월에 그들 또는 계획을 원상태로 해놓, 피델리티 투자 조사에 따르면 이죠. 또한, 모든 고용주의 10 %가 감소 또는 401 (k를 일치)는 내년에 기여를 없앨 계획입니다.

소비자 지출

모든 해고, 무의식적인 휴가를, 그리고 일시적인 일자리와 이익과 임금 감소는 기업 이익 리바운드에서 기악,되어 있지만 직원 보상에 충격적입니다. 소비자 지출에 대한이 2 차감염 약점. 또한, 소비자는 더 이상 점점 더 신용 카드, 주택 담보 대출 및 기타 소득과 지출 성장을 원하는 사이의 간격을 다리로 대출을 저장할 수 있습니다. 또한, 주택 담보는 (표 6)과 신용 카드 및 기타 대출에 꽉 대출 기준 승리 증발했다. 그래서 그들은 절약 행위 및 부채 감소 실험에있어, 더 이상 소비자 지출에 대한 전망을 대폭 내렸습니다, 일반적으로 경기 침체에서 경제 회복을 추진하는 화재 제 3 실린더.

사실, 대규모 재정 자극없이는 보상을 제압 경기 침체가 다운 실질적으로 소비자 outlays 밀어 것입니다. 우리의 계산은 소비자들이 2008 년 여름에받은 세금 환급의 80 %를 저장 보여줍니다. 그리고 그들은 처음에 2009의 세금 감면과 각 사회 보장 수혜자에 대한 $ 250의 특별 수당의 100 %를 구했어요. 그런 조치는 절약 율 차트 5에 표시된의 스파이크있었습니다. 이것은 이후 세금 인하 highincome 사람들에게, 정상적으로 유일한 큰 보호기 가지 않았 주목할 수 있습니다. 또한, 그 사람들은 여분의 사회 보장 수표 몇 가지를 받았습니다 그래서 상대적으로 숫자에 불과합니다. 따라서, 중간 및 낮은 소득 가구가의 성격을 많이 구하려고 나갔습니다.

가정은 복수와 함께 자신의 대차 대조표를 deleveraging 있습니다. 2007 년 4 분기의 끝 주식, 개인 부문의 자산은 3.0 조 달러 추락 붕괴 시작 이래. 일부는 $ 1,800,000,000,000 주식에 2천7백70억달러 뮤추얼 펀드 인출 균형과 평등 직접 소유권 및 뮤추얼 펀드에서 손실 때문에되었습니다. 투자자들이 뮤추얼 펀드에 잔액에 년 1 월, 3 월 4 월,하지만, 특히 주식 자금에서, 5 월 6 월 자신의 소유를 잘라 돈을 넣어. 또한, 개인 연금 보유 2007 년 말까지 3 월 2010 가계 계정의 정부 연금 보유의 끝에 달러 754000000000 하락했다 2천9백억달러했다. 5백33달러의 재무부 채권 보유의 증가는 부분적으로 정부 기관과 5천9백30억달러의 유가 증권의 감소를 오프셋. 한편, 개인 부문의 부채가 다른 희망이 서면으로 해제하는 동안 일부 채무 상환 것처럼 크게 모기지의 감소와 소비자 부채로 인해 달러 500000000000 떨어졌다.

정부에 의해 지원

경기 침체가 2007 년 12 월 2010년 6월, 임금 및 급여의 개인 소득을 통해 년부터 사업자 '소득, 임대료,이자, 배당 및 전송 연금 혜택, 사회 보장, 메디케어와 메디케이드 수당 및 실업 보험과 같은 달러 285000000000 증가했다. 그것은 정부 송금 지불에 5천3백20억달러 증가없이 달러 247000000000 거부 것입니다. 정부 이전에 이러한 증가는 또한 일회용 개인 소득 (세후 소득을 통해), 어떤 추가 382,000,000,000달러 세금 감면으로 인해하고 낮은 과세 소득을 해고로부터 임금 감소 및 보너스 삭감 결과 떨어진 낮은 개인 세금으로 혜택을 흘렀을.

전체적으로 DPI는 5천3백20억달러에 의해 정부의 전송에있는 증가와 3천8백20억달러 낮은 세금에서 향상되었습니다. 이러한 중요한 향상없이는 DPI 구현 2007년 12월 대신에 $ 667,000,000,000 상승 이후 달러 247000000000 떨어진 것입니다. 질문, 그리고 더 많은 그래서 이전 이후 2 차 세계 대전의 경기 침체보다 않고, 소비자가 대규모 정부 자금 증가 전송 및 세금 감면의 형태로 지원되었습니다. 그리고이 숫자는 작업 인프라에 지출 연방 또는 주 및 지방 정부에 연방 전송하여 교사 해고 등 고용 감축을 줄이기에 저장하여 만든부터 임금에 포함되지 않습니다.

돈은 어디로 갔을까요?

무슨 일이 그 DPI에 667,000,000,000달러 증가와 어떤 만성적인 소비 절약 행위의 가능성에 대해 말씀해는 무엇입니까? 그것의 43 % 정도가 64 % 구했으니, 어쩌면 일부 이전 세금 감면을 보냈습니다, 지출했지만 지연 있습니다. 그럼에도 불구하고 64 % 절약 한계 속도는 우리의 만성 절약 행위는 논문을 지원하는 것 같다.

또한, 지출과 절약, 단간에 소비자 경기장에서 대규모 연방 자극에 의해 지원되어 진행되고있다는 측면입니다. 이전 인사이트에 명시된 바와 같이 이러한 자극은 향후 년 동안 만성적인 높은 실업률로 인해 근처에서 현재의 수준에서, 지속 가능성 모르지만 그들은 불황 이후 한 속도로 증가할 것으로 보인다 이미 연방 정부의 대규모 적자에 그들의 효과로 인해 시작했다. 공화당과 심지어 일부 민주당은 의회에 이렇게 자꾸 적자에 대해 현재의 자극이 의아 적어도 때까지 실업 도약 추가 갱신해야하는 걱정하고 있습니다. 이 경우, 소비자 outlays에 대한 지원의 결과 철수 내려 그들을 밀어 수 있습니다. 부분적으로만 증가를 저장하여 상쇄했다 세금 감면으로 추진되었습니다 개인 소득 (표 7)의 공유로 소비자 지출의 도약, 그래서 매우 지속하지 않을 수 있습니다.

최근 소비자 단축의 증거가 만연이다. 소비자 신뢰는 사람들이 고용과 수입 전망에 대해 손실뿐만 아니라 그들의 주식과 주택에 대한 걱정으로 평평했다. 신용 카드 대출 뛰어난 작년 10 % 감소하고 약속 추가로 소비자가 빚을 갚을 가을로, 대출 기준과 새로운 연방 법률 인하 신용 카드 대출의 수익성 개선하십시오. 한편, 은행은 소비자 대출을 위해 수요를보고 드롭, 감소 속도에 있지만 계속됩니다.

증가 절약뿐만 아니라 부채를 갚을 것을 또한 401 (k를 재건하는 데 사용되는하지 않음) s의입니다 피델리티 투자는 2.9 %가 그들을 절감하면서 참가자의 5.3 % 2 분기, 그들의 기여를 제기 발견. 4분의 5에 대한 지속 증가 이상 감소의 그 초과가 있으며 반대의 3 분기를 따릅니다. 그럼에도 불구하고 대부 또는 고난의 인출에 대한 자신의 계정을 도청 숫자도 증가했다.

억제된 지출

지출 측면에서, 7 월 자동차 판매는 연간 11,500,000 속도로, 최대 2008에서 2009 사이의 하위 수준에서 1000 만하지만, 사전에 불황 수준 아래에 잘되었다. 텔레비전에 대한 소비자 지출, 컴퓨터, 비디오 및 전화 장비는 2010 년 상반기에 어플 라 이언스 구매가 3.6 % 하락한 반면 가구 outlays 11 %를 떨어뜨 전년에 비해 1.8 % 증가했다. 의류 판매는 또한 전자 장치에 나가 놓쳤습니다. 이 변화는 두 세력을 반영합니다. 첫째, 소비자가 더 절약하고 더 적은 더 이상 감사하지만 지금은 depreciating 자산의 그들의 집들을 설비에 대한 지출. 둘째, 그들은 여전히 iPads 및 기타 작은 사치, 우리는 몇 년 전에 확인된 투자 테마 구매의 만족을 원하는 우리의 8월 통찰력에 완전히 설명했다.

주택 우울 유적

주택 부문은 정상적인 경제 회복의 중요한 발전기에도 주택 건설은 GDP의 4.7 % 이후 2 차 세계 대전의 년 평균에 대한 계정입니다. 이것은 휘발성의 중요한. 주택 건설 GDP의 6.3 % 2005 년 4 분기에 최근 절정에 있었는데 2.4 %에 그것의 2010 년 1 분기에 낮은 하락했다. 이 3.9 % 포인트의 하락은 매우 중요한, 그 3 %의 실질 GDP에 바닥 거부할 수있는 최고 고려하고 큰 불황을 구성합니다.

지방 정부 지출

그것은 GDP의 13 % 점유율로 1970 년대 초반 이후 등 지속적으로 12 % 되었기 때문에 국가가 지출 및 지방 자치 단체를 하나의 경제 부흥의 소스의 경기 침체 끝 후 없습니다. 초기 이후 2 차 세계 대전 수십년에서는 신속하고 교외를 자꾸의 성장 전후의 아기 교육 자금으로 증가했다. 시정촌은 또한, 최근까지 작업 이후의 안정적인 소스를 제공하고, 많은 적은 수의 직원들이 정리 해고 또는 민간 부문에 비해 상대적으로 해고하고 몇 종료합니다. 몇 년 전, "사회 계약"은 이러한 직원, 그래서 조기 퇴직 조항과 무성한 연금을 민간 부문 근로자보다 낮은 임금을 받았다 개최 그들 나중에 몇 년 동안 따라잡을 수있었습니다. 그러나 1980 년대 초반 이후, 민간 부문은 실제 소득에서 매우 적은 성장과 세계화되었습니다. 한편, 주 및 지방 정부 직원이 지불을받을 수 계속 인플레이션을 초과하고 레이즈 지금 34 % 민간 부문 직원 (차트 8)에 비해 높은 임금 있습니다.

연방 도움말

자사의 회계 자극 프로그램의 일환으로, 연방 정부가 더 많은 학교 교사 정리 해고를 막기 위해 달러를 246000000000 주 정부에 전송되어 도움 기금 메디케이드 비용 증가 및 주 예산에 다른 구멍을 꽂습니다. 연방 자금이 주 예산 격차의 40 %,하지만 30 % 채워지고있어 46 개 주에서 다음 7월 1일 시작하는 2011 회계 연도에 대한 상응하는 예산의 19 %에 121,000,000,000달러의 집단적인 적자를 예상하고 있습니다. 그리고 39 주에서는 회계년도 2012 달러 102000000000 총 격차를 참조하십시오. 연방 정부의 지원을 계속하지 않는 한,이 적자가 훨씬 더 큰 것입니다. 모든 상태지만, 버몬트 한 형태로든 자신의 예산을 균형을 위해 필요하지만 대부분이 회계 속임수와 창조적인 회계로 위반 사실 창의력 영광입니다.

예산 요술은 의심의 여지가 주정부 지출의 급속한 성장으로 최근 몇 년 동안 및 부채의 도약에 관련되어 있습니다. 주 및 지방 자치 단체는 지금 현재 예산을 기준으로 할하는 데 사용, 일부의 부채 문제는 투자 자금을 정기 예산 부족을 충당하기 위해 부채를 사용합니다. 총 주 및 지방 채권 채무 뛰어난 2000과 2009 사이 1,200,000,000,000달러부터 2,300,000,000,000달러에 93 %를 leaped.

그것은 분명, 훨씬 덜 잘라내기, 그들의 지출을 버리고 6 %로 7 % 연간 성장률의 10 년 후 정부가 치아의 상태 및 지역에 대한 외부 어둠 속에서 gnashing이 많이 걸립니다. 시 고용 점프 이전 년 동안 지출을 자꾸의 주된 이유이며, 종종 지역 workforces 상태를 이온화하지 절단은 매우 어렵습니다. 멋진 불황은 2007 년 12 월 4월를 통해 시작 이후, 개인 급여 고용은 6.8 % 떨어 졌어요. 아직도, 주 및 지방 작업이 감소 있지만, 훨씬 덜만이 1.4 %로. 7 월에는 9.5 만, 48,000 작업, 102,000 지난 3 개월에 169,000 올해까지 잘라 고용 상태 및 지방 자치 단체,.

올리 부가세

그들의 재정상의 어려움, 많은 주 및 지방 정부에 반응에 세금과 수수료를 높이려고 시도했습니다. 평소 용의자 회사 밖으로 국가의 기반에 담배 및 알코올 음료에 대한 높은 죄악 세금뿐 아니라 세금하지만 상태에 몇 가지 사업을하는가 포함되어 있습니다. 시도는 메스를 지출 전적으로 불충 분한 및 지방 정부의 재정 상태 문제를 해결하는 내장 세금을 인상합니다. 그리고 그 불황은 만성, 특히 느린 경제 성장의 일기 예보와도 디플레이션이 유효한지 나타납니다. 과세 대상 개인 및 기업의 소득에 상승 재생되지 않습니다. 소매 판매 및 세금 그들 부진한으로 소비자가 향후 10 년 동안 그들의 행위는 절약에, 차입과 지난 10 년간의 지출 실험을 대체 유지됩니다.

주택 가격은 추가로 내년 정도에 빠지게 할 가능성이 거대한 초과 인벤토리의 무게 아래에 있습니다. 경우에도 그 인벤토리가 떨어져 근무하는 주택 가격은 아마 일어날 것이다 약간, 전혀, 낮은 인플레이션이나 deflationary 기후하는 경우. 역사적으로, 그들은 평평한 전반적인 인플레이션과 주택의 크기에 대한 성장 시간이 지남에 정정 후 있었어요. 그리고 이제 주택 가격이 전국적으로 1930 년대 이후 처음으로 추락, 주택 구입자은 더 이상, 또한 훌륭한, 활용 투자로 자신의 abodes를 참조하고 작은, 싼 집을 싶어요. 그것도 재산세에 대한 평가를 줄일 수 있습니다.

한편, 상업용 부동산 높은 공석과 심각한 재정 문제를 해결하기 위해 몇 년, 가격은 약간의 시간 (표 9)에 대한 우울하게 유지됩니다. 그럼, 모든 일들이, 지방 정부 재산세는 여러 해 동안 curtailed 될 가능성이 고려. 한편,시 비용은 잘라 힘들 것입니다. 만성 높은 실업률이 높은 메디케이드 등록과 비용을 결과야 것입니다. 복지 및 실업 수당 비용은뿐만 아니라 상승을 의심합니다.

신경 재정은 국가 및 지방 자치 의무 심지어 파산에 디폴트의 위험을 제기하고 있습니다. 해리스 버그, 펜실베니아의 수도인 5천1백50만달러 인해 2 주 동안의 부채, 그리고 올해 3,300,000달러 시립 채권 지불을하지 않을시 관계자는 파산을 논의했다. 해리스 버그는 또한 2억8천8백만달러 채무에 대한 소각로 사업에 대한 지불을 계속하기 위해서는 자금이 부족. 이전, 제퍼슨 카운티, Ala., 버밍엄의 고향 2억2천7백만달러의 비참한 하수도 업그레이 드에 인해 기본값.

납세자 반란?

사람들은 민간 부문에서 일하는 분명히 지난 몇 년 동안 더 높은 급료를, 더 많은 일자리 보안 및 주 및 지방 직원을위한 더 나은 퇴직 혜택을 받아들일했다. 민간 부문에서 높은 고용과 안정적인 경제 성장을 희망을 그들의 많은 내일 향상이라면 적어도 개최. 하지만 느린 경제 성장과 소득 제한 확장과 높은 실업률은 지금 그들에 의해 년간 예상, 유권자의 태도가 변할 것으로 보인다.

미국인들이 아직 원하는 경찰과 화재 예방, 그들의 아이들이 깨끗한 거리와 쓰레기 수거에 대한 좋은 학교 같은 기본 시립 서비스. 하지만 그들은 분명히 그들은 너무 많이 해당 서비스에 대한 지불 결정되며 해당 주 및 지방 직원을위한 34 % 높은 임금은 민간 부문 노동자에 비해 임금 인하 민간 부문에서 증식과 그가 꺼져 많은 경우에는 덜 수입 마련으로 정당하지 and when they can find another job; that 66% higher benefit costs is over the top, especially as private sector employees are paying more of their health care premiums and seeing their defined benefit pension plans replaced by much more uncertain 401(k)s.

As taxpayers revolt, there are plenty of things that can be done to reduce state and local government costs in an orderly way. Following in the footsteps of bankrupt GM, two-tier wage structures are being established with existing employees continuing at current salary levels, but new hires paid the much lower wages adequate to attract qualified people. And the new people are enrolled in defined contribution pension plans that require employee contributions, not defined benefit plans, while their retirement ages are increased.

Foreign Trade

Another economic sector that normally isn'ta significant engine of economic recovery but is important at present is exports since the Administration hopes they will double in the next five years and provide meaningful economic growth. The President's zeal to achieve that goal rises as he realizes that massive fiscal stimuli have not revived the economy, and already-huge federal deficits impede further rounds of big spending.

But two significant problems are likely to retard export growth in future years – rising protectionism that clearly impedes foreign trade, and finding foreign countries that will buy this doubling of American exports. It's like the story of the stockbroker who calls his client during May's Flash Crash to tell him that stocks are collapsing. “Sell my entire portfolio!” yells the distressed client. “Sure,” retorts the broker, “but to whom? There are no buyers.”

Foreign Buyers?

As far as foreign buyers of US exports is concerned, the reality is that many of those markets that are showing robust growth and therefore might be able to absorb American products, lands like China and Germany, are major exporters themselves, not importers on balance. Indeed, it's no surprise that the EU's measures of both industry and household confidence shows that export-led Germany has the highest level while the economically weak Club Med net importers are at the bottom of the pile (Chart 10).

Currency changes have only limited effects on export or import prices. The volatility of US import prices is only about one-fourth that of the dollar and a third in the case of American export prices. 왜? Many products are sold under long-term contracts and immune from most currency fluctuations. Also, importers and exporters resist reflecting the full extent of exchange rate changes in their prices. If the yen is strong against the dollar, importers of Lexus cars shave their profit margins to offset some of the higher prices in dollars to avoid losing market share. Conversely, US exporters to Japan don't pass on in lower yen prices the full extent of the dollar's decline in order to increase their profits.

어떤 구성 요소가 수입하는 "가공 무역", 조립 후 다시 수출은 중국 수출의 절반 정도까지합니다. 이것은 위안의 환율의 중요성을 줄일 수 있습니다. 또한, 더 많은 콘텐츠와 국내에도 물품이 완전히 환율에 글로벌 세계에서 구분하지 않습니다. 아이의 옷을의 중국 제조 업체의 약 50 %는 비용은 섬유와 직물의 비용 중 약 50 %있다는 목화, 전세계 - 상장 필수품 달러로 가격이 책정됩니다. 그래서, 총 비용의 25 %가 위안 변동에 의해 영향을받지 않습니다. 또, 25 %는 의류의 결합 이익에있을 직물 제작자, 그리고 통화의 변동 오프셋 조정 될 수 - 혹은 생산 위안 가치 leaped 경우 저가형 베트남이나 방글라데시로 옮겼습니다.

더블 불황을 찍어?

우리는 숙소에 아주 느린 미국 경제 성장에 대한, 참으로 년, 앞으로 우리의 케이스를 만들 었어. 경제 리바운드는 재고 순환으로 인해 끝났습니다. 고용 및 소비자 지출이 약한 남아있다. 주택은 너무 과도한 재고 및 결과 가격의 약점으로 언제든지 빨리 살려내 overburdened입니다. 주 및 지방 정부 지출과 고용가 후퇴합니다. 그리고 의미있는 수출 증가 가능성은 경제 성장으로 해외 있습니다 전표. 흥미롭게도, 합의 예보 성장 견적은 최근 몇 달 동안 급속히 감소되어로서 우리의 위치를 향해 이동하고 있습니다. 모두 4 월과 6 월, 아니 우리를 포함한 경제 학자 (의 월스트리트 저널의 여론 조사)이 올해 하반기에 3 %의 경제 성장을 기대했다. 그들은 여전히면 우리가 궁금해.

윌 느린 성장은 다른 경기 침체로 저하, 소위 더블 딥 시나리오는? 그 질문을 탐구하기 전에의 더블 딥을 정의하자. 그것은 2,007에서 2,009 사이 급강하 다음과 같은 경제 하락의 두 번째 기간을 의미하는 것 같습니다. 즉, 경기 침체는 허용 권한은 비즈니스 사이클 데이트위원회는 비영리 국가 통계국 경제 연구의, 2007 년 12 월 시작으로 정확히 지적, 여전히 진행 중입니다 암시 수 있습니다. 물론, 실질 GDP는 지난 4 분기 성장하지만, 일반적인 경기 침체 이내에 이득의 숙소를 가지고있어. 11 일 이후 2 차 세계 대전의 경기 침체에서 지금까지, 7, 2007 - 2009 하락 등 경기 침체 내에서 실질 GDP를 상승 중 적어도 하나의 분기했다. 사실, 2 - 1960에서 1961 사이와 2001 년 감소 - 연속 감소도 2 분기가 없었어요. 1,929에서 1,933 사이의 경제 붕괴에도, GDP의 6 준준결승에 진출했다.

그래도, unprecedentedly 오래 될, 가정 같은 불황의 감소 단계 사이의 4 분기 막간을 가지고는 현재 4 분기 실질 GDP 감소. 경제적 약점의 또 다른 기간은 두 번째 경기 침체로, 7 월 1981 년에 시작된 1981에서 1982 사이 거부,만큼, 1980 년대 경제 불황에만 12 개월 이후에 종료 분류 될 수도있다.

경기 침체로 느리게 성장

우리는 기록에 50 % 이상의 두 번째 딥 또는 다른 경기 침체, 뭐든지가 호출했을 확률하기 위해 왔습니다. The composition of the ECRI Weekly Leading Index remains proprietary, but its growth rate has fallen to the level that in the past was always associated with recessions (Chart 11). Historically, however, recessions have been propelled by shocks. The post- World War II downturns prior to 2001 were caused by Fed tightening in response to threats of economic overheating and the resulting higher inflation. Since then, other shocks have been responsible. The 2001 recession resulted from the 2000 collapse of the dot com bubble augmented by the 9/11 shock. The 2007-2009 downturn resulted from the collapse in subprime residential mortgages that commenced early in 2007.

In the current economic and financial climate, it's highly unlikely that the Fed will tighten credit for years. In fact, the central bank has shifted from planning last spring to withdraw liquidity as the economy grew to renewing quantitative easing and worrying about deflation and subpar growth. It said after its August 10 policy meeting that household spending is being retarded by high unemployment, slow income growth, lower home equity and tight credit conditions while bank lending “has continued to contract.”

Pushing On A String

Conventional monetary ease is now impotent with the federal funds rate close to zero , the money multiplier collapsed and banks sitting on hoards of cash (Chart 12) and over $1 trillion in excess reserves. Sure, large banks report to the Fed that they are easing lending standards for small business, but after the intervening financial crisis, many fewer potential borrowers are deemed creditworthy than in the loose lending days. Furthermore, the small business trade group, the National Federation of Independent Business, reports that 91% of small business owners have had their credit needs met or business is so slow that they don't want to borrow. The Fed is pushing on the proverbial string.

The Fed also worries about deflation, which means that even zero interest rates are positive in real terms, as has been the case for years in deflationary Japan. Also, deflation encourages buyers to wait for still-lower prices in a self-feeding cycle, as is seen in Japan and as we have discussed often in conjunction with our forecast of 2% to 3% per year chronic deflation. In it s post- August 10 meeting statement, the Fed said that “measures of underlying inflation,” already low, “have trended lower” lately and are “likely to be subdued for some time.” James Bullard, President of the Federal Reserve Bank of St. Louis, recently warned of the risks of deflation.

Deflation is a scary phenomenon, but we can't resist noting that the Fed as well as many other forecasters are moving in the direction of our forecast. In contrast, an April 6 Wall Street Journal piece by Peter Eavis stated unequivocally, “No one in their right mind would bet on inflation remaining substantially below 4% for the next 10 years.” Maybe we better have our head examined.

A Baby Step

So, with conventional monetary ease exhausted and further fiscal stimulus on hold because of the already-huge federal deficit, the Fed at its August 10 meeting took a baby step toward more quantitative ease by deciding to buy Treasury bonds to replace the maturing and refinanced Treasury and mortgage-backed securities in the $1.7 trillion hoard it finished buying earlier this year. With low mortgage rates, refinancings were projected to raise the Fed's portfolio contraction from an earlier estimate of $200 billion by the end of 2011 to $340 billion, with another $55 billion coming from retirement of Fannie Mae and Freddie Mac debt held by the Fed.

Furthermore, the Fed is open to further steps if the economy continues to slip. It could buy even more Treasurys or mortgage debt. But would the resulting lower interest rates encourage prospective home buyers who now know that house prices can and do fall? Would another $1 trillion in excess reserves induce more bank lending than the first $1 trillion? The Fed could also promise to keep short-term interest rates low, but it's already said it would for an “extended period.”

It could cut out the 0.25% it pays the banks on their reserves, but would that induce reluctant banks to lend? Finally, the Fed could set an inflation target over its formal 1.5% to 2.0% range. That would be anathema for inflation-wary central bankers, and how could the Fed hit that target in a deflationary world where ample supply exceeds weak demand? Despite all the credit easing actions that Chairman Ben Bernanke, in his famous November 2002 speech, said the Fed could take if the federal funds target reached zero, the credit authorities are about out of ammo – except for dumping money out of helicopters. Remember the “Helicopter Ben” moniker?

Other Shocks

If the Fed is highly unlikely to shock slow growth into recession, what could? This brings us back to the series of seemingly isolated events that are occurring on the deleveraging road, such as further financial woes in Europe, a crisis in commercial real estate, a nosedive in the Chinese economy and a slow motion train wreck in Japan. They are all possibilities – as are other shocks here or abroad that we don't foresee. Maybe the exhausting of federal stimulus will be enough to trigger an economic downturn. Keep your eyes pealed, however, because it won't take much disruption to push the fragile global economy back into decline.

Gary Shilling

John Mauldin…

Houston, My Book, and New York

Tuesday was a very special day. My co-author, Jonathan Tepper of Variant Perception (based in London), and I spent the entire day reading the first complete rough draft of our forthcoming book, The End Game. We went cover to cover, making comments and notes. Of course, I had read the bits and pieces, but not in one sitting. I have to say that I am more than happy. It is a very good first draft, much better than I thought it would be. There is a lot of work ahead, of course, to try and make it a great book, but I can “feel” it. And I think we have managed to capture some very difficult topics and make them simple and maybe even a fun read. We are on target for a January 1 launch.

We make what I feel is an overwhelming case for a period of slow growth in the developed world, with more volatility as the base case. The research we review is very strong. But there are pockets of potential if you step back and take off your localized blinders.

I will be in Houston (along with Gary Shilling, David Rosenberg, Bill King, and Jon Sundt) at the one-day X-Factor Conference on October 1. Quite the lineup. You can learn more by going to www.streettalklive.com . Then I will be in New York in late October, speaking at the BCA conference and a few media events.

It has been interesting talking with investment types in Europe. They are very curious about the US and what they perceive as our lack of seriousness about the deficit. It appears that Greece has focused their attention. And of course, I get off the plane from Malta yesterday and the headline in the Financial Times says, “Greece rules out possibility of default.” I know that made me feel better. And gave us all a laugh. If you have not, read the piece from Michael Lewis in Vanity Fair on Greece. And then share my amusement about the chances of no default.

It is time to hit the send button. I feel a nap coming on. Jet lag has been worse than normal this trip. And maybe another glass of Prosecco to ease me into slumberland.

Your excited about almost finishing this book analyst,

John Mauldin
John@FrontLineThoughts.com

Copyright 2010 John Mauldin. 판권 소유

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The following note from Gary Shilling was forwarded by John Mauldin of Thoughts For The Frontline. John includes a short note at the beginning and end. — Ed.

I am on a plane (yet again) from Zurich to Mallorca, where I will meet with my European and South American partners, have some fun, and relax before heading to Denmark and London. With the mad rush to finish my book (more on that later) and a hectic schedule this week, I have not had time to write a letter. But never fear, I leave you in the best of hands. Dr. Gary Shilling graciously agreed to condense his September letter, where he looks at the risk of another recession in the US.

I look forward at the beginning of each month to getting Gary's latest letter. I often print it out and walk away from my desk to spend some quality time reading his thoughts. He is one of my “must-read” analysts. I always learn something quite useful and insightful. I am grateful that he has let me share this with you.

If you are interested in getting his letter, his website is down being redesigned, but you can write for more information at insight@agaryshilling.com . If you want to subscribe (for $275), you can call 888-346-7444. Tell them that you read about it in Thoughts from the Frontline, and you will get an extra one month on your subscription. And now, let turn to Gary.

– John Mauldin

By Gary Shilling

Investor attitudes have reversed abruptly in recent months. As late as last March, most translated the year-long robust rise in stocks, foreign currencies, commodities and the weakness in Treasury bonds that had commenced a year earlier into robust economic growth – the “V” recovery.

As a result, investors early this year believed that rapid job creation and the restoration of consumer confidence would spur retail spending. They also saw the housing sector's evidence of stabilization giving way to revival, and strong export growth also propelling the economy. Capital spending, led by high tech, was another area of strength, many believed.

Not So Fast

But a funny flash websites, or not so funny flash websites, thing happened on the way to super-charged, capacity-straining growth. In April, investors began to realize that the eurozone financial crisis, which had been heralded at the beginning of the year by the decline in the euro, was a serious threat to global growth. Stocks retreated (Chart 1 ), commodities fell and Treasury bonds rallied and the dollar rose. It is, after all, just one big trade among these four markets, so their correlated actions on the down as well as the up side aren't surprising.

Furthermore, investors began to worry about the health of the US economy and the prospects for a second dip in the Great Recession that started in December 2007. The gigantic 2009 fiscal stimuli of close to $1 trillion was running out, threatening a relapse in an economy that was running on government life support. The $8,000 tax rebate for new home buyers was expiring April 30 and might be followed by a drop in house sales as had its predecessor that expired in November 2009 as the spike in activity early this year only borrowed from future sales. The outlook for exports had turned negative with the robust buck, sagging European economies and the current “stop” phase of China's “stop-go” monetary and fiscal policies. With unemployment remaining high last spring, investors began to fret that consumer spending would falter as fiscal stimuli was exhausted.

Deleveraging

Although investor views of the economy have reversed in the last five months, the reality probably hasn't. The good life and rapid growth that started in the early 1980s was fueled by massive financial leveraging and excessive debt, first in the global financial sector, starting in the 1970s and in the early 1980s among US consumers. That leverage propelled the dot com stock bubble in the late 1990s and then the housing bubble. But now those two sectors are being forced to delever and in the process are transferring their debts to governments and central banks.

This deleveraging will probably take a decade or more – and that's the good news. The ground to cover is so great that if it were traversed in a year or two, major economies would experience depressions worse than in the 1930s. This deleveraging and other forces will result in slow economic growth and probably deflation for many years. And as Japan has shown, these are difficult conditions to offset with monetary and fiscal policies.

The deleveragings of the global financial sector and US consumer arena are substantial and ongoing. Household debt is down $374 billion since the second quarter of 2008. The credit card and other revolving components as well as the non-revolving piece that includes auto and student loans are both declining. Total business debt is down, as witnessed by falling commercial and industrial loans.

Meanwhile, federal debt has exploded from $5.8 trillion on Sept. 30, 2008 to $8.8 trillion in late August. Many worry about the inflationary implications of this surge, but the reality is that public debt has simply replaced private debt. The federal deficit has leaped as consumers and business retrenched, which curtailed federal tax revenues, while fiscal stimulus, aimed at replacing private sector weakness, has mushroomed.

Four Cylinders

As discussed in our May 2010 Insight, in the typical post-World War II economic recovery, four cylinders fire to push the economic vehicle out of the recessionary mud and back out on to the highway of economic growth. At present, only one – the ending of inventory liquidation – is generating significant power. The other three – employment gains, consumer spending growth and a revival in residential construction – are sputtering at best.

The Inventory Cycle

Historically, the liquidation of excess inventories accounts for major shares of the decline in economic activity in recessions. Around business cycle peaks, the sales of manufacturers, wholesalers and retailers begin to weaken but their managers can't tell whether that's the beginning of a major drop in business or just a minor dip in an upward trend. So they delay cutting production and orders until the downward trend is firmly established. Meanwhile, inventory-sales ratios leap as the numerators, inventories, rise and the denominators, sales, fall. That makes cuts in production and orders imperative and propels the economic downward trend in the process.

That was also the case in the Great Recession. In our view, it really started in early 2007 with the collapse in subprime residential mortgages, and then spread to Wall Street that summer with the implosion of the two Bear Stearns hedge funds in June. But these were financial declines, and recessions are measured by production, employment and spending, which are dominated by the goods and nonfinancial services segments of the economy. So the recession didn't officially start until December 2007.

Consumers Go On Strike

Furthermore, it wasn't until late 2008 that the collapse in home equity as house prices nosedived (Chart 2), rising layoffs (Chart 3) and the drying up of consumer lending drove consumers into retrenchment. But they suddenly went on a buyers strike in the last four months of 2008, and the results were leaps in inventory-sales ratios. Consequently, the cuts in inventories to get rid of unwanted stocks were far and away the biggest in the post-World War II era.

The reduction in inventory liquidation has been key to economic growth starting in the second half of 2009. In the third quarter of last year, it accounted for 66% of the 1.6% annual rate real GDP gain and 58% of the fourth quarter's 5.0% advance. The inventory-building in the first quarter of this year was responsible for 67% of the 3.7% annual rate rise in real GDP and 36% of the rise of 1.6% in the second quarter. In total, in the last four quarters, the inventory swing provided 58% of the 3.0% rise in real GDP.

Whether inventories will continue to hype the economy remains to be seen. As of June, the inventory-sales ratio for retailers had returned to its downtrend, but was still above trend for wholesalers and, especially, manufacturers. Furthermore, it's one thing to complete the liquidation of unwanted inventories but another to rebuild them significantly. The latter probably requires sales strength originating in other areas of the economy, and the other three cylinders of the economic engine aren't providing it in meaningful ways. Quite the opposite. It appears that recently disappointing retail sales have stuck merchants with unwanted goods that may be liquidated if consumers continue to retrench.

Employment Lags

In post-World War II recessions before the 1990-1991 decline, payroll employment's bottom came close to the low point in the overall business decline and was followed by rapid rebounds (Chart 4 ). In the mild 1990-1991 and even shallower 2001 recessions, however, the job market remained weak for over a year into economic recovery. The same is true this time, assuming the economic decline ended in July 2009, as many believe. What's changed?

It isn't that a shallow recession results in weak job recovery because even though the 1990-1991 and 2001 downturns were mild, the Great Recession certainly wasn't in terms of jobs (Chart 4). A more likely explanation is that globalization, starting in the 1980s, forced American business to cut all costs vigorously, including labor costs, by outsourcing to domestic and foreign suppliers, promoting productivity and curtailing hiring. This has been especially prevalent in the last decade.

Jobs Lost Forever

Despite the huge employment losses since the end of 2007, many of those jobs are unlikely to return. Of the 7.7 million net nonfarm jobs eliminated between December 2007 and July of this year, 86% were in construction, manufacturing, wholesale and retail trade, finance and leisure and hospitality. These six sectors accounted for 44.5% of nonfarm payrolls in July, only about half as much as their losses. Furthermore, job losses in those industries spawned employment losses in service and other sectors that depend on them. Home building, for example, spurs employment in the production of appliances, furniture, home furnishings and homeowner insurance and provides revenues that support state and local employment.

Given the gigantic overhang of excess house inventories and resulting further price declines, it will be years before residential construction shows any meaningful revival, as we've explained in past Insights and will update next month. Similarly, financially troubled and massively vacant commercial real estate will inhibit new construction and jobs for many years.

The inventory cycle did stabilize manufacturing employment in recent months, but that inventory-related bounce is over and the 2 million manufacturing jobs lost since December 2007, if anything, will probably become an even bigger number. Goods production continues to move offshore. job-reducing productivity gains continue in manufacturing, and consumer retrenchment and deflation will continue to curtail consumer durable goods consumption. Wholesale and especially retail trade will continue under pressure with the 25-year consumer borrowing and spending binge now replaced by a saving spree (Chart 5). That retrenchment as well as persistent business spending restraint will continue to retard jobs in leisure and hospitality.

Financial activities jobs stabilized with the March 2009-March 2010 revival of Wall Street, but the likely continuance of more recent weakness in many securities markets will lead to more layoffs and bonus cuts. The federal government, naturally, has added people, 262,000 since December 2007, as it expands in response to the weak economy. But state governments cut 6,000 on balance and local municipalities 128,000, largely in education.

Diligent Cost-Cutting

American business has been diligently cutting costs since the recession started in December 2007, especially labor costs. A recent survey shows that over half of adults have been affected by some combination of layoffs, wage and benefits cuts, involuntary furloughs and involuntary shifts to temporary jobs. Many may never be restored to their earlier statuses. Those layoffs lucky enough to find new jobs often are paid less than earlier.

About 20% of major employers with over 1,000 workers cut or eliminated their 401(k) plan contributions during the downturn but half have failed to restore them so far. Of those with 500 or fewer employees that cut contributions, only 36% have reinstated them or plan to in the next 12 months, according to a Fidelity Investments survey. Furthermore, 10% of all employers plan to reduce or eliminate matching 401(k) contributions in the next year.

Consumer Spending

All the layoffs, involuntary furloughs, and temporary jobs and benefit and wage reductions have been instrumental in the rebound in corporate profits, but devastating to employee compensation. This spells weakness for consumer spending. Also, consumers are no longer saving less and borrowing more on credit card, home equity and other loans to bridge the gap between income and desired spending growth. Furthermore, home equity has evaporated (Chart 6 ) and tight lending standards on credit card and other loans prevail. So they're on a saving spree and debt reduction binge, further slashing the outlook for consumer spending, the third cylinder that normally fires to propel economic recovery from recessions.

In fact, without massive fiscal stimuli, subdued compensation and the recession would have pushed consumer outlays down substantially. Our calculations show that consumers saved 80% of the tax rebates they received in the summer of 2008. And they initially saved 100% of 2009′s tax cuts and special payments of $250 for each Social Security beneficiary. Those actions resulted in the spikes in the saving rate shown in Chart 5. This is remarkable since the tax cuts did not go to highincome people, normally the only big savers. Also, those folks are relatively few in number so they received few of the extra Social Security checks. Consequently, middle- and lower-income households stepped out of character to save heavily.

Households are deleveraging their balance sheets with a vengeance. Since the end of the fourth quarter of 2007 when stocks began to collapse, personal sector assets have fallen $3.0 trillion. Some $1.8 trillion was in equities and $277 billion in mutual funds due to losses on balance and withdrawals from equity direct ownership and from mutual funds. Investors put money into mutual funds on balance in January, March and April, but cut their holdings, especially in stock funds, in May and June. Also, private pension reserves fell $754 billion from the end of 2007 to the end of March 2010 and government pension reserves in household accounts were down $290 billion. Increases of Treasury bond holdings of $533 only partially offset the decline in government agency and securities of $593 billion. Meanwhile, liabilities of the personal sector dropped $500 billion, largely due to the decline in mortgage and consumer debt as some debts were repaid while others were written off as hopeless.

Support By Government

Since the recession began in December 2007 through June 2010, personal income from wages and salaries, proprietors' income, rents, interest, dividends and transfers such as pension benefits, Social Security, Medicare and Medicaid payments and unemployment insurance increased $285 billion. It would have declined $247 billion without a $532 billion increase in government transfer payments. These increases in government transfers also flowed through to Disposable Personal Income (after-tax income), which further benefited by lower personal taxes that fell $382 billion due to tax cuts and the lower taxable income resulting from layoffs, wage declines and bonus cuts.

In total, DPI was enhanced by $532 billion from the increase in government transfers and $382 billion from the lower taxes. Without these significant boosts, DPI would have fallen $247 billion since December 2007 instead of rising $667 billion. Without question, and much more so than in any previous post-World War II recession, the consumer has been supported by massive government money in the form of increased transfers and tax cuts. And these numbers do not include wages from jobs created by federal spending on infrastructure or saved by federal transfers to state and local governments to curtail teacher layoffs and other employment reductions.

Where Did The Money Go?

What happened to that $667 billion increase in DPI and what does it tell us about the likelihood of a chronic consumer saving spree? About 43% of it was spent and 64% saved, so maybe some of the earlier tax cuts were spent, but with delays. Nevertheless, a 64% marginal saving rate does seem to support our chronic saving spree thesis.

Also, in terms of spending and saving, note that whatever has been going on in the consumer arena has been supported by massive federal stimuli. Those stimuli may persist at near current levels in future years due to chronic high unemployment, as noted in earlier Insights, but seems unlikely to rise at the rates they did since the recession began due to their effects on the already massive federal deficits. Republicans and even some Democrats in Congress are so worried about the mushrooming deficit that current stimuli is unlikely to be renewed at least until unemployment leaps further. In that case, the resulting withdrawal of support for consumer outlays may push them down. So the leap in consumer spending as a share of personal income (Chart 7 ), which has been propelled by tax cuts that were only partially offset by saving increases, is highly unlikely to persist.

Evidence of recent consumer retrenchment is rampant. Consumer confidence has flattened as people worry about employment and income prospects as well as losses on their stocks and houses. Credit card loans outstanding fell 10% last year and promise to fall further as consumers repay debt, lending standards tighten and the new federal law cuts the profitability of credit card lending. Meanwhile, banks report that demand for consumer loans continues to drop, although at declining rates.

Increased saving is not only being used to repay debt but also to rebuild 401(k)s. Fidelity Investments found that in the second quarter, 5.3% of participants raised their contribution while 2.9% reduced them. That excess of increases over decreased has persisted for five quarters and follows three quarters of the reverse. Still, the numbers that tapped their accounts for loans or hardship withdrawals also rose.

Subdued Spending

On the spending side, vehicle sales in July were at an 11.5 million annual rate, up from the sub-10 million levels of 2008-2009, but well below the pre-recession levels. Consumer spending on TVs, computers, videos and telephone equipment rose 1.8% in the first half of 2010 compared with a year earlier while appliance purchases fell 3.6% and furniture outlays dropped 11%. Apparel sales also lost out to electronic gadgets. This shift reflects two forces. First, consumers are saving more and spending less on equipping their houses that are no longer appreciating but now depreciating assets. Second, they still want the satisfaction of buying iPads and other Small Luxuries, an investment theme we identified years ago and explained fully in our August Insight.

Housing Remains Depressed

The housing sector is an important generator of the normal economic recovery even though residential construction only accounts for 4.7% of GDP on average in the post-World War II years. It's the volatility that matters. Residential construction was 6.3% of GDP at its recent peak in the fourth quarter of 2005, but fell to 2.4% at its low in the first quarter of 2010. This 3.9 percentage point decline is very significant, considering that a 3% top to bottom decline in real GDP constitutes a major recession.

State and Local Government Spending

Spending by state and local governments is not one of the sources of economic revival after recessions end because it has been such a steady 12% to 13% share of GDP since the early 1970s. In the early post-World War II decades, it grew rapidly to finance the education of the postwar babies and the growth of mushrooming suburbs. Municipalities have also provided a steady source of jobs since, until recently, many fewer employees were laid off or fired than in the private sector and relatively few quit. Years ago, the “social contract” held that those employees received lower wages than private sector workers, so early retirement provisions and lush pensions allowed them to catch up in their later years. But since the early 1980s, the private sector has been globalized with very little growth in real incomes. Meanwhile, state and local government employees have continued to receive pay raises in excess of inflation and now have wages that are 34% higher than for private sector employees (Chart 8).

Federal Help

As part of its fiscal stimulus program, the federal government is transferring $246 billion to state governments to prevent more school teacher layoffs, help fund Medicaid cost increases and plug other holes in state budgets. Federal money is filling 30% to 40% of state budget gaps, but 46 states are projecting a collective deficit of $121 billion for the 2011 fiscal year that begins next July 1, equivalent to 19% of their budgets. And 39 states see gaps that total $102 billion for fiscal 2012. Unless federal assistance continues, these deficits will be much larger. All the states but Vermont are required to balance their budgets in one form or another, but most are honored in the breach as fiscal gimmicks and creative accounting get really creative.

Budget legerdemain no doubt is related to the rapid growth in state spending in recent years and leap in debt. State and local governments now use debt to fund investments that used to be done on a current budget basis, and some issue debt to cover up routine budget shortfalls. Total state and local bond debt outstanding leaped 93% between 2000 and 2009, from $1.2 trillion to $2.3 trillion.

It obviously takes a lot of gnashing of teeth in the outer darkness for state and local government to flatten, much less cut, their spending after a decade of 6% to 7% annual growth rates. Jumping municipal employment is the main reason for mushrooming spending in earlier years, and cutting often unionized state and local workforces is very difficult. Since the Great Recession started in December 2007 through April, private payroll employment has dropped 6.8%. Still, state and local jobs have declined but by much less, only 1.4%. In July, state and local governments, which employ 9.5 million, cut 48,000 jobs, 102,000 in the past three months and 169,000 so far this year.

Raise Taxes

In reaction to their financial woes, many state and local governments have attempted to raise taxes and fees. The usual suspects include higher sin taxes on tobacco and alcoholic beverages as well as taxes on companies based out of state but doing some business in the state. Attempts to raise taxes and cut spending have proved wholly inadequate to solving state and local government funding problems. And those woes appear chronic, especially if our forecast of slow economic growth and even deflation is valid. Rises in taxable personal and corporate incomes will be muted. Retail sales and taxes on them will be sluggish as consumers persist for the next decade in their saving spree, replacing the borrowing and spending binge of the last decade.

House prices are likely to fall further in the next year or so, under the weight of gigantic excess inventories. Even when those inventories are worked off, house prices will probably rise little, if at all, in a low inflation or deflationary climate. Historically, they've been flat after correcting for overall inflation and the growing size of houses over time. And now that house prices have fallen nationwide for the first time since the 1930s, home buyers no longer see their abodes as also great, leveraged investments, and want smaller, cheaper houses. That will also reduce assessments on property taxes.

Meanwhile, commercial real estate high vacancies and severe financial problems will take years to resolve, keeping prices depressed for some time (Chart 9 ). So, all things considered, local government property taxes are likely to be curtailed for many years. Meanwhile, municipal expenses will be hard to cut. Chronic high unemployment will spawn high Medicaid enrollment and costs. Welfare and unemployment benefit costs will no doubt rise as well.

Deteriorating finances are raising the risks of defaults on state and local obligations and even municipal bankruptcies. Harrisburg, Pennsylvania's capital, will not make a $3.3 million municipal bond payment on $51.5 million debt that's due in two weeks, and earlier this year, city officials discussed bankruptcy. Harrisburg also lacks the funds to continue payments for the $288 million debt on an incinerator project. Earlier, Jefferson County, Ala., home of Birmingham, defaulted on $227 million due on its disastrous sewer upgrades.

Taxpayer Revolt?

People working in the private sector apparently were willing to accept the higher pay, more job security and better retirement benefits for state and local employees in past years. High employment in the private sector and robust economic growth at least held out the hope that their lots would improve tomorrow. But with slow economic growth, limited income expansion and high unemployment now expected by them for years, voter attitudes appear to be changing.

Americans still want basic municipal services like police and fire protection, good schools for their kids, clean streets and garbage collection. But they apparently are deciding they're paying too much for those services; that 34% higher wages for state and local employees compared to private sector workers isn't justified as pay cuts multiply in the private sector and those laid off earn much less if and when they can find another job; that 66% higher benefit costs is over the top, especially as private sector employees are paying more of their health care premiums and seeing their defined benefit pension plans replaced by much more uncertain 401(k)s.

As taxpayers revolt, there are plenty of things that can be done to reduce state and local government costs in an orderly way. Following in the footsteps of bankrupt GM, two-tier wage structures are being established with existing employees continuing at current salary levels, but new hires paid the much lower wages adequate to attract qualified people. And the new people are enrolled in defined contribution pension plans that require employee contributions, not defined benefit plans, while their retirement ages are increased.

Foreign Trade

Another economic sector that normally isn'ta significant engine of economic recovery but is important at present is exports since the Administration hopes they will double in the next five years and provide meaningful economic growth. The President's zeal to achieve that goal rises as he realizes that massive fiscal stimuli have not revived the economy, and already-huge federal deficits impede further rounds of big spending.

But two significant problems are likely to retard export growth in future years – rising protectionism that clearly impedes foreign trade, and finding foreign countries that will buy this doubling of American exports. It's like the story of the stockbroker who calls his client during May's Flash Crash to tell him that stocks are collapsing. “Sell my entire portfolio!” yells the distressed client. “Sure,” retorts the broker, “but to whom? There are no buyers.”

Foreign Buyers?

As far as foreign buyers of US exports is concerned, the reality is that many of those markets that are showing robust growth and therefore might be able to absorb American products, lands like China and Germany, are major exporters themselves, not importers on balance. Indeed, it's no surprise that the EU's measures of both industry and household confidence shows that export-led Germany has the highest level while the economically weak Club Med net importers are at the bottom of the pile (Chart 10).

Currency changes have only limited effects on export or import prices. The volatility of US import prices is only about one-fourth that of the dollar and a third in the case of American export prices. 왜? Many products are sold under long-term contracts and immune from most currency fluctuations. Also, importers and exporters resist reflecting the full extent of exchange rate changes in their prices. If the yen is strong against the dollar, importers of Lexus cars shave their profit margins to offset some of the higher prices in dollars to avoid losing market share. Conversely, US exporters to Japan don't pass on in lower yen prices the full extent of the dollar's decline in order to increase their profits.

The “processing trade” in which components are imported, assembled and then re-exported makes up about half of Chinese exports. This reduces the importance of the yuan's exchange rates. Furthermore, even goods with more domestic content aren't completely sensitive to exchange rates in a global world. About 50% of a Chinese manufacturer of children's clothes costs are fabric and around 50% of the fabric's costs are cotton, a globally-traded commodity priced in dollars. So, 25% of the total cost is not affected by yuan fluctuations. Also, another 25% might be in the combined profits of the clothing and the fabric producers, and could be adjusted to offset currency fluctuations – or production moved to lower-cost Vietnam or Bangladesh if the yuan leaped in value.

Double Dip Recession?

We've made our case for very slow US economic growth in the quarters, indeed the years, ahead. The economic rebound due to the inventory cycle is over. Employment and consumer spending remain weak. Housing is too overburdened with excess inventory and the resulting price weakness to revive any time soon. State and local government spending and employment are retreating. And meaningful export gains are unlikely as economic growth abroad slips. Interestingly, the consensus forecast is moving toward our position as growth estimates have been reduced rapidly in recent months. In both April and June, the Wall Street Journal's poll of economists (not including us) expected 3% economic growth in the second half of this year. We wonder if they still do.

Will slow growth deteriorate into another recession, the so-called double dip scenario? Before exploring that question, let's define a double dip. It seems to mean a second period of economic decline following the 2007-2009 nosedive. That could imply that the recession that the accepted authority, the Business Cycle Dating Committee of the nonprofit National Bureau of Economic Research, pinpointed as commencing in December 2007, is still underway. Sure, real GDP grew in the last four quarters, but it's common to have quarters of gain within recessions. In the 11 post-World War II recessions so far, seven, including the 2007- 2009 decline, had at least one quarter of rising real GDP within the recession. In fact, two – the 1960-1961 and the 2001 declines – didn't even have two quarters of consecutive decline. Even in the 1929-1933 economic collapse, GDP rose in six quarters.

Still, to have a four-quarter interlude between the declining phases of the same recession would be unprecedentedly long, assuming that real GDP declines in the current quarter. So another period of economic weakness could be classified as a second recession, much as the 1981-1982 decline, which started in July 1981, only 12 months after the 1980 recession ended.

Slow Growth to Recession

We're on record for a 50% or higher probability of a second dip or another recession, whatever it would be called. The composition of the ECRI Weekly Leading Index remains proprietary, but its growth rate has fallen to the level that in the past was always associated with recessions (Chart 11). Historically, however, recessions have been propelled by shocks. The post- World War II downturns prior to 2001 were caused by Fed tightening in response to threats of economic overheating and the resulting higher inflation. Since then, other shocks have been responsible. The 2001 recession resulted from the 2000 collapse of the dot com bubble augmented by the 9/11 shock. The 2007-2009 downturn resulted from the collapse in subprime residential mortgages that commenced early in 2007.

In the current economic and financial climate, it's highly unlikely that the Fed will tighten credit for years. In fact, the central bank has shifted from planning last spring to withdraw liquidity as the economy grew to renewing quantitative easing and worrying about deflation and subpar growth. It said after its August 10 policy meeting that household spending is being retarded by high unemployment, slow income growth, lower home equity and tight credit conditions while bank lending “has continued to contract.”

Pushing On A String

Conventional monetary ease is now impotent with the federal funds rate close to zero , the money multiplier collapsed and banks sitting on hoards of cash (Chart 12) and over $1 trillion in excess reserves. Sure, large banks report to the Fed that they are easing lending standards for small business, but after the intervening financial crisis, many fewer potential borrowers are deemed creditworthy than in the loose lending days. Furthermore, the small business trade group, the National Federation of Independent Business, reports that 91% of small business owners have had their credit needs met or business is so slow that they don't want to borrow. The Fed is pushing on the proverbial string.

The Fed also worries about deflation, which means that even zero interest rates are positive in real terms, as has been the case for years in deflationary Japan. Also, deflation encourages buyers to wait for still-lower prices in a self-feeding cycle, as is seen in Japan and as we have discussed often in conjunction with our forecast of 2% to 3% per year chronic deflation. In it s post- August 10 meeting statement, the Fed said that “measures of underlying inflation,” already low, “have trended lower” lately and are “likely to be subdued for some time.” James Bullard, President of the Federal Reserve Bank of St. Louis, recently warned of the risks of deflation.

Deflation is a scary phenomenon, but we can't resist noting that the Fed as well as many other forecasters are moving in the direction of our forecast. In contrast, an April 6 Wall Street Journal piece by Peter Eavis stated unequivocally, “No one in their right mind would bet on inflation remaining substantially below 4% for the next 10 years.” Maybe we better have our head examined.

A Baby Step

So, with conventional monetary ease exhausted and further fiscal stimulus on hold because of the already-huge federal deficit, the Fed at its August 10 meeting took a baby step toward more quantitative ease by deciding to buy Treasury bonds to replace the maturing and refinanced Treasury and mortgage-backed securities in the $1.7 trillion hoard it finished buying earlier this year. With low mortgage rates, refinancings were projected to raise the Fed's portfolio contraction from an earlier estimate of $200 billion by the end of 2011 to $340 billion, with another $55 billion coming from retirement of Fannie Mae and Freddie Mac debt held by the Fed.

Furthermore, the Fed is open to further steps if the economy continues to slip. It could buy even more Treasurys or mortgage debt. But would the resulting lower interest rates encourage prospective home buyers who now know that house prices can and do fall? Would another $1 trillion in excess reserves induce more bank lending than the first $1 trillion? The Fed could also promise to keep short-term interest rates low, but it's already said it would for an “extended period.”

It could cut out the 0.25% it pays the banks on their reserves, but would that induce reluctant banks to lend? Finally, the Fed could set an inflation target over its formal 1.5% to 2.0% range. That would be anathema for inflation-wary central bankers, and how could the Fed hit that target in a deflationary world where ample supply exceeds weak demand? Despite all the credit easing actions that Chairman Ben Bernanke, in his famous November 2002 speech, said the Fed could take if the federal funds target reached zero, the credit authorities are about out of ammo – except for dumping money out of helicopters. Remember the “Helicopter Ben” moniker?

Other Shocks

If the Fed is highly unlikely to shock slow growth into recession, what could? This brings us back to the series of seemingly isolated events that are occurring on the deleveraging road, such as further financial woes in Europe, a crisis in commercial real estate, a nosedive in the Chinese economy and a slow motion train wreck in Japan. They are all possibilities – as are other shocks here or abroad that we don't foresee. Maybe the exhausting of federal stimulus will be enough to trigger an economic downturn. Keep your eyes pealed, however, because it won't take much disruption to push the fragile global economy back into decline.

Gary Shilling

John Mauldin…

Houston, My Book, and New York

Tuesday was a very special day. My co-author, Jonathan Tepper of Variant Perception (based in London), and I spent the entire day reading the first complete rough draft of our forthcoming book, The End Game. We went cover to cover, making comments and notes. Of course, I had read the bits and pieces, but not in one sitting. I have to say that I am more than happy. It is a very good first draft, much better than I thought it would be. There is a lot of work ahead, of course, to try and make it a great book, but I can “feel” it. And I think we have managed to capture some very difficult topics and make them simple and maybe even a fun read. We are on target for a January 1 launch.

We make what I feel is an overwhelming case for a period of slow growth in the developed world, with more volatility as the base case. The research we review is very strong. But there are pockets of potential if you step back and take off your localized blinders.

I will be in Houston (along with Gary Shilling, David Rosenberg, Bill King, and Jon Sundt) at the one-day X-Factor Conference on October 1. Quite the lineup. You can learn more by going to www.streettalklive.com . Then I will be in New York in late October, speaking at the BCA conference and a few media events.

It has been interesting talking with investment types in Europe. They are very curious about the US and what they perceive as our lack of seriousness about the deficit. It appears that Greece has focused their attention. And of course, I get off the plane from Malta yesterday and the headline in the Financial Times says, “Greece rules out possibility of default.” I know that made me feel better. And gave us all a laugh. If you have not, read the piece from Michael Lewis in Vanity Fair on Greece. And then share my amusement about the chances of no default.

It is time to hit the send button. I feel a nap coming on. Jet lag has been worse than normal this trip. And maybe another glass of Prosecco to ease me into slumberland.

Your excited about almost finishing this book analyst,

John Mauldin
John@FrontLineThoughts.com

Copyright 2010 John Mauldin. 판권 소유

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We visited the Ojai, California high school set of the sassy new comedy Easy A last year and saw pretty actress Emma Stone doing a come hither song and dance in a high school gym wearing a hot, lacy bustier and some sexy black stockings. Now… after finally seeing the film, we get it!

Emma plays Olive, a good student/good girl who agrees to help out a male pal by pretending to hook up with him to build his rep with his buds. It works great but the word spreads that Olive is easy and more. How does she beat the rep and get the guy of her dreams? Check out the film opening Sept. 17th.

We're at the 4 Seasons Hotel in Beverly Hills for a sitdown with witty, funny flash websites fellow red-head Emma who is always friendly and ready to spill all! With her hair up and wearing a dark, flower-patterned dress by McQ and 6 inch (at least) beige platform stiletto s by Valentino, the star looks very Hollywood glam. We like her mauve nail polish and big, gold, filigree disc earrings.

As Emma comes in for our chat about her role and the classic '80′s films she loves, we notice that the petite girl is suddenly at least as tall as we are (5'7″). It's those shoes! She puts down her coffee and models them for us.

Emma: Tallest shoes I've ever worn in my life! Wanna know how tall I really am? This is messed up. Check this out [she takes off the shoes and sinks about a foot. We laugh].

TeenHollywood: Okay so super high heels are in with you. After doing the movie, are you a big fan of bustiers now?

Emma: [laughs] Oh yeah. I'ma real 'supporter' of bustiers. I'ma real supporter of that which supports me. Those were from my own personal collection.

TeenHollywood: You seem to be such a thorough preparer for your work. So, did you read Nathaniel Hawthorne's “The Scarlet Letter”?

Emma: No. It's embarrassing to say but I can not tell a lie. I did not. Here's how I'll justify it. Once I got the part, it was go time. We were starting about two weeks after I wrapped Zombieland so, to me, it was so important to have the script completely memorized before we started like you would a play or something so I was so obsessed with reading the script over and over and getting those words down that there were no other books I was reading at the time.

TeenHollywood: It's cool how the book ties in with the movie. Did books effect you a lot as a teen?

Emma: I feel like, when you're a teenager or when you're young, do you remember when you read books or watched movies or listened to music and you made it apply to your life no matter what it was? You're like 'Oh, this book really gets me.' Or 'The Beatles really understand me, specifically' [we laugh]. You made it your own.

TeenHollywood: When you were a teen, were you in the “Let's not and say we did” group of girls?

Emma: Well, I didn't have that traditional high school experience and I was kind of on my own. I was in LA and most of my friends from theater were a bit older than me and in college or whatever. When I was 16 I was friends with some of the people I'm friends with now, and it was a different thing. I talked to my mom more about stuff like that than I did my friends because I wasn't really hanging out with girls my age. So, that [doing it or not] was really more a conversation between my mom and I so you can probably tell where I fell in what category [laughter].

TeenHollywood: Did you do anything when you were a teen to get attention because Olive likes the attention she is getting for a while?

Emma: Only theater and what I do now [laughs]. I was such a ham.. such a ham [she rolls her eyes]. I was awful! Oh my God, always loud. I was _that _kid.

TeenHollywood: With friends or out in public? Would you be at the mall and suddenly just break into song?

Emma: Oh no, no, definitely not that. That would be embarrassing but it was with friends. I was pretty hammy. But, this hopefully, has curbed. When I was a kid I was also bossy and that's a bad combination; a hammy, bossy kid. So, my mom tried to get that out of me pretty quickly.

TeenHollywood: Are you the oldest child?

Emma: Yeah and my brother is just so sweet. He's great and quiet and I've always wanted to be more like him; only speak when you have something really important to say. I'm just like 'wa, wa, wa, wa, wa' and none of it matters.

TeenHollywood: We've talked before and I think you were home schooled. Did you ever have the chance to be the “cool girl”, the “drama girl” or anything?

Emma: Yes, I was home schooled so all of the above. I didn't really have a traditional high school experience. I did go to a high school for a semester of my Freshman year but it wasn't really long enough to be able to gage all that.

TeenHollywood: So then was it difficult to get into this character not having a high school experience?

Emma: Not really because I didn't feel it was a high school movie parse. We're not really dealing with any of the traditional things; graduation or prom or any of the rights of passage of high school. It was more a story about reputation and technology [fast rumor spreading] and judgment and it just happened to be through the eyes of a 17-year-old girl but you don't really see us doing too much 'school-ish' stuff even though we're in the hallways a lot.

TeenHollywood: That's true. But, as a young actor, you go through a similar thing; you're always being scrutinized by the media and your reputation is kind of out there for better or worse. Can you relate to it on that level?

Emma: Probably. There's definitely an element of that. I wouldn't say as much personally because my life is a pretty standard, livable life. There's a lot of other actresses my age that wouldn't be able to say that so I'm lucky but, seeing that and watching that happen, there's probably definitely an element of that.

TeenHollywood: This is really your film. Did you feel extra pressure or go about it like any acting role?

Emma: For me it was less about the size of the role and trying to bring Olive to life in the most accurate way I could to the script. That pressure was what I was thinking about. It wasn't how many lines there were or how many scenes I was in, it was more playing her accurately and making sure that she stayed how she was on the page because she was so fleshed out and fantastic in writing. I don't know if I did her justice but I tried. [we tell her she did].

TeenHollywood: Was the family dog in the film as lovable as he looked?

Emma: Yes. It had halitosis, so incredibly lovable….but smelly!

TeenHollywood: We understand that you went home after your audition for the part and made a webcam video? Was that just on your own?

Emma: No. [Director] Will [Gluck] asked me to do that.

TeenHollywood: It worked great. You're a computer person, right?

Emma: Bigtime, yeah. But I was horrified when he asked me, 'Can you go home after you've been working on this audition and memorizing these things, can you go home and send me a webcam of you?' I was like 'Oh God'. Because it's one thing in the audition room when you're like 'Oh, I wish I hadn't done that but they're making me leave'.

When you go home and you have to record yourself and have so many opportunities to watch it again and beat yourself up and delete it and do it again and again and again before you finally send it in, it feel like you put a stamp on it, 'This is what I think is the best thing I could do'. It was the first monologue of the movie. It was like a minute long.

TeenHollywood: Are you on Facebook and do you tweet?

Emma: No. I love it. I completely understand it. I was into websites when I was a kid, making them and I thought that was what I wanted to do but that was 1999 and 2000 and there weren't blogs yet. It was the age of e-zines; you would sign up and get them in your e-mail. It was just when Flash had come around and I was dabbling in Flash but it's such a complicated program so I kind of faded out.

TeenHollywood: So, you love computers and the internet but no Facebook or tweeting? I'm confused.

Emma: Social networking and blogs are so fascinating to me but I have an addictive personality and the second I get involved in something like that it will consume me. I didn't want to be consumed by Twitter. I didn't want to be a slave to Twitter so I've had to limit myself and have a little phone detox time and take a little hit of IM once in a while.

TeenHollywood: Makes total sense! Your co-star Penn said he hadn't seen most of the John Hughes '80′s movies this film references. Had you?

Emma: [She nods big "yes"]. 너 진심이야? He hadn't seen them? I didn't know that. Had he seen Say Anything ? [NOTE: This was actually a Cameron Crowe movie,.. written and directed by.. not John Hughes]

TeenHollywood: He said no but he knows the [famous] photo [of John Cusack holding up the boom box].

Emma: He'd seen it on a t-shirt? Oh my Lord, that's all I watched when I was a kid. My dad, when it comes to comedy, that was his favorite. The first movie I ever remember watching was The Jerk then Planes, Trains and Automobiles, Animal House, Ferris Bueller's Day Off and The Breakfast Club. Planes, Trains and Automobiles is a John Hughes movie, don't forget. The brilliance of John Hughes was so exciting.

I know Will feels the same way because he's his favorite director. It was so exciting to get to pay tribute and homage to John Hughes because he told his stories in the most empathetic way. That's why they still resonate [when you're] an adult. They might be set in high school but that's a universal truth. He was just absolutely phenomenal.

TeenHollywood: In Easy A , you had the musical number for no reason what-so-ever, like in “Ferris Bueller”. How hard was that to shoot for you?

Emma: It was a little interesting being dressed like that and singing and dancing in front of your peers but I must admit it was actually pretty fun because I grew up doing musical theater so, even though I'm not really a big singer or dancer anymore, it was fun to get to do that. My “hammy' side is coming back in. [She wiggles her shoulders in "sexy" mode] 'Oh yeah! I got a boa. I get to do this'. Oh Lord.

TeenHollywood: What interested you about the character of Olive?

Emma: Everything. I thought she was just layered and realistic and funny flash websites, clever and confused and, the story that she goes through was very interesting to me thematically and her relationship with her parents and her friends and how she takes the matter into her own hands [was great].

Usually a false rumor gets started about you and all you want to do is deny it and she decides to take it to the next level and see what it's like to go for it full-throttle because she knows the truth. And, I like that she was bold enough to know that if it's not hurting anybody, then why does it matter? When it starts to hurt people, that's when things start to spiral out of control but, when it's only her dealing with it, she just has fun with it and is a confident girl that knows herself well enough to know the truth and be comfortable with that.

TeenHollywood: How many takes for the bedroom scene to end all bedroom scenes? [She and her guy friend are jumping around on a bed pretending to be getting it on].

Emma: Oh my God. Too many. There were so many angles in that scene. It went on and on but it was one of my favorite scenes when I read the script. I thought it was so funny flash websites. You've got to be a pretty bold girl and guy to go to a party with all those people dressed like that acting like that. She doesn't even drink and she's so “drunk”.

TeenHollywood: Were you really out of breath doing that scene and needed oxygen. It was in the press kit…

Emma: I love that it was in the press kit. Will Gluck is an ass! Yes, I had an asthma attack without having asthma. I've been making an Olive pun about it, saying I have adult “on set” asthma [groans]. I've only had one asthma attack in my life and it was that day. They just showed me the behind-the-scenes thing from the DVD where Will is talking about my asthma attack and he goes 'I don't even think Em's ever even seen the inside of a gym so..' He's such an ass. Of course he's gonna tell that story [she laughs].

TeenHollywood: What's coming up for you?

Emma: There's a movie coming out in April called Crazy Stupid Love and I'm shooting a movie called The Help based on the book, in Mississippi. We're shooting right now. It's incredible. You've got to read the book. It's just fantastic.

TeenHollywood: So you did read that one.

Emma: Yes. I was talking to Viola Davis who plays one of the lead characters. She's so unbelievable saying the other day. 'when we're on the press tour for The Help I think we should say, 'and then halfway through shooting, someone said there's a book and we thought we should read that'. So, if we see you next year we won't be able to pull that fast one on you. But I might try to pull it a couple of times.

TeenHollywood: Do you have scenes with Bryce Dallas [Howard]?

Emma: Oh yeah. She's got flippy bright red hair in the movie but I wear a blonde wig. We're in these crinolines and we all have our Maidenform bras and girdles. it's fantastic. [Southern accent] We're all talkin' like that.

By Niall Kitson

The other day I came across a t-shirt in a shop on Grafton Street that gave me a chuckle. In nice bright writing across the chest it read “Don't Google it, just ask me”.

It's funny flash websites but it also sums up the current state of the internet, specifically the ways we find information and how reliable we consider it. Academics would call what's going on a 'paradigm shift' – a fundamental change in the way we understand something.

광고

But, unlike the fields of science and literature the term was initially applied to, the web is an exponentially expanding phenomenon, equal parts process and discourse. It's the merging of these two occasionally opposed elements that consist of a new understanding of how to navigate the web for content that's relevant to the user but also immersive, engaging and trustworthy.

The main players in the game are also somewhat unlikely bedfellows: Google and its scientific, orderly methodology, and social networks with their subjective noise and narrow personal networks (note: the average number of friends per user on Facebook is 130).

From these apparently opposed perspectives we are expected to make sense of the world? Well…yes. But it's not as awful as it sounds.

To go back to my t-shirt at the start of this piece let's take the first half of the print: “Don't Google it”. Why wouldn't you Google something? Well aside from appearing completely uninterested in engaging another human being in conversation, using a search engine to find information comes with certain risks.

Google's mission statement is all about the organisation of all the information in the world across all media – print, audio, video and whatever comes over the horizon. Since its founding Google has been about process; the sorting and organisation of other people's content based on an algorithm that looks for value not solely on the proliferation of keywords in body text (although that does help) but the links between websites.

If this piece were to appear on a random blog in the ether you probably would not be able to find it. Put it in a highly organised and optimised environment as this website and you can find it in a flash. That's the way Google works at its most efficient – letting the hive mind of the internet (ie the users) decide what's interesting (if not accurate) and giving it prominence by a democratic process of linking.

The problem with this model, which has served the web for so long, is that raw information is not what the web thrives on anymore, it's discourse.

Shaping the conversation

This brings us to the second half of the print: “Just ask me”. When in doubt who better to ask that a trusted source like a friend or newspaper of record? If you have a problem why would you shout your question into a crowded room of faceless strangers when you could ask your friend – who you know is an expert – or read a newspaper whose level of reporting you rate.

If you would rather do that then welcome to the world of social media – where networks are small, exposure to information managed and the people you share it with less likely to be arbitrarily abusive.

Anyone who uses social networks like Twitter and Facebook knows that, as valuable as they are for keeping up with friends and fostering connections, they make excellent walled gardens for spreading news, asking advice and seeking recommendations for just about anything.

In fact it could be argued that the top thing people do online now is not search but engage in dialogue. The challenge for 'old fashioned' search engines like Google and Bing is how to integrate the wisdom of crowds in finding sources of information (process) with conversation from multiple social sources as quickly as questions can be asked or stories broken (conversation).

The development of such a 'real-time web' of instant reportage and analysis is a complex problem but it seems Google has an answer.

Launched this week, Google Instant has been touted as one way to speed up searches based on combinations of letters as they are input into the search bar. Consider it something like what happens when you type in an address and it completes itself based on your browsing history.

It's a simple move designed to cut down on search times. Another component to Google's real-time search formula is 'Trends'. Already familiar to Twitter users (who tag contributions to specific topics with a '#' symbol so developments can be easily followed) the idea here is that information from social networks can be integrated into regular search to give a sense not only of the raw material but its interpretation in real time.

For example if a political or financial story breaks and is reported on this site you can gauge the progress of the conversation around it and its popularity. Consider it the equivalent of posting a link to a story on your Facebook wall and having your friends comment on it…only on a global scale. Tweets, status updates, discussion forums, anything with open access can be aggregated and delivered as part of a concise package of results that changes as soon as new content is published making for a constantly evolving resource.

Such is the new model of search that analysis and bare fact will be treated as complementing instead of competing sources of information. “Don't Google, just ask me” won't be about choosing between processes, just scale.

Niall Kitson is editor of PC Live! and co-host of TechLife

For more on technology, listen to the podcast at www.pcliveradio.ie

Lately, I've been feeling very self-conscious when talking on the phone in public, and it's not because I'm worried about strangers listening in on my private conversations.

Rather, it's because the cellphone I'm using — the recently released Dell Streak — is actually a touch-screen tablet device that makes some of the clunkiest handsets from the late '90s look diminutive by comparison.

The Streak ($300 with a two-year AT&T contract) is a complicated gadget. For a tablet computer, it is fairly small and thin — a fraction the size of Apple's popular iPad. Its face is dominated by a touch screen that is 5 inches diagonally, compared with the iPad's 9.7-inch display.

Yet Dell insists it is also a phone and, as such, it is fairly enormous and uncomfortable to talk on. Beyond that, it comes with an older version of Google's Android software. Overall, it's just too awkward to bear.

The Streak's big size is inescapable. It's a little less than 6 inches long and 3 inches across, so it looked mammoth to me. I felt like a little kid holding her father's smartphone.

It was clear from the start that carrying around the black gadget would be a chore. It fit into the back pockets of my jeans, but protruded noticeably. I was afraid it would fall out or be filched by some tablet-phone-hungry thief. As a result, I had to carry it in a bag or hold it in my hand if I wanted to tote it around, and this latter option quickly got old.

Still, I figured the Streak's size would be great for at least one thing: watching videos. As expected, videos streamed well from such sites as YouTube and funny flash websites or Die, probably helped by the device's 1 GHz processor. Images looked sharp and bright on the screen. They didn't look quite as stellar as they do on Apple's latest iPhone or Samsung's new Galaxy S smartphones, though.

There is plenty of storage space on the Streak for the videos you want to watch (and for photos and songs, too), as it includes a 16-gigabyte microSD memory card. And the device's battery seemed to have no problem getting through a day filled with video and music streaming, Web surfing and chatting.

The screen was also a swell surface for checking out Google Maps and other websites. I liked having extra real estate to look up directions and see pages that contained both photos and text. But using it to instant message my friends was more difficult than on other touch-screen keyboards I've used; despite the Streak's size, I kept hitting the wrong keys.

Using the Streak to make phone calls was a new experience. I felt weird holding it up to my ear, imagining quizzical looks as I walked down the street. The Streak didn't sound bad, but it didn't sound great, either. Calls sounded fuzzy on my end, and in one frustrating exchange the screen kept changing orientation while I was on the phone, which also meant that the physical button that allowed me to turn the sound up and down kept reversing functions.

Beyond the Streak's basic awkwardness, its biggest flaw is that it relies on old software. Despite the inclusion of a swift processor, the Streak is saddled with an older version of the Android operating software — version 1.6 — which means it is missing some of latest features and can't run some applications that call for newer operating software. It also lacks Adobe's Flash Player 10.1 for watching Flash videos.

Dell says the Streak will get what is currently the latest Android software, version 2.2, later this year and will get Flash 10.1, too. I'm stymied by the decision to not even start out the Streak with version 2.1, which is available on a number of current smartphones.

Another odd handicap: Although the Streak has a low-resolution front-facing camera, which could be used for video chatting, it's only enabled for taking photos and videos. Video chat is expected to work when the device gets the Android software update, but for now it feels like quite a tease.

Fortunately, the Streak comes with a fully functional 5-megapixel digital camera on its back. The camera takes sharp images and has a bright flash, and the display functions as perhaps the biggest viewfinder you've ever used. There are plenty of options for adjusting your shots, and I was able to take a bunch of crisp shots. You'll need to hold it steady while snapping, though, because the Streak takes a long time to take a photo after you've pressed its shutter button.

And you'll probably want to use headphones with the Streak, as the quality of its built-in speaker is dismal. When watching a Ted Leo And The Pharmacists music video online, the sound was muddled, even at a low volume. Because the speaker is located on the Streak's back, it gets even harder to hear when you set the gadget down.

Fresher software will surely improve the Streak, but whether you're looking for a phone, a tablet computer or both, the Streak falls short. Performance-wise, that is; in reality, it's anything but.

Motorola has published another full-page ad for one of its Android devices, and takes a poke at the iPhone's inability to access Flash.

By <!– –>
Eric Zeman

InformationWeek
September 3, 2010 02:21 PM

By RACHEL METZ Associated Press
Published: 8/31/2010  2:20 AM
Last Modified: 8/31/2010  7:49 AM

Rather, it's because the cell phone I'm using – the just-released Dell Streak – is actually a touch-screen tablet device that makes some of the clunkiest handsets from the late '90s look diminutive by comparison.

The Streak – $300 with a two-year AT&T contract – is a complicated gadget. For a tablet computer, it's fairly small and thin – a fraction the size of Apple Inc.'s popular iPad. Its face is dominated by a touch screen that is 5 inches diagonally, compared with the iPad's 9.7-inch display.

Yet Dell insists it is also a phone, and as such it is fairly enormous and uncomfortable to talk on. Beyond that, it comes with an older version of Google Inc.'s Android software. Overall, it's just too awkward to bear.

The Streak's enormity is inescapable. It's a little less than 6 inches long and 3 inches across, so it looked mammoth in my petite hands. I felt like a little kid holding her father's smart phone.

It was clear from the start that carrying around the black gadget would be a chore. It fit into the back pockets of my jeans, but protruded noticeably. As a result, I had to carry it in a bag or hold it in my hand if I wanted to tote it around.

Still, I figured the Streak's size would be great for at least one thing: watching videos. As expected, they streamed well

from such sites as YouTube and funny flash websites or Die, probably helped by the device's 1 GHz processor. Images looked sharp and bright on the screen, but they didn't look quite as stellar as they do on Apple's latest iPhone or Samsung's new Galaxy S smart phones.

There is plenty of storage space on the Streak for the videos you want to watch (and for photos and songs, too), as it includes a 16-gigabyte microSD memory card. And the device's battery seemed to have no problem getting through a day filled with video and music streaming, Web surfing and chatting.

The screen was also a swell surface for checking out Google Maps and other websites.

Using the Streak to make phone calls was a new experience. I felt weird holding it up to my ear, imagining quizzical looks as I walked down the street. The Streak didn't sound bad, but it didn't sound great, either.

Beyond the Streak's basic awkwardness, its biggest flaw is that it relies on old software. Despite the inclusion of a swift processor, the Streak is saddled with an older version of the Android operating software – version 1.6 – which means it's missing some of latest features and can't run some applications that call for newer operating software. It also lacks Adobe's Flash Player 10.1 for watching videos.

Dell Inc. says the Streak will get what is currently the latest Android software, version 2.2, later this year and will get Flash 10.1, too.

Another odd handicap: Although the Streak has a low-resolution front-facing camera, which could be used for video chatting, it's only currently enabled for taking photos and videos. Video chat is expected to work when the device gets the Android software update.

Fortunately, the Streak comes with a fully functional 5-megapixel digital camera on its back. The camera takes sharp images and has a bright flash, and the display functions as perhaps the biggest viewfinder you've ever used.

And you'll probably want to use headphones with the Streak, as the quality of its built-in speaker is dismal. And because the speaker is located on the Streak's back, it gets even harder to hear when you set the gadget down. Fresher software will surely improve the Streak, but whether you're looking for a phone, a tablet computer or both, the Streak falls short.

Original Print Headline: Dell Streak is awkward phone, so-so tablet

Rather, it's because the cell phone I'm using — the just-released Dell Streak — is actually a touch-screen tablet device that makes some of the clunkiest handsets from the late '90s look diminutive by comparison.

The Streak ($300 with a two-year AT&T contract) is a complicated gadget. For a tablet computer, it is fairly small and thin — a fraction the size of Apple Inc.'s popular iPad. Its face is dominated by a touch screen that is 5 inches diagonally, compared with the iPad's 9.7-inch display. Yet Dell insists it is also a phone, and as such it is fairly enormous and uncomfortable to talk on. Beyond that, it comes with an older version of Google Inc.'s Android software. Overall, it's just too awkward to bear.

The Streak's enormity is inescapable. It's a little less than 6 inches long and 3 inches across, so it looked mammoth in my petite hands. I felt like a little kid holding her father's smart phone.

It was clear from the start that carrying around the black gadget would be a chore. It fit into the back pockets of my jeans, but protruded noticeably. I was afraid it would fall out or be filched by some tablet-phone-hungry thief. As a result, I had to carry it in a bag or hold it in my hand if I wanted to tote it around, and this latter option quickly got old.

Still, I figured the Streak's size would be great for at least one thing: watching videos. As expected, videos streamed well from such sites as YouTube and funny flash websites or Die, probably helped by the device's 1 GHz processor. Images looked sharp and bright on the screen. They didn't look quite as stellar as they do on Apple's latest iPhone or Samsung's new Galaxy S smart phones, though.

There is plenty of storage space on the Streak for the videos you want to watch (and for photos and songs, too), as it includes a 16-gigabyte microSD memory card. And the device's battery seemed to have no problem getting through a day filled with video and music streaming, Web surfing and chatting.

The screen was also a swell surface for checking out Google Maps and other websites. I liked having extra real estate to look up directions and see pages that contained both photos and text. But using it to instant message my friends was more difficult than on other touch-screen keyboards I've used; despite the Streak's size, I kept hitting the wrong keys.

Using the Streak to make phone calls was a new experience. I felt weird holding it up to my ear, imagining quizzical looks as I walked down the street. The Streak didn't sound bad, but it didn't sound great, either. Calls sounded kind of fuzzy on my end, and in one frustrating exchange the screen kept changing orientation while I was on the phone, which also meant that the physical button that allowed me to turn the sound up and down kept reversing functions.

Beyond the Streak's basic awkwardness, its biggest flaw is that it relies on old software. Despite the inclusion of a swift processor, the Streak is saddled with an older version of the Android operating software — version 1.6 — which means it is missing some of latest features and can't run some applications that call for newer operating software. It also lacks Adobe's Flash Player 10.1 for watching Flash videos.

Dell Inc. says the Streak will get the latest Android software, version 2.2, later this year and will get Flash 10.1, too. I'm stymied by the decision to not even start out the Streak with version 2.1, which is available now on a number of smart phones.

Another odd handicap: Although the Streak has a low-resolution front-facing camera, which could be used for video chatting, it's only enabled for taking photos and videos. Video chat is expected to work when the device gets the Android software update, but for now it feels like quite a tease.

Rather, it's because the cell phone I'm using — the just-released Dell Streak — is actually a touch-screen tablet device that makes some of the clunkiest handsets from the late '90s look diminutive by comparison.

The Streak ($300 with a two-year AT&T contract) is a complicated gadget. For a tablet computer, it is fairly small and thin — a fraction the size of Apple Inc.'s popular iPad. Its face is dominated by a touch screen that is 5 inches diagonally, compared with the iPad's 9.7-inch display. Yet Dell insists it is also a phone, and as such it is fairly enormous and uncomfortable to talk on. Beyond that, it comes with an older version of Google Inc.'s Android software. Overall, it's just too awkward to bear.

The Streak's enormity is inescapable. It's a little less than 6 inches long and 3 inches across, so it looked mammoth in my petite hands. I felt like a little kid holding her father's smart phone.

It was clear from the start that carrying around the black gadget would be a chore. It fit into the back pockets of my jeans, but protruded noticeably. I was afraid it would fall out or be filched by some tablet-phone-hungry thief. As a result, I had to carry it in a bag or hold it in my hand if I wanted to tote it around, and this latter option quickly got old.

Still, I figured the Streak's size would be great for at least one thing: watching videos. As expected, videos streamed well from such sites as YouTube and funny flash websites or Die, probably helped by the device's 1 GHz processor. Images looked sharp and bright on the screen. They didn't look quite as stellar as they do on Apple's latest iPhone or Samsung's new Galaxy S smart phones, though.

There is plenty of storage space on the Streak for the videos you want to watch (and for photos and songs, too), as it includes a 16-gigabyte microSD memory card. And the device's battery seemed to have no problem getting through a day filled with video and music streaming, Web surfing and chatting.

The screen was also a swell surface for checking out Google Maps and other websites. I liked having extra real estate to look up directions and see pages that contained both photos and text. But using it to instant message my friends was more difficult than on other touch-screen keyboards I've used; despite the Streak's size, I kept hitting the wrong keys.

Using the Streak to make phone calls was a new experience. I felt weird holding it up to my ear, imagining quizzical looks as I walked down the street. The Streak didn't sound bad, but it didn't sound great, either. Calls sounded kind of fuzzy on my end, and in one frustrating exchange the screen kept changing orientation while I was on the phone, which also meant that the physical button that allowed me to turn the sound up and down kept reversing functions.

Beyond the Streak's basic awkwardness, its biggest flaw is that it relies on old software. Despite the inclusion of a swift processor, the Streak is saddled with an older version of the Android operating software — version 1.6 — which means it is missing some of latest features and can't run some applications that call for newer operating software. It also lacks Adobe's Flash Player 10.1 for watching Flash videos.

Dell Inc. says the Streak will get the latest Android software, version 2.2, later this year and will get Flash 10.1, too. I'm stymied by the decision to not even start out the Streak with version 2.1, which is available now on a number of smart phones.

Another odd handicap: Although the Streak has a low-resolution front-facing camera, which could be used for video chatting, it's only enabled for taking photos and videos. Video chat is expected to work when the device gets the Android software update, but for now it feels like quite a tease.

By RACHEL METZ AP Technology Writer NEWLINE Lately I've been feeling very self-conscious when talking on the phone in public, and it's not because I'm worried about strangers listening in on my private conversations. NEWLINE Rather, it's because the cell phone I'm using – the just-released Dell Streak – is actually a touch-screen tablet device that makes some of the clunkiest handsets from the late '90s look diminutive by comparison. NEWLINE The Streak ($300 with a two-year AT&T contract) is a complicated gadget. For a tablet computer, it is fairly small and thin – a fraction the size of Apple Inc.'s popular iPad. Its face is dominated by a touch screen that is 5 inches diagonally, compared with the iPad's 9.7-inch display. Yet Dell insists it is also a phone, and as such it is fairly enormous and uncomfortable to talk on. Beyond that, it comes with an older version of Google Inc.'s Android software. Overall, it's just too awkward to bear. NEWLINE The Streak's enormity is inescapable. It's a little less than 6 inches long and 3 inches across, so it looked mammoth in my petite hands. I felt like a little kid holding her father's smart phone. NEWLINE It was clear from the start that carrying around the black gadget would be a chore. It fit into the back pockets of my jeans, but protruded noticeably. I was afraid it would fall out or be filched by some tablet-phone-hungry thief. As a result, I had to carry it in a bag or hold it in my hand if I wanted to tote it around, and this latter option quickly got old. NEWLINE Still, I figured the Streak's size would be great for at least one thing: watching videos. As expected, videos streamed well from such sites as YouTube and funny flash websites or Die, probably helped by the device's 1 GHz processor. Images looked sharp and bright on the screen. They didn't look quite as stellar as they do on Apple's latest iPhone or Samsung's new Galaxy S smart phones, though. NEWLINE There is plenty of storage space on the Streak for the videos you want to watch (and for photos and songs, too), as it includes a 16-gigabyte microSD memory card. And the device's battery seemed to have no problem getting through a day filled with video and music streaming, Web surfing and chatting. NEWLINE The screen was also a swell surface for checking out Google Maps and other websites. I liked having extra real estate to look up directions and see pages that contained both photos and text. But using it to instant message my friends was more difficult than on other touch-screen keyboards I've used; despite the Streak's size, I kept hitting the wrong keys. NEWLINE Using the Streak to make phone calls was a new experience. I felt weird holding it up to my ear, imagining quizzical looks as I walked down the street. The Streak didn't sound bad, but it didn't sound great, either. Calls sounded kind of fuzzy on my end, and in one frustrating exchange the screen kept changing orientation while I was on the phone, which also meant that the physical button that allowed me to turn the sound up and down kept reversing functions. NEWLINE Beyond the Streak's basic awkwardness, its biggest flaw is that it relies on old software. Despite the inclusion of a swift processor, the Streak is saddled with an older version of the Android operating software – version 1.6 – which means it is missing some of latest features and can't run some applications that call for newer operating software. It also lacks Adobe's Flash Player 10.1 for watching Flash videos. NEWLINE Dell Inc. says the Streak will get what is currently the latest Android software, version 2.2, later this year and will get Flash 10.1, too. I'm stymied by decision to not even start out the Streak with version 2.1, which is available on a number of current smart phones. NEWLINE Another odd handicap: Although the Streak has a low-resolution front-facing camera, which could be used for video chatting, it's only currently enabled for taking photos and videos. Video chat is expected to work when the device gets the Android software update, but for now it feels like quite a tease. NEWLINE Fortunately, the Streak comes with fully functional 5-megapixel digital camera on its back. The camera takes sharp images and has a bright flash, and the display functions as perhaps the biggest viewfinder you've ever used. There are plenty of options for adjusting your shots, and I was able to take a bunch of crisp shots. You'll need to hold it steady while snapping, though, because the Streak takes a long time to take a photo after you've pressed its shutter button. NEWLINE And you'll probably want to use headphones with the Streak, as the quality of its built-in speaker is dismal. When watching a Ted Leo And The Pharmacists music video online, the sound was muddled, even at a low volume. Because the speaker is located on the Streak's back, it gets even harder to hear when you set the gadget down. NEWLINE Fresher software will surely improve the Streak, but whether you're looking for a phone, a tablet computer or both, the Streak falls short. Performance-wise, that is; in reality, it's anything but. NEWLINE © 2010 The Associated Press. NEWLINE