...Or, the perils of combining a venti bold Starbucks coffee and Prozac medication before delivering a public speech.

Hat tip Obsidian Wings blog.

It is not where you are, but where you are going.  Analogies abound, which brings us to a couple of recent topics in the news: Censorship and Banking Policy.

This week, several state attorneys general* threatened, Big Brother-esque, the management of craigslist.org to remove the adult services section of its electronic classifieds, as highlighted at TechCrunch and elsewhere.  Craigslist initially resisted but eventually acquiesced by inserting “censored” on the section of concern – but only on its U.S. pages.  Feel free to visit similar exotic services sections of other Non-U.S. cities such as Beijing for uncensored versions. 

End result, the tactics by civil servants to target one business and ignore many other popular online and print classified ads that arguably attract greater amounts of morally questionable activities should be a warning sign to citizens and businesses.  That is all we will write about this topic, for obvious reasons.

Another headline demonstrates how a government and banking community should responsibly manage their activities.  Yesterday Beijing announced that it tightened residential lending standards by increasing the percent of equity required to obtain a loan from 20% to 40%.  What a novel approach.  In the U.S., lending standards went in the opposite direction, from 20% equity to zero equity.  Did government entities and banks in the U.S. heed lessons from the banking collapse?  Well, based on the recent sponsorship by Federal Housing Administration (FHA) of 3.5% equity loans for luxury condominiums in NYC, the answer is a resounding “no.” 

This presents yet another warning sign that policy makers and government entities are behaving in a harmful, irresponsible manner - a "privatize the gains, socialize the losses" mentality.
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* State attorneys general espousing censorship: Arkansas, Connecticut, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Missouri, Montana, New Hampshire, Ohio, Rhode Island, South Carolina, Tennessee, Texas, and Virginia.

In the past few days, several people and organizations have questioned whether the economy is falling back into a recession (double-dip or “W”recovery). The last double-dip recession in the U.S was the early 1980's.

Our opinion is the economy never really recovered from the notable downturn beginning in late 2007, and for that matter never recovered from the 2001 recession (technology bubble burst).  It’s our lost decade – in terms of economic growth, jobs and the stock market.

Nevertheless, there are some lighthearted articles about the topic.  Here’s a snapshot from Zero Hedge: 

You know we're headed for a double-dip when:

• What you thought was your cable bill, turns out to be your 401k statement.
• Your mortgage shows up on eBay.
• You buy $50 of GM stock, and are named to the board.
• The family dog asks for a severance package.
• Your parents move to Greece.

There’s even a new song by Merle Hazard about a potential double-dip recession.  For a more granular opinion, Yahoo! Finance lists 22 cities in danger of a double-dip recession.  Lastly, there’s the conventional approach to economic forecasting using leading indicators published by the Economic Cycle Research Institute (ECRI).  Given its perfect forecasting record of recent, what is it forecasting?  A double dip recession, as indicated at DailyFinance.

Our opinion?  Psychology plays an important role: if you think you’re beaten, then you’re beaten.

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Note: Footnotes for the first chart may be found at the link provided above (early 1980's at Wikipedia).  To summarize, (1) blue line is percent change from preceding period in real gross domestic product (annualized; seasonally adjusted) and (2) red line is average GDP growth 1947–2009.

Update 2 Sep. 2010: Given several have ask about further feedback about the ECRI, its managing director, Lakshman Achuthan, provides an overview in this interview on Yahoo! Finance.

If you want to gain a better idea of why economics is sometimes referred to as the dismal science, then reference the 50 statistics about the U.S. economy highlighted on the Coalition of the Obvious (COTO) Report’s blog.

The blog is anti-corporation oriented and the statistics are one-sided, but each has a link to source or support material to corroborate, so the article provides a concise one-page summary of statistics and links.

Below is a sampling:

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4.  Thus, the 10 percent rate would be 24 percent, the 15 percent rate would be 36 percent, and the 35 percent rate would have to be 85 percent.

#15) 39.68 million Americans are now on food stamps, which represents a new all-time record.  But things look like they are going to get even worse.  The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010.  That was almost twice the level of a year earlier.

#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north, there are 34,000 open foreclosure cases.  Ten years ago, there were only about 4,000.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.