“When the U.S. hiccups, the rest of the world catches pneumonia” … or words to that effect … and the events of the last few years support that observation.

An International Chamber of Commerce (ICC) report on trade finance released last week cautioned against excessive optimism, stating that … “the economy is still on shaky ground, and despite ‘budding signs of recovery’, evidence is not strong enough to conclude that the current ‘recession’ is waning.”

“Budding signs of recovery”? In the week just prior to that ICC report, the following stories were making headlines around the world:

“Airline Industry Suffers $ 6 Billion Loss”
– “The International Air Transport Association has reported that the airline industry lost more than USD 6 billion in the first half of the year.”

“Iberia Announces Q2 Results and Grounds Three More Planes”
– “The Spanish flag carrier Iberia recently announced a loss of EUR 72 million in Q2/2009.”

“CKYH Alliance Rationalizes Service”
– “Due to stagnating demand, the CKYH Alliance (Coscon, K Line, Yang Ming and Hanjin Shipping), is reducing capabilities on its Asia-North America/Mediterranean service by around 20% in October.”

“Railfreight Traffic in Germany Shrinks by 22.4% ”
– “Germany’s statistics bureau Destatis said that volumes transported fell by 42.5 million tons, or 22.4%, compared to the first six months in 2008.”

“International Freight Week Cancelled”
– “International Freight Week, a trade show for the Middle East logistics industry, has been cancelled by its organizer as a result of the economic downturn, according to a statement on the organizer’s website.”

“US Intermodal Rail Traffic Declines”
– “Intermodal rail traffic in the USA fell by 15.6% last week from the same week a year ago, the Association of American railroads (AAR) said in its weekly report.”

“Boeing Deliveries Plunge by 22% in August”
– “The US aircraft manufacturer Boeing’s commercial jet deliveries tumbled by 22% in August, as weaker demand for air travel and cargo flights forced airlines to scale back plans to buy new planes.”

“CMA CGM Chairman Saade Calls on EU to ‘save European Shipping Lines'”
– “Jacques Saade, the chairman of the board of the shipping group CMA CGM, has appealed to the European Commission, national governments and banks to ‘save the three large European maritime shipping lines, and thus ensure the existence of maritime shipping in Europe.'”

“With Surplus Capacity Seen on Horizon, Shipowners Fear Dwindling Rates”
– “Several shipowners are reportedly anticipating a shrinkage in freight rates over 12-18 months with surplus tonnage entering the market, and the dismal trade situation. Despite fears of huge cancellations, most shipyards went ahead constructing newbuildings because they were already at an advanced stage and wanted to complete the exercise.”

Those are just some of the basket cases being dealt with around “the rest of the world” … and this is what “US hiccups” look like:

“WASHINGTON: Another Wave of Foreclosures Looms – Ballooning Payments Put Mortgages at Risk, Posing New Setback to Market”

“The housing market faces the prospect of a new round of foreclosures as hundreds of thousands of risky home loans known as option adjustable-rate mortgages (ARMs) reset to significantly higher payments that could force borrowers to fall behind, according to a report released Tuesday by Fitch ratings.

“About 70 percent of the $ 189 billion in outstanding option ARMs will reset by 2011, the report said, which would be another setback to a teetering housing market still struggling to recover from the mortgage meltdown that precipitated the financial crisis …

“In its report, Fitch estimates that $ 134 billion in option ARMs will reset in the next two years. It expects monthly payments to jump 63 percent on average, or $ 1,053 a month, for loans adjusting this year and next, prompting a rise in defaults and foreclosures.”

“(Reuters) – Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration’s housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.

“A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis.

“‘The recent crisis in the housing sector has devastated families and communities across the country and is at the center of our financial crisis and economic downturn,’ Michael Barr, assistant Treasury secretary for financial institutions, told a House Financial Services subcommittee … Barr said that even if the Home Affordable Modification Program (HAMP) is a success, ‘we should still expect millions of foreclosures’ as administration and industry efforts continue to stabilize a crisis-stricken housing sector.”

[Notice how it was “the mortgage meltdown that precipitated the crisis”, and how “The recent crisis … is at the center of our financial crisis and economic meltdown”? This is the lie that’s presented to the gullible and semi-literate Americans who “only know what they read in the newspapers”.]

One Federal Reserve economist had the gumption to tell the honest truth, however, when he said that an effective plan to mitigate foreclosures must deal with rising unemployed borrowers.

“Thirty one percent of an unemployed person’s income is often nothing. And a payment of zero will never be attractive to a lender,” Boston Federal Reserve Bank senior economist Paul Willen told the subcommittee.

So, why were billions in bailout dollars given to banks when it was known ahead of time that a “zero payment” from an unemployed borrower “will never be attractive to a ‘lender'”? There’s an easy answer to that question. Those bailout funds were never intended for American sheep – the unemployed electorate who made no campaign gifts to the knighted ones.

From the very beginning, those multi-billions in bailout dollars were intended not for the sheep but for the wolves who funded the campaigns of the electioneering elite. Wall Street donors and bankster donors made out like bandits, because that’s what they are.

“Budding signs of recovery”? In his “healthcare” speech last week, President Obama said: “When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen and our financial system was on the verge of collapse, but thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say we have pulled this economy back from the brink.”

Don’t believe it. “Budding signs of recovery”, or “jobless recovery”, or whatever they’d like to call it, is pure fiction. When a Labor Day telecast on HBO showed workers making the last truck at a GM plant in Ohio, teary-eyed and forlorn workers were asking, “What do we do now? What happens to our families?” President Obama – in spite of his “bold and decisive action” – doesn’t have an answer for those desperate folks and neither, no doubt, do those “lenders” who could hardly be expected to be attracted to borrowers who could offer them only a “zero payment”.

Paul Craig Roberts – a former Assistant Secretary of the Treasury – and economist John Williams both said back in December of 2008 that if the unemployment rate was calculated as it was during the Great Depression, the December 2008 unemployment figure would actually have been 17.5%. Mr. Williams now states that the true unemployment figures for July 2009 rose to 20.6%, and according to an article summarizing the projections of Professor Kenneth Rogoff – former IMF Chief Economist – and University of Maryland Economics Professor Carmen Reinhart, unemployment could rise to 22% within the next 4 years. We’re not “back from the brink” – we’re headed there.
As long as the president acknowledges that this is the worst economic crisis since the Great Depression, why doesn’t he mandate Emergency Shipbuilding Programs the way FDR did? Fifty million new job opportunities would be created – do you think there’d be many applicants?