Every once in a while I come across an article, like the Washington Post report that follows, which seems almost surreal in its delusions.

Not only does the author take it for granted that we are in a "recovery" -- a dubious assumption, at best -- he also asserts that jobs are being "created" without noting the fact that many more have been and are being destroyed.

Then there is the notion that the President's policies have averted "disaster," which, to me at least, seems based on the fact that those who rolled the dice and lost when the bubble burst did not have to suffer the consequences of their actions (because they were bailed out with taxpayer funds).

Even worse, the author seems entirely sympathetic to the assertion that the Administration has found it hard to come up with the right solutions because of partisan politics and "the suspicions that some Americans harbor about an activist government." Sorry, isn't Washington's failure to do what it was supposed to in the first place one reason why people are wary about letting bureaucrats and politicians become even more involved in their lives?

There's plenty more wrong with "Economic Recovery Not Yet Reaching Americans, Middle Class Task Force Chief Says," but I'll leave you to judge the rest for yourselves:

A poster-size replica of the cover of "The State of Working America" hangs behind Jared Bernstein's desk in the Eisenhower Executive Office Building, next to the White House.

The memento is from Bernstein's former life at the pro-labor Economic Policy Institute, where he co-wrote a series of reports about the increasingly uncertain terrain confronting the nation's workers. It is also a reminder of the Main Street sensibility he brings to a White House economic team that's top-heavy with Wall Street experience.

In the administration's first year and a half, the team has helped pull the U.S. economy from the precipice. The federal government passed a massive stimulus plan, and President Obama pushed through far-reaching health-care legislation that proponents say will expand coverage and control costs. The administration is also close to a financial regulatory overhaul.

Economic growth, however shaky, has returned. The nation is again creating jobs, and the stock market has regained much of the value it lost in the dark days after the financial collapse of late 2008. Yet the unemployment rate hovers at the highest level in 28 years, and wages remain flat.

"Is the economic recovery really reaching the American people?" said Bernstein, Vice President Biden's top economic adviser. "And the answer to that is: Not yet."

It is a sentiment Obama himself has expressed, even as he credits his economic policies for averting disaster. But now the administration faces an even more daunting task: translating growth into shared prosperity.

Bernstein, 54, has pondered that challenge for nearly two decades, and as executive director of the administration's Middle Class Task Force, his job is to address it.

He said the reasons the middle class has not fared well in the modern economy are complicated. Increased globalization, technology, diminishing bargaining power for many workers, reduced unionization and slack in the labor market all share responsibility, he said.

While Bernstein thinks he understands the problem, he acknowledged that forging a solution is difficult, given the unrelenting political opposition and the suspicions some Americans harbor about an activist government. Complicating the picture is that the economy often moves in ways that challenge old assumptions.

Just before Obama took office, Bernstein co-wrote a report projecting the likely impact of the administration's $787 billion stimulus bill. The report accurately projected the legislation's effect in cushioning the economic contraction. But employers cut many more jobs than the administration or forecasters anticipated. The unemployment rate crested at above 10 percent, not at the report's predicted 8 percent.

"It tells you that employers were going to squeeze as much as possible from workers," Bernstein said.

'Different orientation'

Bernstein followed an unusual path to a job where he helps brief the president and vice president several times a week. A graduate of the Manhattan School of Music, he worked first as a bass player, sometimes gigging with famous musicians in Greenwich Village nightclubs. He gave that up for social work in hopes of addressing the chilling depravation that seemed to be everywhere. "I remember walking over homeless people to get to work," he said. "That was a symptom that something was very sick in society."

He went on to earn a doctorate in social welfare at Columbia University before going to the Economic Policy Institute. There he helped document the plight of working Americans who found themselves with fewer guaranteed pensions, increased job volatility, skimpier raises and more inequality. Bernstein found that his economic ideas meshed with those of Obama. After the election, Biden summoned him to his Delaware home for an interview to be his top economist.

"Jared has a history of seeing economic policy through the lens of low-income and middle-class Americans," said Lawrence Mishel, president of the institute. "That is a different orientation than some others" in the administration.

'Economic recipe'

Although some of Obama's economic advisers -- particularly National Economic Council Director Lawrence H. Summers and Treasury Secretary Timothy F. Geithner -- are often viewed with suspicion because of their past Wall Street connections, Bernstein says he has not had an ideological conflict with them. "This notion that there are deep Wall Street sympathies somewhere on the economic team is just completely absent, and I am involved in the high-level discussions," he said.

The test the team now faces is how to nurture the fledgling recovery and channel it into the lives of everyday Americans. Recently, Obama has called for more stimulus, money aimed at saving hundreds of thousands jobs in cash-strapped states. But Congress has balked, saying the nation cannot afford the debt. That frustrates the administration.

In the short term, Bernstein said, the economy needs stimulus, followed by budget discipline and then efforts to subdue health-care costs in the long run.

"That's the economic recipe," he said. "But the political recipe is much more challenging."

I'm afflicted with my fair share of behavioral foibles. In fact, I readily admit that I'm a sucker for a point-of-view -- on the economy, at least -- that dovetails neatly with my own (i.e., confirmation bias), even though prudence suggests I should probably be paying more attention to those with an altogether different perspective. Still, when the individual featured in the following Yahoo! Finance Tech Ticker video, "Howard Davidowitz: U.S. Economy 'Is a Complete Disaster,'" offers his insights on what is going on, his proven willingness to bet against the crowd and call a spade a spade usually has me listening with both ears:

The U.S. economy is in shambles and Americans will continue to see high unemployment and lower living standards in the years to come, Howard Davidowitz tells Henry and Aaron in the accompanying clip. 

Davidowitz lays much of the blame for the economy's woes at the feet of the Obama administration, which he calls "the worst of my lifetime."

Obama "Mr. Mass Destruction"

Davidowitz says that the key to Obama's success is his ability to sell his policies to the public. He can confidently read from a teleprompter and appear competent and in control, when in reality, "it's one big bag of empty words," Davidowitz says of Obama's messages.

Davidowitz contends that the President's spending, including the health-care bill, is creating massive deficits that will take the U.S. years to dig itself out of.  "He is Mr. Mass Destruction," Davidowitz says of Obama. "I mean he is a human destroyer. This guy has spent his way into oblivion and we don't have a budget. He is surrounded by a bunch of complete incompetents, led by himself. "

Housing Gloom

As far as the actual economy goes, Davidowitz's chief concern is the strained state of the housing market, from which the bad news continues to pour in. According to Davidowitz, Americans are facing an $8 trillion negative wealth effect from the bursting of the housing bubble.

"We're talking about some serious money here," Davidowitz exclaims. "I mean this is a complete disaster and that's why we are going to have a double dip. We're guaranteed a double dip in housing."

Small Businesses and Unemployment

Davidowitz says that the job market is also in ruins, noting for every new job there are six applicants. As a result of the intense competition for positions, employers can offer lower wages. Young people entering the work force today can expect to make less money in their lifetime than previous generations.   

Considering the majority of new jobs are created by small businesses, Davidowitz argues that new regulations governing loans to small businesses are only making matters worse -- both for the entrepreneurs and the millions of people out of work.

"We have this insane new regulation," Davidowitz says. "Community banks will not even be able to fill out the forms. They'll pack up and quit. They're already underwater. Commercial real estate is still terrible."  

The Future a Massive Struggle

Asked whether he thought the U.S. would experience another Great Depression, Davidowitz said the coming years will look more like Japan today vs. the U.S. in the 1930s.

People will be making and spending less money and the nation as a whole will be dealing with the consequences of the deficit, he says. "We are in a struggle, day by day it's ugly. At the core, when we look at our debt, we are going to have to deal with it."

A few months ago, while other analysts claimed that the economy would continue to follow a V-shaped recovery path, Davidowitz seemed out of step by insisting the nation's problems were still dire. Regardless of what you think of his message or style, Davidowitz's doom and gloom outlook now appears much more credible.

Although opinion polls have their flaws -- among other things, people are fickle and don't always mean or do what they say -- they can be of some help in determining which way the economic winds are blowing. More specifically,... Michael Panzner

Although opinion polls have their flaws -- among other things, people are fickle and don't always mean or do what they say -- they can be of some help in determining which way the economic winds are blowing. More specifically, while I wouldn't bet the ranch on any one survey, a series of polls that tell a similar story should not be taken lightly. With that in mind, a just-released survey from the Pew Research Center, headlined "The Great Recession at 30 Months," reinforces other recent reports indicating that things are (still) not looking up as far as most Americans are concerned.

More than half (55%) of all adults in the labor force say that since the Great Recession began 30 months ago, they have suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers, according to a new survey by the Pew Research Center's Social and Demographic Trends Project.

The survey also finds that the recession has led to a new frugality in Americans' spending and borrowing habits; a diminished set of expectations about their retirements and their children's future; and a concern that it will take several years, at a minimum, for their family finances and house values to recover.

Here are just a few of the key findings:

The Recession at Work: The work-related impact of this recession extends far beyond the 9.7% who are unemployed or the 16.6% who (according to the U.S. Bureau of Labor Statistics) are either out of work or underemployed. The Pew Research survey finds that about a third (32%) of adults in the labor force have been unemployed for a period of time during the recession. And when asked about a broader range of work-related impacts, 55% of adults in the labor force say that during the recession they have suffered a spell of unemployment, a cut in pay, a reduction in hours or an involuntary spell in a part-time job.

Is It Over Yet? Most Americans (54%) say the U.S. economy is still in a recession; 41% say it is beginning to come out of the recession; and just 3% say the recession is over. Whites (57%) are more inclined than blacks (45%) or Hispanics (43%) to say the recession is ongoing. Republicans (63%) are more inclined than Democrats (43%) to say the same.

The New Frugality: More than six-in-ten Americans (62%) say they have cut back on their spending since the recession began in December 2007; just 6% say they have increased their spending. Asked to predict their spending patterns once the economy improves, nearly one-in-three (31%) say they plan to spend less than they did before the recession began, while just 12% say they plan to spend more. A majority say they expect to spend about what they did before the recession. 

Click here to read the rest.

He's made a boatload of mistakes and has squandered every bit of the political capital he came into office with, but at least our 44th president knows how to keep us entertained with his fabulous sense of humor. Just listen to what he had to say in a speech he made after meeting with Fed Chairman Ben Bernanke:

THE PRESIDENT: Well, I just had an excellent conversation with Chairman Bernanke. This is a periodic discussion that we have to get the Chairman’s assessment of the economy and to discuss some of the policy initiatives that we have here at the White House.

I think in our discussions, we share the view that the economy is strengthening, that we are into recovery, that it’s actually led by some interesting sectors like manufacturing that we haven’t seen in quite some time -- the tech sectors are strong; we have gone from losing 750,000 jobs per month to five months of job growth now; private sector job growth that is obviously so important to consumer confidence and the well-being of the economy overall.

Stop, please -- I'm laughing so hard that it hurts!

He's made a boatload of mistakes and has squandered every bit of the political capital he came into office with, but at least our 44th president knows how to keep us entertained with his fabulous sense of humor. Just listen... Michael Panzner

One of the drawbacks of living in a digital age is a pervasive, tunnel vision-like focus on "the numbers," often to the exclusion of everything else. Sure, hard data matters, especially when the topic at hand is business and finance,... Michael Panzner

One of the drawbacks of living in a digital age is a pervasive, tunnel vision-like focus on "the numbers," often to the exclusion of everything else. Sure, hard data matters, especially when the topic at hand is business and finance, but that's not the end of it. What is just as important is what those numbers actually mean, how they are interpreted, and what people plan to do as a result.

If, as we've seen in the U.S. (and elsewhere), the statistical picture is ostensibly positive but the majority are clearly in no mood to spend or invest, then it seems to me that the soft data, as such, should be weighted much more heavily.

In fact, the dark and deteriorating social mood, as revealed through first-hand accounts, anecdotal and news reports, and other means, is one of the reasons why I have remained steadfastly bearish despite all the "good news" Washington and Wall Street keep shoveling our way.

Arguably, the background details of a monthly statistical series announced this morning, summarized by Dow Jones Market Talk in "‘We Are Just Trying to Hold on,’" lend further support to the notion that now is definitely not the time for happy talk and wishful thinking [red highlighting mine].

Just in case you’re still hung over from the weekend, the Dallas Fed has a bucket of cold water for you. The regional bank came out with its June manufacturing survey this morning, and as bad as the numbers are, and they are bad, the comments are even worse.

The general business activity index fell to negative 4 from 2.9, the company outlook index fell to negative 2.8 from 19.6. The production index fell to negative 1.9 from 20.8 in May; capacity utilization fell to positive 2.7 from 18.7 in May. New orders fell to negative 8.2 from 15.8 in May. Go all the way down the line, the numbers are all down from a month ago. But even more so than the numbers, the comments from businesses surveyed are the real tell here, and it seems to me the Fed wouldn’t have any reason to cherry pick especially bad comments, so this is probably a pretty good take on where things stand.

You really need to read the whole thing to get the total picture:

Comments from Survey Respondents
These comments were selected from respondents’ completed surveys and have been edited for publication.

Wood Product Manufacturing
After skyrocketing in February through April, the North American lumber market has collapsed, indicative of the slowdown at U.S. job sites. Small and medium businesses here in “the trenches” are hurting every bit as much as last year. Much of the downturn is a result of the stimulus ending and the typical midyear slowdown that occurs in the building and construction industry.

Paper Manufacturing
A third price increase on linerboard is a possibility within the next couple of months. If this occurs, it will cause a major uproar with our customers. They will all be going out for bids, causing margins to erode.

Chemical Manufacturing
We are not optimistic about the next couple years.  There are too many negative factors in the world of finance right now.

Plastics and Rubber Products Manufacturing
As a business, we are just trying to hold on until the upturn comes.

The availability of skilled technicians and toolmakers is scarce, particularly in the 20- to 40-year-old age group.

Nonmetallic Mineral Product Manufacturing
Housing activity has had some pullback with the expiration of the home-buyer tax credit. The recovery will be lengthy and slow in coming, and it will be subject to improved employment levels and an upturn in the credit markets.

Fabricated Metal Product Manufacturing
After two consecutive months of increased activity, we have seen a dramatic drop in new business, with no backlog for July and beyond. We are having considerable trouble with our bank; although we are not in default and are making all payments, the bank has not executed a loan facility renewal after almost 90 days past our renewal date. There is a high degree of uncertainty in the marketplace, with owners and their designated contractors and design engineers seeing a dramatic reluctance to initiate planned projects, both maintenance and capital expenditure.

We have yet to see any evidence in Texas or across the country of an economic recovery.

Overall business has improved. There seems to be more onshoring of manufacturing due to risk control, inventory management and short lead times. Increased business expenses created by state tax increases are causing pressure on cost competitiveness. It is still very challenging to obtain financing for capital expenditure and growth.

Economic activity remains tenuous for building materials manufacturers.  Financing and demand for capital goods will determine the strength of the recovery as it relates to construction.

Machinery Manufacturing
We are quite concerned about the trends in general business activity. It feels like we are slowing down, not speeding up. I don’t see much that is encouraging at this point.

Our outlook for the next six months has improved due to our company broadening its product offerings, not necessarily due to improved economic conditions.

Demand for capital goods in the food service industry remains at a very low level.

Computer and Electronic Product Manufacturing
Right now business looks steady, but we’re stepping lightly.

Furniture and Related Product Manufacturing
Business has worsened this month. Retail activity has gone down, damaging the hope for improvement among retailers.

Beverage and Tobacco Product Manufacturing
2009 was great, but the wheels came off a little bit in the first quarter of 2010. The second quarter has been better, but not great.

I normally focus on what many might consider to be "traditional" economic and financial issues, but today I am going to make an exception. I came across the following post at Naked Capitalism, "BP: Gulf Resident Gives Behind the Scenes Account, Slams Cleanup and Safety," and could not help but be moved by what one woman had to say about the epic disaster unfolding in her part of the world and what was being done about it -- in a word, very little:

Gulf resident and fisherman’s wife Kindra Arnesen took advantage of the offer extended to her to visit cleanup sites and staff meetings:

At any rate, I was invited the following week to go behind “enemy lines.” They gave me, of all people, security clearance to go into the base of operations meetings in Venice, Louisiana eight days in. Open door invitation to sit like a fly on the wall. Can you believe it? It’s really going on. They also gave me security clearance to go up to the Homer Incident Command Post which is over the entire region of Louisiana. I’ve been in Coast Guard planes all the way out to the site itself. Helicopters. Boat rides. I have been everywhere that anybody could ever want to go to get an inside look at what’s really going on.

Arensen appears to have been invited in because she got media coverage earlier in June when CNN covered her efforts to organize wives of Gulf fisherman over concerns about the safety of working on oil cleanup:

Arnesen believes it was vapors from the oil and the dispersants from the BP Gulf oil disaster that made her husband and the other shrimpers sick. She says they were downwind of it, and the smell was “so strong they could almost taste it.”

For several weeks, she hesitated to talk publicly about it. Like many fishermen who can no longer fish in the Gulf, her husband has signed a contract to work with BP to clean up the oil, and she doesn’t want to bite the hand that puts food on her family’s table.

But now Arnesen, a 32-year-old “uneducated housewife” — her words — is breaking her silence and is encouraging others in her community do the same. After attending a lecture by Rikki Ott, a toxicologist who’s worked with families affected by the Exxon Valdez oil spill in Alaska, Arnesen decided to organize other wives to ask questions about the safety of working near the oil.

Apparently embedding is more successful with journalists than with people who have a stake in the events they are witnessing. Her report indicates (transcript courtesy Suburban Guerilla):

1. BP is playing down concerns over the safety of exposure to oil and chemical fumes, and attributing ailments and symptoms to causes that strain credulity. In addition, it is, as we reported earlier, making it well nigh impossible for responders to obtain respirators (the method is bureaucratic impediments: they not only need to prepare an OSHA form, but need an evaluation by “a medical professional”. Pray tell, how many people have the time and money to do that? (The detail of the interview indicates a Catch 22 in action). And again as reported here, BP is refusing to employ workers who bring their own respirators, even those OSHA rules workers to provide them.

2. Cleanup measures are far less aggressive than depicted to the media and visiting politicians:

So basically, this whole “ponies and balloons” act — if someone does not come in and properly oversee this response — our marsh now is being used as a boom. an overworked (?) boom, a big, giant sponge. It’s on both sides of us. It will fill up, it is filling up, constantly. We have heavy, heavy crude penetrating our marsh right now as we speak. They deploy , and then they pull ‘em back in when the politicians leave and this is not acceptable!

They’re not cleaning it up; they’re covering it up! This is, we’re barely into this. This could go on for years and years and they are already cutting costs! Cutting costs, cutting corners, taking shortcuts is why we are all sittin’ in this room today.

Enough is enough!

Now, as far as EPA, OSHA, NOAA, BP, and the federal government , they every one of them’s in collaboration with each other. That comes from someone at the top of NOAA. That’s who I’ve been talking to. They gave me someone at the top of NOAA. But, they’re all in collaboration with BP.

I have two observations:

1. Her comments help confirm that we are well on our way towards Banana Republicville, led by a corrupt and incompetent government -- bought and paid for by the moneyed interests -- that is doing its best to erase any evidence that America was once the nation the rest of the world looked up to.
2. When I searched for Kindra's name using Google News, the results contained a paltry number of hits (i.e., 14) that was wildly at odds with the valuable information she has to share. Further evidence, perhaps, that the mainstream media, which failed to uncover the truth about just how broken our financial system was before the crisis erupted, is (still) up to its old tricks?

 

Here is the YouTube video of her speech. I encourage you to listen to what she has to say and pass it along to everybody you know. I'm not sure if it will change things, but I guess there is always the hope...

It seems like only yesterday -- June 16th, to be precise -- that the experts were telling us there's little to worry about as far as the economy is concerned: "U.S. Double-Dip Recession Very Unlikely-Economists" (Reuters) The U.S. economy is... Michael Panzner

It seems like only yesterday -- June 16th, to be precise -- that the experts were telling us there's little to worry about as far as the economy is concerned:

"U.S. Double-Dip Recession Very Unlikely-Economists" (Reuters)

The U.S. economy is slowly healing and will avoid a relapse into recession, the American Bankers Association's economic advisory committee said on Wednesday.

The committee, which includes the chief economists from many of the biggest U.S. banks, said Europe's sovereign debt turmoil would inflict minimal damage on the U.S. economy, aside from trimming exports.

On average, the economists pegged real economic growth at 3.2 percent in 2010 and 3.0 percent in 2011. That was similar to the findings in a Reuters poll, also released on Wednesday.

Although that growth rate is not robust enough to repair the ailing labor market, the committee unanimously agreed that a double-dip recession was very unlikely.

"The economy is moving ahead in a lengthy rehab process and will eventually return to full health and strength," said Stuart Hoffman, chief economist with PNC Financial Services Group and the ABA committee's chairman.

Over the course of 11 days, however, things have apparently changed:

"G20 Recognizes Risk of Double-Dip Recession-Canada" (Reuters)

G20 leaders recognize the threat of a double-dip recession and hope they emerge from meetings in Toronto this weekend with an agreement on how to avoid that, Canadian Finance Minister Jim Flaherty said in a television interview.

"There's a recognition that we could slide back into recession and no one wants to slide back into recession so we're trying to get the right resolution, the right balance here," Flaherty told CTV television in an interview aired on Sunday but taped on Saturday.

As the G20 seeks a compromise agreement on how fast to unwind fiscal stimulus and start tackling deficits, Canada sees the biggest risk in sovereign debt levels, Flaherty said

I really wish these guys would get their stories facts straight.

I normally focus on what many might consider to be "traditional" economic and financial issues, but today I am going to make an exception. I came across the following post at Naked Capitalism, "BP: Gulf Resident Gives Behind the Scenes... Michael Panzner

In a CNBC interview, "Consumers Are on 'Tenterhooks': Lauder," a senior executive of a business that sells products which have, historically at least, been somewhat recession-proof, doesn't exactly sound like he believes the recovery in spending that economists, "strategists," policymakers,... Michael Panzner

In a CNBC interview, "Consumers Are on 'Tenterhooks': Lauder," a senior executive of a business that sells products which have, historically at least, been somewhat recession-proof, doesn't exactly sound like he believes the recovery in spending that economists, "strategists," policymakers, politicians, and investors have been counting on is close at hand.

American consumers are on "tenterhooks," said William Lauder, executive chairman of cosmetics maker Estee Lauder.

"The consumer is back with a certain level of confidence...but if (consumers are) given an excuse, (they'll) pull back," Lauder told CNBC.

According to Lauder, American consumers are "more binary" than consumers in other countries. They tend to be either "in" or "out."

Long lines of people camping out to buy Apple's latest iPhone show that consumers are willing to buy the items that they want, but Lauder expects retailers have to make the products worth it for them.

I've leveled many criticisms at the so-called experts in the financial community. Apart from being blatantly conflicted, many wouldn't know how to analyze their way out of a paper bag even if their lives depended on it. Generally speaking, they... Michael Panzner

I've leveled many criticisms at the so-called experts in the financial community. Apart from being blatantly conflicted, many wouldn't know how to analyze their way out of a paper bag even if their lives depended on it. Generally speaking, they are good communicators but lousy thinkers.

But as with most generalizations, there are exceptions to the rule. Some eloquent experts do know what they are talking about, including David Rosenberg of Gluskin Sheff, Albert Edwards and Dylan Grice of Societe General, Paul Kasriel of Northern Trust, and John Hussman of Hussman Funds.

Based on what he has to say, another person who should probably be added to that very short list is the individual interviewed in the following Yahoo! Finance Tech Ticker report, "America's Ticking Debt Bomb: Like Greece, 'Only Worse,' Pento Says":

America's debt bomb is ticking and is likely to detonate in five years or less, says Michael Pento, senior market strategist at Delta Global Advisors.

"It could be much sooner when we hit the debt wall," Pento says. "My opinion doesn't matter: Math tells me we're in a serious problem."

The math Pento refers to is the Treasury Department's recent estimate that total U.S. debt will top $13.6 trillion this year and rise to 102% of GDP by 2015. Moreover, the publicly traded debt (debt excluding intra-governmental obligations) will rise to $14 trillion by 2015, up from "just" $7.5 trillion in 2009.

At $14 trillion, the interest payments on the public debt will total about $1 trillion in 2015, he continues; even assuming solid growth and low inflation, that would equal about 30% of total government revenue. "What do you think that does to our bond market?," Pento wonders. "It leads to a dollar crisis and a bond market crisis. That's why gold refuses to go down. "

Demand for U.S. Treasuries and the dollar currently remain high, especially in the wake of the euro's slow-motion implosion. Pento admits timing this debt crisis is difficult but predicts we'll be "like Greece, but worse," in four years or less, unless we make a sudden turn toward austerity.

(Image: Source)

In "80 Percent of Americans Think We're Still in Recession," The Atlantic highlights what I believe is a classic example of the spin that many mainstream media outlets keep feeding us on a regular basis:

CNN's headline is Uptick in economic optimism. But with 78 percent of the public believing we're still in a recession (technically, we're not) this improvement is hard to cheer.

Most Americans believe that the country is still in a recession, but one in five now say that the recession is over - the highest number since October, 2008, and double the number who felt that way last May, according to a new national poll.The psychological mancession/shecovery dichotomy is still very alive:

The number of women who think the recession is over has grown eight points since December; among men, there was virtually no change.

Even though the recession is allegedly "over," Americans continue to adjust their spending habits:

"Consumers to Continue Food, Beverage Thriftiness" (Food Product Design)

After two years of cutting corners, consumers have learned to get by with less and say they will continue to practice thriftiness at least for the next six to 12 months and perhaps well beyond that, according to a food and beverage market research report from the NPD Group.

The “The What’s Next on the Road to Recovery” report, which explores how consumers’ habits related to food and beverage purchasing and usage have been affected by the recession, finds that nearly one in five consumers expect to be worse off 12 months from now than they are today, and half of all consumers expect their financial situation to be the same as it is today. Looking ahead nine out of 10 consumers say they will plan and watch their spending on food and beverages outside the home.

Among the thriftier behaviors consumers say they will do more often than now over the next six months are decreasing spending on groceries, especially those with household incomes under $35,000; using coupons for food and beverage items from newspapers or magazines; stocking up on foods and beverages when they are on sale; searching store circulars for low prices on food or beverages that are on sale; buying less expensive brands of foods and beverages, and searching for manufacturer coupons online.

As a result, manufacturers are doing the same:

"Procter & Gamble Says It Plans to Expand Gain to Dish Washing, Affirms Earlier forecasts" (Bloomberg)

Procter & Gamble Co. said Tuesday that it will expand its Gain brand from the laundry to the kitchen sink, the latest move by the world's largest consumer products company to market its megabrands in new ways and new places.

At a Jefferies investor conference in Nantucket, Mass., the company also affirmed forecasts on sales and earnings it offered earlier this year.

After slipping during the recession, P&G's revenue is rising again because the company is offering new versions of its most popular products at lower prices that reach new consumers.

Gain is among 22 P&G brands with $1 billion in annual sales. The new Gain dishwashing liquid will debut within a year, according to the Cincinnati-based company's chief financial officer, Jon Moeller.

Gain is usually priced below P&G's best-selling Tide laundry detergent. P&G officials said they're still working out details of plans for the Gain liquid, which would join P&G brands such as Dawn and Joy used for washing dishes by hand.

Moeller also said P&G plans major overseas expansion of the premium-priced Gillette ProGlide shavers launched this month in the United States.

He said new, lower-priced versions of Tide detergent and Gillette Mach3 shavers are off to good starts in India.

And so are retailers:

"Wal-Mart's Price Cuts Leave Soda Makers Flat" (Atlanta Journal-Constitution)

A soda price war started by Wal-Mart is catching beverage companies in the middle.

Soda sales are reportedly jumping as the world's biggest retailer continues price cuts it started in April and deepened over the Memorial Day weekend. But executives at beverage companies such as Coca-Cola, PepsiCo, Dr Pepper Snapple Group and Coca-Cola Enterprises worry the aggressive discounting could harm the industry's long-term prospects.

Packs of 24 cans of Dr Pepper, Coca-Cola and Pepsi for $5 are now common in Wal-Mart stores, and in some outlets shoppers have spotted them for as little as $3.99. A year ago, the average price for a 24-pack in grocery stores was $6.12, according to Beverage Digest. Grocery stores near Wal-Mart stores are slashing prices to try to remain competitive.

It's unclear how long Wal-Mart's soda promotions will last. Industry insiders say it could be months.

The cuts could put the retailer in a fundamental conflict with big beverage companies, which worry that ultra-low prices could jeopardize eight or nine years of work to get consumers to accept higher prices. That effort was meant in part to produce gains for the bottlers who make and distribute soft drinks.

Analysts say the new low prices could train shoppers to look for deep discounts before parting with their money.

I wonder how long it will take investors, who've been buying the shares of retailers and other consumer discretionary companies with reckless abandon, to realize the error of their ways?

Based on past history, probably quite a while.

Here's a quick lesson on how to do a better job of forecasting the future than many of the worthless highly-paid clowns strategists on Wall Street. It's the same formula I used when I wrote Financial Armageddon:

1. Look around
2. Gather and sift through readily available data
3. Sit back and think
4. Make your prediction

As a test example, I ask that you try and predict which way U.S. house prices are headed over the next year or so. To help you along, here are three recent news reports on the subject:

"US Housing ‘Double Dip’ Fears Grow" (Financial Times)

Steve Romeyn, a builder in the northern suburbs of Atlanta, Georgia, is feeling increasingly alone in his industry. “There are many, many builders who have gone out of business . . . a lot of them are working at Home Depot now,” says Mr Romeyn, managing partner at Windsong Properties in Woodstock, Georgia.

Fortunately for Mr Romeyn, his company has been somewhat insulated from the problems facing its rivals, as Windsong builds communities for adults over the age of 55, who tend to be more financially stable.

Windsong’s fortunes have also been helped by an $8,000 (€6,460, £5,400) tax credit for first-time homebuyers put in place last year and extended to the end of last April. Before the deadline, Mr Romeyn’s business benefited as retirees were able to sell their homes more easily, allowing them to move into his adult communities.

Now the tax credit has run out, that momentum has slowed dramatically. “In the last four weeks I’ve seen very weak traffic and weaker activity,” says Mr Romeyn. “It’s not encouraging and it means we’ll have to work even harder to convince people to move forward with their purchases.”

In May, new residential home construction in the US fell by 10 per cent to a seasonally adjusted rate of 593,000 units, its lowest level in five months, the commerce department said last week. Economists expected to see an impact from the ending of the tax credit, but not such a steep drop.

If the weakness continues, the likely conclusion will be that the tax credit brought forward demand from aspiring homeowners but failed to spur a more fundamental improvement in the housing market. The next big test will be new home sales data out on Tuesday. Economists fear the US housing market could be on the verge of a “double dip” – or even a “triple U”, given the fall in new construction over the winter.

"Whitney Says She Sees ‘Double Dip’ in Housing Market" (Bloomberg)

The U.S. housing market will experience a second recession, forcing banks to post additional loan-loss reserves, analyst Meredith Whitney said.

“Most investors are not baking in a double-dip in housing,” Whitney, founder of New York-based Meredith Whitney Advisory Group, said today in an interview on CNBC. “You’re going to see banks post additional reserves associated with this double-dip in housing, and that means weak performance going forward.”

U.S. home prices fell more than 30 percent from their peak in 2006 through the first quarter of 2009, prompting banks to take writedowns on mortgage loans. Housing starts have increased 24 percent since the low in April 2009 as mortgage rates remained near record lows and the U.S. government offered tax credits to homebuyers.

Whitney said she didn’t foresee the trend

"Housing Double Dip a Done Deal" (CNBC)

Everybody take a nice long look at [June 2nd's] Pending Home Sales Index from the National Association of Realtors, because it's just about the last positive picture we're going to see for a while. 

Yes, the index rose even more than expected, as buyers rushed in to take advantage of the home buyer tax credit.

And yes, those numbers will show up in Existing Home Sales in May and June, but then look out.

This index is based on contracts signed in August, and that's how the credit was set up; you had to sign your contract by April 30th and close by June 30th in order to get your $8000 if you're a first time buyer and $6500 if you're a move up buyer.

And then came May, traditionally the height of the spring housing season.

Mortgage applications to purchase a home began to sink. Now, four weeks later, mortgage purchase applications are down nearly 40 percent from a month ago to their lowest level since April of 1997. Yes, you can argue that a larger-than normal share of buyers today are all cash, but those are largely investors.

That means real organic buyers are exiting in droves.

"With another week of historically low mortgage rates, the trend from the prior three weeks continued, as refinance applications increased while purchase applications dropped. Purchase applications are now almost 40 percent below their level four weeks ago, while the refinance share, at 74 percent, is at its highest level since December," said Michael Fratantoni, MBA's Vice President of Research and Economics.

OK, so what's your forecast?

After the events of recent years, many people probably feel we'd be much better off if we shut down most, if not all, of the banks and forced their employees to seek a more productive line of work. But the truth is that every community depends to some extent on financial intermediaries, and even if the anti-bankster crowd got their wish, the void would eventually be filled by similar enterprises. With that in mind, it's no stretch to assume that a troubled banking system is also a sign of a troubled economy, as Barron's Jim McTague suggests in "Main Street Needs a Doctor":

Small banks' delinquencies cast doubt on Main Street's recover

MAIN STREET NEEDS A DOCTOR. Its pulse, unlike Wall Street's, isn't quickening. The Great Recession drags on there like some drug-resistant bacteria. This is disturbing, because Main Street's small businesses generate substantial job growth, which is what the anemic economy sorely needs. All bull runs in the market are suspect until Main Street conquers its malaise.

The latest evidence of Main Street's funk comes from a Treasury report listing banks that are unable to pay dividends on money extended to them under the Troubled Asset Relief Program, or TARP. These are banks that the regulators handpicked as probable survivors of the financial meltdown, which has claimed 260 institutions since 2008.

The government in 2008 purchased $204.9 billion of preferred stock in more than 700 banks so they would have sufficient capital to make loans at a time when the credit markets nearly had frozen solid. (Another $331.7 billion in TARP funds was invested in car makers, American International Group and other programs. I'm limiting the discussion here to banks).

Treasury says a total of 91 banks in 30 states didn't make a quarterly dividend payment due in May, with 23 institutions missing for the first time. Most of the delinquent lenders are small, community institutions with less than $1 billion in assets. Sixty-five of them are listed companies, traded now primarily on the over-the-counter bulletin board.

It isn't as though the banks are a crucial part of TARP. They received a total of $3.5 billion, less than 2% of all funds under the government program. They missed a combined $151 million in dividends, including $50 million they were supposed to pay the Treasury in May. By contrast, Treasury collected $9.4 billon in dividends from all other TARP institutions.

Still, the delinquencies are a grim sign. When small banks are strapped for cash, their communities usually don't do much better. And the situation isn't improving. The 91 delinquent banks are up from 74 in February and 55 in 2009, according to SNL Financial in Charlottesville, Va.

Back in 2009, the largest 19 firms receiving TARP funds were subjected to so-called stress tests. Computer models predicted how much capital they would need from Treasury to weather the equivalent of a 1929 Depression. The firms' losses proved to be less than anticipated. They have had no problem retiring TARP borrowings and replacing them with money from the Street. Most of the remaining banks applying for the capital infusions were picked for the program based on regulator recommendations.

The largest concentration of delinquent banks -- 21 -- is in California. Washington state has seven institutions; Texas and Missouri have six each; and Florida has five.

While the banks are under pressure, they won't necessarily fail. Often they are trying to preserve capital while raising more from asset sales and new investors. These transactions can take months, because Main Street firms don't have the same easy access to capital markets as their bigger brethren. But for the residents of Main Street, months with weakened banks can feel like years.