The New Normal of the Non-Recovery

In "Americans Agree: There Is No Recovery," I highlighted a recent Washington Post-ABC News poll, noting that

no matter how you break it down -- whether by party/ideology, household income, age, or any other category -- the majority of Americans agree on one thing: there is no recovery.

But the fact that things haven't returned to normal isn't just a matter of (public) opinion. As the Globe and Mail's Market Blog reveals in "These Are Bad Days for Garbage," the volume of waste being created nowadays essentially means that, despite persistent talk (from Wall Street, among others) of a renaissance in consumer spending, people are continuing to consume less and recycle more than they used to.

You might think that the business of hauling garbage is a stable industry that can thrive regardless of how the economy is performing. But although the solid waste industry is decidedly unglamorous – and unglamorous can be synonymous with defensive – waste is surprisingly exposed to the economy, making it as vulnerable to setbacks as swishy retailers and gold-plated banks.

And right now, Moody’s Investors Service is arguing that waste operators are in a tough spot. In a report, the credit rating agency cut the industry’s outlook to “stable” from “positive” and warned that low demand from consumers is colliding with weaker pricing from operators. That’s a sign that stocks could be stuck in (wait for it ... ) the trash heap.

...

“The slow economic improvement has failed to generate meaningful growth in waste volumes, and the pricing discipline maintained by waste operators during the recession is beginning to fade,” said Bruce Herskovics, a Moody’s analyst, in a note. “We’re hearing that customers, particularly cash-strapped municipalities, are pushing back when contracts come up for renewal and we believe that operators are bidding more defensively to maintain accounts.”

Garbage gets tossed in good times and bad, of course, but the bad times generate considerably less of it. For example, Moody’s points out that waste volumes from U.S. construction and demolition sectors remain weak and are unlikely to rebound this year, offsetting some improvements in industrial waste.

And then there are the dreaded R-words. No, not recession – but rather reducing, reusing and recycling. Can you believe it? Mr. Herskovics points out that there has been a long-developing trend among consumers to avoid sending old junk to landfills, and that has played havoc with residential waste volumes.

Sounds like the "new frugality" of the Great Recession has become the new normal of today's non-recovery.

Comments

[Nothing's normal in the new normal]

There's also more competition for that garbage..one man's garbage is another man's dinner. What a recovery!

"I Am a Dumpster Diver, and I Eat Trash"

But if you really check out a dumpster, there's one discovery that will stick with you after the smell washes away and you accept your questionable habits -- there's a lot of food in those things. Good, clean, healthy food that we can eat. Loads of it. And it ends up in the trash every day.

Dumpster diving, also known as urban foraging, is the process of sifting through trash, usually behind restaurants and supermarkets, in search of food. It's gaining traction in the United States as more people realize just how wasteful we can be.

http://www.huffingtonpost.com/the-daily-collegian/dumpster-diving-trend_b_1417514.html

[Chip Hughes]

Some recovery. This is all going to end in tears.

[Tom]

Not only is there no recovery, but it's increasingly becoming obvious that the fabric of "society" is shredding or no longer there. Take homeowners insurance which everyone is REQUIRED to have (to protect the mortgage lender): well, now if you get hit with a tornado or major damage from a storm - YOU'RE ON YOUR OWN!

http://news.yahoo.com/insurers-rethink-coverage-weather-disaster-payouts-124608977.html

As weather gets biblical, insurers go missing
"PITTSBURGH (Reuters) - As weather disasters strike with more frequency, homeowners first get hit with the destruction or total loss of property. Many are then hit with the unexpected loss of homeowners insurance policies as insurance companies re-evaluate their financial liabilities.

After a tornado ripped through Springfield, Massachusetts, last year, R. Paula Lazzari's home was badly damaged. The retired teacher found broken windows, missing siding and a damaged roof. Her insurer offered to fund repairs for one broken window and some of the siding. It took nine months -- and mediation services from an independent adjuster and the Massachusetts Division of Insurance -- to get her bills paid, according to the parties involved.

In this era of unpredictable weather patterns, Lazzari's case is not unique. Insurance companies are raising rates, cutting coverage, balking at some payouts and generally shifting more expense and liability to homeowners, according to reports from the industry and its critics.

"Insurance companies have significantly and methodically decreased their financial responsibility for weather catastrophes like hurricanes, tornados and floods in recent years," the Consumer Federation of America said in a statement after studying industry data.

The industry concedes that it is trying to avoid getting trounced by those same punishing weather patterns.

"Last year (2011) was an extraordinary year for natural disasters," said Michael Barry of the Insurance Information Institute (III), an industry trade group. "Insurers have taken a step back to assess whether or not they can absorb severe losses."

STATES LEFT IN THE COLD

Some insurance companies have pulled out of weather-challenged states -- meaning they will not write new homeowners policies and may not renew contracts with current policyholders.

In the wake of Hurricane Irene last summer, for example, Allstate informed some 45,000 North Carolina policyholders that it would not renew contracts that were not bundled with auto insurance.

After a spate of tornadoes last April caused $11 billion of property damage in Alabama, Alfa Mutual Group announced it would not renew 73,000 Alabama property insurance policies.

"The increased frequency and severity of storms over the last decade have highlighted the need for Alfa to review its overall property portfolio," Alfa President Jerry Newby said in a statement.

Florida, where insurers have been dropping coverage since Hurricane Andrew in 1992, is a good example of where this can lead. With an annual average of $1,460 per home, homeowners' premiums there are second-highest in the country (Texas, at $1,511 is first), according to the most recent data available, a 2010 report from the Insurance Information Institute.

"Florida's off the charts when it comes to pricing," said Mike McCartin, an Ashton, Maryland, independent insurance agent.

The state has stepped in to cover some 1.5 million properties via its publicly funded Citizens Property and Insurance Corporation as insurers drop more and more homes.

"You simply have major private insurers that are unwilling to write policies in Florida," said Robin Westcott, the state's insurance consumer advocate.

"It's just a tough market to be in," said Phil Supple, a spokesman for State Farm, which was once Florida's largest property insurer. It stopped writing new homeowners' policies there in 2007." (there's more)

[Recovery will happen with the return of the rule of law]

Should Corrupt Bankers Face the Death Penalty?

Let’s be clear: financial misdeeds ruin lives. If a Madoff takes your money and uses it to pay off other investors in a ponzi scheme, you won’t be able to get it back. If a Blankfein underling issues you with misleading advice, and then bets against you (creaming himself a nice profit), you won’t be able to get it back. If a Corzine steals your money and uses it to bet on the European sovereign debt market, you might not be able to get it back. You might end up in poverty or worse. You might lose your children’s college money, your retirement money, or capital you needed for your business. You might lose your home.

So shouldn’t we take a tough line against financial misdeeds? Shouldn’t tricking and stealing from investors, tricking and stealing from the public, tricking and stealing from clients carry a heavy disincentive, like death? Would a corrupt banker not think twice about their misdeeds if they knew that apprehension would mean a noose around their neck and a kicked bucket?
A much better goal to aspire to is the end of bailouts, and the end of firing off wads of QE-dollars to preserve badly-run (but well-connected) companies and systems (zombification).

Still, in matters of financial fraud I think it is important to seek out equivalent justice; you destroy a livelihood, we take your trust fund, and your Swiss bank account to compensate the victim. The status quo — where regulators shoot off tiny fines for huge financial crimes — is a joke.

http://www.zerohedge.com/news/guest-post-should-corrupt-bankers-face-death-penalty?

[No one's listening]

For Capitalism to Survive, Crime Must Not Pay

There are too many people in the financial sector, with their enablers, familiars, and camp followers, engaged in distorting markets and public policy discussions while collecting their enormous and counterproductive entitlements from corruption, fraud, and the misery of others.

They are crippling the economic recovery. These are not 'job creators' or even wealth creators; they are con men, parasites, and leeches.

http://jessescrossroadscafe.blogspot.com/2012/04/for-capitalism-to-survive-crime-must.html