Friday, November 13, 2009

Yippee! (the pundits say) 'It's over!'

Greetings good citizen,

Every once in a while its a good idea to 're-state' what (my) mission here is...because I don't think I've mentioned what I'm trying to accomplish since I first started posting here almost three years ago.

I am neither an economist nor an investor, in that respect I could care less what the market does. Nope, I watch the economy because that's the best 'indicator' we have to let us know how, er, 'healthy' our society is.

Naturally, the stock market is useless, the only thing its performance tells you is how rich the rich people are getting (because the wealthy own most of the stock!)

So, what you want to pay attention to is the employment situation as well as the size and the nature of domestic investment. Are they building new factories and creating more, better paying jobs (something they haven't done around this neck of the woods for the past thirty years!) or are they closing plants and sending the work overseas? (a much more familiar sight.)

At the end of the day good citizen, it's that 'long view' that tells the story.

Can there really be an 'economic recovery' without any corresponding investment? It only stands to reason that what they do is far more important than what they say!

Oh, and pouring your (taxpayers) money down a black hole to cover their bad bets isn't anyone's idea of an economic stimulus! 99% of this so-called 'economic recovery' (the stock market moving back into the 10,000 range) is simply 'cover' for the trillions of taxpayer dollars that have gone 'missing in action' over the past two years...there is no recovery!

But that's not what
tonight's offering
tells us.

Euro Zone Officially Out of Recession

Published: November 13, 2009

PARIS — After more than a year in the doldrums, the euro area emerged from recession during the third quarter, helped largely by export growth and improved industrial production in its largest economy, Germany.

The European Union’s statistics agency, Eurostat, reported Friday that gross domestic product for the 16 countries using the single currency expanded by 0.4 percent from the second quarter, following five quarters of contraction. Against a year earlier, G.D.P. was still 4.1 percent lower.

Analysts said the outlook remained patchy, particularly because unemployment is still climbing, wages are stagnant and consumption and lending are being propped up by government programs that will not be renewed indefinitely.

“Europe is still very dependent on lenient fiscal and monetary policy,” said

Helge J. Pedersen, chief economist at Nordea in Copenhagen, “so I fear a bit for what happens when all these programs are phased out in coming months.

The German economy grew 0.7 percent from the second quarter, when it was up 0.4 percent, Eurostat said. Compared to a year earlier, G.D.P. was down 4.7 percent.

France recorded a more muted rebound during the same period. Its G.D.P. grew 0.3 percent — the same increase as was reported during the second quarter — against analysts’ expectations of 0.6 percent.[Um, not exactly 'kick ass' growth...worse, chances are good, since we aren't talking whole percentage points here, that we are not outside the statistical 'margin of error' that could wipe this tiny gain right out...]

In Italy, the economy grew 0.6 percent. Spain, struggling with a deep housing market correction and the highest unemployment rate in the region, remains in recession; its economy contracted 0.3 percent. [Does anyone else see a 'pattern' emerging here?]

The data were preliminary, and further details will be published later in the month. [And remember, ALL of these figures are subject to 'revision'...]

But the German numbers appear to have been bolstered by an acceleration in industrial production, which was up 3.5 percent in the third quarter from the previous period, and exports, which rose 5.4 percent during the third quarter despite the stronger euro. [Um, who, good citizen, is buying the goods this little 'spike' in production has produced? Consumers around the world are...'tapped out', not only have they had their paychecks slashed but their credit lines have been cut as well...could a tiny handful of the superwealthy actually account for, spending spree?]

Germany, noted for its value-added manufactured goods like machine tools, chemicals and high-end automobiles, appears to be better placed to gain from the stronger growth in emerging countries than France. [Most people dislike 'truisms', well, there's a 'truism' about German products, they are the most expensive...but they're worth it because they are the best! So we have to ass ourselves, who the fuck has the money to be buying 'the best' in this shitty economy? Sure ain't us po' folks!]

The French recovery was also helped by higher exports, although household consumption leveled out.

The French rebound “is still rather weak and reliant upon the stimulus package put in place by the authorities,” Oscar Bernal, an ING analyst, said.

Only public spending is likely to keep sustaining growth in the next quarters,” he added.

Simultaneously, there is a danger that European authorities will soon pressure France to limit spending to control its rising public deficit and debt ratios, analysts say. [Should we be wondering if those guys are planning on paying us a little visit in the not too distant future? Hey, the Chinese are already on our case to get our 'house in order'...and I don't think having 'Timmy' yak up the dollar is what they mean by that.]

For the 27 members of the full European Union, the economy grew in the third quarter by a more modest 0.2 percent, Eurostat said. [Um, once again I have to wonder if that is 'genuine growth' or a 'statistical error'?]

The British economy, in particular, is lagging its neighbors. British growth contracted by 0.4 percent in July to September from the previous three months, and it shrank by 5.2 percent compared with a year earlier. [Which makes you wonder because they 'deep fried' the books in the US, why couldn't they do the same in the UK and cobble up a number that was 'barely positive' like Germany and France?]

A significant reason for the divergent performance between the economies appears to be the larger debt burden of British consumers. [Understand good citizen that US consumers carry nearly as much debt as consumers in the UK and that didn't even slow 'em down when it came to 'fudging' GDP numbers here.]

The U.S. economy also recovered from recession during the third quarter; G.D.P. there expanded at an annualized rate of 3.5 percent. By comparison, on an annualized basis, the euro area economy grew by about 1.6 percent during that same period.

As I was saying...all three indexes closed in positive territory today...for no particularly good reason except the rich are feeling good about being rich, if you got a problem with that, too bad!

Naturally, sometimes we have to wonder why they tell us what they tell us when they choose to do so.

Understand good citizen that for the most part you are treated like a mushroom, kept in the dark and fed a steady diet of bull shit.

While this kind of treatment is excellent for mushrooms, it's of dubious merit when it comes to maintaining civil order because the truth has a nasty habit of making itself known.

So what are we to make of recent 'revelations' that there's a lot less oil around than was previously 'believed'?

Our civilization and by extension, our society, was built upon the idea of cheap, abundant energy. Once energy is neither our entire 'lifestyle' collapses...things no longer get where they need to be, when they need to be there.

Worse, most of us don't realize just how dependent we are on idea that when we flip the switch, the lights come on.

Iraqis know what it's like to only have power for a couple of hours a day...but the Iraqi economy is in shambles, largely because they only get a couple of hours worth of electricity a day...

Perhaps more puzzling is how the price of energy continues to rise while consumption tapers off, what do you suppose is causing that?

Perhaps we will learn the answer in
tonight's second offering

U.S. Trade Deficit Widens on Oil Imports

Published: November 13, 2009

The United States trade deficit in September widened more than expected, to $36.5 billion, in part because of an increase in oil prices, the Commerce Department said on Friday.

The department’s data showed an 18.2 percent jump in the gap between the value of imports and exports in the economy, known as the trade balance. [The Dollar is sinking like a rock so this is pretty, er, 'puzzling' news...if it isn't outright bull shit!]

Both imports and exports rose in the month, but an increase in the price of oil weighed significantly on the statistics. Oil prices increased to $68.17 a barrel in September from $64.75 in August. As a result, the United States imported $19.51 billion of oil in September, up from $17.38 billion in August. [Well, if you haven't been watching the commodity prices, a barrel of oil today was selling for roughly $80 a barrel but still, 19 and a half billion dollars worth of oil is a crap load of oil, even at $70 a barrel!]

Overall, imports rose to $168.4 billion from $159.1 billion, or 5.8 percent, in September, and exports rose 2.9 percent, to $132 billion from $128.3 billion — a significant increase that indicated increasing demand for American products abroad, including autos, aircraft and industrial machinery. [Ironically, none of those items are actually produced in the USA...well, okay, they 'asemble' the aircraft here and there is, count 'em
ONE US producer of machine tools and only one, the other US brands are like the aircraft example, assembled here with foreign made parts, which is pretty much the same deal when it comes to autos. Assembled here from parts that are made elsewhere. I mean fuck, where do you think all of the jobs went?]

As of September, the trade deficit is running at an annual rate of $366 billion, about half of last year’s $695.9 billion. The deficit with China, which had been easing, rose 9.2 percent to $22.1 billion last month. [You don't suppose that 'rat bastard' Santa Claus has something to do with this, do ya?]

While the economy remains weak, Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Mass., said he saw reason for optimism in the numbers. The rise in imports, he said, indicated that manufacturers in the United States were building up inventories [Excuse me, Stop right there!...can you show me a 'green card' buddy?] — a carmaker importing Japanese auto parts, for instance — in anticipation of higher demand from American consumers. [Um, not a particularly 'patriotic' example there but you have to be sympathetic, there really isn't anything else to point to except food and raw materials, which shoots to hell the idea that we still have a manufacturing base here in the US.]

“It’s a very strong signal that the domestic economy is recovering,” he said.

[I'm disinclined to ask how importing what we need does anything at all to 'help' the domestic economy although one could suppose it helps the retail sector...]

Mr. Behravesh said he expected the appetite for imported goods would recede as the economy stabilizes, and that he believed exports would continue to climb. [Rather strange 'reversal' there, isn't it? Apparently being an economist let's you have things both ways!]

As the dollar continues to drop against other major world currencies, companies in the United States are hoping to take advantage of its dwindling value. [While shell-shocked consumers tighten their belts as their diminished purchasing power forces them to make 'hard choices' like 'heat or eat'...]

A weak dollar makes the price of foreign goods like French wine and Japanese cars more expensive in the United States, driving consumers toward American brands. [Which will really suck because there aren't any at all in a broad swath of consumer goods!] Overseas, it makes United States exports like corn and mining trucks cheaper, helping sales for American companies. [and making US capitalist pigs richer, while their workers starve to death!]

But a bounce in exports may not come as quickly as some producers would like.

John H. Dobson, president of the American Soybean Association, said he took the news of a weak dollar as a positive sign.

“I hope that we will be able to catch up and see strong export growth,” Mr. Dobson said. Exports of soybeans, as well as corn, fell slightly in September.

However, he said the weak dollar meant soybean growers would have to pay more overseas for things like fertilizer and machine parts, and he worried that there was a limit to the demand for soybeans worldwide, even if they were cheaper to foreign consumers. [Just a poorly phrased statement good citizen, Mr. Dobson is simply 'wishing out loud' that his competitors will be hindered by higher domestic prices, making his soybeans more 'attractive']

Dermot Hayes, a professor of economics and finance at Iowa State University who specializes agricultural economics, said the global malaise could slow what might otherwise be a positive for American exporters. [This could become extremely 'problematic' if the dollar sinks so far that domestic goods become priced out of the reach of domestic consumers...]

“If it weren’t for these other impediments in the crisis, we should have seen a big increase in exports,” he said. “But it also takes awhile to produce stuff. You have to ramp up production and grow more acres and grow more pigs and more cows and that takes time.” [Um, I may be speaking out of turn here but if I'm not mistaken, harvests around the world were particularly good this what is 'dodo' wishing for?]

Policy makers in Washington have seemed content to let the dollar slide, so long as it does not go at such a rapid pace that it wreaks havoc on world economies. The Federal Reserve has kept its interest rates at historic lows, helping to contribute to a weak dollar as investors transfer their wealth to the world’s booming stock markets instead. [Um, 'scuse me...they left out the 'fraud riddled' part!]

In Asia this week, Treasury Secretary Timothy F. Geithner reiterated his support for a strong dollar in the face of criticism from the finance ministers of other nations, who hold much of their foreign investments in United States dollars. [Um, is laughing in Timmy's face considered 'criticism'?]

In August, the deficit narrowed unexpectedly as Americans cut back on foreign oil. On Friday, the Commerce Department revised the August deficit to $30.71 billion.

Um, the damn trade deficit is still running at a triple digit billion dollar annual rate, which is to say we're still importing more than we export, so where the fuck is this so-called US manufacturing sector, on Wall Street?

Because before this shit blew up, the boys on Wall Street were busy 'building' toxic financial instruments, complete with a triple A rating from one of their stooges attached to it!

Understand good citizen, when the market for MBS seized up our GDP number went from 4.5% in the third quarter to .5% in the final quarter of 2007.

That's how much of our economy was being driven by the financial sector...the freaking 'paper pushers', for lack of a better description.

Now I ask you, given the original 'mission' of this blog, what do you suppose the outlook is for our collective future?

I think things are looking mighty freaking bleak, but that's just me...

Thanks for letting me inside your head,


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