Revised up, giving this week a 1,000 person drop. Rinse and repeat for the 60th time.

 

U.S. jobless claims fall slightly

Pace of new filings for benefits little changed over past 3 months

 

"First-time jobless claims fell by a scant 1,000 to a seasonally adjusted 367,000 in the week ended May 5, the Labor Department said. Claims from two weeks ago were revised up to 368,000 from an original reading of 365,000."

 

"Claims have zigzagged between a low of 361,000 in early February and a high of 392,000 in late April, indicating that the pace of hiring has leveled off after a fast start entering 2012. The last two monthly employment reports have seen marked deterioration from the 200,000-plus new jobs created during the late-winter months."

http://www.marketwatch.com/story/us-jobless-claims-flat-in-first-week-of-may-2012-05-10

When your mark to fantasy loses money your have some issues. Maybe they should take notes from GS who only had one losing day last quarter. :wink:

 

J.P. Morgan has significant credit portfolio loss

 

"SAN FRANCISCO (MarketWatch) -- Shares of J.P. Morgan Chase & Co. dropped after the bank said in a regulatory filing late Thursday it had "significant" mark-to-market losses in its synthetic credit portfolio. Shares fell 4.5% to $38.87 in after-hours activity. In a Securities and Exchange Commission filing, the bank said its synthetic credit portfolio had proved to be riskier and more volatile than expected. J.P. Morgan said losses have been partially offset from sales in the Chief Investment Office's available-for-sale securities portfolio. CEO Jamie Dimon held a conference call late Thursday to discuss the results."

http://www.marketwatch.com/story/jp-morgan-has-significant-credit-portfolio-loss-2012-05-10?dist=afterbell

 

JPMorgan shares slump 6.5pc after chief Jamie Dimon reveals unexpected $800m trading loss

"JPMorgan Chase shares fell 6.5pc in after-hours trading after it said it has taken an unexpected $800m market loss in a trading book after a hedging strategy failed."

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9258839/JPMorgan-shares-slump-6.5pc-after-chief-Jamie-Dimon-reveals-unexpected-800m-trading-loss.html

 

BofA will have their own loses on their mark to market fantasy sheets in the future. It just a question of how much and when.

 

BofA to slash mortgage balances by $100,000 or more

NEW YORK (CNNMoney) -- Bank of America will significantly slash mortgage balances for as many as 200,000 borrowers.

"As part of the $26 billion settlement reached between the five major mortgage servicers, the federal government and the attorneys general of 49 states and District of Columbia last month, Bank of America (BAC, Fortune 500) customers who qualify could see their mortgages reduced by an average of $100,000 or more, according to bank spokesman Rick Simon."

http://money.cnn.com/2012/03/09/real_estate/mortgage-settlement/index.htm

Some good news in the US not so good news in other parts of the world.

 

Consumer sentiment in May at post-recession high

 

"WASHINGTON (MarketWatch) — Consumer sentiment edged higher in May to the best reading since the recession, as declining gasoline prices appear to have offset slowing job-markets growth."

http://www.marketwatch.com/story/consumer-sentiment-in-may-at-post-recession-high-2012-05-11

 

India’s industrial production drops 3.5% in March

Inflation’s a potential impediment to action by Reserve Bank of India

 

"MUMBAI (MarketWatch) — India’s industrial production contracted sharply in March, raising concerns over a slowing economy while lifting expectations of further cuts in interest rates by the nation’s central bank."

http://www.marketwatch.com/story/indias-industrial-production-drops-35-in-march-2012-05-11

 

China April economic data look weak: analysts

 

"HONG KONG (MarketWatch) — Chinese economic data for April printed weaker than expected, adding to evidence of an accelerating slowdown and highlighting what some analysts said was the need for government action to stabilize the rate of decline."

http://www.marketwatch.com/story/china-april-economic-data-look-weak-analysts-2012-05-11

 

Maybe we truly have decoupled from the rest of the world economically. Europe will not affect us, China will not affect us, India will not affect us, as well as Japan.  :?

 

Home-builder sentiment at best since recession

 

"WASHINGTON (MarketWatch) — Home builder sentiment improved in May to the highest reading since the recession on an upturn in sales and traffic, a trade group said Tuesday.

 

The National Association of Home Builders/Wells Fargo housing market index rose to 29 from 24 in April. The April index was initially reported to be 25. Economists polled by MarketWatch had expected a reading of 27."

http://www.marketwatch.com/story/home-builder-sentiment-at-best-since-recession-2012-05-15

 

New York Empire State index rebounds in May

 

"WASHINGTON (MarketWatch) — Manufacturing activity in the New York rebounded in May, almost entirely erasing a surprising decline in the prior month, the New York Federal Reserve Bank said Tuesday."

http://www.marketwatch.com/story/new-york-empire-state-index-rebounds-in-may-2012-05-15

 

Greece heads for fresh elections after coalition talks fail

"Greek politicians have failed to form a coalition government and fresh elections will be held next month, plunging into chaos the country's future in the euro."

 

"The leaders of Greece's main political parties had been trying to form a coalition since elections nine days ago. The anti-austerity Left Coalition party Syriza, which is widely expected to win the new elections in June, refused to take part in this week's discussions."

 

"On Monday, German Chancellor Angela Merkel warned Greece may be forced to leave the single currency if it refused to implement spending cuts agreed with the European Union. Syriza has already said it will not subject Greece to such cutbacks."

http://www.telegraph.co.uk/finance/financialcrisis/9267247/Greece-heads-for-fresh-elections-after-coalition-talks-fail.html

 

French economy stalls as Francois Hollande is sworn in

"The French economy did not grow at all in first three months of 2012 and the previous quarter's growth was cut, in a blow to new president Francois Hollande."

 

"Official figures released on Tuesday showed that French GDP growth was 0pc in the three months to March 31. Growth in the last quarter of 2011 was revised down to 0.1pc from 0.2pc."

http://www.telegraph.co.uk/finance/financialcrisis/9266292/French-economy-stalls-as-Francois-Hollande-is-sworn-in.html

 

Japan's economy shrinks more than expected in Q4

 

"LOS ANGELES (MarketWatch) -- Japan's economy shrank by more than expected in the October-December quarter, as a strong yen and collateral economic damage from flooding in Thailand took their toll. Real gross domestic product contracted by 0.6% during the quarter, the Cabinet Office reported Monday. The result was deeper than expected falls of 0.3% and 0.4% in separate economist surveys by Reuters and Dow Jones Newswires, respectively. On an annualized basis, the economy contracted 2.3% in the final quarter of 2011."

http://articles.marketwatch.com/2012-02-12/markets/31057741_1_japan-s-gdp-cabinet-office-economy

Is the title of this thread still appropriate?  Just technically speaking, are we still in a recession?  Also, it seems the thread has evolved into more of a general world economy discussion (yes.... I realize how everything is connected).

 

Allow me to make a few modest suggestions:

 

"U.S. and World Economy: News and Discussion"

"Economic Developments and how they affect the U.S. Economy"

 

Or for something more eye-catching and sensational.....

 

"The Sky is Falling and There Isn't Sh!t you can do about it!"

"The Glass is Half Empty"

"The Doom and Gloom Depot"

 

Or perhaps something more accurately descriptive:

 

"The Spin Zone"

So the Greek political party, Syriza, which opposes any austerity measures and is favored to win the elections in June...  I'm puzzled how this is going to shake out.  Someone's bluffing, either Syriza or Germany & other stable Euro nations who are mandating reform measures or get out.

Is the title of this thread still appropriate?  Just technically speaking, are we still in a recession?  Also, it seems the thread has evolved into more of a general world economy discussion (yes.... I realize how everything is connected).

 

Allow me to make a few modest suggestions:

 

"U.S. and World Economy: News and Discussion"

"Economic Developments and how they affect the U.S. Economy"

 

Or for something more eye-catching and sensational.....

 

"The Sky is Falling and There Isn't Sh!t you can do about it!"

"The Glass is Half Empty"

"The Doom and Gloom Depot"

 

Or perhaps something more accurately descriptive:

 

"The Spin Zone"

 

Instead of wisecrack criticism, why not offer some real analysis?  You think we're NOT in a recession?  OK, still in the slowest weakest recovery ever.  Jobs are not being created at a fast enough pace, consumer confidence is still low, business orders are still low...  put your own spin on this.  If there is optimistic data out there, let's see it

The Greeks have no leverage over the EU. What do they think is going to happen if they reject the EU's conditions.

 

The European Union is a nonsensical entity to begin with. This situation just validates the obvious.

Is the title of this thread still appropriate?  Just technically speaking, are we still in a recession?  Also, it seems the thread has evolved into more of a general world economy discussion (yes.... I realize how everything is connected).

 

Allow me to make a few modest suggestions:

 

"U.S. and World Economy: News and Discussion"

"Economic Developments and how they affect the U.S. Economy"

 

Or for something more eye-catching and sensational.....

 

"The Sky is Falling and There Isn't Sh!t you can do about it!"

"The Glass is Half Empty"

"The Doom and Gloom Depot"

 

Or perhaps something more accurately descriptive:

 

"The Spin Zone"

 

So are you saying that the UK is not in a recession, that France is not at zero growth, that Japan doesn't have negative growth in its most recent GDP, that India's manufacturing is not contracting rapidly, that Italy is not in a recession, that Spain is not in a recession, that China's growth is not slowing significantly and that its electrical demand is not 50% less than last year?

 

If this type of information is what you call a spin, I'm fine with that. I call it reality.

 

Also, if it is not apparent by now I believe if we had not 'printed' trillions over the last few years the US would officially have a negative GDP at this time as well. Continuing to use debt as a way to show positive GDP growth is not sustainable forever.

Technically we are NOT in a recession, but the recovery is weak and we apparently ARE locking into higher structural unemployment coming out of the Great Recession.

 

I vote for changing the title to something along the lines of 'The Big Macroeconomic Thread", since calling it world economy is too limiting....we still talk about the Ohio and US economy too sometimes...

So are you saying that the UK is not in a recession, that France is not at zero growth, that Japan doesn't have negative growth in its most recent GDP, that India's manufacturing is not contracting rapidly, that Italy is not in a recession, that Spain is not in a recession, that China's growth is not slowing significantly and that its electrical demand is not 50% less than last year?

 

Not at all (I honestly don't know).  But, does the thread title indicate anything about the UK, France, Japan, Italy, Spain, China, etc?  I was under the impression that the "US" in the title was indicating "United States"..... and when I ask whether "we" are still in a recession, I mean the United States

 

 

Instead of wisecrack criticism, why not offer some real analysis? 

 

So sensitive.  Let's face it, YOU get offended either way.

What about "Global Financial Crisis"?

 

Or "U.S. Recession That Would Be Occurring if We Hadn't Been Printing Trillions of Dollars Over the Last Few Years: News & Speculation"?

So are you saying that the UK is not in a recession, that France is not at zero growth, that Japan doesn't have negative growth in its most recent GDP, that India's manufacturing is not contracting rapidly, that Italy is not in a recession, that Spain is not in a recession, that China's growth is not slowing significantly and that its electrical demand is not 50% less than last year?

 

Not at all (I honestly don't know).  But, does the thread title indicate anything about the UK, France, Japan, Italy, Spain, China, etc?  I was under the impression that the "US" in the title was indicating "United States"..... and when I ask whether "we" are still in a recession, I mean the United States

 

 

Instead of wisecrack criticism, why not offer some real analysis? 

 

So sensitive.  Let's face it, YOU get offended either way.

 

Your not sure? The point that I was trying to make was, is the US really decoupled from the rest of the world. I personally think we are not and that is why I post information from Europe and Asia.

 

You like to say things like don't be so sensitive, this thread is doom and gloom, etc. These types of statements are used to deflect from the real conversation and add no value to the thread. If you have real economic data that you want to use to support an opinion (not just "I honestly don't know") than please make this thread more valuable with that knowledge. I have always said its great to see different data points and different points of view.

What about "Global Financial Crisis"?

 

Or "U.S. Recession That Would Be Occurring if We Hadn't Been Printing Trillions of Dollars Over the Last Few Years: News & Speculation"?

 

I like the second one. But probably to long.  :wink: 'Global Financial Crisis' seems short and to the point. We can go back to having recession in the title once we stop 'printing' a positive GDP.

The thread needs a new name. That is a valid point.

The thread needs a new name. That is a valid point.

 

I have no problem with changing the thread name at this time (Global Financial Crisis is as good as any). As long as the current posts can remain in the thread. Not sure how to do that though.

So the Greek political party, Syriza, which opposes any austerity measures and is favored to win the elections in June...  I'm puzzled how this is going to shake out.  Someone's bluffing, either Syriza or Germany & other stable Euro nations who are mandating reform measures or get out.

 

Maybe this might be an answer. Time will tell.

 

Greece Gets Hint of Leeway From Euro Officials

 

"European governments hinted at giving Greece extra time to meet budget-cut targets, as long as the financially stricken country’s feuding politicians put together a ruling coalition committed to austerity.

 

Calling talk of a Greek pullout from the euro “nonsense” and “propaganda,” Luxembourg Prime Minister Jean-Claude Juncker said only a “fully functioning” Greek government would be entitled to tinker with the conditions attached to 240 billion euros ($308 billion) of rescue aid."

http://www.bloomberg.com/news/2012-05-14/euro-chiefs-may-offer-leniency-to-greece.html

So are you saying that the UK is not in a recession, that France is not at zero growth, that Japan doesn't have negative growth in its most recent GDP, that India's manufacturing is not contracting rapidly, that Italy is not in a recession, that Spain is not in a recession, that China's growth is not slowing significantly and that its electrical demand is not 50% less than last year?

 

Not at all (I honestly don't know).  But, does the thread title indicate anything about the UK, France, Japan, Italy, Spain, China, etc?  I was under the impression that the "US" in the title was indicating "United States"..... and when I ask whether "we" are still in a recession, I mean the United States

 

 

Instead of wisecrack criticism, why not offer some real analysis? 

 

So sensitive.  Let's face it, YOU get offended either way.

 

Your not sure? The point that I was trying to make was, is the US really decoupled from the rest of the world. I personally think we are not and that is why I post information from Europe and Asia.

 

You like to say things like don't be so sensitive, this thread is doom and gloom, etc. These types of statements are used to deflect from the real conversation and add no value to the thread. If you have real economic data that you want to use to support an opinion (not just "I honestly don't know") than please make this thread more valuable with that knowledge. I have always said its great to see different data points and different points of view.

 

I have provided many posts in this thread which have refuted certain points in your narrative.  And I'm not trying to 'deflect' or whatever you want to call it..... I just think the thread title should be changed, especially given the way your narrative has developed into a much wider range over time.  I would say as many as half of your most recent posts have involved foreign economies (or the world economy as a whole). 

Every time the pendulum swings toward Greece defaulting or China slowing down, markets here at home react negatively, and vice versa.  Every US economist is watching those situations abroad as closely as indicators here at home, for signs that we might finally be out of the woods.

I already made the same point as Hts last year around this time, actually:  8-) :evil:

 

"U.S Anemic Recovery and Metastatistical Debates: News & Discussion" doesn't have quite the same flow ...

As for changing the name of the thread to reflect that it now also contains news about events abroad, there may be some merit to that--but at the same time, I kind of think that the eurozone meltdown is worthy of an entire separate thread of its own.  That said, it may be hard to make this a thread about the implications of the eurozone crisis for America without delving a lot about the eurozone crisis itself.

 

==========

 

As for some news more directly related to America's [shaky] recovery, the FBI just opened a preliminary investigation into the recently-announced $2 billion trading loss at JP Morgan Chase:

 

http://dealbook.nytimes.com/2012/05/15/investigators-begin-preliminary-inquiry-into-jpmorgan/

 

Also related to the JP Morgan Chase loss are calls from some surprising quarters for restoring Glass-Steagall or otherwise breaking up the big banks:

 

The Pittsburgh Tribune's endorsement of restoring Glass-Steagall isn't incredibly shocking: http://triblive.com/opinion/1795433-74/glass-steagall-banking-billion-jpmorgan-risk-actually-bank-capital-lost

 

The endorsement of the concept of breaking up the big banks is a little more surprising coming from the normally highly anti-interventionist National Review: http://www.nationalreview.com/articles/299954/once-again-break-banks-arnold-kling

One thing this all showing is it sucks when you can't print your own money.

 

Greece on brink of collapse

"Europe’s financial crisis lurched into a perilous new phase as dire predictions emerged of a collapse in Greece’s economy, with a run on its banks bringing an inevitable end to its membership of the euro."

 

"As leaders in Athens accepted the need for a new general election to end a national stalemate, the International Monetary Fund said Europe’s leaders should prepare for the possibility of a Greek departure from the single currency."

 

"Raising tensions still further, Germany warned Greek voters that the wrong result in next month’s election will force their country out of the single currency."

 

"Greece’s president warned, perhaps most alarmingly, that its banks risk running out of money, posing a “threat to our national existence”.

http://www.telegraph.co.uk/news/worldnews/europe/greece/9268507/Greece-on-brink-of-collapse.html

 

 

Italy's banks shaken as economic slump deepens

"As Greece erupts, Italy is moving into the eye of the storm. Its economy is contracting at speeds not seen since the depths of the slump in 2009 as draconian austerity bites, greatly increasing the risk of social revolt and a banking crisis."

 

"With the world's third largest debt after the US and Japan at €1.9 trillion (£1.18 trillion), it is big enough to bring the global financial system to its knees. It is also in the front line of contagion as the Greek crisis metastasizes.

 

Yields on 10-year Italian debt jumped 16 points to 5.86pc on Tuesday after Italy's data agency said the country is sliding even into deeper recession, with GDP shrinking 0.8pc in the first quarter.

 

Output is now 6pc below its peak in 2008. Italy has been trapped in perma-slump for a decade, the only major state to suffer a fall in real per capita income since 2000.

 

Rising anger has led to a spate of violent attacks by terrorist groups over recent weeks, all too like the traumatic 'years of lead' in the late 1970s. The government is mulling use of troops to protect targets after anarchists shot the head of Ansaldo Nucleare last week and hurled petrol bombs at tax offices."

http://www.telegraph.co.uk/finance/financialcrisis/9268330/Italys-banks-shaken-as-economic-slump-deepens.html

A threat to their national existence?  Will they repossess Greece and sell it off at a bankruptcy auction, after canceling the existing shares and discharging the existing debts following a pro rata distribution of the sale proceeds?  Also, is the asset purchase agreement posted online anywhere?  I'd be interested in seeing it.

 

What really matters to me: if they go back to the drachma, will I be able to vacation in Greece without it costing an arm and a leg?

Just how many islands would they have to sell to make $500bn? Could be doable.

Depends ... do the islands come with or without the Greeks on them?  Germany or Britain might buy some islands on their own.  Not so much if they had to take the Greeks as part of the package.

 

If the British did it, they could consolidate the islands they buy into one administrative unit and name the set the Elgin Marbles.

Spring is eternal. I know the area I work in, here in Colorado, is seeing a nice uptick in building permits. This summer should be one of the better summers for construction in years. The real question is how will things be next summer with the increase build up, by then, of foreclosures and the Presidential elections over? But this spring and summer is pretty well set in stone for the building community. Of course from a sustainability stand point just adding more suburban housing product has long term issues and a lot of this growth is in that category.

 

Building of new U.S. homes rises in April

Housing market posts best stretch of growth in nearly four years

 

"WASHINGTON (MarketWatch) — U.S. builders started construction of new homes in April at a slightly faster pace, extending their best stretch of business in almost four years, according to data released on Wednesday."

http://www.marketwatch.com/story/building-of-new-us-homes-rises-in-april-2012-05-16

 

Hopefully inventories will have a noticable slowdown or production will have to be cut.

 

Industrial output rebounds strongly in April

"Overall production at the nation’s factories, mines and utilities rose 1.1% in April, the strongest gain since December 2010 and well above expectations, the Federal Reserve said Wednesday."

 

“Factory output had been rising faster than sales, so the slowing should not come as a surprise. Inventories were accumulated at a $70 billion annual rate last quarter, an unusually rapid pace that is expected to slow this quarter.”

http://www.marketwatch.com/story/industrial-output-rebounds-strongly-in-april-2012-05-16

Europe, US and the world brace for messy impact from Greece

 

"As Greece teeters on the edge of financial collapse, European officials have a new task before them: preventing the financial turmoil from spreading across the continent, across the Atlantic and around the rest of the world.

 

The fear is that Greece’s financial turmoil could spread beyond its borders despite European efforts to create a “financial firewall” to contain it.

 

“The spillover effects, the chain of consequences are very difficult to assess,” said International Monetary Fund President Christine Lagarde on Wednesday. “We can certainly assume that it would be quite messy.”

http://economywatch.msnbc.msn.com/_news/2012/05/16/11733028-europe-us-and-the-world-brace-for-messy-impact-from-greece?lite

 

 

Greeks withdraw $894 million in a day: Is this beginning of a run on banks?

 

"Political leaders in Athens were due to discuss an emergency government Wednesday to deal with a possible run on banks as it emerged Greeks withdrew almost $900 million in a single day, fearing their country could crash out of the euro currency by the end of the week."

http://worldnews.msnbc.msn.com/_news/2012/05/16/11729795-greeks-withdraw-894-million-in-a-day-is-this-beginning-of-a-run-on-banks?lite

 

Philly Fed factory index turns negative

Manufacturing activity shrinks in May for first time since September

 

"WASHINGTON (MarketWatch) — Business conditions at manufacturing firms in the Philadelphia region worsened in May, as orders for new products fell and executives scaled back hiring plans, a survey showed Thursday.

 

The Philadelphia Federal Reserve said its manufacturing index sank to -5.8 in May from 8.5 in April, marking the first negative reading since September. Economists polled by MarketWatch were expecting the index to increase to 10.0.

 

Readings below zero suggest that more companies are contracting instead of expanding."

http://www.marketwatch.com/story/philly-fed-factory-index-turns-negative-in-may-2012-05-17

 

 

Leading economic indicators dip in April

 

"WASHINGTON (MarketWatch) — The economy is “still struggling to gain momentum,” though long-term trends remain expansionary, the Conference Board said Thursday, as it reported that its index of leading economic indicators dipped in April for the first decline since September."

http://www.marketwatch.com/story/leading-economic-indicators-dip-in-april-2012-05-17

 

H-P gains on layoff reports; techs slip

LinkedIn, Yelp fall ahead of Facebook IPO; Apple loses more ground

 

"SAN FRANCISCO (MarketWatch) — Hewlett-Packard Co. was able to defy a selloff across the rest of the technology sector Thursday, as word emerged that the troubled industry titan was planning to cut as many as 30,000 jobs."

http://www.marketwatch.com/story/apple-h-p-cisco-lead-tech-retreat-2012-05-17?dist=afterbell

If Spain or Italy end up taking the Greece route and 'default' on a large percentage of their debt, it will make Lehman Brothers look like baby talk.

 

Moody's cuts ratings of 16 Spanish banks

 

"SAN FRANCISCO (MarketWatch) -- Moody's Investors Service on Thursday lowered ratings of 16 Spanish banks and Banco Santander's U.K.-based subsidiary by one to three notches. Moody's cited unfavorable operating conditions on renewed recession, reduced creditworthiness of the Spanish sovereign, and rapid deterioration in asset quality for the downgrades. The outlooks on ten of the banks are negative while ratings of seven other banks remain on review for further downgrade."

http://www.marketwatch.com/story/moodys-cuts-ratings-of-16-spanish-banks-2012-05-17-1647570

 

Greece is bluffing, no way they want to bail on the euro and go it alone.  They need the euro money, they are just trying to play hardball and get the bailout without accepting the required reforms.  Read the new leader's comments again, you can tell he's begging for help, saying "we're in this together...."  meanwhile Germany is saying "oh no we're not...."

Greece is bluffing, no way they want to bail on the euro and go it alone.  They need the euro money, they are just trying to play hardball and get the bailout without accepting the required reforms.  Read the new leader's comments again, you can tell he's begging for help, saying "we're in this together...."  meanwhile Germany is saying "oh no we're not...."

 

Someone better be bluffing or this will cause a lot of damage in the economic world. Of course Iceland seems to be recovering nicely, not exactly the same situation but it has many similarities.

This type of information along with the data that was report about China's electrical usage being 50% less than last year and its becoming very apparent that China is seeing a significant economic slowdown. Despite 'official' government data.

 

UPDATE 3-Chinese buyers default on coal, iron ore shipments-trade

 

"SHANGHAI/SINGAPORE, May 21 (Reuters) - Chinese buyers are deferring or have defaulted on coal and iron ore deliveries following a drop in prices, traders said, providing more evidence that a slowdown in the world's second-largest economy is hitting its appetite for commodities.

 

China is the world's biggest consumer of iron ore, coal and other base metals, but recent data has shown the economy cooling more quickly than expected, with industrial output growth slowing sharply in April and fixed asset investment, a key driver of the economy, hitting its lowest in nearly a decade."

http://www.reuters.com/article/2012/05/21/china-coal-defaults-idUSL4E8GL1BS20120521

 

 

I thought this was a good article, discussing how the chickens are going to come home to roost as the stimulus of federal spending is removed from the economy, coupled with taxes going up as cuts expire taking money out of the economy. Sounds like the later 1930s all over again; the "second Depression" that occured  in response to Congress & FDR cutting back on spending due to a misguided desire for austerity will have an echo in the US, perhaps after the elections....yeah, we'll get austerity all right.....

 

Roubini on "The Fiscal Cliff"

 

Many things are expiring at year end. All the tax cuts on income, on dividends, on capital gains, on estates. There's an expiration of the payroll tax (cut). There is a reduction or expiration of transfer payments to state and local governments, to unemployment benefits. There is the expiration of infrastructure spending, and then there are the automatic cuts on discretionary spending, which came about because we failed to reach an agreement for reducing the budget deficit.

 

The point is, all this is expiring at year end, and the hole will be $600 billion, or about 4% of GDP, and then we plunge into a nasty recession.

 

 

 

 

 

...and the Conference Board leading indicators arent looking too hot, as posted upthread. 

 

So we have a weak economy heading into a fiscal crisis, with international economic issues coming into play, too. 

 

I'm guessing these trends will all intersect in 2013, to produce a new recession...we should see indicators of this starting in the Fall (Yes this is a prediction).

Economists more upbeat about job growth, housing

 

A new survey shows economists are growing slightly more optimistic about recovery in the job and housing markets but expect other pillars of the economy to remain weak.

 

The National Association for Business Economists said in a report issued Monday that its forecasters expect modest growth for the rest of the year, with the pace picking up in 2013.

 

Still, the 54 economists that the association surveyed expect consumer spending, business investment and gross domestic product to remain below historic norms.

 

The quarterly survey compiles expectations for indicators such as hiring, home construction and spending from economists at industry groups, government agencies, banks and consulting firms.

 

http://www.ohio.com/business/economists-more-upbeat-about-job-growth-housing-1.308652

No worries, our job creators will come to the rescue! Look at all the good they're doing at HP and Dell, plus I'm sure JP Morgan Chase is on the verge of 100,000 new hires.

 

 

 

Better than relying on our welfare state to come to the rescue.  How many jobs will *that* create?

I'm interested in seeing what the purchasing agent index or poll shows.  That used to be a good leading indicator....

Thanks for the links (Jeffery and Hts121). I think some of these tax breaks will be extended or new one will be created to replace them. I personally believe we never left a recessionary economy (we have just printed a positive GDP), but I agree that an 'official' recession is coming in the first half of 2013. One thing I have learned over the last 5/6 years is don't underestimate the 'power that be' ability to pretend and extend as long as possible. With that said there so many issues coming to a head over the next 6-9 months that I would be amazed if they can put that many fingers in the dam at once. China is falling into a nasty economic 'slowdown' already, India is having some real issues, Europe is just a complete mess (they should only hope that Greece's final default is all they go through over the next year) and the US is clearly slowing down (it takes about 6 months before the slow down shows its face on Main Street). Add in that workforce participation is in the tank and U6 unemployment is still around 14% to 15% and you can see that a giant economic storm is brewing for the world and US economy.

 

Side note: Just had a meeting with some housing/RE people yesterday that do foreclosure sales for major banks. They stated that BOA, JPM and others have a ten year supply of 'shadow inventory' that they plan on starting to release into the system beginning in July. The RE people believe that by early next year we will see new pressure on home prices and inventory. Add in all the junk above with this an things have a very good chance of not looking so good by early next year and the elections will be over as well.

If Merkel gives in on this issue she will not survive politically in Germany. Of course many politcial leaders in Europe have been 'sacrificed' over the last year or so in an effort to keep money flowing to the banks.

 

‘Astonished’ Merkel says no to Eurobonds

High yield spreads undercut reforms, says Spain’s Rajoy

 

"FRANKFURT (MarketWatch) — Chancellor Angela Merkel gave no hint that Germany will soften its opposition to Eurobonds at a Wednesday summit meeting with fellow European leaders, rejecting growing international pressure to pool euro-zone borrowing efforts."

http://www.marketwatch.com/story/astonished-merkel-says-no-to-eurobonds-2012-05-23

 

I guess it all depends on your definition of 'survive'.

 

Euro collapse needn’t torpedo global economy

Commentary: U.K., U.S., China would survive a European depression

 

"LONDON (MarketWatch) — It isn’t hard to understand why the financial markets are going into the summer looking shaky. Fresh Greek elections are set for next month, and may trigger a disorderly exit from the single currency. There is a slow-motion run on the Spanish banking system underway. Contagion from the euro crisis threatens to spill out into the rest of the world."

http://www.marketwatch.com/story/euro-collapse-neednt-torpedo-global-economy-2012-05-23

Eurozone nations told to prepare for Greek euro exit

"EU leaders arrive in Brussels for growth summit as the Bundesbank says a Greek exit from the euro would be "manageable" and Athens denies that eurozone leaders were told to prepare for the eventuality."

http://www.telegraph.co.uk/

 

Visitors to Greece warned over possible euro exit

"Holidaymakers warned over possible food and fuel shortages, but Greek tourism official says "there's never been a better time” to visit."

http://www.telegraph.co.uk/travel/travelnews/9284971/Visitors-to-Greece-warned-over-possible-euro-exit.html

Add in all the junk above with this an things have a very good chance of not looking so good by early next year and the elections will be over as well.

 

If true, Romney better hope his poll numbers don't continue to climb.  I do not think he would want to carry the blame if the economy goes down the toilet in 2013 right after he is sworn in.

^very true.  At this point, I think the 2013 economy is looking tough for whomever wins.

 

I don't normally like to link opinion pieces, but this one has some interesting arguments (all debatable of course) on why the recession is lingering and recovery has been so weak thus far.  It's definitely a criticism of the Obama administration and it's policies, but some of the points about low interest rates penalizing savings seems to be true.

 

http://online.wsj.com/article/SB10001424052702304019404577418311631098508.html?mod=opinion_newsreel

Add in all the junk above with this an things have a very good chance of not looking so good by early next year and the elections will be over as well.

 

If true, Romney better hope his poll numbers don't continue to climb.  I do not think he would want to carry the blame if the economy goes down the toilet in 2013 right after he is sworn in.

 

They will just rinse and repeat the cycle already used. When Obama took over for Bush and the recession really got going they blamed Bush and the republicans for as long as possible. If Romney wins and the economy goes back into an official recession they will blame Obama and the democrats for as long as possible. One thing I give our two party system is that its pretty predictable on a lot of things. With finger pointing near the top of the list.

Durable-goods orders edge up 0.2% in April

Core capital-goods orders fall; signs of export weakness

 

"WASHINGTON (MarketWatch) — Orders for long-lasting goods edged up 0.2% in April, the second rise in three months after demand for cars and car parts picked up."

http://www.marketwatch.com/story/durable-goods-orders-edge-up-02-in-april-2012-05-24

 

Acutally we added 2,000 for this and last weeks number. I have grown to love this data point, it maybe one of the most manipulated stats for a headline you can find. Having this number stay this elevated through the late spring summer higher season is not a good sign.

 

Requests for jobless benefits fall slightly

Applications for jobless benefits stuck around 370,000 mark

 

"Jobless claims dipped by 2,000 to a seasonally adjusted 370,000 in the week ended May 19, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 372,000 from an original reading of 370,000, based on more complete data collected at the state level."

http://www.marketwatch.com/story/requests-for-jobless-benefits-fall-slightly-2012-05-24

When Obama took over for Bush and the recession really got going they blamed Bush and the republicans for as long as possible.

 

Obama 'took over' for Bush in late January 2009.  The recession began in December 2007 and "really got going" in the Fall of 2008.  Just some points of clarification.  And I really don't have a problem with a newly elected administration refusing to take the blame for economic condition caused by the policies of the previous administration and/or congress.  Nothing magical happens during the swearing in ceremony which changes things in an instant (no matter what the candidate says they will do "on the first day in office").  It takes at least 6 months to a year for any real impact.  What I do have a problem with is the talking heads, the fringe websites and such, trying to place that blame.  If in January, February, and March 2013 the economy is losing 400,000 jobs a month, it certainly won't be Mitt's fault...... but the carousel has been set in motion and you better believe that is the spin which will be used (for retribution if nothing else)

On a very slightly related fringe theory, could Obama perhaps benefit if the Supreme Court were to rule Obamacare unconstitutional?  The WSJ piece I linked mentioned that Obamacare was a major roadblock to business hiring due to uncertainty and increased regulation.  By that token, if it were rejected, the business sectors should resume hiring and Obama could claim credit for his other policies finally taking hold thus driving down the unemployment rate...

If Merkel gives in on this issue she will not survive politically in Germany. Of course many politcial leaders in Europe have been 'sacrificed' over the last year or so in an effort to keep money flowing to the banks.

 

‘Astonished’ Merkel says no to Eurobonds

High yield spreads undercut reforms, says Spain’s Rajoy

 

"FRANKFURT (MarketWatch) — Chancellor Angela Merkel gave no hint that Germany will soften its opposition to Eurobonds at a Wednesday summit meeting with fellow European leaders, rejecting growing international pressure to pool euro-zone borrowing efforts."

http://www.marketwatch.com/story/astonished-merkel-says-no-to-eurobonds-2012-05-23

 

I guess it all depends on your definition of 'survive'.

 

Euro collapse needn’t torpedo global economy

Commentary: U.K., U.S., China would survive a European depression

 

"LONDON (MarketWatch) — It isn’t hard to understand why the financial markets are going into the summer looking shaky. Fresh Greek elections are set for next month, and may trigger a disorderly exit from the single currency. There is a slow-motion run on the Spanish banking system underway. Contagion from the euro crisis threatens to spill out into the rest of the world."

http://www.marketwatch.com/story/euro-collapse-neednt-torpedo-global-economy-2012-05-23

 

I don't know if you have been following politics in Germany, but Merkel is already in deep trouble.  The last two significant elections (on a more local, not national scale) have gone against Merkel and the Christian Democrats.  They have lost huge chunks of ground against parties on the left (who presumably are not as zealous about austerity as she). 

^^I can't see how a negative ruling would work favorably for Obama.  It won't be the death of his candidacy, but it was his signature piece of legislation....... the achievement he can claim which has eluded Democratic presidents (and some Republicans) for more than half a century.  And I bet you won't see an significant uptick in hiring if it is struck down and I don't think you will see any slowdown in hiring caused by it being upheld.  But to be clear, only the "constitutionality" of the indiviudal mandate is at issue.  The meaningful provisions of "Obamacare" (i.e. the end goals he sought in terms of increased coverage) are not under constitutional challenge...... though they could (and likely would) be struck down as not being severable from the individual mandate.