Here Comes The Double Dip Pt. 3

[Lore]

Education statistics are heavily linked to overall wealth (reformatted oil) Without education, a country does not generate enough value to have surplus for a decent education system. It is currently impossible to identify a highly educated country with high birth rates. People have more children when the children they have already have high mortality. As peak oil bites, education/ wealth factors will have less restrictive influence IMO.

This all depends on your long term view of the population crash. If it is a series of dips, slowly spiraling downward, which is what I think will happen, or a relatively sudden global event.

[Daniel_Plainview]

Fracking Production Depletes 60-80% after 1st year -- Total Joke ! ! !

This means new wells must constantly be drilled to avoid production for a whole area dropping off very quickly.

That's job security and opportuniy for many an unemployed or underemployed. Not a bad thing.

You ever hear of the broken window fallacy?

lol. One wonders whether Cornies also find value in highly destructive hurricanes, earthquakes, tornadoes, etc. ... namely, because of all the jobs (and GDP) that are created by the cleanup.

It's clear that the Cornies love deficit spending and money printing because the benefits are obvious today (GDP growth), while the costs are spread among future generations.

They love bailouts because of the bump in GDP.

They love student loan debt because of the GDP bump.

They love when the govt pays out unemployment and food-stamps ... because of the GDP bump.

They love asset bubbles, housing bubbles, debt bubbles, education bubbles, stock-mkt bubbles, etc ... because bubbles create a short-term boost in GDP, despite the tragic and catastrophic consequences that transpire when the bubble pops.

Likewise, they love fracking even though 60-80% of the wells are depleted after JUST ONE YEAR, and even though its an ecological disaster. Why? Because the short-term bump in GDP makes it worth it.

They love part-time/temp jobs because of the way they mask the true state of joblessness.

Likewise, they love fracking because of the way it conceals the true state of crude oil depletion.

In short, Cornies embody basically everything that defeats a sustainable, healthy, long-term economy. They exalt fantasy over reality; short-term over long-term; deception over truth.

[eXpat]

In short, Cornies embody basically everything that defeats a sustainable, healthy, long-term economy. They exalt fantasy over reality; short-term over long-term; deception over truth.

I nominate that as the member quote of the month

[OilFinder2]

Awwwwwww, poor doomers are getting really frustrated. To the doomers, anything that isn't doomer-y seems to automatically get labeled as a "bubble."

It's earnings season, and today a bunch of manufacturers reported their results. And they sez ...

Manufacturers Grow as US Demand Offsets Europe

Big U.S. manufacturers continued a wave of strong earnings growth, with United Technologies, 3M, Illinois Tool Works and Parker-Hannifin posting results that topped Wall Street forecasts.

Recovering demand at home helped all four companies offset a very weak European economy and slowing growth in China, which until recently had been a reliable source of rapid growth for big U.S. companies.

3M, ITW and Parker-Hannifin all raised their full-year profit forecasts on Tuesday, while United Tech held its outlook steady, citing concerns about an uneven global economy.

"We have seen some encouraging signs in the United States over the last several months," said United Tech Chief Financial Officer Greg Hayes, noting that sales of Carrier air conditioners had picked up since mid-March.

"Europe remains awful," Hayes told reporters. "The markets there for commercial construction have really been anemic and continue to be."

Fellow blue-chip 3M, which makes products ranging from Post-It notes to films used in flat-screen televisions, sounded a brighter note.

"We are off to a very good start in 2012," said Inge Thulin, who in February became 3M's chief executive, in a statement.

The company saw growth in the Americas, stabilizing European sales and weakness in Asia, primarily in China, Japan and at the company's unit that sells components to consumer electronics makers, noted BernsteinResearch analyst Steven Winoker.

"In his first reporting quarter as CEO, Inge Thulin and the company managed to offset the headwinds," Winoker said.

[...]

[Armageddon]

Here's that robust new housing report

[Quinny]

+++1

In short, Cornies embody basically everything that defeats a sustainable, healthy, long-term economy. They exalt fantasy over reality; short-term over long-term; deception over truth.

I nominate that as the member quote of the month

[OilFinder2]

They love asset bubbles, housing bubbles, debt bubbles, education bubbles, stock-mkt bubbles, etc ... because bubbles create a short-term boost in GDP, despite the tragic and catastrophic consequences that transpire when the bubble pops.

Speaking of bubbles, I was really starting to think Apple was looking bubbly, but then they just came out with their Q1 earnings and - voila! - expectations were crushed once again. No doubt this is because of QE and ZIRP and Obama's stimulus, as are all signs of economic health these days. Oh yeah and I'm sure this is yet another sign that 2012 is the last year of capitalism.


Apple Earnings Blow Past Expectations; Shares Rise

Apple reported quarterly earnings and revenue that beat Wall Street's expectations on Tuesday, sending its shares higher in extended-hours trading.

After the earnings announcement, the technology giant's shares rose 4 percent in trading after the closing bell.

In the past two weeks, Apple stock has dropped 12 percent, falling into correction territory, after rallying 75 percent from late November to a closing high of $636.23 on April 9.

The company posted fiscal second-quarter earnings excluding items of $12.30 per share, up from $6.40 a share in the year-earlier period.

Net income was $11.6 billion, or $12.30 per share, up from $6 billion, or $6.40 per share, a year ago.

Revenue shot up 59 percent to $39.2 billion from $24.67 billion a year ago.

Analysts had expected the company to report earnings excluding items of $10.04 a share on $36.81 billion in revenue, according to a consensus estimate from Thomson Reuters.

[...]

[ralfy]

One article describes the current phenomenon as profits for corporations but unemployment and high oil and food prices for most, with the former driven by financial speculation that is ironically leading to the latter.

Given that, one should expect mostly good news related to corporate earnings, stock prices, consumer spending, and fudged data concerning employment, all of which were happening even after the first dip.

[ralfy]

Related, an older article:

"A Tale of Two Depressions"

http://www.voxeu.org/index.php?q=node/3421

[dolanbaker]

UK economy in double-dip recession
http://www.bbc.co.uk/news/business-17836624
The UK economy has returned to recession, after shrinking by 0.2% in the first three months of 2012.

A sharp fall in construction output was behind the surprise contraction, the Office for National Statistics said.

A recession is defined as two consecutive quarters of contraction. The economy shrank by 0.3% in the fourth quarter of 2011.

Wednesday's figure is an early estimate and is subject to at least two further revisions in the coming months.

The ONS said output of the production industries decreased by 0.4%, construction decreased by 3%, and output of the service sector increased by 0.1%.

Dipping!!

[TheAntiDoomer]

^Awesome you should start a "Here's comes the UK Double Dip" Thread. In the meantime the USA keeps rollin rollin rollin!

[OilFinder2]

US OIL PRODUCTION REACHES 6.113 MILLION BARRELS/DAY LAST WEEK, MOST SINCE NOVEMBER 1999

[Armageddon]

Looks like March durables took another dump

Tyler Durden's picture
March Durable Good Implode, Worse Than Lowest Wall Street Forecast And Biggest Drop Since January 2009

ZH

[ralfy]

One article points out that the only thing that has been offsetting a dip in prime lending is the incredible amount of credit pumped into the system to keep it afloat. The catch is that the first dip was caused by an incredible amount of credit pumped into the system.

[dorlomin]

^Awesome you should start a "Here's comes the UK Double Dip" Thread. In the meantime the USA keeps rollin rollin rollin!

One country is seriously reducing its deficit and another is not.

One country is growing and the other has an L shaped recovery.

Borrowing to avoid a serious contraction is a great idea if you use the time to sort out the problems in your economy.

[pstarr]

Related, an older article:

"A Tale of Two Depressions"

http://www.voxeu.org/index.php?q=node/3421

Why have you linked to this older article? Is it still relevant? Just curious whether I should read it?

[ralfy]

Related, an older article:

"A Tale of Two Depressions"

http://www.voxeu.org/index.php?q=node/3421

Why have you linked to this older article? Is it still relevant? Just curious whether I should read it?

The article indicates that we face a situation similar to or worse than the previous depression. The threat of a double dip may reinforce that claim, thus making it relevant.

[pstarr]

Related, an older article:

"A Tale of Two Depressions"

http://www.voxeu.org/index.php?q=node/3421

Why have you linked to this older article? Is it still relevant? Just curious whether I should read it?

The article indicates that we face a situation similar to or worse than the previous depression. The threat of a double dip may reinforce that claim, thus making it relevant.

Okay. then I will give it a shot. tomorrow.

[Daniel_Plainview]

Spain unemployment rises from 22.9% to 24.4%; Ratings slashed to BBB+

MADRID—Official figures show that unemployment in Spain has risen to 24.4 percent in the Q1 from 22.9 percent in the fourth quarter of 2011.

The National Statistics Institute says 365,900 more people lost their jobs in the first three months of the year, taking the total out of work to 5.6 million.

The institute also said Friday that the number of households with every member unemployed rose by 153,400 to 1.7 million.

Spain's unemployment rate is the highest in the 17-nation eurozone.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

MADRID (AP) -- The decision by Standard & Poor's to cut Spain's credit rating has weighed on European markets Friday, reinforcing fears that the country's new government faces an uphill battle to get a grip on its finances.

Late Thursday, S&P became the first of three leading credit rating agencies to strip Spain of an A rating. It cited a worsening in Spain's budget deficit and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.

Spain has become the epicenter Europe's debt crisis in recent weeks as investors worry over its ability to push through austerity and reforms at a time of recession and mass unemployment.

Why does Spain's unemployment matter to the US? Please note the extremely close long-term correlation between the US and the Eurozone:

[Daniel_Plainview]

Mish: Eurozone Retail Sales Plunge at Strongest Pace Since Late-2008; German Retail Sales Plunge Into Contraction; French Retail Sales Plunge at Record Pace; Record Job Losses, Record Retail Plunge in Italy

The word of the day is plunge. Retail sales fell like a rock in Germany and fell at a record pace in France. Jobs and retail sales plunged at a record pace in Italy, and in general, did a nose-dive across the entire Eurozone

Eurozone Retail Sales Plunge at Strongest Pace Since Nov. 2008, Dropping to 41.3


Plunging to its second-lowest level on record in April, the PMI hit 41.3, down from 49.1 in March. The latest figure signaled the largest monthly fall in retail sales across the single currency area since the depths of the global financial crisis in November 2008 (40.6).

Eurozone retail PMI figures are based on responses from the three largest euro area economies. For the first time since September 2010, retail sales fell across Germany, France and Italy. The rate of contraction in Germany was the fastest since April 2010, while French retailers posted a survey-record drop as they reported disruption due to the presidential elections. Italy continued to see the steepest overall rate of decline, however, as the pace of contraction reaccelerated to approach the record level posted in January.

The annual rate of decline in Eurozone retail sales was also one of the strongest since the survey started in January 2004. Sales have fallen on an annual basis each month since last June.

Why is this important? Notice the nearly 1:1 long-term correlation between US and Eurozone industrial production: