Here Comes The Double Dip Pt. 4 (merged) Archived

[Daniel_Plainview]

US manufacturing contraction feeds fear of global slowdown

America's manufacturing sector has contracted for the first time in almost three years, intensfying fears that the world's major economic centres are suffering a simultaneous slowdown.

An index of US manufacturing activity fell to 49.7 in June from 53.5 in May, according to the Institute for Supply Management.

Any reading below 50 signals contraction and June's figure was lower than the most pessimistic forecast. Stock markets on Wall Street weakened after a reading that economists said confirms US economic growth is losing the momentum it enjoyed at the start of the year.

"It's a really terrible number," said David Semmens, an economist at Standard Chartered. There was little encouragement to be found in the majority of the smaller indices that make up the headline number.

A measure of new orders dropped to 47.8 from 60, while prices paid slumped to 37 from 47.5.

Although manufacturing now only accounts for just over 10pc of US gross domestic product, the sector has been one of the brightest parts of the economy since America technically emerged from recession in the middle of 2009.

The survey also suggests that Europe's economic struggle and tentative signs of slowing in China may have reached America's biggest manufacturers. In its survey, the ISM said that comments from those companies questioned "range from continued optimism to concern that demand may be softening due to uncertainties in the economies in Europe and China."

[Armageddon]

The new-orders index now stands at 47.8%, a level that’s extremely rare outside of recessions.

[Armageddon]

Economy crashing
Iran's parliament voting to close the Straights of Hormuz

Why do I sense a war with Iran is brewing ?

[OilFinder2]

Well well, as if we didn't see this coming. /sarcasm. Doomers can have some fun about a manufacturing slowdown, but ... no prob. Fortunately there are other sectors of the economy.



Construction Spending In U.S. Climbs To More Than Two-Year High

Construction spending in the U.S. increased in May to the highest level in more than two years, held up by improvement in the housing market.

The 0.9 percent climb followed a 0.6 percent increase in April that was bigger than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.2 percent increase. The value of all projects rose to $830 billion at an annual rate, the most since December 2009.

A sustained housing recovery is supporting the construction sector even as public spending weakens. Concern over the European debt crisis and domestic fiscal uncertainty may also limit business confidence, restraining commercial projects.

“We’re definitely seeing a rebound in home building, absolutely no question about that,” Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Philadelphia, said before the report. “Construction is going to be a positive for growth, primarily on the residential side this year, and maybe more on the commercial side in 2013.”

Estimates from 46 economists in the Bloomberg survey ranged from an increase of 1 percent to a decline of 0.8 percent, following an initially reported 0.3 percent increase for April.

Construction spending increased 7 percent in the 12 months ended in May, after adjusting for seasonal variations.

Private construction spending climbed 1.6 percent in May from the prior month.

[...]

[OilFinder2]

And speaking of both manufacturing and construction, here's something that's soon to be constructed in order to support more manufacturing!



Airbus to build assembly plant in Alabama

Airbus made it official Monday, announcing it will build an assembly plant in Alabama to make passenger airplanes, giving the European aerospace giant its first foothold in the United States to compete with archrival Boeing (BA).

The plant is expected to cost $600 million to build and will employ 1,000 people when it reaches full production, likely to be four planes a month by 2017. It also will create about 2,500 construction jobs, officials have said.

"We are going to create great jobs and generate growth right here," Airbus CEO Fabrice Bregier said at the convention center in Mobile, where many of the 2,000 people in attendance waved American flags.

Boeing has employed hundreds of people in Alabama for years. Airbus, based in France, planned to build refueling tankers for the U.S. Air Force in Alabama, but its parent company, the European Aeronautic Defense and Space Co., lost the contract to Boeing in 2011.

The companies have had a long-running international trade dispute. Each also has been critical of subsidies received by the other.

Airbus plans to manufacture the A320, a widely used plane flown by Delta Air Lines, US Airways and others. The 150-seat plane is generally used on short- and medium-haul flights, and Airbus makes more of them than any of its other planes. They retail for $88 million, although discounts are common for big customers.

The Mobile operation will join Airbus assembly plants in in Toulouse, France; Hamburg, Germany; and Tianjin, China.

[...]

[OilFinder2]

Online Job Demand Rises In June; Both Total Ads And New Ads Reach New Monthly Record Highs

From today’s Conference Board report on online labor demand:

“Online advertised vacancies rose 232,000 in June to 4,947,100, according to the Conference Board’s Help Wanted OnLine (HWOL) Index. Following little growth in the first two months of the second quarter, June closed out the quarter with a strong gain. The Supply/Demand rate stands at 2.7 unemployed for every vacancy.

“Online labor demand in the first half of 2012 increased by an average of 104,000 per month, but about one-third of both the States and the 100 largest metro areas are still below their pre-recession highs for labor demand,” said June Shelp, Vice President at The Conference Board. “As of June, almost half of the occupational groups have Supply/Demand rates at or below 2.0. However, most of these are in the professional categories, such as business and finance, healthcare professionals, and management. Although we’ve seen improvement, other categories like construction, building and grounds maintenance, and personal care are still struggling with high Supply/Demand rates.

Other highlights include:

1. All 20 of the largest metro areas posted gains in labor demand in June.

2. Eight of the 20 largest metro areas have supply/demand rates below 2, indicating that there are fewer than two unemployed workers for every online advertised vacancy.

[...]

[Lore]

And speaking of both manufacturing and construction, here's something that's soon to be constructed in order to support more manufacturing!

Airbus to build assembly plant in Alabama

Airbus made it official Monday, announcing it will build an assembly plant in Alabama to make passenger airplanes, giving the European aerospace giant its first foothold in the United States to compete with archrival Boeing (BA).

The plant is expected to cost $600 million to build and will employ 1,000 people when it reaches full production, likely to be four planes a month by 2017. It also will create about 2,500 construction jobs, officials have said.

"We are going to create great jobs and generate growth right here," Airbus CEO Fabrice Bregier said at the convention center in Mobile, where many of the 2,000 people in attendance waved American flags.

Boeing has employed hundreds of people in Alabama for years. Airbus, based in France, planned to build refueling tankers for the U.S. Air Force in Alabama, but its parent company, the European Aeronautic Defense and Space Co., lost the contract to Boeing in 2011.

The companies have had a long-running international trade dispute. Each also has been critical of subsidies received by the other.

Airbus plans to manufacture the A320, a widely used plane flown by Delta Air Lines, US Airways and others. The 150-seat plane is generally used on short- and medium-haul flights, and Airbus makes more of them than any of its other planes. They retail for $88 million, although discounts are common for big customers.

The Mobile operation will join Airbus assembly plants in in Toulouse, France; Hamburg, Germany; and Tianjin, China.

[...]

Except for evey one of these down the road projects. You get one of these on a weekly basis. The positive numbers just don't stack up.

Whirlpool Calls It Quits in Fort Smith

By the end of tomorrow, more than 900 people will be out of work in Fort Smith. The plant will close its doors Friday for good.

The company announced last fall the Fort Smith plant would shut down. The closure means more than 900 people will lose their jobs. “I know a lot of the people there. I know there’s a lot of sadness,” said Fort Smith Mayor Sandy Sanders.

Mayor Sanders retired from Whirlpool after 32 years of service. He said, “You don’t necessarily miss the job itself or the jobs you’ve had, you miss seeing a lot of the people, excellent people, an excellent workforce.”

The plant employed more than 4,500 workers in 2006, but that number dwindled over time. “They bring a lot of money into Fort Smith,” said Rogers. “They created a lot of jobs in Fort Smith. My son lost his job because Whirlpool’s closing.”
http://5newsonline.com/2012/06/28/whirl ... ort-smith/

[dissident]

Whirlpool Calls It Quits in Fort Smith

By the end of tomorrow, more than 900 people will be out of work in Fort Smith. The plant will close its doors Friday for good.

The company announced last fall the Fort Smith plant would shut down. The closure means more than 900 people will lose their jobs. “I know a lot of the people there. I know there’s a lot of sadness,” said Fort Smith Mayor Sandy Sanders.

Mayor Sanders retired from Whirlpool after 32 years of service. He said, “You don’t necessarily miss the job itself or the jobs you’ve had, you miss seeing a lot of the people, excellent people, an excellent workforce.”

The plant employed more than 4,500 workers in 2006, but that number dwindled over time. “They bring a lot of money into Fort Smith,” said Rogers. “They created a lot of jobs in Fort Smith. My son lost his job because Whirlpool’s closing.”
http://5newsonline.com/2012/06/28/whirl ... ort-smith/

The deindustrialization of America continues. Why do people expect there to be a middle class in the new trickle down service sector economy based on Chinese imports? We can't have an economy based on selling crap to each other.

[Daniel_Plainview]

US Debt-to-GDP Hits 101.5%

Last week's bond auctions have finally settled and the numbers are in. As of the last day of June, the US had a record $15,856,367,214,324.44 in debt, a $75 billion increase overnight, and a post World-War II high Federal debt/GDP ratio of 101.5%.* That is all.

[Daniel_Plainview]

Eurozone manufacturing craters to 3-yr low

Eurozone manufacturing activity remained at a three-year low in June, as production and orders in the sector slid.

The eurozone manufacturing Purchasing Managers' Index (PMI) published by Markit was 45.1 in June, unchanged from May, which was the lowest level since June 2009. Anything below 50 indicates the sector contracted.



The survey showed factories in Germany were hit as the effects of the eurozone crisis begin to widen. The German PMI fell to a 36-month low of 45.

Manufacturers shed jobs at an accelerated pace in June, with the survey's employment index falling to 46.7 in June, the lowest since January 2010.

"Companies are clearly preparing for worse to come, cutting back on both staff numbers and stocks of raw materials at the fastest rates for two-and-a-half years," said Chris Williamson, chief economist at Markit.

Ireland and Austria were the only eurozone countries to see growth in manufacturing in June. The Ireland PMI rose to a 14-month high of 53, and it was the only country in the region where manufacturing jobs actually increased. Austria's PMI was 50.1.

Overall, Mr Williamson said the PMI suggested output in the eurozone's manufacturing sector shrank by 1pc in the second quarter, "with this steep rate of decline looking set to accelerate further as we move into the second half of the year".

The region narrowly escaped recession in the first quarter, but only because of reasonable growth in Germany.

Signs of easing price pressures among eurozone manufacturers were a positive element of the June PMI.

Mr Williamson said: "Producers' input costs are now falling at the fastest rate for nearly three years, which should help boost profitability and feed through to lower inflation.

"However, their biggest fear at the moment is slumping demand rather than rising prices, with demand in home markets and further afield being hit by heightened uncertainty regarding the economic outlook as the region's economic crisis rolls on."



Output prices fell for the first time since March 2010, because of a lack of demand and strong competition, which restricted manufacturers' ability to raise prices.

The exceptions were the Netherlands, where prices rose, and Ireland, where they held steady.

[Daniel_Plainview]

Eurozone joblessness among young rises

More than one in three young Italians are out of work after the youth unemployment rate hit a record 36.2pc in May. The figure was a rise from 35.3pc in April, and far outpaced the eurozone average of 22.6pc in May. Unemployment among the under-25s also remained a huge problem in Spain, where more than half of young people are jobless. The rate rose to 52.1pc in May from 51.6pc in April.

Italy and Spain are struggling to battle the eurozone debt crisis which has driven their sovereign borrowing costs to unsustainable levels.

Andrea Broughton, of the Institute for Employment Studies, said: "The greatest concern for EU policymakers remains youth unemployment, which is more than twice the average rate for the whole working population, and is continuing to rise.

EU policymakers and stakeholders are aware of this potential catastrophe of creating a 'lost generation', but so far appear powerless to halt the rising figures."

By comparison, youth unemployment rates were 7.9pc in Germany in May, and 22.7pc in France.

Unemployment in the eurozone overall rose to a record 11.1pc, from 11pc in April. The number of jobless jumped for a 13th month, up by 88,000 to more than 17.5m according to the EU's statistics office Eurostat.

Howard Archer, chief UK economist at IHS Global Insight, said: "With the eurozone likely having suffered appreciable GDP contraction in the second quarter and in grave danger of contracting again in the third... the likelihood is the eurozone unemployment rate will move significantly higher over the coming months."

Spanish youth unemployment skyrocketed from 51.6pc to 52.1pc in May

[Armageddon]

Global Growth Outlook Weakens

Three weeks ago we noted that Goldman Sach's Global Leading Indicator (GLI) and its Swirlogram had entered a rather worrying contraction phase. Today's update to the June GLI data suggests things got worse and not better as momentum is now also dropping as well as the absolute level. This continued deterioration in momentum suggests further softening in the global cyclical picture. Of particular concern is the broad-based deterioration in the GLI’s constituent components in June. Nine of ten components weakened last month, only the second time this has occurred since the depths of the recession in 2008Q4. The June Final GLI confirms the pronounced weakening in global activity in recent months. Goldman has found elsewhere (as we noted here) that this stage of the cycle, when momentum is negative and decelerating, is typically accompanied by deteriorating data and market weakness.

http://www.zerohedge.com/news/global-gr ... ok-weakens

[Daniel_Plainview]

Japan to double sales tax over 3 years

TOKYO (AP) — Japan's lower house voted Tuesday to double the country's sales tax to 10 percent over three years in a bid to rein in a bulging national debt as an aging population burdens the country's social security system.

The vote, however, shook Prime Minister Yoshihiko Noda's grip on power because of strong opposition from a group within the ruling party led by power broker Ichiro Ozawa that believes the tax hike will weaken the economy. Ozawa and his supporters have threatened to bolt the Democratic Party over the tax issue.

The bill passed easily by a vote of 363-96, with support coming from the two biggest opposition parties. The bill must still pass the less powerful upper house to become law, which is expected.

It calls for raising the sales tax from 5 percent to 8 percent in 2014, and then to 10 percent in 2015.

Noda, who has been in power only since last September, has said the tax hike is needed to reduce Japan's bulging national debt, which is more than twice its gross domestic product. He has made the tax increase the centerpiece of his efforts to tackle Japan's structural woes.

"We made a first significant step toward the future," Noda told reporters after the vote. "It is painful to have to ask the people to share the burden. ... I wish I could avoid this measure. But somebody has to support the social security system, which benefits everyone."

Finance Minister Jun Azumi said he hoped the vote would send a message to the world that Japan is dealing with its economic problems. "I think this shows the international community that although we had been criticized as indecisive, we are taking action," he said.

Japan was hit hard by last year's devastating earthquake and tsunami, but has been sputtering for years with a stagnant economy and one of the largest public debt burdens in the developed world. The country's aging population has strained its social security and tax systems, with Japanese aged 65 and older now making up about a quarter of the population — a figure projected to rise to 40 percent by 2050.

Even Noda's government projects the tax hike will take only a modest bite out of Japan's deficit. The Cabinet Office forecasts that doubling the sales tax will boost revenues by 13.5 trillion yen ($170 billion) annually by 2015. Japan currently runs a deficit of about 45 trillion yen ($563 billion) a year.

Some economists warn that the tax increase will weaken consumer demand at a time when wages are stagnant and people are already holding back on spending. Key auto and electronics exporters, meanwhile, have been battered by a strong yen, natural disasters that have disrupted supply chains, and intensifying competition from Asian rivals.

While last year's tsunami disaster made many Japanese more willing to make sacrifices to help their country recover, they are concerned about how the higher taxes will affect their personal finances.

"The tax hike will bring about another headwind to the economy, which is weaker consumption," said Hiromichi Shirakawa, Credit Suisse's chief Japan economist. He said the tax increase will drag down economic growth and erode income taxes and corporate taxes, thus worsening Japan's debt burden over time. He said the government instead should first focus on ways to cut public spending and bolster the economy, and then raise the sales tax.

"In 10 years' time, we may see a more disastrous fiscal situation," he warned.

Noda disputed criticism that a higher sales tax would harm the economy, saying that if the government waited any longer it would be too late. ...

Remember when the Cornies would declare that national debts don't matter? Well, apparently Japan is now terrified of its oncoming fiscal Armageddon, declaring that "if the government waited any longer it would be too late" to address its growing debt blackhole.

Raising the consumption tax is extremely unpopular, and Japan would not be doing this unless it were absolutely necessary to avoid collapse.

And let's not forget:

Almost 50% of [Japan's] national spending is today financed by issuing government debt, rather than tax revenues, meaning that half of the cost of benefits being enjoyed by today’s old people will be debt obligations that their children and grandchildren will inherit as debt that must be serviced. It is a grossly unfair, even immoral, situation, though hardly unique to Japan.

[dissident]

Remember when the Cornies would declare that national debts don't matter? Well, apparently Japan is now terrified of its oncoming fiscal Armageddon, declaring that "if the government waited any longer it would be too late" to address its growing debt blackhole.

Raising the consumption tax is extremely unpopular, and Japan would not be doing this unless it were absolutely necessary to avoid collapse.

And let's not forget:

Almost 50% of [Japan's] national spending is today financed by issuing government debt, rather than tax revenues, meaning that half of the cost of benefits being enjoyed by today’s old people will be debt obligations that their children and grandchildren will inherit as debt that must be serviced. It is a grossly unfair, even immoral, situation, though hardly unique to Japan.

That would be the very definition of living beyond your means. This sales tax rise will not solve their main problem: faking their real standard of living to be well above its actual level.

[TheAntiDoomer]

Chrysler Sales Rise 20%, Topping Expectations
http://www.cnbc.com/id/48056579

Chrysler Group's June U.S. auto sales rose 20 percent to 144,811 vehicles, the company said Tuesday, slightly topping analyst expectations. It was the 27th consecutive month that Chrysler sales topped those from the previous year, and its best June sales since 2007.

[OilFinder2]

The deindustrialization of America continues. Why do people expect there to be a middle class in the new trickle down service sector economy based on Chinese imports? We can't have an economy based on selling crap to each other.

U.S. Factory Orders Up 0.7 Percent In May, Higher Than Expected

U.S factory orders posted a stronger than expected rebound in May buoyed by orders of ships, boats and aircraft, according to figures released Tuesday by the Commerce Department.

The Commerce Department put the level of new orders for manufactured goods up $3.3 billion, a 0.7 percent increase that partially reverses two consecutive months of declines.

And although the April level of factory orders was revised down to a 0.7 percent decline from the 0.6 percent decline initially reported, the May increase comes in significantly higher than the 0.1 percent growth predicted by most economists.

Transportation orders were especially strong in May, posting a 2.7 percent increase.

Excluding transportation, new factory orders were up 0.4 percent, an increase that also reverses two consecutive months of declining orders.

New defense spending in May also boosted the overall level of new factory orders, with non-defense factory orders up 0.5 percent.

[TheAntiDoomer]

^LOL OF2! and just like that DP's doom bubble is popped.

[TheAntiDoomer]

Trulia: Asking House Prices increased in June
http://www.calculatedriskblog.com/2012/ ... ed-in.html

Asking prices on for-sale homes–which lead sales prices by approximately two or more months – increased 0.3 percent in June month over month (M-o-M), seasonally adjusted. With the exception of nearly flat prices in May, prices rose in four of the past five months. Asking prices in June rose nationally 0.8 percent quarter over quarter (Q-o-Q), seasonally adjusted. Year-over-year (Y-o-Y) asking prices rose by 0.3 percent; excluding foreclosures, asking prices rose Y-o-Y by 1.7 percent. Nationally, 44 out of the 100 largest metros had Y-o-Y price increases, and 84 out of the 100 largest metros had Q-o-Q price increases, seasonally adjusted.

[dolanbaker]

http://www.bbc.co.uk/news/business-18693825
The US recovery "remains tepid", according to the annual report from the International Monetary Fund (IMF).

It has cut its growth forecast for the US economy to 2% this year from an earlier estimate of 2.1%.

The IMF warned of risks from the eurozone debt crisis and uncertainties surrounding domestic policies, with an election in November and the debt ceiling needing to be raised in 2013

HMMM These guys are usually always optimistic!

[Armageddon]

Work For A State Or Local Government? Read This

I've tried to warn you all about this if you're a firefighter, cop, teacher or otherwise employed by a state or local government -- you are not going to get your pension!

(Reuters) - U.S. states and localities have run up more than $2 trillion of unfunded pension liabilities, Moody's Investors Service said on Monday, citing data on plans offered by 8,500 local governments and over 14,000 individual entities.

The Wall Street credit agency said that according to its estimate, the total liabilities for fiscal 2010 were more than three times the amount reported by local governments.

Read that last sentence again. And again. And again.

You are being lied to. Actively. Intentionally. Repetitively.

The money does not exist to pay those pensions. The governments cannot tax sufficiently to pay those pensions.

You are not going to get your pension.

Oh sure, if you're retired now, or nearly so, you are likely to get a good part of it. But you won't get it all if you've got more than 10 years left (before you die) -- that is, if you're under 70 or so.

Keep threatening, teachers, firefighters and cops. Go on strike. Please. All those threats, protests and strikes demonstrate is that you are demanding that 2 + 2 = 5 -- but no matter how loudly you scream, you can't make it so.


http://market-ticker.org/akcs-www?post=208109


The entire system is bankrupt. Oilfinder can deny this all he/she wants, but the entire global financial system is about to crash. 2008 was only a dress rehearsal. The big one is coming sooner rather than later. Buckle up.