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

[Daniel_Plainview]

Denninger: "The Ongoing Depression"

Many people doubt the truth, but arithmetic cannot be doubted. It just is; your options are to either accept it or deny it, but you can't change it. And arithmetic says we're in a Depression.

Let's go through this one again. The real GDP growth is the red line. That's simply the nominal number less government deficit spending. Why must you subtract it? Because if you don't you are double-counting the government's spending -- you are at the same time counting both the debt issuance (which goes into the private economy) and the purchases by the government with the net debt issuance.

This is a distortion and you must subtract it back out.

Once you do what happened -- and is still happening -- becomes clear. We would have to post up nearly 10% annual GDP growth with deficits where they are to have actual economic growth. That's not going to happen, which means we're actually destroying purchasing power instead of growing the economy. * * *

[Daniel_Plainview]

US Export Orders Are Collapsing

Holy shit!



Presented with little comment, courtesy of Diapason Commodities' Sean Corrigan, NAPM Export Orders have plunged over 3 sigma in the last 3 months and have only dropped more (in history) immediately after the Lehman debacle. Decoupling anyone?

Remember when the Cornies were boasting that the US was impervious to the Eurozone's woes because it had completely and utterly decoupled?

Oops!

[Daniel_Plainview]

Remember when the Cornies were boasting that the US was impervious to the Eurozone's woes because it had completely and utterly decoupled?

Oops!

U.S. Manufacturing May Be Softening; Factory Orders Fell in June

WASHINGTON (Reuters) — New orders for factory goods unexpectedly fell in the United States in June, a fresh sign that the slowdown in the country’s manufacturing sector will probably stretch into the second half of the year.

The Commerce Department said on Thursday that new orders for manufactured goods dropped 0.5 percent during the month. Economists in a Reuters poll had forecast a rise of 0.5 percent. American factories appear to be one of the sectors most vulnerable to Europe’s festering debt crisis. The trend in American manufacturing has appeared softer and has added to concerns the economic recovery is losing steam. The decline in new orders in June will probably mean softer output down the road, which could weigh on economic growth.

New indications of the depth of the slowdown may emerge Friday, when the government is expected to report that employers added 100,000 new workers to their payrolls last month, according to a Reuters survey. That is up from 80,000 in June but a sharp deceleration from the average monthly increase of 226,000 in the first three months of the year.

... Thursday’s report on manufacturing orders in June showed broad weakness across industries making everything from machinery and appliances to cars and electronics. New machinery orders dropped 2.1 percent and orders for motor vehicles and parts gave up 0.7 percent.

The overall decline was tempered by a 14.2 percent increase in new orders for civilian aircraft. Outside transportation, orders were down 1.8 percent. New orders have declined in three of the last four months. In June, shipments of factory goods fell 1.1 percent.

Orders for nonmilitary capital goods excluding aircraft — seen as a measure of business confidence and spending plans — slipped 1.7 percent in June.

On Wednesday, the private Institute for Supply Management said activity in the manufacturing sector contracted in July for the second consecutive month.

[Pops]

Thanks for that Denniger chart, it could replace the entire thread, several popular threads actually. Eyebaall a line along the tops in actual GDP from when bush took office to when he left office to now, that is a long trend and doesn't look good for the next data point.

[TheAntiDoomer]

Seeiosly pops, Denninger? That guy is the morons moron.

[OilFinder2]

Awww, poor doomers. I always feel bad for them when their wishes of imminent economic collapse are completely demolished.



July jobs data show improvement in hiring as 163,000 jobs are added

The nation’s labor market showed some signs of improvement in July as job growth came in above market expectations, U.S. government data showed on Friday.

Employment outside the farm sector grew by 163,000 workers in the month, the Labor Department said. This is the fastest pace of job growth since February.

Wall Street had expected a fairly moderate 100,000 increase in nonfarm payrolls for the month, according to a MarketWatch survey. See MarketWatch’s comprehensive economic calendar.

Wall Street greeted warmly the size of the monthly increase, with U.S. stock futures rising after the report was released.

The gain in July was concentrated in the service sector. Factory employment also increased. Read full government report.

Government employment slipped. Private-sector payrolls rose by 172,000 in the month.

The payrolls count over the prior two months was revised lower by a cumulative 6,000.

Payrolls rose by a revised 87,000 in May and by 64,000 in June.

[...]

I now await the inevitable articles from Zerohedge and elsewhere telling us the number is really worse than it looks.

[vision-master]

More Young Adults Living With Parents

More of today’s twenty- and-thirty-somethings are living with their parents than in generations before them. The pattern is generally the result of delayed adulthood and lingering effects of the Great Recession, an Ohio research concludes in a new study.

About 17 percent of the adults between the ages of 20 to 34 lived with their parents in 1980, compared with 24 percent during the Great Recession period, which the study describes being between 2007 and 2009.

The increase was sharpest for young people under 25; that group grew from 32 percent to 43 percent during those times, according to the study “During the Great Recession, More Young Adults Lived with Parents.”

Part of the reason that more young adults stayed at home was that the Great Recession, while it affected everyone, hit young people the hardest. The study’s author says they where generally the last to get hired and the first ones to get fired.

The findings are not surprising considering that Generation Y, while more educated than previous generations, is facing a tougher time finding steady employment.

Young people are also more likely to earn less than those who graduated in better economic times. A 2010 Yale University study suggested that those with a college degree would likely earn about 17.5 percent less per year than their peers who graduated in a more robust economy. That’s because there are fewer jobs to pick from and their job experience might not be a direct match.


http://www.nationaljournal.com/thenexta ... s-20120801

[dissident]

You have to subtract at least 2% from the GDP growth since the GDP deflator is being understated through inflation rate shenanigans.

Also, you can't subtract the deficit from the GDP growth in the short term. Nobody subtracts private sector borrowing from the GDP and most of the private sector operates on borrowing (not quite at the scale of the government). The problem with deficit spending is that eventually interest costs crush proper spending and lead to economic contraction. Paying back loans does not create jobs, spending on infrastructure and social assistance does.

[OilFinder2]

And yet another big Boeing factory order.



Boeing Wins 94 737 Orders, Lures Singapore Air Unit From Airbus

Boeing Co. won 94 orders for 737 planes from Asian carriers, including a sale to a Singapore Airlines Ltd. unit that has an all-Airbus SAS fleet.

SilkAir, Singapore Air’s regional arm, signed a provisional agreement for 54 737s, including 31 of the in-development MAX 8, the carrier said in a statement today. A China Southern Airlines Co. unit also ordered 40 737-800s. The two deals have a combined list price of $8.3 billion. Carriers usually get discounts.

“It is a big positive for Boeing that they have managed to get the confidence of Singapore Airlines,” said Ahmad Maghfur Usman, a transport analyst at OSK (Asia) Securities in Kuala Lumpur. “Going forward, Singapore Air will continue to order Boeing.”

The deal is a boost for Boeing as the company and Airbus both work on revamping their narrowbody models to help compete in the biggest segment of the global aircraft market. The Chicago-based planemaker has racked up more than 1,200 orders and commitments for the planned 737 MAX since its introduction late last year, of which 649 had been signed as of July 26.

[...]

[dolanbaker]

Awww, poor doomers. I always feel bad for them when their wishes of imminent economic collapse are completely demolished.
....
I now await the inevitable articles from Zerohedge and elsewhere telling us the number is really worse than it looks.

Would the BBC be more acceptable.

http://www.bbc.co.uk/news/business-19109249
US firms hired an extra 163,000 workers in July, according to official figures, beating economists' forecasts.

However, the unemployment rate rose from 8.2% to 8.3% last month, as more people re-entered the workforce but failed to find a job.

The US Department of Labor also said 6,000 fewer jobs were created in May and June than first estimated.

[OilFinder2]

Pity the poor doomers, getting all excited about two (barely) negative manufacturing ISM's in a row, when the sector that accounts for almost 80% of the economy continues to expand.

Ironic this one shows contraction in employment for the same month we just got a decent jobs report!



Pace of Service Sector Growth Rises Modestly: ISM

The pace of growth in the vast U.S. services sector edged up in July as new orders gained traction, but employment fell to its lowest level in nearly a year, according to an industry report released on Friday.

The Institute for Supply Management said its services index rose to 52.6 last month from 52.1 in June, topping economists' forecasts for 52.

A reading above 50 indicates expansion in the sector.

Forward-looking new orders gained to 54.3 from 53.3, while exports climbed out of contraction territory, rising to 51 from 49.5.

But the employment gauge shrank, falling to its lowest level since September 2011 at 49.3 from 52.3. It was also the first the index has contracted since December.

[OilFinder2]

Would the BBC be more acceptable.

http://www.bbc.co.uk/news/business-19109249
US firms hired an extra 163,000 workers in July, according to official figures, beating economists' forecasts.

However, the unemployment rate rose from 8.2% to 8.3% last month, as more people re-entered the workforce but failed to find a job.

The US Department of Labor also said 6,000 fewer jobs were created in May and June than first estimated.

Yes, the BBC is more acceptable.

However, if you look at the household survey table and divide the number of unemployed by the size of the labor force, you learn the unemployment rate in June was 8.217% while the same in July was 8.254%. So while it's disappointing it went up, the reason it went up on a single-decimal-point basis was because it just barely went over the 8.25% mark, which incurs a rounding up to 8.3%. Something like that is probably not much more than noise.

[ralfy]

Several articles and facts shared by Zerohedge come from Bloomberg and similar sources.

[Pops]

Seeiosly pops, Denninger? That guy is the morons moron.

The numbers are from treasury, not that that means they are "true" but like Nielson ratings at least it is somewhat comparable with itself over time - given some optimism bias of course.

Someone said you cant subtract deficits from GDP short term. It seems like that would be the time you should subtract it if you wanted truer look at the underlying economy, No?

[Daniel_Plainview]

Full-Time Jobs -197,000; Part-Time Jobs +31,000

We got the pre-spun job quantity data already, where we learned that nearly 3 times the headline print was due to seasonal and B/D adjustments and is thus nothing but noise. Now we get the quality.



As can be seen in the chart, courtesy of Table A9 from the Household Survey, in July the number of part-time jobs added was 31K, bringing the total to 27,925, just shy of the all time record of 28,038. Full time jobs? Down 228,000 to 114,345, lower than the February full-time jobs print of 114,408.



Once again, more and more Americans are relinquishing any and all benefits associated with Full Time Jobs benefits, and instead are agreeing on a job. Any job. Even if it means working just 1 hour a week. For the BLS it doesn't matter - 1 hour of work a week still qualifies you as a Part-Time worker.

.

What a sad, pathetic, sickly economy!

[Daniel_Plainview]

Economist Richard Duncan: Civilization May Not Survive ‘Death Spiral’

Richard Duncan, formerly of the World Bank and chief economist at Blackhorse Asset Mgmt., says America’s $16 trillion federal debt has escalated into a “death spiral, “as he told CNBC. And it could result in a depression so severe that he doesn’t “think our civilization could survive it.”



And Duncan is not alone in warning that the U.S. economy may go into a “death spiral.”

Since the recession, noted economists including Laurence Kotlikoff, a former member of President Reagan’s Council of Economic Advisers, have come to similar conclusions. Kotlikoff estimates the true fiscal gap is $211 trillion when unfunded entitlements like Social Security and Medicare are included.

However, while the debt crisis numbers are well known to most Americans, the economy hasn’t suffered a major correction for almost 4 years.

So the questions remain: Is the threat of collapse for real? And if so, when?

A team of scientists, economists, and geopolitical analysts believes they have proof that the threat is indeed real – and the danger imminent.

One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:

“We found an identical pattern in our debt, total credit market, and money supply that guarantees they’re going to fail. This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible. And what’s really disturbing about these findings is that the pattern isn’t limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well.”

According to Martenson: “These systems could all implode at the same time. Food, water, energy, money. Everything.”

Another member of this team, Keith Fitz-Gerald, the president of The Fitz-Gerald Group, went on to explain their discoveries.

“What this pattern represents is a dangerous countdown clock that’s quickly approaching zero. And when it does, the resulting chaos is going to crush Americans,” Fitz-Gerald says.

Dr. Kent Moors, an adviser to 16 world governments on energy issues as well as a member of two U.S. State Department task forces on energy also voiced concerns over what he and his colleagues uncovered.

“Most frightening of all is how this exact same pattern keeps appearing in virtually every system critical to our society and way of life,” Dr. Moors stated.

The work of this team garnered such attention, they were brought in front of the United Nations, UK Parliament, and numerous Fortune 500 companies to share much of their findings.

“It’s a pattern that’s hard to see unless you understand the way a catastrophe like this gains traction,” Dr. Moors says. “At first, it’s almost impossible to perceive. Everything looks fine, just like in every pyramid scheme. Yet the insidious growth of the virus keeps doubling in size, over and over again – in shorter and shorter periods of time – until it hits unsustainable levels. And it collapses the system.”

Martenson points to the U.S. total credit market debt as an example of this unnerving pattern.

“For 30 years – from the 1940s through the 1970s – our total credit market debt was moderate and entirely reasonable,” he says. “But then in seven years, from 1970 to 1977, it quickly doubled. And then it doubled again in seven more years. Then five years to double a third time. And then it doubled two more times after that.

“Where we were sitting at a total credit market debt that was 158% larger than our GDP in the early 1940s… By 2011 that figure was 357%.”

Dr. Moors warns this type of unsustainable road to collapse can be seen today in our energy, food and water production. All are tightly connected and contributing to the economic disaster that lies directly ahead. ***

[OilFinder2]

I now await the inevitable articles from Zerohedge and elsewhere telling us the number is really worse than it looks.

Sooooo predictable! Certain doomers here could never admit a data point came in good, or at least halfway decent! Never, never, never! Won't happen! Any data point unabashedly good gets completely ignored, and any other halfway decent data point with a few disappointing aspects here and there get those disappointing aspects ADVERTISED AS IF THE END OF THE WORLD OR AT LEAST ANOTHER RECESSION WERE IMMINENT, with completely predictable articles from Zerohedge or Karl Denninger or Mish or some other doomer-tending writer. It's blatantly obvious these people want the economy to crash, and as evidence of that, in spite of the numerous times I've pointed that out, they have yet to deny it. They would rather see people unemployed en masse with widespread suffering than to see a recovery occur not on their terms. I have one word for people like this:

[OilFinder2]

U.S. Stocks, Metals Gain After Jobs Data; Treasuries Drop

U.S. stocks rallied to the highest level since May, commodities gained and Treasuries declined as American payrolls climbed more than forecast. Italian and Spanish notes jumped as German coalition politicians signaled support of the European Central Bank’s bond-buying plan.

The Standard & Poor’s 500 Index increased 1.9 percent to 1,390.99 at 4 p.m. in New York. The Stoxx Europe 600 Index jumped 2.4 percent. Ten-year Treasury yields added nine basis points to 1.57 percent, while Italian two-year debt sank 61 basis points to 3.13 percent. S&P’s GSCI Commodity Index advanced 2.8 percent, its biggest gain in a month. The dollar weakened against most major counterparts and a gauge of U.S. corporate debt fell the most in a week.

U.S. payrolls climbed in July, boosted by a pickup in employment at automakers, even as the jobless rate unexpectedly rose to a five-month high, Labor Department figures showed. Italian and Spanish two-year notes jumped as members of German Chancellor Angela Merkel’s coalition parties signaled they won’t stand in the way of ECB chief Mario Draghi’s plan to buy government bonds.

“We haven’t seen an upside surprise in a while and that’s what the market is reacting to,” said Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston. “It’s still not strong enough to make a real dent in the overall growth of the economy and it’s not weak enough to get the Fed acting.”

Payrolls increased 163,000 following a revised 64,000 rise in June that was less than initially reported, according to the Labor Department. The median estimate of 89 economists surveyed by Bloomberg News called for a gain of 100,000. Unemployment rose to 8.3 percent.

[...]

[peripato]

So, let me get this straight. Unemployment actually rose in America, yet the stock market didn't fall, but rallied because the eCONomy is doing so well. Obviously there must be another bailout coming soon from someone, somewhere for delusion to reach such dizzying heights.

If this little fact doesn't offer sufficient proof that stocks are rallying in anticipation of "mo' free money", then perhaps these will...

Final PMI Data Confirm Global Downturn

UK manufacturing PMI - worst contraction since March of 2009

Euro Area Manufacturing PMI – manufacturing recession deepens further

German manufacturing PMI – steepest fall in output since April of 2009

French manufacturing PMI – falls to a 38 month low as pace of decline accelerates

Italy's manufacturing PMI – a three month low, employment contracts at sharpest pace since October of 2009

China, HSBC PMI – first increase in output in five months, but final data worse than flash PMI, remains in contraction territory overall

Spain's manufacturing PMI – output, new orders and employment all continue to contract sharply.

Japan's manufacturing PMI – sharpest deterioration since April of 2011 (n.b., that was right after the tsunami)

US ISM Report – contraction slows somewhat (49.8 from 49.7), a mixed bag.

Wow, just keep printing money central banker dudes at near zero interest rates, to paper over the growing holes in the world economy. Who'd have guessed that economics was so easy, why didn't anyone ever think of this before! I mean what could possibly go wrong?

[OilFinder2]

^
Those are all manufacturing PMI's. In most nations, manufacturing is a minority of output. If you include the service PMI's ...

JP Morgan's Single-Best Proxy For Global GDP Growth Just Turned Up

JP Morgan's global all-industry PMI output index, which they describe as the "single best proxy for global GDP growth" rose 1.4 points to 51.7, halting a 4 month decline.

"The results offer a bit of a breather for this key barometer of global growth, halting a four-month slide," wrote JP Morgan's David Hensley.

The growth was driven by a big jump in services PMI, which overcame weaker manufacturing numbers.

Here's the chart:

Not a big uptick, but at least it breaks a 4-month downward trend.