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

[OilFinder2]

AW CRAP! DOOMER HOPES FOILED ONCE AGAIN AS INITIAL CLAIMS PLUNGE 35,000 TO 353,000

The number of people who filed applications for unemployment benefits fell by 35,000 last week to a seasonally adjusted 353,000, marking the third straight week of sharp swings that reflects the government's difficulty in assessing employment levels in the auto industry. Auto manufacturers used to schedule brief shutdowns of plants every July to retool for new models, but the size of temporary layoffs has varied widely since the industry was bailed out several years ago. That makes the claims report especially volatile in July and less useful in gauging labor-market trends. Economists surveyed by MarketWatch had projected they would drop to 378,000 from last week's upwardly revised level of 388,000. A more accurate barometer of labor-market trends, the four-week claims average, declined by 8,750 to 367,250,000, the Labor Department said Thursday.

[...]

[OilFinder2]

Mixed news in the characteristically complex durable goods orders report, but overall it was OK. Not great, but OK.



U.S. Durable Goods Orders Up 1.6 Percent In June, Higher Than Expected

Fueled by a second month in a row of increases in the transportation sector, U.S. durable goods orders increased to a notably higher level than expected in June.

According to figures released Thursday by the Commerce Department overall new orders for durable goods came in at $221.6 billion, a 1.6 percent increase from May levels.

Furthermore the increase, which was much higher than most economists expected, came atop revised figures for May that showed a 1.6 percent increase in durable goods orders for that month, higher than the 1.1 percent increase initially reported.

Strong growth in the transportation sector drove much of the increase in overall durable goods orders.

Excluding transportation orders, however, the durable goods orders for June were less encouraging, falling 1.1 percent for the month.

[peripato]

AW CRAP! DOOMER HOPES FOILED ONCE AGAIN AS INITIAL CLAIMS PLUNGE 35,000 TO 353,000

The number of people who filed applications for unemployment benefits fell by 35,000 last week to a seasonally adjusted 353,000, marking the third straight week of sharp swings that reflects the government's difficulty in assessing employment levels in the auto industry. Auto manufacturers used to schedule brief shutdowns of plants every July to retool for new models, but the size of temporary layoffs has varied widely since the industry was bailed out several years ago. That makes the claims report especially volatile in July and less useful in gauging labor-market trends. Economists surveyed by MarketWatch had projected they would drop to 378,000 from last week's upwardly revised level of 388,000. [color=red]A more accurate barometer of labor-market trends, the four-week claims average, declined by 8,750 to 367,250,000, the Labor Department said Thursday.

[...]

*Yawn*

[dolanbaker]

The European Central Bank is ready to do "whatever it takes" to support the euro, its president has said.

Mario Draghi's strong message of support prompted a rally in European share markets and the euro.

They also triggered a fall in bond yields. Spain's 10-year yield, which had hit a record high of 7.6% earlier, fell back to 7%.

Bond yields are an indication of the interest rate a country would have to pay to borrow money.

A rate above 7% is generally seen as unsustainable in the long run.

Leading stock markets rose, with London's FTSE 100 share index up more than 1%, Germany's Dax rising almost 2% and France's Cac climbing 3%.

WOW! A rally based on the vague promise to do something to save the Euro, I wonder how long it will take for the steam to go from this blast of hot air!

[peripato]

The European Central Bank is ready to do "whatever it takes" to support the euro, its president has said.

Mario Draghi's strong message of support prompted a rally in European share markets and the euro.

They also triggered a fall in bond yields. Spain's 10-year yield, which had hit a record high of 7.6% earlier, fell back to 7%.

Bond yields are an indication of the interest rate a country would have to pay to borrow money.

A rate above 7% is generally seen as unsustainable in the long run.

Leading stock markets rose, with London's FTSE 100 share index up more than 1%, Germany's Dax rising almost 2% and France's Cac climbing 3%.

WOW! A rally based on the vague promise to do something to save the Euro, I wonder how long it will take for the steam to go from this blast of hot air!

ECB pig-men jawboning their way to a "solution", yet again.

[peripato]

Levels of US poverty are set to be the highest since the 1960s

Clothing is snapped up by the poor in Lakewood, New Jersey. Picture: Stuart Ramson

THE ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

Census figures for 2011 will be released later this year, in the critical weeks ahead of the November elections.

The Associated Press surveyed more than a dozen economists, think tanks and academics, both nonpartisan and those with known liberal or conservative leanings, and found a broad consensus: The official poverty rate will rise from 15.1 per cent in 2010, climbing as high as 15.7 per cent. Several predicted a more modest gain, but even a 0.1 percentage point increase would put poverty at the highest level since 1965.

Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor. More discouraged workers are giving up on the job market, leaving them vulnerable as unemployment aid begins to run out. Suburbs are seeing increases in poverty, including in such political battlegrounds as Colorado, Florida and Nevada, where voters are coping with a new norm of living hand to mouth...

Oh dear... abundance is not everywhere it seems, not even in the land of the free and home of the brave... And this is after how many stimulus packages, bailouts and deficit blow-outs these past 5 years or so?

Imagine the scene when the Whore Street pig-men finally disappear up their own backsides in the financial reset which is bound to happen, sooner or later, now the bastards at the Fed and Treasury have painted the U.S. into a ZIRP corner from which there is no escape.

[dolanbaker]

The European Central Bank is ready to do "whatever it takes" to support the euro, its president has said.

Mario Draghi's strong message of support prompted a rally in European share markets and the euro.

They also triggered a fall in bond yields. Spain's 10-year yield, which had hit a record high of 7.6% earlier, fell back to 7%.

Bond yields are an indication of the interest rate a country would have to pay to borrow money.

A rate above 7% is generally seen as unsustainable in the long run.

Leading stock markets rose, with London's FTSE 100 share index up more than 1%, Germany's Dax rising almost 2% and France's Cac climbing 3%.

WOW! A rally based on the vague promise to do something to save the Euro, I wonder how long it will take for the steam to go from this blast of hot air!

ECB pig-men jawboning their way to a "solution", yet again.

Well, the markets dropped this morning, another short lived rally!
Perhaps they're waiting for something to back up those promises.

[peripato]

The European Central Bank is ready to do "whatever it takes" to support the euro, its president has said.

Mario Draghi's strong message of support prompted a rally in European share markets and the euro.

They also triggered a fall in bond yields. Spain's 10-year yield, which had hit a record high of 7.6% earlier, fell back to 7%.

Bond yields are an indication of the interest rate a country would have to pay to borrow money.

A rate above 7% is generally seen as unsustainable in the long run.

Leading stock markets rose, with London's FTSE 100 share index up more than 1%, Germany's Dax rising almost 2% and France's Cac climbing 3%.

WOW! A rally based on the vague promise to do something to save the Euro, I wonder how long it will take for the steam to go from this blast of hot air!

ECB pig-men jawboning their way to a "solution", yet again.

Well, the markets dropped this morning, another short lived rally!
Perhaps they're waiting for something to back up those promises.

Well they don't have the money...and anyway it was the availability of too much free money (i.e. cheap debt) that caused the whole mess in the first place. More of the same isn't going to magically fix things, otherwise why not just make everyone instant gazzillionaires? Voila and problem solved...

[Daniel_Plainview]

Spanish jobless rate 24.6pc, youth unemployment at 53pc

Spain's unemployment rate rose to 24.63pc and 53pc among the young in the second quarter, despite the start of the tourist season.
Spanish jobless rate 24.6pc, youth unemployment at 53pc ... The unemployment rate rose from 24.4pc recorded in the first quarter - already the highest in the industrial world - as Spain entered its third straight quarter of economic contraction. Among those aged 16 to 24, the rate rose to 53.27pc from 52.01pc the previous quarter, reflecting the ongoing impact of Spain's double-dip recession following the collapse of a construction boom in 2008. ... The country is in its second recession in four years, hit hard by the bursting of the property bubble that threw millions out of work. On Monday the statistics office will publish its provisional figure of economic output in the second quarter. ... .

[Daniel_Plainview]

In Q2 America Added $2.33 In Debt For Every $1.00 In GDP

As noted before, courtesy of the GDP revision, all the kneejerk reactions in the past 3 years to various GDP headlines (preliminary, first and final revisions at that), were all for nothing. In fact, today's GDP number will be revised and re-revised in the next two months, then re-re-re-revised at the annual revisions in 2013, 2014 and 2015. In other words, the number after (and likely before) the decimal comma is irrelevant. One thing however stands, and that is the trendline change in actual GDP compared to the change in debt used to "buy" said GDP. Which is why we present our favorite chart showing how much more total federal debt was added per quarter over the GDP. Bottom line: in Q2, the US added $274.3 billion in debt while adding $117.6 billion in GDP (from the revised data: Q1 GDP of 15,478 billion rising to just Q2 in $15,595 billion).



Probably what is more indicative, is that in Q2 the delta change between debt and GDP rose from 2.28x in Q1. But that too is largely noise and will be revised. What won't be revised is that over the past two years, the US has added 2.42x more debt than it has added GDP.

Economy weak in second quarter, GDP grows at 1.5% rate

Gross domestic product grew at an annual rate of 1.5% between April and June, down from 2.0% in the first quarter and 4.1% late last year. More cautious consumers were the main reason. Consumer spending, which makes up about 70% of the economy, grew at a 1.5% rate, compared with 2.4% in the first quarter.
"If consumers grow just over 1%, you have trouble getting the overall economy to do much more than that,'' Bank of America Merrill Lynch economist Michelle Meyer said before the report. ...

... [One] reason this recovery has been slow is that consumers still have too much debt, said Harvard economist Carmen Reinhart, co-author of the book This Time is Different, a history of financial crises. Consumer debt is still near 90% of GDP, and about twice as high as it was during the much faster rebound from the 1982 recession, she said. That has especially hamstrung the housing market, which is just beginning to grow again, Reinhart said.

To repeat: over the past two years, the US has added 2.42x more debt than it has added GDP.

Ask yourself: "is this sustainable?"

[dolanbaker]

http://www.bbc.co.uk/news/business-19018586
Spain is in an "unprecedented" double-dip recession and the outlook for the country remains "very difficult" with "significant downside risks", the International Monetary Fund has said.

Its annual report on the Spanish economy praised Madrid's "decisive action on many fronts", but warned further reforms were needed.

Action to cut debt and push financial reform were "critical", it said.

Earlier, figures showed Spanish unemployment hitting a fresh high.

Almost 5.7 million Spaniards are now out of work, with the jobless rate reaching 24.6% during the April to June quarter - the highest since the 1970s.

[pstarr]

Stupid, stupid doomers grasping at every hope of doom they can possibly grasp! They're reduced to posting articles about home sales which was actually pretty good news!

It's considered a sign of desperation when people start to attack the poster instead of the post!

Oilfinder does not post without a derogatory "doomer" thrown into most paragraphs. But he rarely steps over the line, and has never had himself removed. I hope he keeps his cool. Oil-loser iss sport. One would assume (given his constant embarrassment) he is compensated quite well by his handlers, probably an oil company or maybe Walmart, etc. They'll stoop to anything to keep the profits rolling in.

As it is, the the ratio of downside news outweighs the upside news by a wide margin, the good news is that the upside news just proves that we're not in a total collapse situation, but in a long slow decline.

Save a few outliers (mostly oil exporting countries, Germany (still benefiting from reunification) and the China, the Greatest Communist State ever) all the nations are already on a downslope. The Tipping Point will arrive sooner rather than later. This is a death watch.

[dsula]

This is a death watch.

Same as in 2008? Or is it for sure this time?

[dolanbaker]

This is a death watch.

Same as in 2008? Or is it for sure this time?

Just another step-down IMHO, many more to come, each one being ending lower than the previous one.

[pstarr]

This is a death watch.

Same as in 2008? Or is it for sure this time?

Same one. It's not getting any better, if you haven't noticed. Sorry if things aren't playing out more to your liking. You'll have you excitement. trust me

[Daniel_Plainview]

Spanish bail-out 'impossible’, experts warn

A full-blown sovereign bail-out of Spain would be economically and politically impossible and cost up to €650bn (£510bn), an in-depth study has warned.

Leading think-tank Open Europe made the estimate based on the assumption the Spanish government would be forced out of the markets for three years because of its unsustainable borrowing costs, as happened in Greece, Ireland and Portugal.

Between now and mid-2015, Spain has funding needs of €542bn, with its banks requiring up to €100bn on top of this. The Spanish regions possibly require another €20bn, according to the study.

A Greek-style bail-out for Spain would bleed dry the eurozone’s €500bn rescue fund, making an alternative solution essential.

Fears that Spain will need a sovereign bail-out mounted last week after the government’s borrowing costs hit fresh highs and Catalonia followed Murcia and Valencia as a region which may be forced to turn to Madrid for assistance to meet its debt obligations.

“The regions will not make or break Spain financially, but their bail-out requests show how politically difficult it will be for Spain to rein in spending and reform,” said Raoul Ruparel, head of economic research at Open Europe.

“The current bank rescue plan is clearly insufficient, while a full bail-out – which could be in the region of €650bn – is impossible.”

Open Europe said the most likely scenario would involve a loan of around €155bn and more liquidity provision from the European Central Bank in Frankfurt.

“However, even that could, at best, only buy Spain six months to a year,” said Mr Ruparel.

Writing in The Sunday Telegraph, the chairman of Goldman Sachs Asset Management and one of the world’s leading economists, Jim O’Neill, said the power to resolve Spain’s problems rests with Germany and the ECB. “The solution lies beyond Spain and partly in Brussels, but probably much more in Frankfurt and also Berlin,” he said.

Mr O’Neill said that Germany and the central bank must decide whether they want the eurozone to stay as one or break up.

If Germany will not agree to pooling the region’s debt through the creation of eurobonds, perhaps “they should stop the project now”, he argued.

The ECB must be prepared to do more and come up with a vision for the future of the region, he warned.

“The ECB has to start asking itself more searching questions, and soon. How can it be an effective central bank if it can’t influence overall financial conditions in the euro area? The ECB needs to introduce new ideas.”

Mario Draghi, the ECB president, vowed on Thursday to do “whatever it takes” to save the euro. “Believe me, it will be enough,” he added, triggering market expectation of further policy intervention, although some analysts said it was more words without action. ...

[peripato]

Spanish bail-out 'impossible’, experts warn

A full-blown sovereign bail-out of Spain would be economically and politically impossible and cost up to €650bn (£510bn), an in-depth study has warned.

Leading think-tank Open Europe made the estimate based on the assumption the Spanish government would be forced out of the markets for three years because of its unsustainable borrowing costs, as happened in Greece, Ireland and Portugal.

Between now and mid-2015, Spain has funding needs of €542bn, with its banks requiring up to €100bn on top of this. The Spanish regions possibly require another €20bn, according to the study.

A Greek-style bail-out for Spain would bleed dry the eurozone’s €500bn rescue fund, making an alternative solution essential.

Fears that Spain will need a sovereign bail-out mounted last week after the government’s borrowing costs hit fresh highs and Catalonia followed Murcia and Valencia as a region which may be forced to turn to Madrid for assistance to meet its debt obligations.

“The regions will not make or break Spain financially, but their bail-out requests show how politically difficult it will be for Spain to rein in spending and reform,” said Raoul Ruparel, head of economic research at Open Europe.

“The current bank rescue plan is clearly insufficient, while a full bail-out – which could be in the region of €650bn – is impossible.”

Open Europe said the most likely scenario would involve a loan of around €155bn and more liquidity provision from the European Central Bank in Frankfurt.

“However, even that could, at best, only buy Spain six months to a year,” said Mr Ruparel.

Writing in The Sunday Telegraph, the chairman of Goldman Sachs Asset Management and one of the world’s leading economists, Jim O’Neill, said the power to resolve Spain’s problems rests with Germany and the ECB. “The solution lies beyond Spain and partly in Brussels, but probably much more in Frankfurt and also Berlin,” he said.

Mr O’Neill said that Germany and the central bank must decide whether they want the eurozone to stay as one or break up.

If Germany will not agree to pooling the region’s debt through the creation of eurobonds, perhaps “they should stop the project now”, he argued.

The ECB must be prepared to do more and come up with a vision for the future of the region, he warned.

“The ECB has to start asking itself more searching questions, and soon. How can it be an effective central bank if it can’t influence overall financial conditions in the euro area? The ECB needs to introduce new ideas.”

Mario Draghi, the ECB president, vowed on Thursday to do “whatever it takes” to save the euro. “Believe me, it will be enough,” he added, triggering market expectation of further policy intervention, although some analysts said it was more words without action. ...

This doesn't mean that Draghi won't try to bailout everyone exposed to Spanish debt, or that the Bernank won't try and goose the stock market higher, or that the Chinese won't try and keep their malinvestment super spending spree going - since all these economies are circling the drain, despite ginormous efforts at gaming them further. Forthcoming bailout/stimulus/QE announcements will merely confirm what many already know, that the world economy is now well and truly f*cked and beyond redemption, since why would any of this financial bullsh*t be necessary otherwise?

[Revi]

When will the final shoe fall? It seems like they are able to keep Europe together by hinting at these Eurobonds for now. When will it all fall apart? Or will it?

[Plantagenet]

As soon as Spain goes on the EU dole, the bond hawks will focus on the next domino to fall

-----look for Italian interest rates to come under attack again soon.

[peripato]

When will the final shoe fall? It seems like they are able to keep Europe together by hinting at these Eurobonds for now. When will it all fall apart? Or will it?

Sure it will, as the ability for posturing and half-arsed solutions to be effective is drawing to an end. We do not know when that end will be, but it's getting closer and closer. We can see this in the fact that borrowing costs for the PIIGS keep making new and record highs after every fresh bout of panic and crisis.