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the48thronin wrote:neat chart.
common sense... I cannot afford much but a guy making $100 a month can afford less....
OilFinder2 wrote:Heineken wrote:Such data are meaningless, esp. considering the sources. I wonder which "economists" Bloomberg chose to "survey"? Hacks.
A classic case of, "Don't like the message, so blame the messenger."
The data is from the Dept of Commerce, not Bloomberg, in case you weren't aware.
OilFinder2 wrote:On the contrary, there is plenty the Chinese can purchase from the US. Here is a chart showing US exports to China through 2007:
No doubt it went down during the recession, but also no doubt it's picked up this year.
The US makes plenty of plastic parts. If a rise in Chinese prices due to a revaluation of the yuan led to the impracticality of the US importing whatever plastic parts from China we do import from them, they can always build whatever facilities they need to in the US.
In fact, as of last year, "Plastics and Articles Thereof" were the 5th largest US export to China (Table 2).
Fund manager John Hussman (via PragCap), who's been bearish for awhile, says it's now clear that a double-dip is coming.
Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.
A few weeks ago, I noted that our recession warning composite was on the brink of a signal that has always and only occurred during or immediately prior to U.S. recessions, the last signal being the warning I reported in the November 12, 2007 weekly comment Expecting A Recession. While the set of criteria I noted then would still require a decline in the ISM Purchasing Managers Index to 54 or less to complete a recession warning, what prompts my immediate concern is that the growth rate of the ECRI Weekly Leading Index has now declined to -6.9%. The WLI growth rate has historically demonstrated a strong correlation with the ISM Purchasing Managers Index, with the correlation being highest at a lead time of 13 weeks.
Taking the growth rate of the WLI as a single indicator, the only instance when a level of -6.9% was not associated with an actual recession was a single observation in 1988. But as I've long noted, recession evidence is best taken as a syndrome of multiple conditions, including the behavior of the yield curve, credit spreads, stock prices, and employment growth. Given that the WLI growth rate leads the PMI by about 13 weeks, I substituted the WLI growth rate for the PMI criterion in condition 4 of our recession warning composite. As you can see, the results are nearly identical, and not surprisingly, are slightly more timely than using the PMI. The blue line indicates recession warning signals from the composite of indicators, while the red blocks indicate official U.S. recessions as identified by the National Bureau of Economic Research.
Heineken wrote:Why don't you post a chart showing the change in Chinese exports to the US? The trade imbalance is massive.
pstarr wrote:There is little the Chinese need to purchase from us. They do not need our pharmacueticals, F-22's, Ipods etc. They make their own. But we desperately need their extruded plastic parts and have not means of manufacturing this stuff ourselves. We can not labor cheaply enough, nor are we willing to pollute our country for the subassemblies we depend on.
Heineken wrote:We can't possibly compete with Chinese labor without accepting a drastic drop in our living standards---much lower wages, fewer benefits.
Heineken wrote:More expensive Chinese imports will be a double whammy on the consumer and the economy, because it will cause not only inflation but higher interest rates, which is the last thing the US can afford.
As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence.
pstarr wrote:From the NYT:
The Third Depression
By PAUL KRUGMAN
Published: June 27, 2010As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence.
Of course, Krugman proposes more deficit spending etc. to stimulate the economy, assuming future growth will ameliorate the current debt. He is another Infinite-Earth Believer who doesn't understand our energy/ecology/debt/growth conundrum.
DETROIT (AP) - Most automakers have seen their U.S. sales drop from May to June, a sign that this year's slow recovery in the industry may be stalling.
Consumers are delaying big-ticket purchases because they're worried about their jobs in an environment of high unemployment. Analysts predict overall sales for the industry will drop 10 percent or more from May.
Sales of General Motors Co., Ford Motor Co. and Chrysler Group cars and trucks fell between 12 and 13 percent from May. Subaru's sales were also down, but Hyundai Motor Corp. bucked the trend with a slight gain.
Hyundai Motor Corp. reported a 4 percent increase from May and a 35 percent jump from June of last year, helped by sales of its midsize Sonata sedan.
Wednesday, June 30, 2010
Ga. ports booming -- will economy follow?
By Dan Chapman
The Atlanta Journal-Constitution
China’s factories run ‘round-the-clock. Ships laden with containers low-ride the Pacific. Georgia’s ports report record traffic.
Trucks and trains leave the ports filled to the brim. Warehouses and distribution centers add workers. Retailers re-stock inventories -- and hope shoppers will reach for their wallets.
It’s looking like Christmas in July; retailers are getting an early start filling warehouses for the holidays. Georgia’s ports, truckers and rail lines hustle to keep them supplied.
“We just had our sixth consecutive month of double-digit growth and we are on pace for the 2010 calendar year to be a record for us,” said Curtis Foltz, executive director of the Georgia Ports Authority. “I don’t want to claim the recession is over throughout the U.S. But it’s pretty remarkable that we’ve fully recovered the loss of volume at our ports.”
Container traffic at Georgia ports is up 25 percent through the first five months of the year, versus the same period last year, with more than 631,000 of the steel boxes passing through Savannah. May was the sixth busiest month ever.
The trucking industry is finally experiencing a period of growth, as an economic recovery has led to solid freight volumes, tightening capacity and signs of a driver shortage waiting in the wings, said Bob Costello, chief economist of the American Trucking Associations, in the Trucking Economic Review.
"It looks like motor carriers are finally enjoying some better days, after more than two years of extremely tough times," he said.
In the review, the ATA said it has raised its economic forecast for the rest of this year. While gross domestic product grew at a 2.7 percent annualized rate in the first quarter of 2010, the ATA expects GDP growth to top 4 percent this quarter. For the entire year, GDP is expected to grow 3.4 percent, compared to the 2.4 percent drop in 2009.
OilFinder2 wrote:There are plenty of things the Chinese already purchase from us, so it is not unreasonable to believe they could purchase even more given sufficient incentive. Of course we have a large trade deficit with them, but that was beside the point.
OIlFinder2 wrote:There are already companies leaving China because it's becoming too expensive.
Heineken wrote:It's not beside the point. It is a huge point.
Heineken wrote:Also, China's economy is slowing, so the Chinese will turn even more to domestic sources of good and services.
Heineken wrote:OIlFinder2 wrote:There are already companies leaving China because it's becoming too expensive.
Well, if companies are leaving China because it's becoming too expensive there, they certainly aren't going to move here! Ghana, maybe.
Heineken wrote:The US has pretty much abrogated its industrial base. It's gone. We just make specialty products now in certain niches. And, oh yeah, some cars (and only one major US car manufacturer is remotely solvent).
Heineken wrote:The US economy is housing. Housing is the US economy. And housing is hopelessly mired in a quagmire.
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