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Crafty_Dog
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« Reply #950 on: December 03, 2014, 10:40:24 AM »

Nonfarm Productivity Increased at a 2.3% Annual Rate in the Third Quarter To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 12/3/2014

Nonfarm productivity (output per hour) increased at a 2.3% annual rate in the third quarter, revised up from last month’s estimate of 2.0%. Nonfarm productivity is up 1.0% versus last year.
Real (inflation-adjusted) compensation per hour in the nonfarm sector increased at a 0.2% annual rate in Q3 and is up 0.4% versus last year. Unit labor costs declined 1.0% in Q3 but are up 1.2% versus a year ago.
In the manufacturing sector, the Q3 growth rate for productivity (2.9%) was faster than among nonfarm businesses as a whole. The faster pace in productivity growth was due to a slower increase in hours in that sector. Real compensation per hour was up in the manufacturing sector (+0.5%), and unit labor costs declined at a 1.3% annual rate.

Implications: Already signaled by last week's upward revision in the growth rate for Q3 real GDP, today's data show that productivity growth was also revised from a modest 2% annualized growth to a more respectable 2.3%. We say respectable, because productivity has been relatively weak - up just 1% from a year ago following an anemic 0.7% gain the year before. So, while the most recent quarter was in line with history, the past few years have seen productivity improvements noticeably slower than the average gain of 2.3% since 1996. There are three points to make about this. First, there are measurable improvements in productivity. Second, one must remember that productivity is an "aggregate" number - it includes all output, from new-tech, high productivity 3D printing, and, the wasted time spent on filling out complicated tax and regulatory paperwork. In other words, don't blame the private sector for slow growth, blame government. And, third, productivity is probably underestimated in the high-tech arena, especially for services, because we don't know how to account for things like GPS road guidance, for example. Sectors of the economy that are easier to measure show more rapid productivity growth. On the manufacturing side, productivity rose at a 2.9% annual rate in Q3, and is up a more healthy 2.7% from a year ago. Manufacturers, due to new technologies, are still able to increase output faster than hours. Overall, for the rest of the year and into 2015-16, we look for faster productivity growth than in the past two years. In other news this morning, the ADP index, which measures private-sector payrolls, showed a gain of 208,000 in November. Our models now forecast a nonfarm gain of 219,000, with 210,000 in the private sector, although the forecast may change slightly tomorrow based on new data for unemployment claims.
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DougMacG
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« Reply #951 on: December 04, 2014, 11:02:27 AM »

1)  I give due credit to Wesbury and other bulls for calling the good stock market over these times.  (Not for the reasons they give.)

2)   There is such a disconnect between the US economy and the stock market that maybe they are separate topics...

3)   Wesbury gets this right on two important counts:

 "don't blame the private sector for slow growth, blame government"

This is slow growth, and this is government's fault.  Growth could be, should be, 4-5% or more - consistently, under pro-growth policies.

4)  Actual, real growth in per person consumption expenditures is up (only) 1.4% over the past year.  Real GDP growth per person was up only 1.7%.  Source:  stlouisfed.org

This is pathetic and almost unprecedented stagnation for coming out of such a deep hole.


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ccp
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« Reply #952 on: December 06, 2014, 08:53:51 AM »

Someone called into Mark Levin and wondered if the 5 million illegals who are now legal will be added to the unemployment rolls.  Since I believe the vast majority who are not children are working Obama could  claim he "added" a million or two new jobs to the rolls.  That assumes these people will also admit to working. 

The point is the unemployment numbers are all just smoke and mirrors.  And this is one more example to prove it. 
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DougMacG
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« Reply #953 on: December 07, 2014, 12:01:06 PM »

ccp:  "Someone called into Mark Levin and wondered if the 5 million illegals who are now legal will be added to the unemployment rolls.  Since I believe the vast majority who are not children are working Obama could  claim he "added" a million or two new jobs to the rolls.  That assumes these people will also admit to working."

We have illegals working her in numbers greater that all the working class citizens looking for work.  If we wanted to absorb new immigrants at a faster rate, we should combine that wish with policies that enhance the starting and growing of new businesses and jobs, instead of the opposite.


"The point is the unemployment numbers are all just smoke and mirrors.  And this is one more example to prove it. "

Lead story yesterday on our local paper was just how great the employment situation now is.  Twin Cities' unemployment is now back to 3.6%.  No mention that the majority of adults in north Minneapolis are now permanently out of the workforce.

Meanwhile, the number of adults completely out of the workforce in America will hit 100 million by the end of the Obama administration.  More adults have left the workforce than work full time in the private sector, 92M to 86M.

Yes, ccp, we need new ways to measure and talk about employment and unemployment.
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objectivist1
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« Reply #954 on: December 09, 2014, 09:56:45 AM »

Contrary to what all the economic pollyannas are telling us.  Here is the reality.  AS IF anyone who looks around with their own two eyes can't see this for themselves:

http://www.alt-market.com/articles/2428-retail-disaster-holiday-sales-crater-by-11-online-spending-declines

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Crafty_Dog
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« Reply #955 on: December 16, 2014, 08:01:34 AM »

http://www.nytimes.com/2014/12/16/business/economy/economic-recovery-spreads-to-the-middle-class-.html?emc=edit_th_20141216&nl=todaysheadlines&nlid=49641193
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prentice crawford
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« Reply #956 on: December 16, 2014, 11:35:21 PM »

Obama's friends do good. $ http://start.toshiba.com/news/read/category/Business/article/afp-ge_to_distribute_40_bn_to_shareholders_in_20152016-afp GE to distribute $40 bn 2015-16  http://www.thenewamerican.com/usnews/politics/item/9268-obamas-crony-capitalism-and-his-top-2008-donors Obama’s 08 Donors.

                              P.C.
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Crafty_Dog
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« Reply #957 on: January 02, 2015, 12:06:12 PM »

Have We Finally Turned the Corner?
 

The silver lining

As 2014 came to a close, it was all about economic good news. Leading off the parade: In December, the Dow Jones Industrial Average capped off a torrid year of 7.5% growth when it reached 18,000 for the first time. Meanwhile, GDP grew at a 4.6% annual rate in the second quarter and an even faster 5% in the third -- a pace not seen since 2003. And on top of that, Americans saved $14 billion at the gas pump in 2014, and could save even more this year. Things are looking a bit brighter for 2015.
With all that economic good news, experts feel the job market will further strengthen in 2015 so the headline unemployment rate will slide ever closer to 5%. The labor market may remain a little bit soft as the long-term unemployed will be the last to find work, but as a whole it's no wonder the Left is boasting of the “Obama boom.” Even those on the Right are admitting this may end the “Age of Suck.”

This general feeling of economic optimism is reflected in increasing consumer confidence. While some worried about sluggish Black Friday sales as well as slower than expected last-minute shopping at retailers as the Christmas season wound down, online purchasing was strong enough to keep sales right around their predicted growth rate for the 2014 season.

While some try to credit Barack Obama for the rebound, the good news is rooted in two areas the president has tried his best to obstruct.

One is an overall slowdown in government spending growth, which is declining as a percentage of GDP. Congress hasn't done nearly enough to cut spending given its tendency to govern by continuing resolution rather than a set budget -- meaning the Obama spending bonanza of 2009 and 2010 is the new minimum.  But as columnist David Harsanyi puts it, “After [2010], Congress, year by year, became one of the least productive in history. And the more unproductive Washington became, the more the economy began to improve.”

The key date is 2010, when Republicans took over the House. Harsanyi argues gridlock has created part of this improvement, and there's a compelling argument for that point. Imagine what we may have been saddled with had Republicans not taken over the House in 2010: endless government “stimulus” programs, cap and trade, and a faster implementation of ObamaCare for starters -- all leading to a national debt far larger than the already-astronomical one we're facing now.

Another part of the economic rebound stems from lower oil prices, which have plummeted by nearly half in the last six months. That steep drop is now reflected in gas-pump prices, resulting in what Citigroup estimates as an average $1,150 annual boost to consumers. This boom could have been amplified still further if not for Obama's stalling of the Keystone XL pipeline or his refusal to open up federally controlled land to oil exploration. An activist EPA also waits in the wings with the potential for crippling regulations similar to those imposed on the coal industry.

Obama can try his best, but no president has figured out a way to kill the American free enterprise system. Its resilience has brought us out of numerous depressions, panics, recessions and economic slumps over the years as enough people found a way to work through or around the situation.

We will begin to see the effects of a truly divided government, with Republicans now totally in charge of Congress and Obama threatening to veto more legislation. “I haven't used the veto pen very often since I've been in office,” Obama not-so-subtly threatened last month. “Now, I suspect, there are going to be some times where I've got to pull that pen out.”

While the economy is improving -- at least according to the numbers our government releases, if not necessarily everyone's personal situation -- it will be up to those respective sides to make the case why things could be even better if their vision prevails. It's a battle that will be joined as contenders for the 2016 presidential election come onto the scene and spell out their plans to continue the momentum.

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ccp
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« Reply #958 on: January 02, 2015, 04:42:55 PM »

 “I haven't used the veto pen very often since I've been in office,” Obama not-so-subtly threatened last month. “Now, I suspect, there are going to be some times where I've got to pull that pen out.”

Yeah Harry Reid did his dirty work.

"Citigroup estimates as an average $1,150 annual boost to consumers"

The Democrats response of course is this is the perfect time to increase gas taxes.  Even heard some phoney Republicans make this case.  I think Ben Stein was one of them. 

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Crafty_Dog
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« Reply #959 on: January 26, 2015, 12:45:02 PM »

Monday Morning Outlook
________________________________________
GDP, Strong Again To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 1/26/2015

With all the focus on Europe in general and Greece in particular, it’s important to keep in mind that the US economy continues to move forward. After real GDP dropped in the first quarter of last year, some analysts were predicting another recession. By contrast, we said the drop was due to unusually harsh winter weather and the economy would rebound quickly.
And rebound it did. Real GDP grew at a 4.6% annual rate in the second quarter and a 5% rate in the third. On Friday, the government will report its initial estimate for real GDP growth in Q4 and we think the economy grew at a 3.3% annual rate. If we’re right, real GDP was up a Plow Horse 2.6% in 2014, slightly faster than the 2.3% pace the economy has averaged since the recovery started in 2009.
For 2015, we’re forecasting 2.7%. Some analysts are lifting their forecasts based on plummeting oil prices and Europe’s quantitative easing, while some might mark them down due to Greece. But these are all sideshows.
Lower oil prices may push up non-oil spending, but oil production will now expand more slowly. QE in Europe is not going to help boost growth; it’ll just stuff European banks with as many useless excess reserves as US banks hold already. And our exports to Greece are less than 0.01% of US GDP.
Instead, investors need to focus on the fundamentals that drive the economy, which haven’t changed. Monetary policy remains loose, tax rates are not going up (regardless of what President Obama said in his State of the Union address), and entrepreneurs are still innovating.
Below is our “add-em-up” forecast for Q4 real GDP.
Consumption: Auto sales increased at a 0.5% annual rate in Q4 while “real” (inflation-adjusted) retail sales outside the auto sector were up at a tepid 1.8% rate. But services make up about 2/3 of personal consumption and those were up at about a 4.5% rate. So it looks like real personal consumption of goods and services combined, grew at a 3.8% annual rate in Q4, contributing 2.6 points to the real GDP growth rate (3.8 times the consumption share of GDP, which is 68%, equals 2.6).
Business Investment: Business equipment investment and commercial construction were both unchanged in Q4. Factoring in R&D suggests overall business investment grew at a 0.8% rate, which should add 0.1 point to the real GDP growth rate (0.8 times the 13% business investment share of GDP equals 0.1).
Home Building: A 9% annualized gain in home building in Q4 will add about 0.3 points to real GDP (9 times the home building share of GDP, which is 3%, equals 0.3).
Government: Public construction projects continued to increase in Q4 while military spending picked up as well. As a result, it looks like real government purchases grew at a 1.1% annual rate in Q4, which should add 0.2 percentage points to real GDP growth (1.1 times the government purchase share of GDP, which is 18%, equals 0.2).
Trade: At this point, the government only has trade data through November, but the data so far suggest the “real” trade deficit in goods has gotten a little smaller. As a result, we’re forecasting that net exports add 0.1 point to the real GDP growth rate.
Inventories: After a weather-related lull in Q1, companies built inventories at a very rapid pace in Q2. Since, then that pace has neither slowed nor sped up further, meaning inventories are a net zero for GDP, neither adding nor subtracting.
The US government has expanded way too much in the past decade or so, which is why we have a Plow Horse economy rather than a Race Horse economy. But, even in this environment, the private sector still has room to grow. Not just in Q4, but in 2015 and likely beyond.
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objectivist1
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« Reply #960 on: January 29, 2015, 07:00:45 AM »

It's time if you haven't already - to make sure you have food supplies, water, firearms, and GOLD & SILVER.  Paper investments will be worth next-to-nothing.  IGNORE AT YOUR PERIL - Please read the article below carefully and take it seriously.  There is not much time left. If you don't have at least 50% of your liquid assets in gold and silver - you will be very sorry later this year.  Don't be foolish - it's easy to stay in denial and tell yourself this is nothing more than alarmism:


Failing Stimulus And The IMF's New 'Multilateral' World Order

Tuesday, 27 January 2015 05:24   Brandon Smith

My theme for 2015 has been the assertion that this will be a year of shattered illusions; social, political, as well as economic. As I have noted in recent articles, 2014 set the stage for multiple engineered conflicts, including the false conflict between Eastern and Western financial and political powers, as well as the growing conflict between OPEC nations, shale producers, as well as conflicting notions on the security of the dollar's petro-status and the security and stability of the European Union.
Since the derivatives and credit crisis of 2008, central banks have claimed their efforts revolve around intervention against the snowball effect of classical deflationary market trends. The REAL purpose of central bank stimulus actions, however, has been to create an illusory global financial environment in which traditional economic fundamentals are either ignored, or no longer reflect the concrete truths they are meant to convey. That is to say, the international banking cult has NO INTEREST whatsoever in saving the current system, despite the assumptions of many market analysts. They know full well that fiat printing, bond buying, and even manipulation of stocks will not change the nature of the underlying crisis.

Their only goal has been to stave off the visible effects of the crisis until a new system is ready (psychologically justified in the public consciousness) to be put into place. I wrote extensively about the admitted plan for a disastrous “economic reset” benefiting only the global elites in my article 'The Economic End Game Explained'.

We are beginning to see the holes in the veil placed over the eyes of the general populace, most notably in the EU, where the elites are now implementing what I believe to be the final stages of the disruption of European markets.

The prevailing illusion concerning the EU is that it is a “model” for the future the globalists wish to create, and therefore, the assumption is that they would never deliberately allow the transnational union to fail. Unfortunately, people who make this argument do not seem to realize that the EU is NOT a model for the New World Order, it is in fact a mere stepping stone.

The rising propaganda argument voiced by elites in the International Monetary Fund and the Bank For International Settlements, not to mention the ECB, is not that Europe's troubles stem from its ludicrous surrender to a faceless bureaucratic machine. Rather, the argument from the globalists is that Europe is failing because it is not “centralized enough”. Mario Draghi, head of the ECB and member of the board of directors of the BIS, tried to sell the idea that centralization solves everything in an editorial written at the beginning of this year.

“Ultimately, economic convergence among countries cannot be only an entry criterion for monetary union, or a condition that is met some of the time. It has to be a condition that is fulfilled all of the time. And for this reason, to complete monetary union we will ultimately have to deepen our political union further: to lay down its rights and obligations in a renewed institutional order.”

Make no mistake, the rhetoric that will be used by Fabian influenced media pundits and mainstream economic snake-oil salesmen in the coming months will say that the solution to EU instability as well as global instability is a single global governing body over the fiscal life of all nations and peoples. The argument will be that the economic crisis persists because we continue to cling to the “barbaric relic” of national sovereignty.

In the meantime, internationalists are protecting the legitimacy of stimulus actions and banker led policy by diverting attention away from the failure of the central planning methodology.

Mario Draghi has recently announced the institution of Europe's own QE bond buying program, only months after Japan initiated yet another stimulus measure of its own, and only months after the Federal Reserve ended QE with the finale of the taper.

I would point out that essentially the moment the Fed finalized the taper of QE in the U.S., we immediately began to see a return of stock volatility, as well as the current plunge in oil prices. I think it should now be crystal clear to everyone where stimulus money was really going, as well as what assumptions oblivious daytraders were operating on.

The common claim today is that the QE of Japan and now the ECB are meant to take up the slack left behind in the manipulation of markets by the Fed. I disagree. As I have been saying since the announcement of the taper, stimulus measures have a shelf life, and central banks are not capable of propping up markets for much longer, even if that is their intention (which it is not). Why? Because even though market fundamentals have been obscured by a fog of manipulation, they unquestionably still apply. Real supply and demand will ALWAYS matter – they are like gravity, and we are forced to deal with them eventually.

Beyond available supply, all trade ultimately depend on two things - savings and demand. Without these two things, the economy will inevitably collapse. Central bank stimulus does not generate jobs, it does not generate available credit, it does not generate higher wages, nor does it generate ample savings. Thus, the economic crisis continues unabated and even stock markets are beginning to waver.

As demand collapses due to a lack of strong jobs and savings, it pulls down on the central bank fiat fueled rocket ship like an increase in gravity. The rocket (in this case equities markets and government debt) hits a point of terminal altitude. The banks are forced to pour in even more fiat fuel just to keep the vessel from crashing back to Earth. No matter how much fuel they create, the gravity of crashing demand increases equally in the opposite direction. In the end, the rocket will tumble and disintegrate in a spectacular explosion, filled to capacity with fuel but unable to go anywhere.

Oil markets have expressed this reality in relentless fashion the past few months. Real demand growth in oil has been stagnant for years, yet, because of stimulus, because of the real devaluation of the dollar, and because of market exuberance, prices were unrealistically high in comparison. The crash of oil is a startling sign that the exuberance is over, and something else is taking shape...

The disconnect within banker propaganda could be best summarized by Mario Draghi's recent statements on the ECB's new stimulus measures. When asked if he was concerned about the possibility of European QE triggering currency devaluation and hyperinflation, Draghi had this to say:

“I think the best way to answer to this is have we seen lots of inflation since the QE program started? Have we seen that? And now it's quite a few years that we started. You know, our experience since we have these press conferences goes back to a little more than three years. In these 3 years we've lowered interest rates, I don't know how many times, 4 or 5 times, 6 times maybe. And each times someone was saying, this is going to be terrible expansionary, there will be inflation. Some people voted against lowering interest rates way back at the end of November 2013. We did OMP. We did the LTROs. We did TLTROs. And somehow this runaway inflation hasn't come yet.

So the jury is still out, but there must be a statute of limitations. Also for the people who say that there would be inflation, yes When please. Tell me, within what?”

Firstly, if you are using “official” CPI numbers in the U.S. to gauge whether or not there has been inflation, then yes, Draghi's claim appears sound. However, if you use the traditional method (pre-1990's) to calculate CPI rather than the new and incomplete method, inflation over the past few years has stood at around 8%-10%, and most essential goods including most food items have risen in price by 30% or more, far above the official 0%-1% numbers presented by the Bureau of Labor Statistics.

But beyond real inflation numbers I find a very humorous truth within Draghi's rather disingenuous statement; yes, QE has not yet produced hyperinflation in the U.S. (primarily because the untold trillions in fiat created still sit idle in the coffers of international banks rather than circulating freely), however, what HAS stimulus actually accomplished if not inflation? Certainly not any semblance of economic recovery.

Look at it this way; I could also claim that if international bankers lined up on a stage at Davos and danced the funky-chicken, hyperinflation would probably not result. But what is the point of dancing the funky chicken, and really, what is the point of QE? Stimulus clearly has about as much positive effect on the economy as jerking around rhythmically in tight polypropylene disco pants.

Japan and the ECB are in fact launching sizable stimulus measures exactly because the QE of the Federal Reserve achieved ABSOLUTELY NOTHING except the purchase of 5-6 years without total collapse (only gradual collapse). And what is the real cost/benefit ratio of that purchase of half a decade of fiscal purgatory? When the breakdown of debt and forex markets does occur, it will be a hundred times worse than if the Fed had done nothing at all. Which brings me to our current state of affairs in 2015, and the IMF plan to take advantage...

IMF head Christine Lagarde put out a press release this past week, one which was probably drafted for her by a team of ghouls at the BIS, mentioning the formation of what she called the “New Multilateralism”.

Lagarde begins with the same old song about accommodative monetary policy:

“Besides structural reforms, building new momentum will require pulling all possible levers that can support global demand. Accommodative monetary policy will remain essential for as long as growth remains anemic – though we must pay careful attention to potential spillovers. Fiscal policy should be focused on promoting growth and creating jobs, while maintaining medium-term credibility.”

Of course, as we have already established, monetary policy does nothing to inspire demand. So, what is a global syndicate of bankers to do? Promote maximum interdependency! Lagarde laments the impediments of the sovereign attitude:

“No economy is an island; indeed, the global economy is more integrated than ever before. Consider this: Fifty years ago, emerging markets and developing economies accounted for about a quarter of world GDP. Today, they generate half of global income, a share that will continue to rise.

But sovereign states are no longer the only actors on the scene. A global network of new stakeholders has emerged, including NGOs and citizen activists – often empowered by social media. This new reality demands a new response. We will need to update, adapt, and deepen our methods of working together.”

And here we have a more subtle insinuation of the planning and programming I have been warning about for years. Because national sovereignty is no longer “practical” in an economically interdependent world (a world forced into economic interdependency by the globalists themselves), we must now change our way of thinking to support a more globalist framework.

The first big lie is that interdependency is a natural economic state. Historically, economies are more likely to survive and thrive the LESS dependent they are on outside factors. Independent, self contained, self sustaining, decentralized economies are the natural and preferable cultural path. Multilateralism (centralization) is completely contrary and destructive to this natural state, as we have already witnessed in the kind of panic which ensues across the globe when even one small nation, like Switzerland, decides to break from the accepted pattern of interdependency.

Also, take note of Lagarde's reference to the growing role that developing nations (BRICS) are playing in this interdependent globalized mish-mash. As I have been warning, the IMF and the international banks fully intend to bring the BRICS further into the fold of the “new multilateralism”, and the supposed conflict between the East and the West is a ridiculous farce designed only as theater for the masses.

Lagarde reiterates the IMF push for inclusion of the BRICS (new networks of influence) into the new system, as well as the IMF's role as the arbiter of global governance:

“This can be done by building on effective institutions of cooperation that already exist. Institutions like the IMF should be made even more representative in light of the dynamic shifts taking place in the global economy. The new networks of influence should be embraced and given space in the twenty-first century architecture of global governance. This is what I have called the “new multilateralism.” I believe it is the only way to address the challenges that the global community faces.”

The IMF head finishes with my favorite line, one which should tell you all you need to know about what is about to happen in 2015. I have for some time been following the progress (or lack of progress) in the IMF reforms presented in 2010; reforms which the U.S. Congress has refused to pass. Why? I believe the reforms remain dormant because the U.S. is MEANT to lose its veto powers within the IMF, and the IMF has already made clear that lack of passage will result in just that.

“Against this backdrop, the adoption of the IMF reforms by the United States Congress would send a long-overdue signal to rapidly growing emerging economies that the world counts on their voices, and their resources, to find global solutions to global problems.

Growth, trade, development, and climate change: 2015 will be a rendezvous of important multilateral initiatives. We cannot afford to see them fail. Let us make the right choices.”

Why remove U.S. veto power? Because BRICS nations like China are about to be given far more inclusion in the IMF's multilateralist order. In fact, 2015 is the year in which the IMF's Special Drawing Rights conference is set to commence, with initial discussions in May, and international meetings in October. I believe U.S. veto power will probably be removed by May, making the way clear (creating the rationale) for the marginalization of the U.S. dollar in favor of the SDR basket currency system, soon to be boosted by China's induction.

In 2015 what we really have is a sprint towards currency and market devaluation across the spectrum. India, Japan, Russia, Europe, parts of South America, have all been debased monetarily. The U.S. has as well, most Americans just don't know it yet. The value of this for globalists is far reaching. They have at a basic level created an atmosphere of lowered economic expectations – a global reduction in living standards which will at bottom lead to third world status for everyone. The elites hope that this will be enough to condition the public to support centralized financial control as the only option for survival.

It is hard to say what kind of Black Swans and false flags will be conjured in the meantime, but I highly doubt the shift towards the SDR will take place without considerable geopolitical turmoil. The public will require some sizable scapegoats for the kind of pain they will feel as the banks attempt to place the global economy in a totalitarian choke hold. While certain institutions may be held up as sacrificial lambs (including possibly the Federal Reserve itself), the concept of banker governance will be promoted as the best and only solution, despite the undeniable reality that the world would be a far better place if such men and their structures of influence were to be wiped off the face of the planet entirely.
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"You have enemies?  Good.  That means that you have stood up for something, sometime in your life." - Winston Churchill.
DougMacG
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« Reply #961 on: January 29, 2015, 12:19:46 PM »

Objectivist:  "It's time if you haven't already - to make sure you have food supplies, water, firearms, and GOLD & SILVER.  Paper investments will be worth next-to-nothing.  IGNORE AT YOUR PERIL - Please read the article below carefully and take it seriously.  There is not much time left. If you don't have at least 50% of your liquid assets in gold and silver - you will be very sorry later this year.  Don't be foolish - it's easy to stay in denial and tell yourself this is nothing more than alarmism:"


Our side tends to be wrong on severity and especially timing of these things.  Like oil prices, the US economy as a whole is a bit of a futures market.  The last time the economy tanked corresponded exactly with when it became clear that America would be run by one, far-left party for the foreseeable future.  The changing of the House in 2010 offset that some damage.  Gridlock is better than lunging to the left.  The changing of the Senate now has offset that a little more.  The prospect that Hillary will either govern more centrist or better yet lose is encouraging.  The US economy is enormous and has absorbed at least some this political and governmental damage.  We have at least a 50-50 shot at turning this ship around in the two years.  I believe we survived the worst and people are ready to connect to a message better than give up and let your bankrupt government support you.  There is also positive movement around the globe for this message.  Sweden has rolled back a part of the biggest entitlement state on the planet.  Australia and Canada have turned for the better.  France rolled back its worst tax and is starting to understand security threats we all face.  America is one leader and one election away from moving back in the direction of freedom, IMHO.

That said, I am 100% invested in hard assets (real estate) and zero in dollar-based paper.  I wouldn't either buy equities or bet against them right now.  I survived the worst R.E. collapse in memory.  If there is any rule of law left after the next meltdown, I will charge my rents in gold, silver, copper, barter or whatever people are exchanging for value.  
« Last Edit: January 29, 2015, 12:24:19 PM by DougMacG » Logged
Crafty_Dog
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« Reply #962 on: January 29, 2015, 01:04:15 PM »

Also, US is now or about to be the world's largest energy producer.
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G M
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« Reply #963 on: January 29, 2015, 03:39:37 PM »

Also, US is now or about to be the world's largest energy producer.

The massive layoffs in the energy sector tend to show otherwise.
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DougMacG
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« Reply #964 on: January 29, 2015, 04:40:36 PM »

Also, US is now or about to be the world's largest energy producer.

The massive layoffs in the energy sector tend to show otherwise.

The forecast for gas prices is to stay down and the forecast for production is up.  Sounds like a win both ways. http://www.eia.gov/forecasts/steo/report/us_oil.cfm 

The expansion of drilling may be stopped by low oil prices, but I doubt they will close existing operations.
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« Reply #965 on: February 02, 2015, 10:12:41 PM »

What did we have there, one good quarter in a row?

Q4 GDP Advance Estimate at 2.6% Disappoints Expectations
http://www.financialsense.com/contributors/doug-short/q4-gdp-advance-estimate-disappoints-expectations

Growth is back below average, median and 'breakeven' growth, as it should be expected with this policy mix.  Maybe Wesbury will see it in a more positive light...
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« Reply #966 on: February 02, 2015, 10:31:54 PM »

Actually he says it remains the plow horse that has been his hypothesis all along.
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« Reply #967 on: February 03, 2015, 06:46:31 AM »

Actually he says it remains the plow horse that has been his hypothesis all along.

That is a more accurate characterization than other reporting implying we are in an expansion fueled by the success of big government.  We have a positive income and wealth effect coming from gas costing as low as $1.72 yesterday in the heartland, half of what it used to cost and 1/4th of the administration's target.  Also an employment bump helped by unemployment benefits running out.

Meanwhile I see friends running medium sized businesses, playing defense instead of offense in a global economy, trying to work around paying the highest corporate income tax in the world not to mention our ever-expanding regulatory burden.

With these policies, why should the economy grow any faster?
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« Reply #968 on: February 06, 2015, 07:30:10 AM »

"Don't worry be happy!"  rolleyes

http://news.yahoo.com/video/world-debt-not-just-greece-163213118.html#/world-debt-not-just-greece-163213118.html
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« Reply #969 on: February 13, 2015, 05:23:12 PM »

http://www.ftportfolios.com/Commentary/EconomicResearch/2015/2/13/apocalypse-not-a-chance
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« Reply #970 on: February 15, 2015, 08:31:56 AM »


http://humanevents.com/2008/02/25/brian-wesbury-sees-no-recession-ahead/
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« Reply #971 on: February 15, 2015, 10:03:39 AM »

 grin
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« Reply #972 on: February 27, 2015, 12:43:25 AM »

http://www.youngresearch.com/researchandanalysis/real-estate-researchandanalysis/bullish-economic-indicator-nobody-talking/
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« Reply #973 on: February 27, 2015, 11:32:08 AM »

As family size drops below 1 we will need more and more housing?
« Last Edit: February 27, 2015, 11:35:15 AM by DougMacG » Logged
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« Reply #974 on: March 05, 2015, 09:01:48 AM »

The Morning Ledger: U.S. Capital Spending Set to Grow


James Willhite
The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send us tips, suggestions and complaints: james.willhite@wsj.com. Get The Morning Ledger emailed to you each weekday morning by clicking http://on.wsj.com/TheMorningLedgerSignup. Follow us on Twitter @CFOJournal.
Good morning. Big U.S. businesses are anticipating that the economy will continue to grow for some time, and many of them are finally putting their money where their mouth is, the WSJ’s Theo Francis reports. Large companies across the U.S. are gearing up to improve tactical radio systems, expand distribution centers, produce more crackers and refurbish hotel rooms—all signs of increased business investment that could give another boost to the strengthening economy.
Aging business models and equipment are running into limits on their growth, but the new confidence has many of them taking the plunge with significant capital investments. All told, capital investment rose 15% in the fourth quarter to a five-year high of $166 billion, the third-fastest rise since early 2010.
“In terms of all the fundamentals, it looks pretty good still, so why wait?” said Gee Lingberg, a vice president at Host Hotels & Resorts Inc. With occupancy at 14-year highs, Host Hotels is more than doubling its spending on major projects, to as much as $260 million in 2015 from $112 million last year. “Now that the economy is getting stronger, even with a slight uptick in supply, demand should be able to exceed that.”
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« Reply #975 on: March 06, 2015, 08:40:02 PM »



http://www.ftportfolios.com/Commentary/EconomicResearch/2015/3/6/strong-jobs,-foolish-stocks
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« Reply #976 on: April 08, 2015, 01:13:39 PM »

Someday it will turn out that the bears that were wrong all this time will eventually be right. 
http://www.marketwatch.com/story/6-reasons-to-sell-stocks-now-and-go-to-cash-2015-04-06
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« Reply #977 on: April 11, 2015, 11:43:05 AM »

Posted: 10 Apr 2015 05:30 PM PDT

 

As the chart above shows, Commercial & Industrial Loans outstanding at U.S. banks grew at a 19% annualized pace in the first three months of this year. These loans are mostly to small and medium-sized businesses that are not able to access the capital markets directly. It's good news not because more loans mean more spending and/or more economic activity (lending doesn't create growth, but it can facilitate growth by distributing capital to people and businesses can make productive use of the money). It's good news because it reflects a significant increase in confidence on the part of banks and businesses. Confidence has been in short supply for most of the current recovery, as can be seen by the tepid growth of business investment and the disappointingly slow growth of the economy. That looks to be changing for the better now.

Banks have had the ability to increase their lending virtually without limit ever since the Fed began its Quantitative Easing program in late 2008. However, lending didn't really pick up until the beginning of last year, right around the time the Fed announced the tapering and eventual end of QE. Things have changed dramatically since then. With rising confidence comes a reduced demand for money (i.e., money in the form of cash and cash equivalents like bank reserves, which exceed required reserves by about $2.5 trillion), and this validates the Fed's decision to stop growing its balance sheet. On the margin, banks are becoming less and less willing to sit on trillions of excess reserves; they'd rather lend money to the private sector than to the Fed, and they are beginning to do that in spades.

With lending activity booming, this is no time to be pessimistic about the economy's prospects.
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« Reply #978 on: April 13, 2015, 12:16:15 PM »

Cyber Security seems like a good sector.  People whom I respect are mentioning FireEye.

https://www.securityweek.com/fireeye-uncovers-decade-long-cyber-espionage-campaign-targeting-south-east-asia
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« Reply #979 on: April 29, 2015, 11:13:22 AM »

Was winter during global warming unexpectedly cold again?

I wonder if 0.2% growth is still considered plowhorse pace.  You aren't going to plow much land this way.  Fingernails grow faster.

Latest from Wesbury that I see:  Where's the Hyper-Inflation?
http://www.ftportfolios.com/retail/blogs/economics/index.aspx

Why would we see hyper-inflation in a stalled economy?

The experts tell us we can make no change to policies and just hope for things to improve - to get back to the near zero growth of last year.
http://www.nytimes.com/2015/04/30/upshot/how-to-make-sense-of-weak-economic-growth-in-2015.html?_r=0&abt=0002&abg=0

Good grief.
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ccp
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« Reply #980 on: April 29, 2015, 12:10:16 PM »

People whom I respect are mentioning FireEye.

One of the Cabot newsletters recommended them about a year ago.  Supposedly they have some leading edge (for now) security system.  I never bought.  It crashed and Cabot finally said to cash out and take the losses.  I think it has recovered some.   I think one of the other email companies (Fool or other?) may be recommending it again.

Story stock.  Sounds good.  Could be big.   Could be a dead end.   
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« Reply #981 on: April 30, 2015, 12:11:38 PM »

Personal Income was Unchanged in March To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 4/30/2015

Personal income was unchanged in March, coming in below the consensus expected gain of 0.2%. Personal consumption rose 0.4% in March versus a consensus expected 0.5%. Personal income is up 3.8% in the past year, while spending is up 3.0%.

Disposable personal income (income after taxes) was unchanged in March, but is up 3.6% from a year ago. Gains in private-sector wages & salaries, government benefits, and nonfarm small-business income were offset by lower dividends, farm income and interest income.

The overall PCE deflator (consumer prices) increased 0.2% in March and is up 0.3% versus a year ago. The “core” PCE deflator, which excludes food and energy, rose 0.1% in March and is up 1.3% in the past year.
After adjusting for inflation, “real” consumption increased 0.3% in March and is up 2.7% from a year ago.
Implications: Hold off on personal income and spending for a moment. The biggest news this morning was that new claims for jobless benefits fell 34,000 last week to 262,000. Continuing claims dropped 74,000 to 2.25 million. Both initial and continuing claims are now the lowest since 2000. Plugging these figures into our models suggests nonfarm payrolls rose about 280,000 in April, well above the current consensus estimate of 220,000. This is consistent with our view that the economy is rebounding quickly from the lull in Q1 and the Federal Reserve will have the justification it needs to start lifting short-term rates in June. Some analysts may be dismayed by today’s headline of no change in personal income, but this was mostly the result of a drop in dividend and interest income after a spike upward in February. The underlying trend remains positive, with overall personal income up 3.8% in the past year and private wages & salaries up a more robust 4.3%. This trend in income is why consumer spending can keep rising as well, which it did by 0.4% in March. Expect more gains in the months ahead, powered by income gains as well as savings from lower energy prices. In the meantime, lower energy prices helped hold down commercial construction in Q1. Detailed numbers on that sector arrived this morning and showed that 70% of the large drop in commercial construction in Q1 was due to less exploration and drilling for oil and natural gas. In other news this morning, the Employment Cost Index, a useful measure of worker earnings, increased 0.7% in Q1 and is up 2.6% in the past year, the largest gain since 2008. This kind of wage acceleration boosts the case that the Federal Reserve has room to start raising rates. On the housing front, pending home sales, which are contracts on existing homes, increased 1.1% in March, suggesting existing home sales, which are counted at closing, will rise again in April. On the manufacturing front, the Chicago PMI, a measure of factory sentiment in that key region came in at 52.3, above the consensus forecasted 50.0. As a result, we are forecasting that the national ISM index will come in at 52.2, a respectable gain from 51.5 in March.
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« Reply #982 on: April 30, 2015, 05:42:25 PM »

http://www.youngresearch.com/researchandanalysis/stocks-researchandanalysis/raging-bull-in-china-has-shaky-foundation/?awt_l=PWy8k&awt_m=3YtE7yMQqvzlu1V
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« Reply #983 on: May 08, 2015, 04:29:15 PM »

There IS NO RECOVERY HAPPENING, despite what the talking heads in the media - Wesbury being a rather egregious example - will tell you:

www.zerohedge.com/news/2015-05-08/americans-not-labor-force-rise-record-93194000

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« Reply #984 on: May 08, 2015, 07:07:14 PM »

There IS NO RECOVERY HAPPENING, despite what the talking heads in the media - Wesbury being a rather egregious example - will tell you:
www.zerohedge.com/news/2015-05-08/americans-not-labor-force-rise-record-93194000

With a little rounding that is 100 million ADULTS not in the workforce by the end of the Obama Presidency.  They don't even count as unemployed!  We need another way of measuring what used to be called the unemployment rate.

I heard Wesbury say that total growth is over 3%.  He clarified that total growth is inflation plus real growth.  Really?  Now we're combining those to make it sound like something is going on?

He also said that plowhorse is the combined growth of the race horse segments, Uber is all I can think of, and what he called the rest - the "dead horse" economy.  He got that part right.
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« Reply #985 on: May 29, 2015, 11:10:20 AM »

Real GDP was Revised to a -0.7% Annual Rate in Q1 To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 5/29/2015

Real GDP was revised to a -0.7% annual rate in Q1 from a prior estimate of +0.2%. The consensus expected -0.9%.

The largest downward revisions were for net exports and inventories. Business investment in equipment and home building were revised higher.

The largest positive contribution to the real GDP growth rate in Q1 was personal consumption. The weakest component, by far, was net exports.

The GDP price index was unrevised at a -0.1% annual rate. Nominal GDP growth – real GDP plus inflation – was revised down to a -0.9% annual rate from a prior estimate of 0.1%.

Implications: Look out for the Pouting Pundits of Pessimism calling for a recession. Today’s GDP report showed contraction, but the report is for Q1, the last days of which ended two months ago, so it’s a “rearview mirror” picture of the economy and very likely a distorted one. Real GDP growth was revised down to a -0.7% annual rate from an original estimate of +0.2%. But as we have always argued, there were three main temporary culprits behind the Q1 weakness: plummeting energy prices, bad weather, and West Coast port strikes – all of which have dissipated. Also, part of the downward revision was due to lower inventories, which leaves more room for growth in future quarters. There also seems to be a fourth factor that held down growth in Q1 and it has nothing to do with actual output, but how the government seasonally adjusts the data. A study from the Federal Reserve shows that the government hasn’t been adjusting the data correctly based on the time of year. In turn, the wrong adjustments have meant growth looks artificially low in the first quarter, and artificially high in other quarters. The average for the year is the same, but it should be spread out more evenly than the government data now show. Luckily, the government is aware of the problem and will release new seasonal adjustment methods for GDP in late July. This puts the Fed in an interesting place. If the data are really better than what the government now says, and if the economic data continue to show a pick-up in activity, a June rate hike does not seem like much of a stretch. Today’s report also provided the first glimpse at overall corporate profits, and just like GDP, the headline was ugly. Corporate profits fell 5.9% in Q1, but the drop in both real GDP and profits resembles what happened in the first quarter of last year, after which profits rebounded sharply. Keep in mind that despite the drop in Q1, corporate profits are still up 3.7% from a year ago. In other news yesterday, pending home sales (contracts on existing homes) increased 3.4% in April, hitting a nine-year high. This report suggests existing home sales, which are counted at closing, will show a solid gain in May. Also yesterday, initial claims increased 7,000 last week to 282,000 and continuing claims increased 11,000 to 2.22 million. Plugging these figures into our payroll models suggests a nonfarm gain of 234,000 in May. (The forecast will change as we get more data in the next week on claims, the ADP index, and consumer spending.)
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objectivist1
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« Reply #986 on: May 29, 2015, 01:41:59 PM »

Of course he doesn't.  He's a paid hack for those who wish to promote the illusion that this economy is growing.  As I've stated here ad nausem, anyone with a room-temperature IQ (let alone one of 130+, which I believe more than a few of our members would test at) can see by simple observation that the economy is NOT growing, and hasn't been for the duration of this Presidency.  Observe, once again, that there are 93 MILLION able-bodied Americans of working age NOT EVEN LOOKING FOR A JOB.  They are not counted in these patently fraudulent unemployment statistics the government is promulgating, and suggesting that they are somehow directly comparable to unemployment rate statistics issued many decades ago.  This is an obscene joke.  Work-force participation rate is at its lowest level since 1978.  Hillary Clinton, for God's sake - is saying that she has been "shocked" to discover recently that small business creation has "stalled out" under this administration.

The "real" unemployment rate, I submit - along with many other traditional/conservative economists - is currently hovering at or above 15%.  The reason this doesn't manifest itself as obviously as the soup lines of the 1930s is because all of these non-working people are still eating, they are still driving their cars, they are still watching their cable television, still using their smart phones - ALL ON THE BACKS OF THE INCREASINGLY FEW OF US WHO ARE ACTUALLY WORKING, and fiat money created out of thin air, i.e., printed by the Treasury.  Fueled, I might add, by MASSIVE multi-trillion-dollar debt.

CLEARLY, this is unsustainable, and it is only a matter of time before the economic collapse happens.  Of course when it does, the likes of Wesbury, et. al. won't give a damn, because (assuming they don't believe their own b.s.) they will have placed the vast majority of their personal wealth into hard assets - not those such as stocks - which are dollar-denominated - as they tiresomely continue to urge everyone else to do.  It is staggering to watch as otherwise intelligent people fall victim to this sophistry.  I suppose there is no limit to the capacity for human reality-denial when it comes to ugly truths, no matter how obvious those truths happen to be.  

« Last Edit: May 30, 2015, 03:25:50 AM by objectivist1 » Logged

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« Reply #987 on: May 30, 2015, 12:44:36 PM »

http://scottgrannis.blogspot.com/

This is not to say that we are wrong, but we are speaking as prophets, and Wesbury is speaking to profit.   With regard to the stock market (whidh is one of the subjects of his thread) he has done spectacularly better than any of us for the past six years.
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objectivist1
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« Reply #988 on: May 30, 2015, 04:01:11 PM »

Crafty:

I wouldn't want to go up against you in a physical fight (God help me - I want you on MY side!)  BUT - I don't think I would swap places with you financially either - if these are the prognosticators you are listening to smiley
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« Reply #989 on: May 30, 2015, 04:10:00 PM »

 cheesy cheesy

You're right, you don't want to trade places with my finances-- which would be A LOT better if I had listened to Wesbury and Grannis (the one time I actually acted on Scott's advice I made 90% on TIP bonds in about 18 months) than what I actually did; I listened to us here and held back from reinvesting for FAR too long.
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« Reply #990 on: May 30, 2015, 04:26:39 PM »

http://scottgrannis.blogspot.com/

This is not to say that we are wrong, but we are speaking as prophets, and Wesbury is speaking to profit.   With regard to the stock market (whidh is one of the subjects of his thread) he has done spectacularly better than any of us for the past six years.

I agree with Obj in large part, but what Crafty says about past stock market performance is true too.  The "markets" are way up over a long period - using the rear view mirror and skipping all downturns which seem so far behind us now.  But the rear view mirror does not tell us much about what is in front of us now.

Wesbury knows that half or more of this economy has been under-performing this whole time.  And he mixes his analysis between markets and the US economy, as we do.  He is on our side of the political fence, but with a positive bias on the markets.  Scott Grannis has roughly the same views without the bias of writing for an equities firm.

When we saw 00.002 growth in the 1st quarter, one could only guess this will no doubt be adjusted downward.  Now there is perhaps a 50% chance we are already 5 months into a recession that no one is reporting on - hence some of the frustration. 

The negative bias on our side comes from the fact that we know these policies don't work.  The only question is how resilient is the productive spirit in the remaining sectors of the private American economy to withstand these negative forces.  Where we should have had 5-6% growth coming out of a collapse, we had 2%.  Where we should be getting on a 3.1% longer term growth trend we are see zero, and now less.  Instead of getting back on our long term GDP growth curve, we have a gap of tens of trillions of dollars of production and wealth that will never be recovered.  Or as the O administration says, it was because of a long cold, snowy, harsh winter - again - right while global warming is our number one national security risk.  Good grief.

As PP points out on housing, so many of these economic measures are bogus, out of date, or tell us nothing.  The unemployment rate tells us nothing about how many people are out of work just as our poverty measures tell us nothing about the real income of the poor.  Affordable housing, the term, refers to all housing that isn't affordable.  Affordable care means that 84% on it require subsidy.  The GDP growth rate now has more margin of error than it has growth.  The Dow tells us how 30 big companies are doing, adjusted for occasionally removing and replacing the lousy ones.  The wider measure S&P covers 500, Nasdaq lists 3000, and none of these tell us anything about the other 28 million small businesses in this country or the millions that never got started due to excessive government barriers to entry.  At some point a rational person trying his or her hardest to understand what is going on gets tired of hearing bullsh*t.

Here is another look at it without the Wesbury spin.  Note how QE affects the market and how Wall Street is up without seeing the larger context.

http://www.thegatewaypundit.com/2015/05/worst-president-ever-gdp-growth-shrinks-by-0-7-in-first-quarter/
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« Reply #991 on: June 01, 2015, 12:12:45 PM »

________________________________________
Personal Income Increased 0.4% in April To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 6/1/2015

Personal income increased 0.4% in April (0.5% including revisions to prior months), coming in above the consensus expected gain of 0.3%. Personal consumption was unchanged in April versus a consensus expected 0.2% gain. Personal income is up 4.1% in the past year, while spending is up 2.8%.

Disposable personal income (income after taxes) increased 0.4% in April, and is up 3.6% from a year ago. The gain in April was led by personal interest income and private-sector wages & salaries.

The overall PCE deflator (consumer prices) was unchanged in April but is up 0.1% versus a year ago. The “core” PCE deflator, which excludes food and energy, rose 0.1% in April and is up 1.2% in the past year.
After adjusting for inflation, “real” consumption remained unchanged in April but is up 2.7% from a year ago.
Implications: Although consumer spending took a breather in April (as tax payments surged), consumer purchasing power continued to grow and we expect that to translate into faster spending in the months ahead. Payrolls are up almost three million in the past twelve months and wage growth is starting to accelerate as well. Private-sector wages & salaries are up a robust 5.1% in the past year. Total income – which also includes rents, small business income, dividends, interest, and government transfer payments – increased 0.4% in April and is up 4.1% in the past year, noticeably faster than the 2.8% gain in consumer spending. This is why consumers have enough income growth to keep on lifting their spending without getting into financial trouble. One part of the report we keep a close eye on is government redistribution. In the past year, government transfers to persons are up 5.8%, largely driven by Obamacare (with, Medicaid spending up 10.9% versus a year ago). However, outside Medicaid, government transfers are up a slower 4.6% in the past year and unemployment compensation is very close to the lowest level since 2007. The bad news is that taken all together, government transfer payments – Medicare, Medicaid, Social Security, disability, welfare, food stamps, and unemployment comp. – don’t seem to be falling back to where they were prior to the Panic of 2008, when they were roughly 14% of income. In early 2010, they peaked at 18%. Now they are down to around 17%, but not falling any further. Redistribution hurts growth because it reallocates resources away from productive ventures. This is why we have a Plow Horse economy instead of a Race Horse economy. The PCE deflator, the Fed’s favorite measure of consumer inflation, was flat in April. Although that measure is only up 0.1% from a year ago, it’s been held down by falling energy prices. The “core” PCE deflator, which excludes food and energy, is up 1.2% from a year ago. That’s still below the Fed’s 2% inflation target, but it’s up at a 1.5% annualized rate in the past three months. Now that energy prices have leveled off, look for overall inflation to move up toward “core” inflation over the rest of the year. Key fact: incomes and spending are up even with price pressures low. That’s real growth. The Fed knows all this, which is why we still think it will strongly consider a rate hike at the meeting later this month.
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« Reply #992 on: June 08, 2015, 04:57:04 PM »

Monday Morning Outlook
________________________________________
Don't Deny The Jobs Recovery To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein - Deputy Chief Economist
Date: 6/8/2015

Don’t Deny The Jobs Recovery
 
You would think that after 63 straight months of growth in private sector payrolls, the longest streak since the 1930s, everyone would agree that the job-market recovery is for real.  But, that ain’t the case.  A quick Google search still uncovers a whole bunch of pessimistic appraisals of jobs and the economy.
 
Analyzing these pessimists shows they have four major complaints about any supposed strength in the job market.
 
The first complaint is that the job growth is all or mostly part-time.  The numbers on part-timers come from the civilian employment survey, which is very useful over longer periods of time (like a year) but very volatile from month to month.
 
What does this report show?  That in the past year, part-time employment is up 196,000, while overall jobs are up about 3 million.  So, guess what?  The share of the workforce in part-time jobs has continued to fall – not rise.
 
Remember, these monthly numbers can be very volatile.  So, at least a couple of times per year, the numbers will show that “all” of the jobs in some certain month were part-time.  This brings the pessimists out of the woodwork.  Rush Limbaugh will talk all day about part-time jobs and Obamacare.  But, then, the data go back to normal and we don’t hear from the pessimists again (on this issue) until it happens again.  Meanwhile, they ignore the opposite trend month after month, while finding something else to complain about.
 
The second misleading story is that the number of adults not in the labor force (neither working nor looking for work) is at or near a record high.  The problem with this claim is that it’s both 100% true and 100% irrelevant.  The reason it’s irrelevant is that because of population growth, the number of non-working adults is usually rising whether we’re in recession of not.  For example, it grew by more than six million during the economic expansion from 1991 to 2001.
 
The third misleading pessimistic story about the job market is that the “true” unemployment rate is 10.8%, not the 5.5% the government says.  There are multiple problems with this claim.  First, what’s called the “true” unemployment rate is reported by the government in its monthly jobs data, so it’s not like the Labor Department is trying to hide anything.
 
This more expansive “true” unemployment rate (called the U-6) includes all those counted as unemployed by the regular jobless rate as well as people working part-time who say they’d prefer to work full-time, plus “discouraged” and “marginally-attached” workers.  In other words, it is always higher than the regular unemployment rate.  Traditionally, in good times or bad, it’s about 80% higher.  (So when the regular jobless rate was 4.4% back in March 2007, the so called “true” or U-6 unemployment rate was actually 8.0%.)
 
Today, the “true” unemployment rate is 10.8%, while the regular unemployment rate is 5.5%.  This is slightly above the normal relationship between the two measures, but back in 2009, the “true” unemployment rate was 17.1% - so both measures are lower than they were – the labor market is better no matter what data you use.
 
The last misleading story, which is still widespread, is that there might be more jobs but wages aren’t rising. Average hourly earnings are up only 2.3% from a year ago.  But with lower energy prices, overall consumer prices are barely higher than a year ago, which means “real” (inflation--adjusted) wages are up about 2% per hour since last year.  That easily beats the trend over the past several decades.
 
The pessimists would be more believable if they said, the economy and jobs would be better with a more free-market set of policies.  Lower tax rates, less regulation, and less government spending (particularly on entitlements) would all spur faster growth.  But to say things are “awful” is misleading.  Investors need to be wary of narratives that use the data to try to trick them into thinking the recovery isn’t there at all.  It’s important for investors to separate politics from economics.
 
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DougMacG
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« Reply #993 on: June 08, 2015, 10:54:17 PM »

"Today, the true unemployment rate is 10.8%"    - 'nuff said!

In fact the unemployment rate is 37.2% of adults in America. 
http://cnsnews.com/news/article/ali-meyer/628-labor-force-participation-has-hovered-near-37-year-low-11-months
"62.8%: Labor Force Participation Has Hovered Near 37-Year-Low for 11 Months"
That is the lowest participation rate EVER FOR ADULT males. 


It is like an Obama straw man argument.  Why is the comparison point the depth of the worst collapse instead of the median or best of other so-called recoveries?

What portion of this so called 'recovery' is artificial?  What should or would be the market interest rate if not for QE-insanity?  What is the growth rate employment rate if / when we remove all the artificial stimuli and create an economy of private sector balance, where savings equals investment?

What is the GDP gap since 2009, the area under the curve between where we are and we we should be?  2-3 trillion per year times 6.5 years and counting - on the conservative side?  We are approaching 20 trillion of income not earned and wealth not created due to counter-productive policies and approaching 100 million adults not working by the end of his term. 

Yay, rah - rah, zero percent growth!    Excuse me if I don't get excited.  We are not the ones mixing politics with economics.
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objectivist1
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« Reply #994 on: June 09, 2015, 12:38:54 AM »

Something I and many others here have been saying for some time now:

AP ANALYSIS: MORE 'PHONY NUMBERS' IN REPORTS AS STOCKS RISE

June 8, 2015

NEW YORK (AP) -- Those record profits that companies are reporting may not be all they're cracked up to be.

As the stock market climbs ever higher, professional investors are warning that companies are presenting misleading versions of their results that ignore a wide variety of normal costs of running a business to make it seem like they're doing better than they really are.

What's worse, the financial analysts who are supposed to fight corporate spin are often playing along. Instead of challenging the companies, they're largely passing along the rosy numbers in reports recommending stocks to investors.

"Companies are tilting the results," says fund manager Tom Brown of Second Curve Capital, "and the analysts are buying it."

An analysis of results from 500 major companies by The Associated Press, based on data provided by S&P Capital IQ, a research firm, found that the gap between the "adjusted" profits that analysts cite and bottom-line earnings figures that companies are legally obliged to report, or net income, has widened dramatically over the past five years.

At one of every five companies, these "adjusted" profits were higher than net income by 50 percent or more. Many more companies are in that category now than there were five years ago. And some companies that seem profitable on an adjusted basis are actually losing money.

It wasn't supposed to be this way. After the dot-com crash of 2000, companies and analysts vowed to clean up their act and avoid highlighting alternative versions of earnings in a way that could mislead investors.

But Lynn Turner, chief accountant at the Securities and Exchange Commission at the time, says companies are still touting "made-up, phony numbers" as much as they did 15 years ago, perhaps more, and few experts are calling them out on it.

"The analysts aren't doing enough to get behind the numbers that management gives them to find out what's really going on," Turner says.

Offering an alternative view of profits that leaves out various costs is not new. It's perfectly legal, and sometimes helpful as a tool for investors to gain insight into how a business is doing.

But with stocks breaking record after record and the current bull market entering its seventh year, there's more money riding on the assumption that the earnings figures being touted by companies and analysts are based on sound calculations.

"The longer the rally, the bigger the downside because of all the smoke and mirrors," says money manager John Del Vecchio, co-author of "What's Behind the Numbers?" a book on how profit reports can mislead.

In its study, AP compared bottom-line profit figures that follow rules called generally accepted accounting principles, or GAAP, to the adjusted profit figures calculated by financial analysts and collected by S&P Capital IQ. AP looked at companies in the Standard & Poor's 500 index.

Most of the time, the adjustments made companies look better by leaving out things like costs related to laying off workers, a decline in the value of patents or other "intangible" assets, the value of company stock distributed to employees, or losses from a failed venture. Critics argue that these are regular costs and shouldn't be excluded.

Key findings

- Seventy-two percent of the companies reviewed by AP had adjusted profits that were higher than net income in the first quarter of this year. That's about the same as in the comparable period five years earlier, but the gap between the adjusted and net income figures has widened considerably: adjusted earnings were typically 16 percent higher than net income in the most recent period versus 9 percent five years ago.

For a smaller group of the companies reviewed, 21 percent of the total, adjusted profits soared 50 percent or more over net income. This was true of just 13 percent of the group in the same period five years ago.

- Quarter after quarter, the differences between the adjusted and bottom-line figures are adding up. From 2010 through 2014, adjusted profits for the S&P 500 came in $583 billion higher than net income. It's as if each company in the S&P 500 got a check in the mail for an extra eight months of earnings.

Fifteen companies with adjusted profits actually had bottom-line losses over the five years. Investors have poured money into their stocks just the same.

- Stocks are getting more expensive, meaning there could be a greater risk of stocks falling if the earnings figures being used to justify buying them are questionable. One measure of how richly priced stocks are suggests trouble. Three years ago, investors paid $13.50 for every dollar of adjusted profits for companies in the S&P 500 index, according to S&P Capital IQ. Now, they're paying nearly $18.

In a crackdown after the dot-com crash, regulators required companies to lay out clearly in their financial reports how they arrived at alternative versions of their profits. The bottom-line figures have to be prominently reported, too. But it's not clear the extra details have helped.

"The data is more confusing than it's been in a long time, and the reason is all the junk they put in the numbers," says fund manager Michael Lewitt of the Credit Strategist Group. He says analyst reports don't help, and finds himself spending too much time sifting through the same "nonsense" figures he confronted back in the dot-com days.

Michelle Leder, founder of Footnoted.com, which produces detailed analyses of financial statements, says most investors don't even bother to sift, preferring instead to seize upon a single number, often the wrong one.

"People just want to know the number," she says. "They don't care how the sausage is made."

Frequent adjustments

Boston Scientific, a maker of medical devices like stents used to prop open arteries, had adjusted profits of $3.6 billion in the five years through 2014, according to analysts' calculations. But if you include a write-off for a failed acquisition, various "restructuring" charges and costs stemming from layoffs and lawsuits, it's a different picture entirely: $4.9 billion in net losses.

In a brief talk to analysts in April, the chief financial officer at Boston Scientific used the word "adjusted" in referring to results 34 times, twice every minute, on average. The word is also littered throughout the company's presentations and financial reports. In recent years rivals Medtronic, Stryker and Zimmer have also highlighted their results this way, says Raj Denhoy, an analyst at Jefferies, an investment bank.

Aluminum giant Alcoa has taken "restructuring" and related charges in 20 of the past 21 quarters. The company reported net losses of more than $900 million in the five years through 2014, but analysts have largely shrugged them off because they're tied to a strategic shift that involves getting rid of unwanted businesses. Analysts prefer to point to the $3.1 billion in adjusted profits during that time.

To be fair, analysts see the adjusted figures more as a tool for helping estimate future profits than as a judgment on the past. They say many losses and charges are not likely to recur and shouldn't be included in their calculations.

But in an age of constant change, when some companies revamp their business repeatedly, many one-time items are starting to seem not so one-time anymore.

"If you have to reinvent the company every couple of quarters, then it's not a one-off," says accounting expert Jack Ciesielski, longtime publisher of The Analyst's Accounting Observer, a newsletter.

What to count

For their part, Boston Scientific and Alcoa say the extra figures they provide help shed more light on their companies. Boston Scientific says the numbers allow investors to see the company "through the eyes of management" because they are the same ones its executives use in making decisions. Alcoa says its financial results reflect a "significant transformation" to make it more competitive.

Another number often missing in adjusted profit figures is the value of stock awarded to employees. This stock-based pay, the argument goes, requires no exchange of cash, so it doesn't affect a company's earnings power. Critics say stock distributions are a part of compensation and should be counted as an expense.

"What if they said they're going to pay for rent by issuing stock?" asks Brown of Second Curve Capital. "Would you then (exclude) rent" in calculating earnings?

Salesforce.com, a leader in cloud computing, routinely excludes the cost of stock compensation from figures it touts to investors, and analysts largely do the same. Analysts say the company earned $1.2 billion in adjusted profits in the five years through 2014. Its bottom-line result, including stock pay and other costs, was a $712 million loss.

Brian Rauscher, chief portfolio strategist at Robert W. Baird & Co., says stocks can continue to rise based on an inflated account of company profits for months or even years, but not indefinitely. He says it's like a bomb no one can see has been placed under the market: You know it's there, but you're not sure when it will go off.

"We don't know if the fuse is a few inches or a few miles," he says.
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"You have enemies?  Good.  That means that you have stood up for something, sometime in your life." - Winston Churchill.
Crafty_Dog
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« Reply #995 on: June 10, 2015, 11:03:16 AM »

http://www.ftportfolios.com/Commentary/EconomicResearch/2015/6/9/liar,-liar,-unemployment-not-higher
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DougMacG
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« Reply #996 on: June 11, 2015, 11:30:53 PM »


42% of adults don't work.  Not 5.5%.  Not 10.8%.  42%!  If you are not actively looking for work, you are not employed, but not unemployed.  That's clear isn't it?  If the government pays you SSI, SNAP, MFIB, TANF, Medicaid, Section 8 or one of a thousand and fifty other social spending programs other than unemployment compensation to not work, and you don't work, don't look for work, don't even want to work or plan to work - ever again, then you are NOT unemployed.

This kind of logic makes me sick. 
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DougMacG
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« Reply #997 on: June 16, 2015, 11:14:46 AM »

The Fed has the best data available anywhere on the US economy, down to micro-level crop reports and equivalent for all regions and industries.  They arguably have the most and best economists on staff of anywhere in the world with a virtually unlimited budget to study and track data. Yet The Fed has left their interest rate at 0% for 6 1/2 years - since Dec. 2008 including all of this "recovery", all of the Obama Presidency, through two different Fed Chairs.  All this in spite of the fact that we know zero interest rates are bad for savings, skew incentives, mis-allocate resources, give the policy makers no additional room to move and should only be used in an absolute emergency, if then.

We are told how solid the economy now is and how great and strong the recovery is and has been and how the market gains are not from Fed policy, yet those who know the very most think this economy and this recovery is still too weak and fragile to handle interest rates of even one or two percent, much less the 4 or 5% it would take to make savings possible.

I know Wesbury and Grannis think interest rates should start coming back up, but how do they explain that fact that The Fed, with all their wisdom, disagrees.


On another point, slightly related, it is time to repeal Humphrey Hawkins.

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Crafty_Dog
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« Reply #998 on: June 29, 2015, 02:33:22 PM »



Personal Income Increased 0.5% in May To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 6/25/2015

Personal income increased 0.5% in May (0.6% including revisions to prior months). The consensus expected an increase of 0.5%. Personal consumption was up 0.9% in May (1.1% including revisions to prior months), beating the consensus expected 0.7%. Personal income is up 4.4% in the past year, while spending is up 3.6%.

Disposable personal income (income after taxes) increased 0.5% in May, and is up 3.8% from a year ago. The gain in May was led by private-sector wages & salaries, interest, and small-business income.

The overall PCE deflator (consumer prices) increased 0.3% in May and is up 0.2% versus a year ago. The “core” PCE deflator, which excludes food and energy, rose 0.1% in May and is up 1.2% in the past year.

After adjusting for inflation, “real” consumption rose 0.6% in May and is up 3.4% from a year ago.

Implications: Whatever happened to the theory that consumers would just pocket the savings from lower energy prices instead of spending it? Instead, consumer spending came back with a vengeance in May, rising 0.9%, the fastest pace for any month since 2009. And that was back when the government was using “cash-for-clunkers” to pass out checks to car buyers. Skipping that program, we’d have to go back to 2006. “Real” (inflation-adjusted) consumer spending is up 3.4% from a year ago, also the fastest growth since 2006. Expect more of this in the year ahead. Payrolls are growing about three million per year and wage growth is accelerating as well. Private-sector wages & salaries are up a robust 5.7% in the past year. Total income – which also includes rents, small business income, dividends, interest, and government transfer payments – increased 0.5% in May and is up 4.4% in the past year, faster than the 3.6% gain in consumer spending. This is why consumers have enough income growth to keep on lifting their spending without getting into financial trouble. One part of the report we keep a close eye on is government redistribution. In the past year, government transfers to persons are up 5%, largely driven by Obamacare. However, outside Medicaid, government transfers are up a slower 4.3% in the past year and unemployment compensation is the lowest since 2007. The bad news is that overall government transfer payments – Medicare, Medicaid, Social Security, disability, welfare, food stamps, and unemployment comp. – aren’t falling back to where they were before the Panic of 2008, when they were roughly 14% of income. In early 2010, they peaked at 18%. Now they are down to around 17%, but not falling any further. Redistribution hurts growth because it shifts resources away from productive ventures. This is why we have a Plow Horse economy instead of a Race Horse economy. The PCE deflator, the Fed’s favorite measure of inflation, increased 0.3% in May. Although it’s only up 0.2% from a year ago, it’s been held down by falling energy prices. The “core” PCE deflator, which excludes food and energy, is up 1.2% from a year ago. That’s still below the Fed’s 2% inflation target, but it’s up at a 1.7% annualized rate in the past three months. Now that energy prices have leveled off, look for overall inflation to move up toward “core” inflation over the rest of the year. In other news this morning, initial claims for unemployment insurance rose 3,000 last week to 271,000, the 16th straight week below 300,000. Continuing claims for regular state benefits increased 22,000 to 2.25 million. These claims numbers are at rock bottom levels and are about as good as it gets.
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G M
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« Reply #999 on: June 29, 2015, 08:12:49 PM »

Wesbury: the deck chairs are looking very well organized on the Titanic!
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