joi, 6 decembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Small Business Owners' Hiring Intent Plunges to 2008 Lows; Don't Blame Sandy or Fiscal Cliff

Posted: 06 Dec 2012 09:11 PM PST

A Gallup random dial poll of 607 small businesses conducted November 12-16 2012 asked the question "Over the next 12 months, do you expect the overall number of job positions at your company to increase a lot, increase a little, stay the same, decrease a little, or decrease a lot?"

The net survey results show Small-Business Owners' Hiring Intentions Plunge.
U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession, according to this November's Wells Fargo/Gallup Small Business Index survey. Small-business owners' net hiring intentions for the next 12 months plunged to -4 in November, down from +10 in July and matching the previous record low recorded by the Wells Fargo/Small Business Index of -4 in November 2008.



Historically, net hiring intentions have tended to be very positive, with small-business owners expecting to grow and hire more new employees than they will let go over the next 12 months. In good economic years, net hiring intentions have been in the double-digits. This has not been the case since the recession and financial crisis in 2008-2009 with net hiring intentions reaching a low of -4 in November 2008. There was considerable improvement in small-business owners' hiring expectations during much of 2012, prior to the recent November plunge, but now expectations have deteriorated to tie the low recorded in 2008.



In November, 21% of owners say they expect to decrease jobs at their companies over the next 12 months, the most recorded on this measure since the inception of the Wells Fargo/Gallup Small Business Index in August 2003. At the same time, 17% of small-business owners say they expect to increase the number of jobs or positions at their companies, down from 20% in July of this year and the lowest level measured since November 2011.

Owners' Net Hiring Down Over Past 12 Months

In addition to asking about future hiring intentions, the survey also asks small-business owners to report on hiring over the past 12 months. In November, more small-business owners reported decreasing the number of employees (26%) than increasing (14%), resulting in a net hiring score of -12. That is down from -7 in July and -9 in the prior three quarterly measurements. Net hiring over the past 12 months is about where it was in July 2011, at -11. This lack of improvement in small-business owners' self-reported hiring helps explain why too few new jobs have been created during much of 2012 to significantly lower the U.S. unemployment rate.

Implications

That net hiring expectations at the nation's small businesses have declined to levels last seen in late 2008 is reason for concern. Such low net hiring expectations were followed by massive layoffs in early 2009. While a repeat of that experience seems unlikely in 2013, there is the potential for a serious decline in jobs early next year if small-business owners' hiring intentions do not improve.

Whether the pessimism of the nation's small-business owners is due to the fiscal cliff, Superstorm Sandy, the election, or some combination of these factors, the U.S. economy remains weak and unemployment remains high from a historical perspective. A further sharp increase in small-business layoffs, resulting in higher unemployment on top of the current economic conditions, could turn today's slow growing U.S. economy into something worse.
Not Sandy, Not Fiscal Cliff

It is difficult to blame this on the fiscal cliff, and even more difficult to pin this on Sandy. More than likely, the poor net result is primarily the result of a clear slowdown in the economy (lack of customers).

I believe the US is back in recession and so does the ECRI.

On top of deteriorating economic conditions, also factor in the election and Obamacare.

Obamacare Discussion


No Election Relief

I suspect a majority of small business owners are Republican, and most Republicans seemed to believe Romney would win. Certainly any businesses expecting election relief from Obamacare were mistaken.

It would have been interesting if Gallup asked "why?" to those who intended to hire less.

Regardless of "why?" it makes perfect sense for businesses to cut back if the economy is slowing, and indeed it is.

Manufacturing leads the way (see ISM Manufacturing in Contraction; Expect Conditions to Worsen), and services will follow sooner rather than later.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
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France Unemployment Rate Hits 10.3%, Youth Unemployment at Record High 24.9%; New Business Activity Plunges

Posted: 06 Dec 2012 03:38 PM PST

President Francois Hollande's economically insane policy "Make Layoffs So Expensive For Companies That It's Not Worth It" continues to reap negative rewards.

Reuters reports French jobless rate hits 10.3 pct, highest in 13 years
France's unemployment rate rose to 10.3 percent in the third quarter of 2012, its highest since the third quarter of 1999, from 10.2 percent in the previous quarter, data published by national statistics office INSEE showed on Thursday.

Youth unemployment rose more markedly, with the jobless rate edging up to 24.9 percent, from 23.6 percent, among people under 25 years old. That was higher than any quarter on records going back to the start of 1996.

On the non-ILO measure issued by the Labour Ministry, the picture is even bleaker, with October data showing mainland jobless totals at 3.1 million, the highest in 14 years.

Francois Hollande, who took over in May as France's first Socialist president in 17 years, has promised to reverse the upward trend by the end of 2013.
How high will unemployment rise before it reverses as Hollande promises?

While pondering that question, please note the Markit France Services PMI® shows new business falls at sharpest rate since April 2009.
Summary

French service providers reported another decrease in business activity during November. Although the slowest in three months, the rate of contraction was solid. Underlying the drop in activity was a marked and accelerated contraction of new business. Backlogs of work and employment both decreased, albeit at weaker rates.



Composite data showed that business activity across the French private sector fell for the ninth month running in November. The rate of contraction remained considerable, despite easing to the slowest in three months.

The level of new business placed with service providers in France decreased for the eighth month running in November. The rate of contraction was substantial, having accelerated to the sharpest since April 2009. Panel members commented that general market conditions remained tough, with clients cancelling projects and making fewer invitations to tender.

With manufacturers also registering a steep (albeit slower) decline in new orders, overall new business across the French private sector continued to contract at a marked pace in November.
Expect a plunge in GDP and further plunge in employment to catch up to the PMI plunge in the above chart.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Senator Jim DeMint, Republican Tea Party Activist, Resigns From Senate; DeMint Seeks to "Harden the Jello"

Posted: 06 Dec 2012 11:35 AM PST

Following the dismal results of Republicans in the last election, and amidst all the Republican infighting over the fiscal cliff comes startling news DeMint resigns from Senate to run Heritage Foundation.
Sen. Jim DeMint said Thursday he'll resign from the Senate to go run the Heritage Foundation, the powerhouse conservative think tank that dominates Republican policy circles.

"It's been an honor to serve the people of South Carolina in United States Senate for the past eight years, but now it's time for me to pass the torch to someone else and take on a new role in the fight for America's future," Mr. DeMint said in a statement announcing the news.

He will step down from the Senate in January and will take over for Heritage President Edwin J. Feulner in April.

Mr. DeMint, a tea party favorite who became a major electoral force in the 2010 elections, helping promote tea party candidates in primaries against establishment GOP favorites, said he's ready to shift to the policy arena.

He said he never intended for the Senate to be a career for him. He previously served six years in the House and won election to the Senate in 2004 and re-election in 2010.
South Carolina governor Nikki Haley, a Republican will get to appoint a replacement so the seat will remain in Republican hands.

Video



DeMint: "I've decided to join the Heritatage Foundation at a time when the conservative movement needs strong leadership in the battle of ideas"

DeMint Seeks to "Harden the Jello"

The Financial Times has some interesting comments in DeMint resigns from US Senate.
Mr DeMint's departure comes amid difficult budget negotiations over the US fiscal cliff, $600bn worth of tax increases and spending cuts that are triggered on January 1 unless the White House and Republicans can reach a deal.

Mr DeMint sharply criticised the Republican leadership in Congress this week for its budget proposal to Mr Obama offering extra tax revenues, even though they are gained through the close of loopholes rather than by lifting rates.

It is not the only reason why many Republicans may be happy to see the back of Mr DeMint, who angered colleagues in the last two elections by backing and funding extremely conservative candidates to run for the Senate, with disastrous results.

In both 2010 and 2012, Republicans failed to gain control of the Senate when they were well positioned to win, in large part because a number of DeMint-backed candidates were judged by voters to be outside the mainstream.

In an interview with the Financial Times last year, Mr DeMint said his main focus was getting more staunch conservatives into the Senate to harden the "jello" in the middle of Republican ranks.

Clearly Jim DeMint thinks he will have more influence heading up a special interest group rather than staying inside the US Senate.

I highly doubt that. More importantly, let's hope not. A majority of US citizens favor reductions in military spending, and do not favor extreme stances on abortion.

Indeed, extreme positions of the Tea Party on military spending and abortion are two reasons Republicans lost the WhiteHouse and seats in the US Senate as well.

A genuinely moderate, non-wishy-washy Republican candidate might have won the election. More militant extremism is highly unlikely to do Republicans any good.

I would like to see Republicans take up a true fiscal-conservative cause (including reductions in military spending), while leaving the social issues aside.

Many independents are in the same camp, and ignoring independent voters is no way to win elections. Didn't the last election just prove that?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

ECB Leaves Rates Unchanged, Significantly Downgrades 2013 Economic Forecast; Is Italy Falling Into the Abyss?

Posted: 06 Dec 2012 08:43 AM PST

Earlier today the ECB left its benchmark rate at a record low .75% stating the rate was "very accommodating". What's more interesting is the ECB's Significant Downgrades To Growth And Inflation Forecasts.
The ECB downgraded its 2012 GDP forecast to a range of -0.6% to -0.4% from -0.6% to -0.2% previously, its 2013 GDP forecast to a range of -0.9% to 0.3% from -0.4% to 1.4% previously, and said its 2014 GDP forecast was for a range of 0.2% to 2.2% growth in the euro area.

On inflation, the ECB forecasts 2.5% inflation in 2012 versus a range of 2.4% to 2.6% previously. 2013 inflation forecasts were lowered to a range of 1.1% to 2.1% from 1.3% to 2.5% previously. In 2014, the ECB sees inflation in a range of 0.6% to 2.2%.
In the Q&A period following the meeting, ECB president Mario Draghi refused to answer the first question from a reporter regarding whether Italy is falling into the abyss.

Is Italy Falling Into Abyss?

Draghi would not address the question, but I will. Let's take a look at the Markit/ADACI Italy Services PMI® released yesterday, for clues regarding the abyss.
Key Points

  • Business activity and new work fall at accelerated rates
  • Steepest decrease in employment since June 2009
  • Input price inflation weakest for a year

Output across Italy's service sector decreased at a marked and accelerated rate in November, as highlighted by a drop in the seasonally adjusted Markit/ADACI Business Activity Index – which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago – from October's reading of 46.0 to 44.6. That stretched the ongoing sequence of contraction to a year-and-a-half.

Contributing to the decrease in activity was a further reduction in the volume of new business placed with Italian service providers in November. The latest drop was sharper than one month before, and attributed by the survey panel in part to lower disposable incomes and a lack of credit.

With incoming new work decreasing, services firms directed more resources towards the clearing of backlogs, which fell for the twenty-first straight month in November. Moreover, the rate of decline was the fastest since August 2009. That was despite a considerable decrease in operating capacity within the sector, as businesses continued to cut staff numbers over the month. In fact, the decline in employment was the most pronounced since June 2009 and close to the series record. Panellists commented on reduced working days and the non-renewal of temporary contracts.

Comment

Phil Smith, economist at Markit and author of the Italy Services PMI® said:

"These data, showing business activity at service providers contracting at a marked and accelerated rate in November, mark a turnaround from the general trend seen in recent months when the pace of decline had eased steadily. Furthermore, a sharper decrease in new business inflows points to further weakness in coming months and adds to the suggestion that Italy's largest sector is some way off a return to growth. Firms were quick to react to the renewed downturn, reducing employment levels at near survey-record pace over the month amid efforts to lower costs. The sharpest decrease in backlogs since August 2009 shows that there remains a substantial degree of excess capacity, giving businesses more room to cut staff numbers."
I believe that answers the question. More specifically, "Yes, Italy has fallen into the abyss." Expect France to fall into the abyss as well, and expect Spain and Greece to stay in the abyss.

Draghi might have spooked everyone if he gave the answer I just did. Thus, it's no wonder that he failed to address the question.

My answer also explains the significant downgrades in the overall eurozone forecast (likely way too optimistic still).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Geithner Says Obama Willing To Go Over Fiscal Cliff: Game Theory Bluff Or Reality?

Posted: 05 Dec 2012 11:40 PM PST

If republicans will not go along with tax hikes on the wealthy, then Geithner Willing To Go Over Fiscal Cliff.
Treasury Secretary Timothy Geithner said Wednesday that the Obama administration was willing to allow the economy to go over the fiscal cliff if Republicans did not agree to raise tax rates on the wealthy. In an interview with CNBC, Geithner drew a harder line in the sand than the White House previously has articulated. "There is no prospect of an agreement that doesn't involve those rates going up on the top 2%," he said. The Treasury Secretary repeated President Barack Obama's tough line that he would not negotiate with Republicans if they held the economy "hostage" to threats that the debt ceiling would not be lifted. At the same time, Geithner tried to sound optimistic that the two sides would reach a deficit-reduction framework. "I think you see the broad outlines of a framework now look more inevitable," he added. Reports to the contrary were "orchestrated drama."
Orchestrated Drama

I am amused at the idea Republicans will not cave in is "orchestrated drama". There is nothing purposely "orchestrated" about the setup.

Republicans brought this mess upon themselves out of arrogance, but game theory now suggests they have little to lose by telling Obama where to go. Likewise, president Obama has little incentive to bargain either.

Ironically, the US could stand a great deal of fiscal austerity. However, the sad reality is neither party has the decency to stand up and say to US citizens what needs to be said: We cannot afford the promises we have made on entitlements, nor can we afford our lavish military budget, nor can we afford to be the world's policeman with US troops in 140 countries.

So, instead of realistic compromises, we have to listen to demagogues in both political parties acting as if cuts in projected budget increases are the same as actual cuts in real spending.

The result is fiscal insanity and trillion dollar deficits for four consecutive years. Whether or not inability to face reality constitutes "drama" is clearly in the eyes of the beholder.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Damn Cool Pics


November 2012 Fail Compilation [Video]

Posted: 06 Dec 2012 07:17 PM PST


We admit it. This is our favorite part of the whole month.

It's time to look back on all the awesome/epic fails from the month of November 2012.

Jetski fails, bikini fails, motorcycle fails, rooftop fails, they're all right here.

Check them out below.



35 Sexy Catwoman Cosplay Girls

Posted: 06 Dec 2012 07:06 PM PST

Catwoman (Selina Kyle persona behind the mask) was introduced in Batman #1 in 1940 and quickly became a popular Batman adversary. Below is a collection of 35 Catwoman cosplay pictures.







































































Family Adopts Orphaned Baby Rhino

Posted: 06 Dec 2012 04:04 PM PST

The mother of this baby rhino was shot by poachers. Now it lives in a guesthouse in Zimbabwae which is run by husband and wife team Roger and Anne Whittall.



























Redskins Cheerleaders

Posted: 06 Dec 2012 03:30 PM PST

Enjoy this photo gallery of the Washington Redskins cheerleaders in action.





















































































































































An AK-47 Made Out of a Shovel

Posted: 06 Dec 2012 01:01 PM PST

Incredible but true. One man builds an AK-47 out of a rusty old shovel.
All you need is:
Shit shovel: $2
Romy sans-barrel AK kit: $200
Barrel blank: $30
He took his time and melted down the metal shovel head and reforged it into the actual gun receiver.

Now of course building this gun based on nothing but these pictures will be virtually impossible, but hopefully you will get the idea.


































































































Via: northeastshooters

Best Times to Send Email to Clients [Infographic]

Posted: 06 Dec 2012 11:00 AM PST

This infographic from GetResponse.com takes a look at when the optimal times are to hit the send button as well as some tips for dealing with an international clientele.

Key Takeways:
- Emails reach the best results within 1 hour after landing in the inbox.
- 24 hours after delivery, the average open rate is close to zero
- 8 a.m. – 10 a.m. and 3 p.m. – 4 p.m. are the top engagement times
- If your recipients are occupied with other activities, they won't be able to engage while it's still fresh, and your message will be crowded out by more recent messages
- To optimize the engagement rates for your message, you should schedule it to hit the inbox no later than 1 hour before the top open times, when its chances of getting noticed are the highest.
- If your emailings go to worldwide lists, make sure you use solutions that optimize delivery times in different time zones, such as GetResponse Time Travel.

Click on Image to Enlarge.