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luni, 2 noiembrie 2015

Mish's Global Economic Trend Analysis

UK Seeks "Two-Tier" Europe Enshrined in Law
Rising Trucker's Pay, Falling Desire for Trucking Jobs Provide Reasons Self-Driving Trucks Will Reshape Industry
Manufacturing ISM Flirts With Contraction Third Month, Employment Shifts to Contraction

UK Seeks "Two-Tier" Europe Enshrined in Law

Posted: 02 Nov 2015 05:23 PM PST

German chancellor Angela Merkel, EU president Jean-Claude Juncker, and French President Francois Hollande will not be pleased to learn UK Chancellor Seeks Two-Tier Europe Enshrined in Law.

George Osborne, Britain's chancellor of the exchequer, will on Tuesday set out for the first time the UK's demands for EU treaty change to protect its economy, taxpayers and the City of London in a two-speed Europe.

After months of diplomatic shadow boxing, Mr Osborne will use a speech in Berlin to set out in detail how Britain wants a new EU settlement to enshrine the rights of non-eurozone countries in the 28-member club.

"Quite frankly, the British people do not want to be part of an ever closer union," the chancellor will tell a business audience. "I believe it is this that is the cause of some of the strains between Britain and our European partners."

Mr Osborne will call for "principles embedded in EU law and binding on EU institutions" to govern a two-tier Europe, with an integrated eurozone surrounded by a looser group of countries using their own currencies.

Mr Osborne will say that the new rules must enshrine the "integrity of the European single market" and ensure that it is not distorted by eurozone countries rigging the rules in their favour.

The treaty changes would include "the recognition that the EU has more than one currency and we should not discriminate against any business on the basis of the currency [area] in which they reside".

That clause is specifically aimed at protecting British financial groups from protectionist measures by the eurozone, and to ensure that London will retain its position as the principal centre for European finance.

Mr Osborne will add: "We must never let taxpayers in countries that are not in the euro bear the cost for supporting countries in the eurozone."

The UK wants to keep the British Pound, not bear any Euro country bailout costs, protect London from financial transaction taxes, and enshrine in law measures to protect non-euro countries, effectively creating a two-tier Europe.

If Merkel and Hollande will not go along, would prime minister David Cameron then urge UK citizens to vote in favor of the UK leaving the EU?

Mike "Mish" Shedlock

Rising Trucker's Pay, Falling Desire for Trucking Jobs Provide Reasons Self-Driving Trucks Will Reshape Industry

Posted: 02 Nov 2015 09:21 AM PST

Fewer and fewer people willing to live the trucker's life. This has created a shortage in drivers and in turn Rising Pay is Reshaping the Trucking Industry.

The shortage of truck drivers in the U.S. is driving salaries higher, with gains up to 12 percent over the past year.

Average pay for long-haul truckers jumped 17 percent since the end of 2013 to a record average of $57,000 in 2015, according to the National Transportation Institute. The surge comes as U.S. employment costs overall are up just 2 percent and average weekly earnings are rising only 2.2 percent.

The shortage of truck drivers has grown to nearly 48,000 and could expand further due to a combination of industry growth and a retiring workforce, according to the American Trucking Associations' Truck Driver Shortage Analysis for 2015.

The ATA believes that trucking will need to hire an average of 89,000 drivers per year over the next decade.

"The ability to find enough qualified drivers is one of our industry's biggest challenges," said ATA President and CEO Bill Graves.

Trucking Costs

Reader Tim Wallace writes ...

Hi Mish

I asked FreightIndex.com if I could use publish their data again, and they granted permission.

Overall Trucking costs are lower per mile now then in 2007. However, that is not the whole story.

Fuel costs are down, but most other costs have gone up considerably, led by a 40% increase in wages.

Tim

Trucking Costs Per Mile

Trucking Costs Per Mile Less Fuel

Truck Fuel Costs Per Mile

Thanks Tim!

The ATA believes that trucking will need to hire an average of 89,000 drivers per year over the next decade.

I propose long-haul trucking jobs will vanish with self-driving trucks.

Mike "Mish" Shedlock

Manufacturing ISM Flirts With Contraction Third Month, Employment Shifts to Contraction

Posted: 02 Nov 2015 08:31 AM PST

Economists who looked at last month's barely above contraction report and predicted the same results this month were nearly spot on.

Last month the Manufacturing ISM was 50.2, this month the Bloomberg Consensus was 50.0, and the report came in at 50.1.

For a third straight month, the ISM is skirting near contraction, at 50.1 in October vs 50.2 and 51.1 in the prior two months.

New orders are showing some life, up nearly 2 points to a 52.9 reading that is safely above breakeven 50. Production is also at 52.9. But other readings are not as a favorable. Backlog orders remain in deep contraction at 42.5 while employment, for the first time in six months, is also in contraction, down nearly 3 points to 47.6. Exports have been the difference this year for the factory sector and new export orders in this report, at 47.5, remain below 50 for the fifth straight month. Prices, at 39.0, extended their long run of contraction.

ISM October 2012-Present

That was the lowest reading since May of 2013. Let's investigate all the details of today's report straight from the Institute for Supply Management Manufacturing ISM® Report On Business® released this morning.

Index	Oct	Sep	PP Change	Direction	Rate of Change	Trend in Months
PMI®	50.1	50.2	-0.1	Growing	Slower	34
New Orders	52.9	50.1	+2.8	Growing	Faster	35
Production	52.9	51.8	+1.1	Growing	Faster	38
Employment	47.6	50.5	-2.9	Contracting	From Growing	1
Supplier Deliveries	50.4	50.2	+0.2	Slowing	Faster	3
Inventories	46.5	48.5	-2.0	Contracting	Faster	4
Customers' Inventories	51.0	54.5	-3.5	Too High	Slower	3
Prices	39.0	38.0	+1.0	Decreasing	Slower	12
Backlog of Orders	42.5	41.5	+1.0	Contracting	Slower	5
Exports	47.5	46.5	+1.0	Contracting	Slower	5
Imports	47.0	50.5	-3.5	Contracting	From Growing	1

Key Points

Backlog of orders are in contraction
Growth in new orders barely positive
Exports contracting for the fifth month
Prices have plunged

There's nothing in the ISM report to make the Fed want to hike, but the Fed will do what they want.

For an interesting alternative to today's ISM numbers please see Gardner Business Index Shows Small to Medium Sized Businesses Struggling Most.

Mike "Mish" Shedlock

Damn Cool Pics

Rattlesnake Bites Itself After Losing Its Own Head

Posted: 02 Nov 2015 12:39 PM PST

After having its head cut off this rattlesnake still managed to bite itself. Now that's creepy.

Cosplayer Totally Nails Leeloo From The Fifth Element

Posted: 02 Nov 2015 12:19 PM PST

This cosplayer took on Milla Jovovich's character Leeloo from "The Fifth Element" which isn't an easy cosplay to pull off. But she did it with flying colors, well mostly just a lot of orange.

via deviantart

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Seth's Blog : Election day

Election day

Every day, people vote.

They vote for brands, for habits, for the people they trust. They vote for where they will place their attention, their money and their time.

The big difference is that you can do just fine in today's election without winning a majority of votes. Most elections aren't winner-take-all.

The people at the edges, the special interest groups and the weird ones matter a lot when you don't need a landslide to make a difference.

The magic is this: As soon as you stop acting like you need every single vote, you can earn the votes of the people you seek to serve.

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duminică, 1 noiembrie 2015

Mish's Global Economic Trend Analysis

Greek Banks Need €14 Bn Recapitalization Following Latest Stress-Free Tests

Posted: 01 Nov 2015 05:34 PM PST

Greek banks did much better than expected in the latest ECB stress test (undoubtedly stress-free). The ECB's adverse scenario shows Greek banks only underfunded to the tune of €14 Billion.

A scramble is now underway to raise that amount and Stabilize the Greek Banking Sector.

Greece's four big banks will this week finalise recapitalisation plans to raise €14bn the European Central Bank says they require, in the latest move to stabilise the Greek economy.

After a weekend in which the ECB announced the result of stress tests for the banks and the Greek parliament passed legislation paving the way for the state to inject more funds into the sector, a senior Greek banker said the banks' needs were manageable, but stressed that time was short.

Much attention has focused on whether the recapitalisation of the four banks — Piraeus Bank, National Bank of Greece, Alpha Bank and Eurobank — will dilute international investors' equity stakes.

"So far, so good . . . the outcome of the stress tests could have been much worse," the banker said. He was referring to the ECB's finding that the banks would be short of €14.4bn of capital under the so-called "adverse scenario", where lenders must be able to withstand a worsening of economic and financial conditions. "But there's still a lot of work to be done in a very short time."

The banks have until Friday to present their recapitalisation plans for approval by the European Central Bank's single supervisory mechanism.

One person with knowledge of the discussions added that the government would steer clear of heavily diluting international investors' equity.

"We're looking at a 25 per cent direct equity stake for the Greek state and 75 per cent in the form of cocos [hybrid bonds that convert into equity only if a bank's capital falls below a certain level]," this person said.

In addition, the senior banker also suggested that it would be counter-productive to "bail-in" senior bondholders to any recapitalisation by imposing losses on them, even though such a course of action might be possible under the new framework legislation.

"It is clear that if adopted [a bail-in] would become a legal minefield that could affect the sector's overall stability," the banker said.

Stress-Free Results

Heaven forbid bondholders take any losses. And of course the €14 Billion stress-free result was better than anyone expected: nudge-nudge, wink-wink.

As we all know, bondholders generally don't lose (except to bail out public unions and public pension plans as in GM, Detroit, and various California cities).

Mike "Mish" Shedlock

Seth's Blog : It's not your fault

It's not your fault

... but it might be your responsibility.

That's a fork in the road on the way to becoming a professional.

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luni, 2 noiembrie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

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Seth's Blog : Election day

Election day

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Mish's Global Economic Trend Analysis

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