Central Perk

sâmbătă, 16 octombrie 2010

Mish's Global Economic Trend Analysis

Global Trade Sags; Striking Workers Shut Down Fuel Pipeline to Paris; US Backs Off Currency Manipulation Charges
Advertising General Information
32% of Homeowners Expect Home Prices to Drop Next Year, Highest Short-Term Pessimism Ever; Recognition Phase Underway

Global Trade Sags; Striking Workers Shut Down Fuel Pipeline to Paris; US Backs Off Currency Manipulation Charges

Posted: 16 Oct 2010 12:22 PM PDT

With most eyes fixed on Quantitative Easing let's take a look at some global macro events.

World Trade Sags Yet Again

In yet another sign of the slowing global economy, World Trade, Once Rising, Is Starting to Sag Again

THE rapid recovery in world trade after the financial crisis appears to have slowed this spring and summer, raising new concerns about the global economy. Exports of many countries have stabilized at levels well under the peaks reached before the crisis sent world trade into a tailspin.

The accompanying charts show the dollar volume of monthly exports reported by 16 major countries since world trade peaked in July 2008.

The latest American figure is 10 percent below the peak. That compares with figures showing falls of 20 percent or more in most of Europe.

For some interesting currency and trade charts that accompany the above article, please see World Exports Level Off.

Striking Workers Shut Down Fuel Pipeline to Paris

Reuters reports Fuel to Paris reduced as French protests escalate

Striking French oil refinery workers shut down a fuel pipeline supplying Paris and its airports on Friday and airport workers grounded some flights as protests mounted to derail an unpopular pension reform.

France's airport operator played down worries of fuel shortages, but strikes at all of the country's 12 refineries and fuel depot blockades prompted motorists to stock up on petrol.

Truck drivers also were set to join the fray as momentum built for a day of street rallies on Saturday.

The widening protests have become the biggest challenge facing President Nicolas Sarkozy, who is struggling with low popularity ratings as he tries to appease financial markets by stemming a ballooning pension shortfall.

"This movement is deeply anchored in the country," CGT union leader Bernard Thibault told LCI television. "The government is betting on this movement deteriorating, even breaking down. I think we have the means to disappoint them."

"We're filling up at petrol stations to save the fuel we have in depots as much as possible," said one trucker in Paris's southern suburb of Rungis. "But if this carries on, we won't be able to last too long either. We'll have to go fishing."

Polls show two-thirds of people oppose Sarkozy's plan to raise the minimum retirement age to 62 from 60 and change the age at which people can retire on a full pension to 67 from 65.

The government has been at loggerheads with unions for months over the issue and five rounds of strike action since the summer have disrupted public transport and air travel.

French Political Refugee Chimes In

My friend Bruno, a French political refugee has a few insights I would like to share. Bruno writes ...

Hi Mish,

As a former French, now being a political refugee in Thailand, I would like to put things into context.

First, the retirement age is not automatically 60 in France. Only someone who has contributed to a pension plan for 40 years, or more precisely 160 quarters, can retire at the age of 60. Otherwise, the official retirement age is 65.

However, considering that French people have one of the longest life expectancy in the world, it is not rare to see a father and his son both retired, one age 85 or so, and the other between 60 and 65.

Thus, it is not surprising that the pension funds are broke. Until now, the government has been paying for the difference, thanks to a 8% annual budget deficit. But this won't last and the day of reckoning is getting closer and closer.

As far as demonstrators are concerned, All of them belong to public companies: train (SNCF), metro (RATP), air traffic controllers, teachers and so on.

On top of that, they all benefit from special retirement conditions, which they are very afraid to lose. Most of them are entitled to retire between 50 and 55, depending on how terrible their working conditions are!

This too must be factored in, when figuring retirement age.

As for getting rid of these people, don't even think about it! They would not hesitate to destroy the country. The government is afraid of them.

The "PATCO" Solution

Bruno's reply was to comments I made on Tuesday in French Unions On Strike Against Pension Reform, Disrupt Rail, Air Traffic

The correct government response to this mess is to do what Reagan did to the PATCO workers, fire all the public union employees on strike and terminate their benefits.

Moreover, the French government should take this opportunity handed to them on a silver platter and go one step further to make a much needed change and dissolve all public unions. The same should happen in the US.

This would end the nonsense quickly and effectively. As in the US, there would be lines miles long to take those jobs at much lower wage and benefit levels.

Free Lunch Mentality Runs Deep

Bruno thinks the unions would destroy the country if Sarkozy tried what Reagan did. If so, France will be destroyed one way or another because this spending is not sustainable.

U.S. Backs Off Currency Dispute

In what may be pre-election jitters, or perhaps a sign that cooler heads are prevailing, U.S. backs off in currency dispute with China

The Obama administration backed away on Friday from a showdown with Beijing over the value of China's currency that would have caused new frictions between the world's only superpower and its largest creditor.

The Treasury Department delayed a much-anticipated decision on whether to label China as a currency manipulator until after the U.S. congressional elections on November 2 and a Group of 20 leaders summit in South Korea on November 11.

China left little doubt about the rancor that would ensue if it is branded as a currency manipulator -- a largely symbolic move by the United States that would mandate more consultations with Beijing but no immediate penalties.

"The Chinese yuan should not be a scapegoat for the United States' domestic economic problems," Commerce Ministry spokesman Yao Jian said on Friday.

Search for Scapegoats

Regarding scapegoats, I said the same thing on Thursday in Geithner's Search for Scapegoats Avoids the Harsh Truth No One Wants to Hear

Labeling China a currency manipulator would be a big mistake, but it is quite possible after the elections.

The open issue is whether or not Obama would sign such a measure.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Advertising General Information

Posted: 16 Oct 2010 11:31 AM PDT

With the exception of a few advertisers, negotiated in advance, I have an exclusive contract with the Investing Channel to handle all the advertisements on this blog.

Select Site Demographics from August 2008.

Please Email investing channel founder Nikesh Desai nikesh@investingchannel.com to discuss advertising on this blog.

Thanks
Mish

32% of Homeowners Expect Home Prices to Drop Next Year, Highest Short-Term Pessimism Ever; Recognition Phase Underway

Posted: 16 Oct 2010 09:34 AM PDT

Rasmussen Reports recently released an interesting survey that shows Homeowners Are More Pessimistic Than Ever About the Short-Term Housing Market

A new Rasmussen Reports survey finds that 32% expect the value of their home to decrease over the next year, the highest finding since Rasmussen Reports began asking the question regularly in December 2008.

Just 21% believe the value of their home will go up over the next year.

Looking longer term, people are feeling a bit better. Fifty-two percent (52%) of homeowners say the value of their home will increase over the next five years, the highest level of optimism measured since May.

For the second month in a row, only 55% of homeowners say their home is worth more than their mortgage. A third (33%), however, report that the mortgage is bigger than the home value.

Over half of Americans know someone who has lost their home because they could not pay their mortgage, but just 20% believe that when banks foreclose on a home, it's generally due to unfair lending practices.

Recognition Phase

Some will look at the survey results and see a contrarian indicator. I rather doubt it. I do not think we bottom until homeowners sour on long-term optimism.

Given current conditions, housing inventory, shadow inventory, another jobless "recovery", and changing social attitudes from younger generations, home prices will likely stay depressed for a while.

So instead of the survey being a contrarian indicator, I view these attitudes as part of the recognition phase. Consumers are starting to realize the economic headwinds and what that will do to housing prices in the short-term, even if they have not yet figured out the long-term demographic mess.

Time and Price is the Only Legitimate Cure

The most encouraging sign in the report is that "a majority of Americans continue to oppose any government intervention in the housing market."

The only legitimate cure for what ails housing is price and time. Prices need to fall to the point there is genuine demand. When that happens, the bottom will be in, although appreciation off that bottom will be quite slow.

In the meantime, the Fed's misguided attempt to prop up prices, in conjunction with all the interference by Congress, just stretches out the bottoming timeline.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

SEOmoz Daily SEO Blog

October's Linkscape Update

Posted: 16 Oct 2010 08:27 AM PDT

Posted by randfish

As many of you likely noticed, Linkscape updated its index on Thursday night. New data is now available in the SEOmoz Firefox and Google Chrome toolbars, Open Site Explorer, the classic Linkscape tool and many of our other SEO tools.

This update was, sadly, just over 2 weeks off schedule, primarily due to some hardware failures at Amazon's EC2 where we run processing on our large link graph to produce the metrics and views for the API. Although we've encountered issues like this in the past, this was one of the larger failures and meant processing had to be restarted several times to update the index. You might be able to read more about the technical details in the near future on our nascent and geektacular Dev Blog.

Index Stats

Pages: 41,219,038,886 (41 Billion)
Subdomains: 436,693,488 (436 Million)
Root Domains: 99,649,652 (99 Million)
Links: 402,521,240,277 (402 Billion)

I made some graphs showing a few interesting trends over the past few months in the web's adoption/use of certain protocols.

Nofollow Usage over Time

The chart above shows how using rel=nofollow on internal links is slowly becoming less popular (though it's still a majority of use).

Rel=Canonical Use Over Time

This chart's telling us that rel canonical use has barely grown from June to October (as a percent). In this index, 5.42% of the pages we saw used rel=canonical tags. The datapoint from May (when rel=canonical was on 5.50% of pages we saw) is curious, but I suspect it has more to do with which pages we were choosing to crawl and index vs. an actual shift in usage. It's a good reminder, though, that unless we see large, sustained shifts across indices comprised of relatively similar URLs, we shouldn't jump to conclusions.

The next scheduled update for Linkscape is Nov. 12th (see the Linkscape Calendar page on our API Wiki) and we hope to be in much better shape with hitting that deadline.

Linkscape is also undergoing some serious upgrades over the next 3 months. With our web app launched (and regular upgrades on track), 4 of our 10 engineering folks (Phil, Chas, Bryce & Ben) are going to be working to make Linkscape fresher, faster, more comprehensive and higher quality by January. Expect to see some incremental improvements between now and then, which we'll report here on the blog.

Do you like this post? Yes No

Daily Snapshot: GOP Rewarding Corporations that Create Jobs Overseas

Your Daily Snapshot for
Saturday, October 16, 2010

Your Weekly Address: GOP Rewarding Corporations that Create Jobs Overseas

The President lays out his agenda to foster investment here at home. He vows to close the tax loopholes for sending jobs and profits overseas that Congressional Republicans have tried to protect. Watch the video.

Weekly Wrap Up: Work That Needs to Be Done

A quick look at the week of October 11th, 2010:

Quote: "This is work that needs to be done. There are workers who are ready to do It." – President Obama on investing in our infrastructure. http://wh.gov/381

Your West Wing Week: “I Spy” Video: http://wh.gov/3Kw

Talk to Us: Don’t miss next week’s live chats: Talk about the economy with Austan Goolsbee http://wh.gov/30N, the arts with Chuck Close http://wh.gov/30N and cyber security awareness with Howard Schmidt http://wh.gov/38Y

It’s the Waiting for Superman Kids: Students from the documentary meet President Obama in the Oval Office and watch him take off in a helicopter from the South Lawn in this behind-the-scenes video: http://wh.gov/3Zo

A Colbert Bump: Austan Goolbee, Chair of the Council of Economic Advisers, talks tax cuts on the Colbert Report: http://bit.ly/cZpBjW (and the White House White Board video that inspired it all: http://wh.gov/38C)

You Asked, Chu Answered: Department of Energy Secretary Chu answers your questions on home energy efficiency: http://wh.gov/3Kr

Dam Good Tweet: RayLaHood: How 'bout that bridge? I mean, seriously, THAT is something. #hooverdam http://bit.ly/api9vP

Picture Show: Behind-the-scenes shots from September: http://wh.gov/38a

Notable Number: $2,500. Learn more about what the American Opportunity Tax Credit means for college students: http://wh.gov/30T

Bill Shock: The FCC takes on “bill shock,” and other practices that are giving consumers headaches with their Consumer Empowerment Agenda. http://bit.ly/aPObzV

Your VA: VA launches a national awareness campaign on benefits for Veterans, watch the video: http://bit.ly/aN9ou8 and check out the website: http://bit.ly/bZ16et

Think Pink: The White House goes pink in honor of Breast Cancer Awareness Month and Dr. Jill Biden discusses the battle that takes place every day http://wh.gov/30t

The White House seen from the North Lawn is bathed in pink light in honor of Breast Cancer Awareness Month Oct. 14, 2010. (Official White House Photo by Lawrence Jackson)

Get Updates

Stay Connected

This email was sent to e0nstar1.blog@gmail.com
Manage Subscriptions for e0nstar1.blog@gmail.com
Sign Up for Updates from the White House
Unsubscribe e0nstar1.blog@gmail.com | Privacy Policy
Please do not reply to this email. Contact the White House

The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : N-1

[You're getting this note because you subscribed to Seth Godin's blog.]

N-1

Fred had an inspiring post about the ability to always add one more thing. His old roommate called it N+1. Just when you think there's no more, you find a little room.

Perhaps it's worth considering an alternative. N-1. There are tons of things on your to do list, in your portfolio, on your desk. They clamor for attention and so perhaps you compromise things to get them all done. What would happen if you did one fewer thing? What if leaving that off the agenda allowed you to do a world-class job on the rest? What if you repeated N-1 thinking until you found a breakthrough?

• Email to a friend •

•

vineri, 15 octombrie 2010

Mish's Global Economic Trend Analysis

Inflation Targeting Proposal an Exercise in Blazing Stupidity; Fed Fools Itself

Posted: 15 Oct 2010 08:43 AM PDT

Lower interest rates are not typically synonymous with rising inflation, but Bernanke foolishly thinks he can get that magic pair with the power of persuasion in conjunction with Quantitative Easing.

Please consider Fed Considers Raising Inflation Expectations to Boost Economy

Federal Reserve policy makers may want Americans to expect inflation to accelerate in the future so they spend more of their money now.

Central bankers, seeking ways to boost flagging growth after lowering interest rates almost to zero and buying $1.7 trillion of securities, are weighing strategies for raising inflation expectations as well as expanding the balance sheet by purchasing Treasuries, according to minutes of the Fed's Sept. 21 meeting released yesterday.

Some Fed officials are concerned that expectations of lower inflation will become self-fulfilling, damping demand by increasing borrowing costs in real terms, the minutes said. By encouraging Americans to believe prices will start rising at a faster pace, the Fed would reduce inflation-adjusted interest rates and stimulate the economy. Chairman Ben S. Bernanke said in 2003 that Japan could beat deflation by using a "publicly announced, gradually rising price-level target."

"The Fed is on the verge of actively targeting a higher inflation rate," said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York. U.S. stocks advanced, sending benchmark indexes to five-month highs, the dollar fell and gold declined for the first time in three days after the minutes were released.

Trying to raise inflation expectations is untested in the U.S. The policy may backfire if actual inflation drifts higher than the Fed would like, potentially eroding gains won in the early 1980s by former Fed Chairman Paul Volcker, who raised interest rates as high as 20 percent to subdue prices.

Jim O'Sullivan, global chief economist at MF Global Ltd. in New York, said in a Bloomberg Television interview that the biggest risk is "boosting long-term inflation expectations more than they lower real interest rates."

The FOMC could adopt a combination of inflation targeting and price-level targeting to get inflation expectations up, said Mark Gertler, a New York University economist and research co-author with Bernanke.

The Fed could restate its commitment to keep inflation rising annually at around 1.7 percent to 2 percent. At the same time, the FOMC could announce some tolerance for inflation above that goal to make up for recent undershooting of those rates, Gertler said.

That would help convince the public that the Fed wasn't going to raise rates rapidly if inflation moved above 2 percent, he said. Such a strategy "tells the market that the farther we undershoot, the more aggressive we are going to be," he said.

Dudley, who serves as FOMC vice chairman and is the only regional Fed president to vote at every meeting, said in an Oct. 1 speech that, for example, "if inflation in 2011 were 0.5 percentage point below the Fed's inflation objective, the Fed might aim to offset this miss by an additional 0.5 percentage- point rise in the price level in future years."

"There's some evidence that inflation expectations are playing a role both in limiting demand and keeping prices low," FTN's Low said.

"You look at housing now and one of the reasons people aren't buying is they expect they can get a better price if they wait," he said. "If that behavior spreads into other markets, it could be a real problem."

Elegant Nonsense

The idea that inflation expectations matter one iota except as pertains to hyperinflation is silly.

Seriously, will you go out and buy appliances, food, autos, gasoline, or anything else just because you expect prices to go up? Even if you would, how much? You cannot store gasoline nor will you buy more food than a freezer or your pantry will hold. Then if you do, then what?

Then if everyone else does too, demand down the road will crash, and prices will fall back as well.

Perhaps you will buy an appliance, but only if you needed one anyway. Then after you buy it, you sure will not buy another.

Thus, it does not take a lot of brainpower to see that at best (a very iffy at best), all targeting inflation expectations can possibly do is shift some marginal demand forward.

However, if stores attempt to take advantage of the Fed's announcement and hike prices, the opposite could happen. With unemployment at 10% higher, higher prices might just as easily scare consumers away as opposed to goading them into spending.

Inflation Targeting is an Exercise in Blazing Stupidity

Stepping back for a second, it is imperative to understand that although the Fed can attempt to increase liquidity, it cannot determine where the liquidity goes, or if it goes anywhere at all.

From that perspective, attempts by the Fed to increase prices, if they worked at all, would more likely than not affect goods with inelastic demand such as food and energy, and commodities via speculation. That is not at all what the Fed wants.

Thus, the entire proposal is an excise in blazing stupidity.

Consumers Need to Deleverage

Consumers are tapped out in need of further deleveraging. Boomers are headed into retirement with insufficient savings. Small businesses are suffering from lack of demand, with rising input costs and lower prices received.

Forcing prices higher now (assuming the Fed could do such a thing) would hurt demand. Yet the Fed is hell bent on trying, first by destructive Quantitative Easing strategies, now with absurd inflation targeting ideas.

Hello Ben, This is Not 2004

This is not 2002-2004 where consumers were willing to mortgage their souls to buy a house. This is 2010 on the back end of housing and credit cycle busts.

The one thing the Fed desperately needs to rise is home prices, but home prices are dead last on the list of things likely to rise should the Fed have any "success" in getting prices to rise.

The last bubble is never reblown. Japan, The dotcom crash, and the housing bubble are prime examples of bubbles not reblown.

After 10 years, only a handful of Nasdaq stocks made it back to new highs. Even solid companies like Cisco and Intel are down 60% or more. After 20 years, the Nikkei is more than 70% off its record high.

Lower Prices Needed

For price hikes to stick, demand must be real, not artificial. Otherwise, forcing prices higher by artificial means such as QE and inflation targeting will just serve to lower demand while increasing speculation and risk in commodities.

Eventually, housing prices and other prices will fall low enough so that genuine demand picks up. When that happens, the economy will stage a recovery.

In the meantime, and just as happened in Japan, the Fed's blazingly stupid policies are actually delaying the recovery.

Fed Fools Itself

I wrote that last night. Caroline Baum had similar thoughts this morning in Fed Wants to Hoodwink Public, Only Fools Itself: Caroline Baum

If I were a central banker, I would be afraid.

If I were a central banker getting ready to embark on another round of quantitative easing, I would be very afraid.

Here's why. Central bankers in the U.S. are being bombarded with market-based signals suggesting their fears of deflation, or falling economy-wide prices, may be misplaced.

Gold prices continue to set new highs. The U.S. dollar, the global reserve currency, keeps sinking amid expectations the Federal Reserve will dilute the existing stock starting at its Nov. 2 to 3 meeting.

Commodity prices, both industrial and agricultural, are on a tear. The CRB Spot Raw Industrial Price Index, which includes scrap metals, cotton and rubber -- but not oil -- hit an all- time high this week.

Junk bond issuance already set a record for the year, with demand for high-yield debt narrowing spreads to Treasuries. Investors are pouring money into emerging markets debt issued in local currencies by countries that used to be considered banana republics. Mexico sold $1 billion of 100-year bonds last week, double the announced issue size, at a yield of 6.1 percent. Just ask yourself: Would you lend money to Mexico for 100 years? Exactly.

If the Fed's goal was to make investors move out the risk curve, it succeeded. An alternate interpretation: Zero-percent interest rates are causing a misallocation of capital, a nice way of saying, "asset bubbles."

Every time policy makers talk about inflation expectations, I want to know just whose expectations they are targeting. The man on the street? The 14.8 million Americans who are unemployed? Small businesses, which are more concerned about the rising cost of health care and taxes than higher prices? Or is it bond traders' expectations, reflected in the price of Treasury securities? The Fed never makes that clear.

These Fed folks and their academic acolytes need to step away from their models and get out in the real world.

Fed Cannot Control Consumer Psychology

The main problem Caroline describes is the Fed can provide liquidity, but not determine where it goes. And as I sated above, that liquidity is going into all the wrong things.

Moreover, record junk bond sales, loans to Mexico, massive demand for emerging market debt do not even factor into the CPI. So while consumer prices stagnate outside of food, energy, and medical, Keynesian and Monetarist clowns call for still more liquidity.

My only disagreement with Baum regards her conclusion: "Policy makers may end up fooling themselves that they can create expectations of a little more inflation without delivering a lot of the real thing. "

The risk is not rising consumer prices, but more credit and asset bubbles just like the housing bubble that popped. We are awash in over capacity with little demand for goods and services. Consumers need to deleverage and so they are. They will continue to deleverage no matter what the Fed says or does.

Models Don't Trump Reality

We are in this mess in the first place because arrogant buffoons at the Fed, Greenspan and Bernanke included, remain in wonderland, where models trump reality.

For more on this line of thinking, please see Drunken Horses and Drunken Horses' Asses in Academic Wonderland

Economic Illiterates Trapped In Academic Wonderland

Only the back end of a horse would think that adding water or alcohol to an ocean of liquidity will solve anything. The fact of the matter is small businesses are the economic driver for jobs, and small businesses will not expand even at 0% interest rates.

For details, please see NFIB Small Business Trends for October Continue to Show No Recovery, Inflation Not a Threat; Fed Governor Hoenig Blasts Bernanke's QE Strategy

It would sure help if the economic illiterates at the Fed would get out in the real world and talk to small business owners.

But they don't and they won't. Instead they sit in their academic wonderland of Monetarist stupidity that says if horses won't drink, give the horses more water and if that does not help, offer them whiskey.

The problem is not falling prices, but falling demand for loans. We are in this mess because of overleveraged consumers, businesses, and financial institutions. Just as you do not cure an alcoholic by offering him another drink, you do not cure a problem caused by excessive liquidity, still more liquidity.

Biggest Bubble Is Fed's Belief In Itself

The Fed could not see asset bubbles form on numerous occasions.

The Bernanke Fed is missing another set of asset bubbles right now in junk bonds, emerging market debt, and arguably commodities.

The Fed believes it is all powerful and can control consumer demand and prices, in a global economy. It can't. We have countless bubbles to prove it. Another set of bubbles is forming now, and the buffoons cannot even see it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Retail Sales Rise More Than Forecast; Once Again I Ask "Really?"

Posted: 15 Oct 2010 08:27 AM PDT

Bloomberg reports Retail Sales in U.S. Increased More Than Forecast

Retail sales in the U.S. climbed more than forecast in September, easing concern consumer spending will weaken and endanger the recovery.

Purchases rose 0.6 percent following a 0.7 percent gain in August that was larger than previously estimated, Commerce Department figures showed today in Washington. Other reports showed inflation cooled even further last month and manufacturing in the New York region accelerated.

Retailers like Target Corp. and Wal-Mart Stores Inc. are sweetening discounts and using promotions ahead of the holiday season to move merchandise as joblessness hovers near a 26-year high. Federal Reserve Chairman Ben S. Bernanke today said gains in spending would probably be "uneven" because unemployment was too high, and indicated that additional monetary stimulus may be needed.

"They're reasonably solid consumption numbers," said Jim O'Sullivan, global chief economist at MF Global Ltd in New York. "Momentum is going to be up again in the fourth quarter."

Really?!

Once again I am questioning the numbers. They do not fly in in relation to Gallup Poll Shows Discretionary Spending at All Time Low; Trends Support Double-Dip Theory

Lower- and middle-income Americans' self-reported average daily spending in stores, restaurants, gas stations, and online averaged $48 per day during September -- down $6 from August and $16 from July. Consumer discretionary spending by these Americans making less than $90,000 a year is now at its lowest level since Gallup began daily tracking in January 2008, as the recession was just getting underway.

See above link for more charts.

Retail Sales Not Believable

Calculated Risk has a nice chart in Retail Sales increase in September

Retail sales are up 9.6% from the bottom, but still off 3.2% from the pre-recession peak.

Retail sales had moved mostly moved sideways for six months, but this is now the high for the year.

Retail sales may be at their best point in the year, but sales are certainly not within 3% of the all time high. If they were tax revenue collection would be exceeding all time highs given increases in sales taxes.

Sales Tax Collections Down 5.9% June 2010 vs. June 2008

In spite of numerous sales tax hikes, tax collections are still 5.9% lower than two years ago. Moreover, June of 2008 was not the pre-recession peak. November of 2007 was the pre-recession peak.

Bear in mind those statistics are as reported in Retail Sales Rise .4% from July - How Far to Pre-recession Levels? Where to from Here? reflective of the second quarter.

See link for several charts.

Unless consumers have gone on a tear in the third quarter (highly unlikely with renewed slowdown in housing as well as the recent Gallup survey above), these retail sales reports are simply not believable.

What's clear is the methodology is flawed. By how much is the question. The way to figure out how much is to factor in all sales tax hikes and compare state sales tax collections. I will take another look at that as time permits.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Parachuting into a Football Stadium

Posted: 15 Oct 2010 07:44 AM PDT

Sgt. Adam Sniffen of the U.S. Army's 101st Airborne division dropped into the football stadium at the University of Michigan to deliver the game ball. A tongue-controlled head-mounted camera captured his descent from several thousand feet up.

35 Sad Pugs In Costumes

Posted: 15 Oct 2010 07:24 AM PDT

Costumes make pugs sad. Never bring a pug to a costume party.

Extreme Motorcycle Stunts

Posted: 15 Oct 2010 06:54 AM PDT

The legacy of Evel Knievel continues, as these motorcycle daredevils try to leap their bikes higher and farther and make it to the other side with most of their bones and internal organs intact!

Women Driving Fails

Posted: 15 Oct 2010 04:42 AM PDT

Women, like men, crash their cars, and they can do it with some style as most of these photos show it.

Make Your Own Stormtrooper Mask

Posted: 15 Oct 2010 04:31 AM PDT

All you need to make a stormtrooper mask is a couple of plastic milk jugs and these instructions. The result is absolutely amazing. However, it does make a person wonder how long it took this person to figure this out and what his real job is.

Famous Crimes

Posted: 15 Oct 2010 04:19 AM PDT

Does evil reside within the individual? or is it a force which can be as powerful when applied to more than one person, as in a couple, a gang, or even an army?

More Infographics.

Click to Enlarge.

Source: courtreporter

sâmbătă, 16 octombrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog

Index Stats

Daily Snapshot: GOP Rewarding Corporations that Create Jobs Overseas

Seth's Blog : N-1

N-1

More Recent Articles

vineri, 15 octombrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Pagini

Persoane interesate

Arhivă blog

sâmbătă, 16 octombrie 2010

Index Stats

More Recent Articles

vineri, 15 octombrie 2010

Pagini

Persoane interesate

Arhivă blog

Subscribe to