Mish's Global Economic Trend Analysis |
- Tsipras Talks With Putin; Energy Minister Rules Out Deal; Wordsmithing Extraordinaire; 16 Tons
- Durable Goods Charts Seven Ways
- Solid Jobs Report: Labor Force +397K, Establishment +280K Jobs, Employment +272K, Unemployment +125K, Unemployment Rate +0.1%
- Another Twist in Greece
| Tsipras Talks With Putin; Energy Minister Rules Out Deal; Wordsmithing Extraordinaire; 16 Tons Posted: 05 Jun 2015 12:38 PM PDT Greek prime minister Alexis Tsipras keeps hinting that a "deal is close" while publicly trashing every deal offer. One seriously has to wonder if this is purposeful gamesmanship to string the Troika along and encourage the ECB to keep liquidity in place so that Greek citizens can pull their money out of the banks. The more simple possibility is everyone truly believes the other side is likely to cave in at any moment. Tsipras Won't Agree to Irrational Proposals Repeating similar rants of the past, Tsipras said today: Greece will Not Consent to Irrational Proposals. Greece cannot accept the "irrational" proposal made this week by the institutions overseeing its bailout, Prime Minister Alexis Tsipras said during an emergency Parliament session Friday, adding that any deal must also include some form of debt relief.Wordsmithing Extraordinaire Is it remotely possible Tsipras actually believed a better deal was going to be handed to him? I strongly doubt it. Please note that Tsipras did not say "he believed the deal will soon be withdrawn". He said he would "like to believe it will soon be withdrawn", a completely different meaning altogether. What about his statement a "deal is now closer than ever"? Quite possibly, that's technically true. If the deal was a mile away before, and there was an inch of progress today, the deal could indeed be "closer than ever" but at the same time "not close at all". I am still amused at yesterday's wordsmanship. Thursday morning, when asked by reporters whether Friday's installment would be made, the Greek prime minister replied: "Don't worry about that." Thursday afternoon, we learned Athens to Delay IMF Repayment. Of course "Don't worry about that" is quite different than "yes". A skillful politician frequently appears to say something significant without saying anything at all. These last two days prove that Tsipras is a wordsmith master. There is technically not a single lie in any of the above statements. That's a remarkable achievement for any politician, especially one under the gun, both foreign and domestic. Energy Minister Rules Out Deal Lending credence to the theory that a deal is closer, yet not close at all, Greek Energy Minister Rules Out Deal with Creditors Who Want 'Pound of Flesh'. The divisions within Greece's government were laid bare on Friday when a senior minister ruled out any agreement with the country's creditors, accusing them of demanding a "pound of flesh".Athens Looks to Moscow Does the above rant sound like a deal is close? I think not. And what about Russia? Please consider Putin holds phone call with Tsipras, agrees to meet in 2 weeks in Russia. Russian President Vladimir Putin has held a telephone talk with Greek Prime Minister Alexis Tsipras on Friday. They have discussed Russian gas supplies via Turkish Stream and agreed to meet at the St. Petersburg International Economic Forum in mid-June.Another Day Older and Deeper in Debt In spite of (or because of) the above wordsmithing, we still do not know whom, if anyone is bluffing. All we know for sure is that if a deal is worked out, Greece will sell its soul to the "company store" better known as Troika. I offer this musical tribute. Link if video does not play: Tennessee Ernie Ford Sings 16 Tons Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Durable Goods Charts Seven Ways Posted: 05 Jun 2015 10:25 AM PDT Reader Tim Wallace sent a series of four charts on durable goods components. Each chart compares April of this year to April in prior years. Durable Goods Shipments  click on any chart for sharper image This is the first time since 2008 that April year-over-year shipments are down. Durable Goods New Orders  This is the first time since 2008 that year-over-year new orders in April declined. New orders rose above the pre-recession high but are now slightly below the 2007 high. Durable Goods Unfilled Orders  Unfilled orders keep climbing. They are at a record high. Durable Goods Inventory  Durable goods inventory is near a record high. The above charts show nominal prices, not adjusted for inflation. Adjusted for inflation, shipments and new orders are well below pre-recession levels. Over time, shipments and orders should match unless there are cancellations. Unfilled orders are a reflection on aircraft orders that have a very long lead time and are subject to cancellation. Here is a chart I created in Fred that explains unfilled orders. Unfilled Orders Breakdown  Blue - Unfilled Orders Total Green - Unfilled Transportation Orders Red - Unfilled Orders Excluding Transportation Unfilled orders except for transportation are meandering along. New orders is the primary story. To weed out the possibility that April of 2015 was some sort of outlier, let's look at some seasonally adjusted growth charts. Durable Goods New Orders Percent Change From Year Ago  Durable Goods New Orders Excluding Transportation Percent Change From Year Ago  Durable goods orders are a volatile series, in large part due to huge transportation orders but conditions have been weak ever since November of 2014. Durable Goods Growth From Year Ago
Durable Goods Growth From Year Ago Excluding Transportation
Excluding transportation, the numbers look better. Yet even excluding transportation, year-over-year new orders have been very weak all year. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 05 Jun 2015 09:07 AM PDT Initial Reaction Today's job report (for May) showed good numbers for the labor force, establishment jobs, and household employment. In contrast to April, this month's report was not marred by huge growth in part-time employment. Household survey employment rose by 272,000 while unemployment rose by 125,000. That means more people actively seek jobs. They are back in the labor force. As a result, the unemployment rate rose by 0.1% to 5.5%. Let's take a look at all the key numbers. BLS Jobs Statistics at a Glance
March 2015 Employment Report Please consider the Bureau of Labor Statistics (BLS) Current Employment Report. Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline. Unemployment Rate - Seasonally Adjusted  Nonfarm Employment  Click on Any Chart in this Report to See a Sharper Image Nonfarm Employment Change from Previous Month by Job Type  Hours and Wages Average weekly hours of all private employees was flat at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours. Average hourly earnings of production and non-supervisory private workers rose $0.06 at $20.97. Average hourly earnings of production and non-supervisory private service-providing employees rose $0.06 at $20.77. For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? Birth Death Model Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back. Table 15 BLS Alternate Measures of Unemployment  click on chart for sharper image Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation. The official unemployment rate is 5.5%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. U-6 is much higher at 10.8%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 05 Jun 2015 12:24 AM PDT Greek prime minister Alexis Tsipras was confident just yesterday of working out a deal with the Troika. Thursday morning, when asked by reporters whether Friday's installment would be made, the Greek prime minister replied: "Don't worry about that." Thursday afternoon, we learned Athens to Delay IMF Repayment. Of course "Don't worry about that" is quite different than "yes". Grounded by Dissent Friday morning we learned Alexis Tsipras Grounded by Dissent from Within Syriza. After four hours of discussions with EU leaders in Brussels on Wednesday night, Alexis Tsipras was planning to return on Friday in hopes of at last sealing a bailout deal with creditors.What's the Game? Ever since Alexis Tsipras won the Greek election and appointed finance minister Yanis Varoufakis, an expert who wrote a book on game theory, it's been extremely difficult to determine who is bluffing and who isn't. Heck, it's very difficult to determine what most of the players really want. German chancellor Angela Merkel is one notable exception. She wants Greece in the eurozone, but not if it costs her too many political points. How many points is too many? Ask Merkel, but she won't tell you. Does Alexis Tsipras want Greece out of the eurozone? The possible answers are yes, no, yes provided he can blame the Troika, yes provided his party goes along, yes provided he can stay in power, etc. The only way to know if anyone wants a deal is if there is a deal. If Tsipras' goal all along was to default and place the blame elsewhere, he played his hand masterfully well. He can blame the Troika, Germany, his own party, or coalition partners. And months of delays gave everyone a chance to pull deposits from Greek banks. On that note I have a strong recommendation: If you have money in Greek banks, you are begging for a haircut. Get your money out of Greek banks immediately, and keep it out even if a deal is announced. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
Postări
