Thursday, April 03, 2008
The 4 week moving average YoY ratio (08/07) as of this week is 1.20% (374,500/311,750). The YoY NSA continued claims ratio for March 22nd is 1.18 (3,219,407/2,727,408).
These ratios have roughly doubled this year in comparison to the previous year. There is a decisive and very clear trend for the worse in employment indicative of a recession. Rises in unemployment are more the consequence of recession than the cause of one, so the employment picture often continues to worsen for quite a while after the general economy begins to improve. But we aren't in the economic improvement cycle yet.
The NY Fed is publishing an interesting dynamic map of Alt-A and subprime loans by state. You can also look at color-coded differences by zip code. The data is from Loan Performance. On the Alt-A side, there is a pretty good general correlation between low/no doc loans and non-currents! Amazing how that happens....
ISM services will be published later today.
At the ISM site you can also get the JPMorgan Global Manufacturing report. The most recent was published on the 1st (but it is not an April Fool's joke):
March data indicated that growth of global manufacturing production was the weakest since May 2003, as the volume of new orders was unchanged compared to levels one month ago. Cost inflationary pressures remained elevated, with the rate of increase in average purchase prices accelerating sharply to reach its second-highest in the survey history.In the Eurozone, Germany was expanding but Italy, Spain and Ireland are weakening.
By country this is the JPMorgan share of global GDP:
US: 30.5%There are disputes because no one really agrees about the calculation of GDP for some of the EMs! But regardless, if the US goes into recession, the UK, France, Germany, China and Japan must have good growth to carry out a global slowdown instead of a global recession. Right now Japan and the US are both expected to be in recession sometime this year and the UK is weakening. Both China's and India's rate of growth is expected to slow. So the IMF is assigning a 25% chance of global recession.
Update: ISM services (now non-manufacturing) is in. It is still in contracting range, but increased a bit from Feb (0.3). This report marks three months of relative improvement for NMI, from January's 44.8, to February's 49.3, to March's 49.6.
The worst danger to global economic growth remains food prices. Rice and corn are at highs, rice exporting countries are beginning to curb exports to contain the political problems imposed by high prices, and Zoellick of the World Bank addresses some of this problem:
Zoellick said the time was "now or never" to break the impasse in global trade talks. A "fairer and more open trading system" would encourage developing country farmers to expand production, he said.Diplomatically spoken, but almost nothing in these proposals addresses the current threat.
"The poor need lower food prices now. But the world’s agricultural trading system is stuck in the past. If ever there was a time to cut distorting agricultural subsidies and open markets for food imports, it must be now."
An accord would give developing countries, big and small, more opportunities to become more productive and lower prices through trade. It would also infuse confidence in an economic system stressed by financial anxiety, he said.
However, "powerful voices across the political spectrum, including in my own country, are calling for, rationalizing, protectionism," Zoellick said. "This economic isolationism signals a defeatism that will reap the losses, not the gains, of globalization."
The trade talks are also a "critical test" for striking a global deal on climate change. "If negotiators of 150 economies cannot manage the political tradeoffs of the Doha Round to reap the clear benefits, it does not auger well for bringing developed and developing countries together on a new accord for climate change."
Also, in a possibly unrelated incident, Ted Turner proves that he is either barking mad or frustrated that he gets less global warming press than Al Gore:
If steps aren't taken to stem global warming, "We'll be eight degrees hotter in 30 or 40 years and basically none of the crops will grow," Turner said during a wide-ranging, hour-long interview with PBS's Charlie Rose that aired Tuesday.First he said in the interview that this would happen in ten years. Then he corrected himself. Later on he said that he hasn't said anything "really stupid" for a long time.
"Most of the people will have died and the rest of us will be cannibals," said Turner, 69. "Civilization will have broken down. The few people left will be living in a failed state — like Somalia or Sudan — and living conditions will be intolerable."
In a profoundly depressing development, Obama is reported to have stated that Al Gore will be his guiding light on global warming issues. I will definitely not vote for Obama. Al Gore is rich enough already and has lost all perspective on this issue. He is the climate change equivalent of a mortgage banker claiming that giving liar loans to borrowers is the only way to uplift the US economy:
Sen. Barack Obama said Wednesday he would give Al Gore, a Nobel prize winner, a major role in an Obama administration to address the problem of global warming.Shoot me! Just shoot me!
..."I will make a commitment that Al Gore will be at the table and play a central part in us figuring out how we solve this problem. He's somebody I talk to on a regular basis. I'm already consulting with him in terms of these issues, but climate change is real. It is something we have to deal with now, not 10 years from now, not 20 years from now."
Obama said he would use Gore to help forge a cap-and-trade system for carbon emissions designed to lower pollution.
Yes, I am beginning to believe that just drafting four average person in a lottery and then picking from that pool would work better!
Because Al would remind him of his pastor?
Like you, I ruled out voting for McCain some time ago. I've definitely also ruled out Obama. If not for his solid left voting records, then for his dissembling about his actual views and creation/maintenance of what seems to me to be a deceptive moderate image. I was tending toward Hillary (assuming she beat Obama for the nomination) but have decided that she has a pathological lying streak that I don't want to see in a chief executive.
For the first time in my adult life, I can't see how I could vote for a president this year.
Teri, the next president was always going to have a tough time. The hope was that this election would be a real debate about some fundamental problems (such as underfunded retirement programs and the budget) that most of our legislators have been evading. Now even that appears unlikely.
Could you imagine a Teddy Roosevelt or a Truman putting up with this garbage?
It's the process dictated and created by the media pimps and the two-- party system head--jackasses.
It's months upon months of these media chimps and chimpettes whose companies make hundreds of millions off this fiasco.
Wasn't strongly in favor of Hilary, but it's not a lying streak. It's what happens when having to be out politicing' -- with around all those chimps and chimpettes dissecting every word, your appearance, everything every day for a year. Even on the planes with them.
Hundreds of millions wasted on their media cos. and paying for the chimps to spew out more hot air gases out of their mouths or on paper (wasting more trees).
Dem ultraliberals led by Dean and others are fighting to take over the party vs. the Hilary centrists.
AND: I would like to see all campaign coverage be in black and white.
Maybe, C-span should take on more
in a non-partisan way as need some changes there too. I would be involved. Old folks and unemployed call in shows don't change anything. Same re the same old same topic history books publ. and on there...
Unless the Republicans can hold at least 41 Senators who will stand firm against it, cap and trade will happen next year. All three presidential candidates favor it and the Dems are going to hold both the House and the Senate.
I doubt we'll see any further trade agreements. We may even see some trade agreements end if Hillary or Barack get the nod; both have had to quietly reassure the Canadians that they didn't mean the Canadians were evil poluting jobstealers, which doesn't say good things about the survival prospects of agreements that the Democrats like even less than NAFTA.
Our choices seem to lie between Hoover and Hoover-Plus (do nothing, versus do something actively stupid).
Independent, I was not really reacting (strongly) to the Bosnia/sniper story (which I think you are somewhat referring to here). In fact, when I listened to the story/watched her tell it, it reminded me of "war stories" that people in my industry tell about things they did/lived through, etc. Some definite embellishment but done not maliciously but with increasingly inaccurate recall that emphasizes drama. So I actually was disposed favorably to her on this.
But then I started remembering lots of things from her earlier history (I'd rather not dredge them all up; you can easily find stuff like this if you search for it), and I have come to the conclusion that she has a long history of active manipulation (significantly more than most politicians). You may or may not agree, but that's my conclusion.
I don't want to vote for a candidate that I believe has demonstrated a strong predeposition to lie. Probably they all would under the right set of circumstances, but I don't want to help choose someone I think does that routinely.
Just my 2 cents.
So I am left considering 'who struck John's' point: is there a lesser evil such that I could hold my nose and vote for them? I can't seem to get to that perspective yet. WSJ: what's your take on the lesser evil?
Hillary's not an ethical person, and the idea of getting Rubin and Greenspan (who created the current financial mess) to fix it makes me want to vomit. So unethical and economically unsound is a pretty dire combo. Yes, she does lie more than the average politician. Also she is hip-deep in the whole Wall Street-Runs-The-Universe thing. If we do not get serious about fixing the financial mess we will not climb out of this. We will not be able to fix it without making some changes which will piss the Street off big time.
Obama is a nice guy and he might be a good president under different conditions. However I don't think he has the iron in his soul necessary to deal with what's coming down the pike. It will be ugly and dangerous in international politics and it will be wrenching for domestic policy. We have got to make acutely painful adjustments to deal with retirement spending, and those adjustments will require a combination of higher taxation on those who are above median income, tightening of welfare programs for the intermediate (forget paying for health insurance for kids whose families earn 60K a year), and a slashing of real government expenditures.
I have spoken to several persons who have decided to vote for McCain due to the above factors, but they concede that he may be on the verge of senility.
I think I'm having a voting-related panic attack. All three are running on unachievable economic programs, although McCain is probably closest to reality - but he is far from it.
Hillary's economic initiatives look the worst.
Obama is an unknown. He's never been really tested, so we have no idea how he'll act in a crisis. We could get lucky and have a Lincoln (who had no notable experience prior to saving the Union) or he could be a complete flop. We do know that he's a product of the northern Illinois machine, but Truman was a product of machine politics too -- the question is whether he can break free of it. The Wright thing makes me think he's not likely to be Lincoln or Truman, though.
McCain is stubborn and has a bad temper. He certainly has the grit for what's coming, but will he get set on the wrong course and then get stubborn about sticking with it beyond all hope or reason?
Right now it's between Obama and McCain for me, with a hefty edge to McCain. The reason is Congressional politics: the Dems are going to retain the House and add 5 or more Senators. The House leadership is substantially less realistic than Hillary (!). The only way to put a break on some of the nuttiness the House is likely to try is to put someone from the opposite party in the Presidency so that the worst nuttiness gets vetoed.
This is worse than stupid. The man lived in Indonesia as a boy. He should have some feel for this from his own experiences. We are looking at a person who lives in a made-up world. It's much worse than the Church of Black Jesus and US Govt-Supplied Virii.
Obama is not an independent thinker. In other circumstances - when the CW wasn't so wildly off - his personal gifts might make him a very good president. In these circumstances, he'll be rudderless.
No matter which of these candidates gets in, the next president is going to have a lot of trouble with a dysfunctional reality-adverse Congress. Obama won't be able to stand up to it. He's a get-along type of guy. His assets are that he genuinely likes people and he genuinely wants to make a better world, plus he believes it can be done. But at this point, he seems to have no ability to relate his own life experience to what is actually going on. The rise of Muslim fundamentalism is mostly related to the poor economic circumstances of the average guy in these Muslim countries.
The next president will be a one-term president. Maybe Obama will be back after that. Once our politicos stop running from reality a consensus-builder would be valuable.
Where were you all when they tossed the Moderates out of both parties and they haven't been able to win since @1985.
What is needed is a third party of Logical Independents (since so many hate the word "Moderate" [esp. all the bible thumper & relig. ideologues as correlate, Moderate, with weakness & weak people].
Hillary is a Centrist.
McCain? We as a country cannot and should not tolerate in any way have the size of this military, its budgets, and its outrageous contracting & waste.
McCain had a chance before our Alfred E. Neuman to be prez. & his handlers pushed John McCain off the nomination stage 8 years ago.
Only way he wins now is if Obama
is the candidate, then people
will hold their nose and vote for McCain or not vote at all.
We don't this huge military and its costs or around the globe while
the rest of this country is going down the tubes.
And, hey, do you not remember the McCain and the Keating Five(his trips to Caribeean resorts with and travel on Keating jets; his wife's real estate dealings with Keating; his wife as a druggie and pilfered from a non-profit; his wife's skinny body obsession; re his naval hot dogging career (other than respects for him as a POW for his country) and finnagling to protect those S&lsin the 1980s Bailout paid --billions paid off by none other than the taxpayers?
Look what these asses are doing for those homebuilders as of yesterday:
billions in writeoffs for all their
thieving profits to bail them out.
They gave $20M to Federal--Sen. & Congr.coffers--last election season.
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