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Economic Recovery

By tatupu70   Follow   Mon, 12 Jul 2010, 2:27pm   1,442 views   15 comments
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Here's the lastest on the earnings front:

 http://finance.yahoo.com/news/CSX-2Q-profit-jumps-on-apf-3092795664.html?x=0

 "CSX, based in Jacksonville, Fla., earned $414 million, or $1.07 per share, compared with $305 million, or 77 cents per share a year earlier."

"Shipping volume was up in every category in the three-month period, except food and consumer shipments, which were flat. Shipments of vehicles and parts jumped the most -- 63 percent compared with last year. Metal shipments surged 44 percent. Shipments of forest products like lumber, tied to the still-shaky housing market, rose 2 percent."

IMO you can question the sustainability or strength of the recovery, but don't tell me things are the same as a year ago...

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1. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   1   4:09pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   um, if things were still the same as a year+ ago, we'd be living in a Road Warrior sequel by now. http://finance.yahoo.com/q/bc?s=%5EGSPC&t=5y&l=off&z=l&q=l&c= If the Senate can't get EUC extensions passed for the ~5 million people dropping off this month, hello Mad Max.

2. errc Follow Befriend (7) 29 threads 1,214 comments 31 male Premium

   2   4:10pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Protected   Well, yea. So did the stimulus work? Whatever 'work' means If you pull the rug out from under this state manipulated economic recovery and it falls flat on its face Personally, I'm much more concerned with how this plays out in the next 5-10-20+ years then the noise of the last couple months What will the future implications be of all this stimulus?

3. SFace Follow Befriend (2) 61 threads 1,306 comments Premium

   3   5:13pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Protected   Here's wells Fargo July 2010 California economic outlook, FWIW. For people that don't know, Wells Fargo is based in San Francisco and heavily rely on the CA market. http://blogs.sacbee.com/real_estate/California_Jul2010.pdf "the pace of growth is expected to moderate" "Still, the gradually improving trend is easily visible when one looks at the income gains by industry sector. Higher earnings were recorded by 17 of 24 industry sectors during the first quarter." "Housing affordability is the best it has been in California in decades" "That is not to say there will be no negative effects; indeed, we expect California existing home sales to be somewhat weaker this year on average than last year, as sales decline into the end of 2010. The good news is that this temporary weakening of sales will not be enough to send statewide home prices reeling back to their financial crisis lows. Current market conditions appear much too balanced for a repeat performance of steep California housing price declines. We reach this conclusion even as we expect a rising supply of distressed home selling to reemerge over the near term."

4. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   4   6:49pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Does WFC have it in their models 200,000 state employees getting paid minimum wage until the budget is passed? Federal EUC benefits for the unemployed class of 2009 ending in June instead of November or December? "California has added an average of 19,200 jobs a month to date, yet private sector employment growth was 45 percent less than that, at 10,500 per month. Temporary help services and Census hiring are responsible for the bulk of the hiring so far this year, 78,300 jobs to date. The balance of the job growth in the rest of the economy totaled only 17,600 jobs. The biggest job gains last month, 30,000 jobs, came from government. Federal government positions increased by 32,900 jobs as the Census Bureau ramped up hiring" and: "Higher earnings were recorded by 17 of 24 industry sectors during the first quarter. Gains were lead by forestry, fishing and related sectors, up 16.2 percent over the quarter. Strong gains were also reported in administrative and waste services, private education, federal military and mining." Christ. Forestry is now our prime economic mover? What century is this again? We just can't cut $19B of state spending and leave it as "State and local budget cuts are expected to be a major source of economic weakness over the forecast horizon" $19 billion is 300,000 jobs at $60K per, and the lost velocity of money will take out another 300,000 or more jobs AFAICT.

5. iwog Follow Befriend (48) 274 threads 12,546 comments 47 male Lafayette, CA Premium

   5   7:32pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Protected   Job growth lags economic growth by about 18 months. This isn't some wild theory, it's what usually happens. Although I disagree with cutting off unemployment benefits, now is about the time unemployment should start going down IF the 18 month model is correct. Mad Max? Seriously Troy? As the numbers continue to improve I think it's high time you started to examine just how much of yourself you have invested in your dire predictions. I wouldn't mind a new Great Depression and a popular revolt against the aristocracy myself, but it's not going to happen this cycle. Unemployment never got as bad as it did in 1982 and it's leveling off now. Things aren't even close to the 1930s. Back before the New Deal when wealth disparity was as high as it is now, the United States suffered a 20 year Boom-Bust-Bank Failure-Depression cycle. This was before unemployment. This was before SSI and Medicare. I'm not surprised that the first real bank failure bust since 1929 was a mild one. They get worse from here (especially if the Republicans run things) but THIS bust is coming to an end.

6. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   6   8:16pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   This bust is in its 3rd inning still AFAICT. We've put 5 million+ people on the dole since mid-2008 but the funemployment is quickly coming to an end. The state has a ~$20B funding gap still. If we cut spending or raise taxes to close that gap, that's going to be massive pain to the economy, pain greater than any recovery the state has seen since last year. You can't just rattle off what normally has happened in recessions. This is not a typical recession, it is 3X deeper than the 2001 tech recession, and the only way we got out of that was the housing sector BS, which itself has only dropped one shoe so far. http://calculatedriskimages.blogspot.com/2010/07/employment-recessions-aligned-bottom.html Interest rates are in ZIRP territory. Federal deficit spending was $1.5T over the TTM. Can we continue this rate of "stimulus"? Unemployment never got as bad as it did in 1982 and it’s leveling off now http://research.stlouisfed.org/fred2/series/CAUR says otherwise -- it's "levelled off" greater than the worst of the 1980s recession period. This was before SSI and Medicare SSI isn't going to help most people this decade. The peak baby boomer is turning 55 this year. Medicare, of course, is being gutted and is tens of trillions of unfunded future liabilities. The House couldn't even pass the $30B Medicaid bailout to the states this year. Another $2B or so lost to the state's economy. This is a balance sheet recession. Recovery is only going to come in fits and starts, if at all. Things have a great probability of getting a lot worse before it gets any better. The 2003-2007 economy was a dream that is not coming back. Speaking of SSI, it's going to be drawing cash from the Treasury this year, $50B worth or so. It may never be in the black again, unless Obama's commission does what Bush's couldn't.

7. iwog Follow Befriend (48) 274 threads 12,546 comments 47 male Lafayette, CA Premium

   7   8:29pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Protected   Yet the GDP continues to grow although slowly. This is a far cry from the doomsday predictions I keep hearing you make. Things can't go to hell without a single measure of the economy going to hell. It just can't happen that way. Nice touch on the California unemployment rate instead of the national one, but I was talking about the country as a whole.

8. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   8   8:43pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   iwog says Yet the GDP continues to grow although slowly. We are in a period of readjustment. Things were heading to $0 in early 2009, that's what I meant by Mad Max, if we'd kept the trajectory of 1Q09 we'd be seeing scenes out of Soylent Green by now. GDP is driven by a lot of fluff, and that $1.5T of deficit spending doesn't just disappear, it gets converted into private dollars. I still have NO idea how $6T+ of total government spending only folds out into a $14T total economy. $6T of spending in my naive calculations should fund about 100M $60K jobs, ie nearly every household should have a decently paid government worker in it. Things can’t go to hell without a single measure of the economy going to hell We've thrown everything we have to staunch the bleeding. A trillion dollar expansion of the Fed balance sheet on top of $1.5T of federal deficit spending. These measures will keep things together until they don't. I'm not actually committed to this doomsday thinking, I'd like to think I am wrong. My negativity just comes from the fact that the bullshit can only work for so long. Maybe I'm wrong about that and we'll wheel out some bigger & better bullshit to keep things together, kinda like how WW2 took over for the New Deal.

9. ¥ Follow Befriend 35 threads 5,700 comments Bellingham, WA

   9   8:46pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   http://research.stlouisfed.org/fred2/series/CC4WSA?cid=32240 http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=USPRIV&s[1][range]=5yrs

10. Austinhousingbubble Follow Befriend 7 threads 677 comments

    10   10:21pm Mon 12 Jul 2010   Share   Quote   Permalink   Like   Dislike   Unemployment: A sizable chunk of the unemployed are simply being erased from the unemployment rosters, making the official numbers appear better than they are. In fact, they dropped one million Americans off the list in the last two months. According to the BLS, these people are not actively seeking employment, so they don't count. Pretty cool. Recovery: Highly interesting and informative item from Dr. John P Hussman yesterday, who is anything but a bear. Very much worth reading: http://www.hussmanfunds.com/wmc/wmc100712.htm "From our perspective, we continue to observe pointed recession risks. I'll emphasize again that our Recession Warning Composite (see the June 28 comment Recession Warning) is based on the observation of multiple conditions simultaneously, and is not driven by any single indicator. Given that I've made two, and only two, recession calls over the past decade (October 2000 and November 2007) based on this Composite, and we've always and only observed such signals during or immediately preceding other post-war recessions, I don't take the present indications lightly, and I don't like the odds. The consensus of economists has never correctly anticipated a recession, nor have Ben Bernanke or Alan Greenspan, nor to my knowledge did any of the analysts currently assuaging investors that further economic weakness is unlikely. With regard to the ECRI Weekly Leading Index, I'll emphasize again that it nicely leads the ISM Purchasing Managers Index with a lead time of about 13 weeks. As a result, its inclusion in the composite produces more timely signals than the ISM. The WLI growth rate dropped again last week, to -8.3%, from -7.6% the prior week, which is consistent with a decline in the Purchasing Managers Index to about 44 over the next few months."

11. jkl Follow Befriend 2 threads 68 comments

    11   7:18am Tue 13 Jul 2010   Share   Quote   Permalink   Like   Dislike   lol "Yet the GDP continues to grow although slowly." wow thats funne, its not really growth as much as it is a bubble driven by govt spending and inventory restocking and now we are overstocked again and factory orders are plummeting AGAIN, and looks like congratards have rallied around shutting off spending.. weeeeeee

12. tatupu70 Follow Befriend (3) 15 threads 5,641 comments

    12   7:27am Tue 13 Jul 2010   Share   Quote   Permalink   Like   Dislike   surfingerman says factory orders are plummeting AGAIN, What do you define as a plunge? Last report I saw showed a small decline after a year of increases. And here's what the ISM said about the manufacturing sector: "ISM warned against looking too much into the numbers because the manufacturing sector's recovery remains firm and ongoing" Their reading of 56.2 in June is down from May, but still above 50 which signals growth in the sector.

13. jkl Follow Befriend 2 threads 68 comments

    13   10:23am Tue 13 Jul 2010   Share   Quote   Permalink   Like   Dislike   “ISM warned against looking too much into the numbers because the manufacturing sector’s recovery remains firm and ongoing” Their reading of 56.2 in June is down from May, but still above 50 which signals growth in the sector. Germany's seasonally adjusted factory orders fell in May for the first time in five months, data released by the Federal Ministry of Economics and Technology showed Wednesday. The 1.4 percent decrease in factory bookings was the biggest since March 2009 and followed a revised 1 percent gain in April, inventories are also sky high, the fact that factory orders are falling as stimulus ends workers are cut and inventory is overstocked means factory orders are declining guaranteed. Even if the released numbers haven't shown it yet the analyst forecasts all point to it

14. tatupu70 Follow Befriend (3) 15 threads 5,641 comments

    14   10:59am Tue 13 Jul 2010   Share   Quote   Permalink   Like   Dislike   surfingerman says inventories are also sky high Seriously--do you just make this stuff up? There are certainly enough troubling signs out there that I wouldn't think you'd have to... Here is the latest report on inventories: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/whlsls.htm Not sure how you can read that graph and say inventories are sky high...

15. tatupu70 Follow Befriend (3) 15 threads 5,641 comments

    15   8:52am Wed 14 Jul 2010   Share   Quote   Permalink   Like   Dislike   Just out today, another inventory report. "Separately, the Commerce Department said that business inventories rose 0.1 percent in May" Not exactly sky high and overstuffed, are they?