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Latest Articles: Business
Government Layoffs Slow U.S. Cities’ Recoveries: Report
Post Date: 2011-06-22 11:35:46 by Brian S
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WASHINGTON (Reuters) - The layoffs of thousands of government workers may threaten the already slow-motion economic recovery in many U.S. metropolitan areas, according to a report released on Wednesday by the Brookings Institution. "Job growth, though occurring in more metropolitan areas than in the past, was sluggish," the think tank said. "Those that suffered the most, as well as those with the weakest economic recoveries, typically lost government jobs." Since the recession began in 2007, 19 out of the 20 metropolitan areas with the strongest economies gained government jobs, according to the report which focused on the first quarter of the year. Conversely, 13 of ...
U.S. Existing-Home Sales Hit Six-Month Low
Post Date: 2011-06-21 11:06:50 by Brian S
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Sales of existing U.S. homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8 percent to a 4.81 million annual pace last month, in line with the 4.8 million median estimate in a Bloomberg News survey of economists, data from the National Association of Realtors showed today in Washington. Preliminary figures showing a jump in contract signings suggest May will prove to be the weakest sales month of the year, according to the group’s chief economist. An unemployment rate hovering around 9 percent and tight credit standards mean it may take years to absorb the 1.8 million ...
The Economy Dems Now Own
Post Date: 2011-06-19 08:49:01 by CZ82
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The Economy Dems Now Own Posted 06/16/2011 06:22 PM ET The head of the Democratic National Committee says the administration has turned the economy around. So let us give discredit where discredit is due. Joe Biden should sue DNC chief and Florida Congresswoman Debbie Wasserman Schultz for copyright infringement based on her statement at a Politico breakfast. We thought the vice president had a monopoly on statements completely detached from reality. "We own the economy," Schultz said. "We own the beginning of the turnaround, and we want to make sure that we continue that pace of recovery, not go back to the policies of the past under the Bush administration that put us ...
GM to Idle Michigan, Indiana Plants Next Month to Reduce Supply of Trucks
Post Date: 2011-06-17 15:49:56 by Brian S
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June 17 (Bloomberg) -- General Motors Co. will idle U.S. truck plants for two weeks in July as the automaker pares inventory of pickups and prepares the factories for output of 2012 model year vehicles. GM’s Flint Assembly in Michigan will shut down for the weeks of July 4 and July 11, said Tom Wickham, a spokesman for the Detroit-based automaker. Production at Fort Wayne Assembly in Roanoke, Indiana, also will stop during those weeks, said Orval Plumlee, president of United Auto Workers Local 2209, which represents hourly workers among the factory’s more than 3,300 employees. The two plants make Chevrolet Silverado and GMC Sierra pickups. GM’s truck inventory was 288,000 ...
Payrolls Dropped in 27 U.S. States in May, Led by California
Post Date: 2011-06-17 11:46:05 by Brian S
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June 17 (Bloomberg) -- Payrolls dropped in 27 U.S. states in May, indicating the weakening in the job market was broad- based. California led the nation with a 29,200 decrease followed by New York with 24,700 fewer jobs, figures from the Labor Department showed today in Washington. The jobless rate fell in 24 states and rose in 13. The report is consistent with nationwide figures released June 3 that showed employers added 54,000 workers in May, the fewest in eight months, and unemployment rose to 9.1 percent, the highest this year. Improvement in hiring across a wider swathe of the U.S. is needed to sustain consumer spending, which accounts for about 70 percent of the U.S. economy. ...
Consumer Confidence Drops in June
Post Date: 2011-06-17 11:38:03 by Brian S
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NEW YORK (TheStreet) -- Americans aren't happy about their jobs or incomes these days. Consumer confidence, as measured by the U.S. Consumer Sentiment Index, dropped 71.8 in June, according to the Reuters/University of Michigan Surveys of Consumers. That's much worse than May's reading of 74.3. The gloomy report came as a surprise to some analysts who were expecting a slight uptick to 74.5. Consumer sentiment in May rose marginally, but today's data suggests that despite easing gas prices, consumers may be entering the summer doldrums. Some 500 households responded to questions about their financial well-being and attitude towards the economy. The report compiles a ...
Is the Bitcoin a Digital Gold Standard?
Post Date: 2011-06-16 17:56:27 by jwpegler
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Bitcoin is a digital peer-to-peer technology and currency that allows users to transact online without using credit cards or bank accounts. Using a file sharing system, users can trade Bitcoin files for goods and services. Records of every Bitcoin transaction are stored on every user's computer, but the service offers significantly more anonymity than traditional methods of online payment. This has made it a currency of choice for the black market. Most infamously, Bitcoins are being used to purchase drugs on the illicit Silk Road website—a fact which has drawn the ire of two powerful Democratic senators. There may be something more to the Bitcoin story, however. Bitcoins are ...
Confidence Is Eroding Among U.S. Factories, Consumers, Economic Data Show
Post Date: 2011-06-16 16:44:19 by Brian S
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June 16 (Bloomberg) -- Manufacturing in the Philadelphia region unexpectedly contracted in June and Americans’ views on the economy’s outlook soured, signaling an erosion of confidence in the expansion. The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. Readings less than zero signal contraction. The Bloomberg gauge of economic expectations slumped to minus 31 this month, the weakest since March 2009, from minus 16. The Fed’s report corroborates data yesterday showing New York-area manufacturing shrank in June and adds to evidence the economy’s slowdown extended through the ...
Camaro Outruns Mustang as Lost Sales Put Factory in Doubt
Post Date: 2011-06-16 16:42:39 by Brian S
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June 16 (Bloomberg) -- Ford Motor Co.’s Mustang is falling farther behind the Chevrolet Camaro as the top-selling U.S. sports car, jeopardizing a Michigan factory as designers work to win back the hearts of pony car fans. Ford narrowly lost the crown in 2010 after a 24-year run, and the gap widened this year, with General Motors Co.’s revived Camaro outselling Mustang by 33 percent through May. The 1,700- person plant in Flat Rock has just one shift of workers, and its Japanese partner decided last week to pull out. “The Mustang on its current sales pace isn’t enough to sustain Flat Rock,” said Jeff Schuster, an automotive analyst with researcher J.D. Power ...
Foreclosures Plunge as Process Delays Mask Rising Bank Inventory
Post Date: 2011-06-16 16:39:52 by Brian S
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June 16 (Bloomberg) -- Foreclosure filings in the U.S. tumbled last month to the lowest in almost four years as banks weighed down by an increasing inventory of seized homes delayed processing defaults, according to RealtyTrac Inc. A total of 214,927 properties received default, auction or repossession notices in May, the fewest since November 2007, the Irvine, California-based data company said today in a statement. Filings dropped 33 percent from a year earlier and 2 percent from April. One in 605 households got a notice. Foreclosure filings have fallen for eight straight months on a year-over-year basis as banks rework their documentation procedures following claims they improperly ...
Philadelphia-Area Manufacturing Unexpectedly Shrinks to -7.7 in Fed Index, Jobless Claims Fall 16,000
Post Date: 2011-06-16 11:40:33 by Brian S
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June 16 (Bloomberg) -- Manufacturing in the Philadelphia region unexpectedly shrank in June for the first time in nine months, raising the risk that factory production may contribute less to the expansion. The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The median forecast of 54 economists surveyed by Bloomberg News was 7. The report, following data yesterday that showed manufacturing shrank this month in the New York region, adds to concern that the industry is slowing ...
US Builders' Outlook Falls Amid Weakening Sales
Post Date: 2011-06-15 14:18:47 by Brian S
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WASHINGTON — The outlook among homebuilders has been grim all year. This month, it became grimmer. An index that measures builders’ sentiment for their industry fell three points in June to 13, the National Association of Home Builders said Monday. That’s the lowest level in nine months. And it’s just five points above the lowest reading on record, in January 2009. That’s when the home market was absorbing the brunt of the housing bust. Any reading below 50 indicates negative sentiment about the market. The index hasn’t reached that level since April 2006, the peak of the housing boom. Builders are finding it “extremely difficult to construct a new home ...
TBTF Day of Reckoning for the West
Post Date: 2011-06-15 12:56:57 by Capitalist Eric
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You probably know what TBTF stands for: too big to fail. We need a comparable acronym: TBTK. It stands for too big to kick, as in "kick the can." "Too big to fail" is such a common phrase these days that HBO chose it as the title for a movie on the big bank bailout of 2008. The context of TBTF is correct: the largest banks, all over the world. FOLLOW THE MONEY The famous phrase, "follow the money," became famous because of All the President's Men, the movie about the investigation of Watergate. No one knows where it came from. The book's two authors don't recall. The screenwriter is not sure. But it has become part of the American language. ...
May Core CPI Rises Most In Nearly 3 Years
Post Date: 2011-06-15 10:29:19 by Brian S
5 Comments
(Reuters) - A closely watched measure of consumer prices logged its biggest rise in nearly three years in May and a regional factory gauge contracted this month, showing the economy facing a troubling mix of weakness and inflation. The Labor Department said on Wednesday its Consumer Price Index, excluding food and energy, increased 0.3 percent, the largest gain since July 2008, after rising 0.2 percent in April. Core inflation was lifted by steep rises in motor vehicle and apparel prices. Analysts pointed to supply chain disruptions from Japan's earthquake as a factor behind the auto price rise. Economists had expected the core CPI, which is closely watched by the Federal Reserve, to ...
Senate Sidetracks Move To Repeal Ethanol Tax Credits, Despite Claim It Is Waste Of Money
Post Date: 2011-06-14 17:55:51 by Brian S
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WASHINGTON _ The Senate refused to kill a $5 billion annual subsidy for ethanol on Tuesday, backing continued government aid for a Farm Belt-based industry over deficit reduction in an era of record red ink. The 40-59 vote, far short of the 60 needed to advance the measure, reflected regional as well as partisan differences, a split among Republicans _ and anything but the final word on the issue. "We continue to spend money that we don´t have on things that we don´t need," said Sen. Tom Coburn, R-Okla., a prominent deficit hawk who led the effort to eliminate the subsidy immediately. Supporters of continued federal spending for ethanol argued it is a leading source ...
A Beginners Guide to Shadow Banking, Financial Crisis and Repo
Post Date: 2011-06-13 13:25:27 by Capitalist Eric
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What if I told you that the financial crisis could be explained in just two words? Would you believe me? It's true, and oddly enough, neither of the words is "subprime". So, what are the words? Bank run. The financial crisis was actually a run on the banking system. Only it wasn't a run in the usual sense of the word where jittery depositors line up on the street waiting to withdraw their savings, but a run on the shadow banking system where traditional banks get their funding via short-term loans in what's called the "repo market". (short for "repurchase agreement") The shadow banking system has become a critical part of the infrastructure of ...
It’s The Debt, Dummy
Post Date: 2011-06-13 12:42:58 by Capitalist Eric
38 Comments
I think charts tell a story that allows you to disregard the lies being spewed by those in power. Below are four charts that tell the truth about our current predicament. The first is from http://www.mybudget360.com/. The austerity and debt reduction storyline being sold by the MSM is a crock. The total amount of mortgage debt outstanding peaked at $14.6 trillion in 2008. The total amount of consumer debt (credit cards, auto loans, student, boats) outstanding peaked at $2.6 trillion in 2008. Today, mortgage debt outstanding stands at $13.8 trillion, while consumer debt stands at $2.4 trillion. Therefore, total consumer debt has declined by $1 trillion in the last three years. The MSM and ...
Profits Seen Increasing Jobs as Earnings Grow Most Since 1940s
Post Date: 2011-06-13 10:55:51 by Brian S
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June 13 (Bloomberg) -- Profits at American companies are poised to be one of the few bright spots in the U.S., helping to steady the faltering recovery. Earnings will climb an average 10 percent a year through 2013, more than three times quicker than the economy, after what has already been the fastest rebound since the late 1940s, JPMorgan Chase & Co. projects. In mounting signs of confidence, Macy’s Inc. has raised its annual profit forecast, Intel Corp. and Target Corp. increased dividends and DuPont Co. plans to invest more than $500 million to boost production. Surging overseas sales, improving U.S. demand and the Federal Reserve’s pledge to keep interest rates close ...
Death by Debt
Post Date: 2011-06-10 17:39:59 by Capitalist Eric
10 Comments
One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can't be fixed. By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past. At least they are for the debt-encrusted developed nations over the short haul - and, over the long haul, across the entire soon-to-be energy-starved globe. The sooner we can accept that idea and make other plans the better. To paraphrase a famous saying, Anything that can't be fixed, won't. The basis for this view stems from understanding that debt-based money systems operate best when they can ...
GM Expands Chevrolet Volt Orders To All 50 States, Lowers Price [Full Thread]
Post Date: 2011-06-10 13:00:24 by Brian S
110 Comments
General Motors opened up orders for the Chevrolet Volt to all 50 states today, lowering the base price for the 2012 model by about $1,000 and adding four option packages. The 2012 Volt will start at $39,995, including delivery, and customers may be eligible for a $7,500 federal tax credit. GM was able to lower the base price because the car has more optional content now that it's available nationally, the automaker said today in a statement. The 2011 Volt had been available in eight states and Washington, D.C., and only had three option packages. GM is expanding Volt ordering as it prepares to add two shifts worth 2,500 jobs to the Detroit-Hamtramck plant that builds the car. Volt ...
Second Half 2011 U.S. Growth Rebound Intact, Economists Say
Post Date: 2011-06-10 12:27:35 by Brian S
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June 10 (Bloomberg) -- Slowdowns in consumer spending and employment will prove temporary, giving way to a U.S. growth rebound in the second half of 2011, economists surveyed by Bloomberg News said. After growing at a 2.3 percent annual pace this quarter, the world’s largest economy will expand at a 3.2 percent rate from July through December, according to the median forecast of 67 economists polled from June 1 to June 8. Rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events like poor weather and the disaster in Japan, economists said. Nonetheless, the current slackening ...
U.S. Stocks Decline as Dow Heads for Longest Slump Since 2002
Post Date: 2011-06-10 12:24:04 by Brian S
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June 10 (Bloomberg) -- U.S. stocks fell, extending the longest weekly Dow Jones Industrial Average slump in more than eight years, amid concern the global economy is slowing. Caterpillar Inc., Alcoa Inc. and Exxon Mobil Corp., lost 1 percent or more, pacing losses among companies that are most- dependent on economic growth. Travelers Cos. slumped 3.8 percent after the insurer said it’s scaling back share repurchases because about $1 billion in catastrophe costs will likely wipe out second-quarter operating profit. Research In Motion Ltd. dropped 1.8 percent after Morgan Stanley said the maker of the BlackBerry smartphone will likely cut its 2012 earnings-per- share forecast. The ...
Americans' Equity In Their Homes Near A Record Low
Post Date: 2011-06-09 18:10:02 by Brian S
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Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago. The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. But even alluring rates have failed to deliver any lift to the depressed housing industry. The Fed report is based on data from the first quarter of this year. Another report last week found that home prices in big cities have fallen to 2002 levels. Normally, home equity ...
Destruction of US Manufacturing, Confessions of an Economic Terrorist
Post Date: 2011-06-09 13:43:41 by Capitalist Eric
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Just in case anyone has an idea to dispatch seventy-two SEALS by helicopter to deliver me a tap-tap, like they did to that other guy, save your money, I’m a minnow. If you want to know the real “culprits”, have a look at this chart: The blue line is US Employment in Manufacturing (from the St Louis Fed), the purple line is the cumulative amount of money that Americans (mainly US Corporations) invested in projects outside of USA, instead of inside USA; (from the BEA time series on International Transactions (Line 51)). http://www.bea.gov/international/index.htm#trade Do I need to draw a picture? That line is probably an under-estimate of the value that was sucked out ...
Initial Jobless Claims in U.S. Unexpectedly Increased Last Week
Post Date: 2011-06-09 11:33:08 by Brian S
9 Comments
June 9 (Bloomberg) -- U.S. initial jobless claims unexpectedly rose last week, a sign that the labor market is struggling to gain traction. Jobless claims increased by 1,000 to 427,000 in the week ended June 4, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 419,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased. Some employers are cutting staff as demand slows because of elevated energy prices, falling house prices and tight credit. The economy generated the fewest jobs in May in eight months and the unemployment rate rose, a ...
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