Dale Franks’ QandO posts
Today’s only economic release is the Empire State manufacturing index, which fell sharply to -10.41 vice -5.85 in August. New orders plunged to -14.03 down 12 points since June. Unfilled orders have been falling for months now, and stand at -14.89. On the other hand, the 6-month expectation for new orders is up to 17.02, well into positive territory. Whether those expectations will be met remains to be seen. Meanwhile, the district’s manufacturing sector continues to bump along the bottom.
This week, Bruce, Michael, and Dale talk about the week’s events.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.
I‘ve Just finished watching a documentary call "The End of the Road: How money became worthless" on Netflix. It’s 55 minutes long. It’s wonderfully educational, and horrifically frightening.
IT explains exactly why I’ve been harping on the coming hyperinflation for the last three years, and it tells you how close we are to seeing it happen. It explains the current situation we face extremely clearly and simply, so that anyone can understand it.
You need to watch it as soon as you possibly can.
The Los Angeles Times was there when the LASO came to pick up the "Innocence of Muslims" filmmaker for a "voluntary interview".
As the Times put it:
Just after midnight Saturday morning, authorities descended on the Cerritos home of the man believed to be the filmmaker behind the anti-Muslim movie that has sparked protests and rioting in the Muslim world.
Sheriff’s officials could not be reached by The Times, but department spokesman Steve Whitmore told KNBC News that deputies assisting the federal probation department took Nakoula to the sheriff’s substation in Cerritos for interviewing.
Apparently, they’re concerned about a possible probation violation, because he wasn’t supposed to access the Internet. But now his horrible movie is on YouTube, so he may in trouble. Hence, brown-shirted men showed up at midnight to "escort" him to a "voluntary interview".
There’s no free speech issue at all to be concerned with here. Move along citizen.
Instapundit has a round-up of reaction.
Chris and I went down to Oceanside today, and I took along the FZ200 to take a few pictures. This time though, rather than fill up the front page, all the pictures are below the fold. All the pics are clickable, so you can see a 1920×1280 larger version.
Below the fold is a NSFW image. It is obscenely offensive. It was posted by The Onion in one of the most brilliant satirical statements about the cultural difference between the Muslim world and everyone else I’ve ever seen. As The Onion writes:
The image of the Hebrew prophet Moses high-fiving Jesus Christ as both are having their erect penises vigorously masturbated by Ganesha, all while the Hindu deity anally penetrates Buddha with his fist, reportedly went online at 6:45 p.m. EDT, after which not a single bomb threat was made against the organization responsible, nor did the person who created the cartoon go home fearing for his life in any way. Though some members of the Jewish, Christian, Hindu, and Buddhist faiths were reportedly offended by the image, sources confirmed that upon seeing it, they simply shook their heads, rolled their eyes, and continued on with their day.
The FBI will not launch an investigation to find out the identity of the artist involved. The offices of The Onion will not be besieged by angry Christians, demanding death to the editors. No heads will be cut off. No Internet-wide debate will be sparked on whether or not this image should be reproduced. No calls for the arrest and imprisonment of the author will be made.
But, if you were to add a bearded fellow with a turban into this depraved scene, we all know the response would be far different.
So, you can take your multicultural "no culture is better than any other" nonsense and stick it where the sun don’t shine.
Here are today’s statistics on the state of the economy:
The Consumer Price Index rose sharply, up 0.6% for the month, though the year-over-year inflation rate is 1.7%. The core CPI, ex-food and –energy, rose just 0.1% last month, and 1.7% on a year-over-year basis.
Business inventories rose 0.8% in July, while sales rose 0.9%, trimming the stock-to-sales ratio down to 1.28.
The Reuter’s/University of Michigan’s consumer sentiment index rose a sharp 4.9 points to 79.2.
The Fed reports that industrial production declined by -1.2% last month, erasing the previous two month’s production increases. Capacity utilization at the nation’s factories fell -1.0% to 78.2% from 79.2 percent.
Retail sales jumped 0.9% in August, and sales less cars were up 0.8%. But, sales less gas and cars only rose 0.1% showing underlying weakness in the headline number. On a year-over-year basis, sales were up 4.7%. When taking prices into effect, sales were soft for the month.
Ben Bernanke, the Chairman of the Federal Reserve, announced today that the Fed will embark on another round of Quantitative Easing, beginning immediately. The Fed will increase its holdings by an estimated $85 billion per month in securities, about half of which will be long-term Treasury bonds, and the remaining $40 billion or more will be agency mortgage-backed securities. The agency paper will be purchased with new cash, while the long-term Treasuries will be acquired in exchange for short-term Treasury paper, as a continuation of Operation Twist.
There is no ultimate target amount or end date specified for this round of easing. Essentially, the Fed will buy or exchange $1 trillion in securities per year, until chairman Bernanke says to stop. It is completely open-ended. Additionally, the Fed expects to keep interest rates at or near 0% until sometime in 2015.
Let’s be clear about what this announcement means: The Fed will print $500 billion per year in new money, and inject it into the economy by buying agency paper (Freddie Mac, Fannie Mae, et al.), while also flooding the market with $500 billion of short-term paper in exchange for long bonds. That new money is not based on any realistic estimate of economic growth, or economic requirement to expand the money supply. It is pure, Keynesian monetary stimulus.
This will, of course, be done in a completely responsible way, and there is no threat whatsoever that this will cause an increase in inflation, and in any case, the Fed is fully prepared to sterilize this move at any time conditions warrant. Seriously, it’s best for the Fed to do this, and nothing could possibly go wrong.
Some may disagree.
Anyway, here’s some video of the first round of this open-ended QE being implemented:
Image via Max Keiser
The following US economic statistics were announced today:
Initial jobless claims rose 15,000 in the latest week to 382,000. The 4-week moving average rose to 375,000. But, continuing claims are down 49,000 to 3.282 million. Much of this week’s rise is blamed on Tropical Storm Isaac, which led to increased claims.
The producer price index rose a sizable 1.7% in August—mainly on sharp increases in food and energy prices—after a 0.3% rise in July. Ex-food and energy prices, the core PPI rose 0.2%.
The Bloomberg Consumer Comfort Index rose sharply on improved personal finances, up 4.3 points to -42.2. Despite the sharp improvement, the CCI is still at a deeply depressed level, of course.
The following US economic statistics were announced today:
The MBA reports a big 11.1% surge in mortgage applications for last week, with purchases up 8.0% and re-fis up 12.0%.
Export prices rose 0.9% in August, while import prices rose by 0.7%. On a year-over-year basis, export prices fell -0.9%, while import prices fell -2.2%.
Wholesale inventories continue to rise relative to sales, up 0.7% in July, while the stock to sales ratio rose to 1.21, the third straight increase and the highest of the recovery.