The following US economic statistics were announced today:
Initial claims for unemployment fell 41,000 last week, to 410,000. The 4-week moving average rose to 396,250. Continuing claims fell 30,000 to 3.337 million. The huge swings of the past couple of weeks are clearly related to Hurricane Sandy, so getting any handle on the fundamentals of the labor market are impossible with the current weekly volatility.
The MBA reports that mortgage applications fell –2.2% last week, with purchases up 3.0% and refinancings –3.0%. Despite an overall decline in applications, purchase applications are trending up, which is a positive trend for the health of the housing market.
The Bloomberg Consumer Comfort Index fell –0.8 points to –33.9.
The Reuter’s/University of Michigan’s consumer sentiment index fell more than 2 points to 82.7.
The Conference Board’s index of leading economic indicators rose 0.2% in October.
The Markit Economics PMI Manufacturing Index Flash rose more than a point to 52.4 for the mid-month flash. Anything over 50 generally indicates economic growth.
The following US economic statistics were announced today:
In weekly retail sales, Redbook reports a lackluster 1.8% increase from the previous year. ICSC-Goldman reports a weekly sales decline of -0.3%, and a weak 2.5% increase on a year-over-year basis.
Housing starts rose 3.6 percent in October to an annual pace of 894,000. Building permits, an indicator of future construction activity, fell 2.7% to an annual pace of 866,000.
California, of course:
“The California Republican Party is functionally dead. And how is California doing, now that liberals have successfully terminated the state’s remaining conservatives?” #1 in debt, #1 in welfare, #1 in taxing the rich. And hoping for a federal bailout, I suspect. As is Illinois, which is in similar straits for similar reasons. “One-third of all the nation’s welfare recipients live in the state, despite the fact that California has only one-eighth of the country’s population. That’s four times as many as the next-highest welfare population, which is New York. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.”
You can warn people till you’re blue in the face (no pun intended) how the blue state model is going to end up, but sometimes it is instructive to just let it happen. Of course that assumes that those observing the train wreck try to understand how it happened and work to avoid it elsewhere. I’m not so sure that’s the case in this nation. But fair warning, given the fiscal road we’re on California is as much in our future as Greece:
“For a century or so, guided by brilliant private sector leadership, California was a beacon to the world, a land of opportunity such as never had existed in human history. Unimaginable wealth was created. Yet it required only 40 years of liberal governance to bring the whole thing crashing down. Today, California is the most spectacular failure of our time. Its government is broke. Productive citizens have been fleeing for some years now, selling their homes at inflated prices (until recently) and moving to Colorado, Arizona, Texas and even Minnesota, like one of my neighbors. The results of California’s improvident liberalism have been tragically easy to predict: absurd public sector wage and benefit packages, a declining tax base, surging welfare enrollment, falling economic production, ever-increasing deficits. Soon, California politicians will be looking to less glamorous states for bailout money. Things have now devolved to the point where California leads the nation in poverty.”
California is a state which has modeled blue government for decades, despite warning of where it’s continuance would lead.
And, shockingly to the left, it has ended up right where it was predicted it would end up. Yet, they blindly and willfully continue to march along as though the reality will change and economic laws will disprove themselves if they just persist in their actions.
California is our future. Our near future. See, it’s pretty much as simple as this:
If a country runs a deficit (as a percentage of GDP) that is equal to its growth rate, the debt level will remain constant. This year U.S. GDP will be a little less than $16 trillion, and its historical growth rate is 3.25%. That works out to what we might call a “safe” deficit of $520 billion, or even $600 billion if you allow for a little inflation. Last year, however, the U.S. deficit was $1.1 trillion — or roughly $500 billion too much.
That gap could be closed by ending all tax cuts, tax breaks and stimulus payments for everyone, according to the Tax Policy Center. But two-thirds of the burden would fall on the middle class — something both political parties want to avoid. All the proposed tax increases on the wealthy, however, even combined with the end of the payroll-tax cut, would raise only $295 billion. So unless there were spending cuts twice as big as the ones currently scheduled, the deficit would still be too large.
Those sorts of cuts aren’t even being discussed. Imagine, if you would, radical cuts in the size and scope of our current federal government. Imagine subsidies of all sorts being eliminated. Imagine backing government out of many of the areas it has no business. Imagine simplifying the tax code and giving business a warm fuzzy feeling about the business atmosphere by freezing regulation and in some instances rolling them back. Imagine all of that, because none of it is going to be done.
Instead, the solution is to “tax the rich”.
So let ‘em have it (only if they repeal the Hollywood tax cut). Tax the rich. And when it doesn’t work, and it won’t (in fact, I’m not sure what “work” means in this particular case since the amount to be collected is a mere drop in a 1.6 trillion dollar ocean of debt that’s planned each year for the foreseeable future), they’re left with a lot fewer excuses, huh?
Not that they won’t try to point fingers when their grand plan crashes.
Yup, in the end it all looks like we’re headed to California. Apparently we’re going to have to recreate that debacle on a national level before the blinders come off of the public and the realization that you can’t spend more than you have forever finally sinks in.
Whether or not it will too late to salvage the country at that point, remains to be seen.
I know, like me, you’ve been watching with some wonder as Israel gets called everything but a child of God for defending itself from hundreds of rockets being fired into its country and then having the unmitigated temerity to strike back. Now we have a member of NATO upping the tensions just a bit more:
Turkish Prime Minister Tayyip Erdogan described Israel on Monday as a “terrorist state” in carrying out its bombardment of Gaza, underlining hostility for Ankara’s former ally since relations between them collapsed in 2010.
His comments came after nearly a week of Palestinian rocket attacks on Israel and Israeli air strikes on the Gaza Strip. An Israeli missile killed at least 11 Palestinian civilians including four children in Gaza on Sunday.
“Those who associate Islam with terrorism close their eyes in the face of mass killing of Muslims, turn their heads from the massacre of children in Gaza,” Erdogan told a conference of the Eurasian Islamic Council in Istanbul.
I’d go through the litany of the whys and wherefores that detail why there are “civilian” casualties when Israel strikes back (hint: because that’s part of the plan when Hamas does these sorts of things as a means of swaying the ignorant and those who tend buy into the “poor, wronged victims” they love to portray themselves as), but you know them as well as I do.
We’ve talked about Turkey’s inexorable slide toward radical Islam for quite some time, so in reality, this doesn’t come as much of a surprise. Turkey, which once looked west has turned its view to the east and is eyeing regional power. Turkey knows that there’s one requirement to admission to power in that region, and that’s embracing and touting Islam. In fact, it is about embracing a radical form of Islam that refuses to recognize Israel or it’s right to exist. This is just another shot among many that Turkey has taken. The NATO reference just reminds us of the possible difficulties their membership could pose in a situation like this.
And speaking of the present situation, as soon as Israel strikes back we begin to hear the false arguments about “proportionality” begin to surface. No one mentions that 750 to 1,000 unanswered rockets and mortars have flown disproportionally into Israel, it’s always about those 100 air strikes the Israelis put into Gaza that are condemned as violating this new law of proportionality. Yes, proportionality is only a concern when Israel acts, not when the terrorists attack.
The real reason that it comes up at all is because Hamas surrounds its launchers with civilians and are lousy shots and Israel isn’t.
It’s just not fair.
Amazing, but not atypical of a lot of thinking in this country these days:
The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees is holding out hope that a buyer will salvage chunks of the company and send the union’s members back to work, even as Hostess Brands Inc. gears up for a fire sale.
While Hostess has said the shutdown would result in the loss of more than 18,000 jobs and place the fate of more than 30 American brands in jeopardy, union President Frank Hurt said he believed there was “more than a good chance” that a buyer quickly would swoop in to buy the profitable parts of the company and give his union’s members their jobs back.
Give them “their” jobs back?
See, if I was a buyer, the last people I’d hire are those whose inability to think beyond what the union demanded they do that caused a company to liquidate and “their” jobs to go away. Because I’d not want to give them the chance to gum up the works at my company. So I’d ensure that they understood that “their” jobs went with Hostess.
By the way, Frank Hurt isn’t hurting. He’s still got his six-figure job with the union that “their” jobs, since gone, helped pay for.
Said Teamster Luigi Peruzzi, a Hostess driver in Detroit for 25 years:
“I think they [the Baker's union]made a terrible choice based solely on terrible information from their leadership.”
Not that their “leadership” will suffer for it or anything.
If you’re at all concerned about the economy, the answer is likely “not very well”:
U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.
At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms’ expansion plans.
Why are we seeing this happen? As it stands, most corporate spenders see no possibility of the hostility toward corporate America easing and also view whatever is to come in January concerning taxes and tax policy to likely be a lose-lose for them however it goes:
Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.
Companies fear that failure to resolve the fiscal cliff will tip the economy back into recession by sapping consumer spending, damaging investor confidence and eating into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.
Or, as before the election, an unstable business climate persists which does not provide any incentive to expand, spend or hire. In fact, as indicated above, it is providing precisely the opposite incentives. It’s one reason the GDP forecast for the country has been downgraded again to 1.5% (Mexico, for heaven sake, has GDP growth of 3.2%).
But when you vote for the status quo, well, you get what you vote for — enjoy.
This week, Bruce, Michael, and Dale discuss Gen. Petraeus and Benghazi, Israel, and the Twinkie.
The direct link to the podcast can be found here.
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Employees at Los Angeles International Airport were considering plans Friday to walk off the job ahead on what is traditionally the busiest traveling day of the year.
A coalition of Southland labor and community leaders are calling for the protest of alleged violations by LAX contractor Aviation Safeguards (AVSG) after breaking their contract with the airport earlier this year.
Andrew Gross-Gaitan, the director of the Southern California Airports Division of SEIU, told KNX 1070 NEWSRADIO that AVSG left more than 400 LAX workers without affordable family health care when it failed to comply with the city’s Living Wage Ordinance.
I’ve honestly never understood the mentality that says “if I can make your planned day as miserable as possible, maybe you’ll look upon my cause favorably”. Some Wal-Mart employees are considering the same sort of action and, I assume, think that those they inconvenience will then support them? Really?
Oh, and the bottom line here, which you’re likely not going to see included in many stories? The employees of AVSG voted to de-certify the SEIU. That’s right. This isn’t really about “living wages” or “affordable family health care”. This is another union, just like in the case of Hostess, throwing a collective tantrum because a company decided it didn’t want to play their silly and explensive games any more. It is another in a long line of examples of how unions have outlived their usefullness.
Company officials said their employees voted in December to reject or decertify their collective bargaining agreement with the SEIU before its expiration date. Since then, hourly wages have improved for the vast majority of employees, they said, and workers can choose the type of healthcare plan they want.
Goodness, higher wages (so much for the non compliance with the “living wage ordinance) and a choice of health care without having to pay union dues? Sounds like a win-win to me.
But the SEIU can’t imagine anyone rejecting them and they’re perfectly fine with trashing the holiday plans of others to throw their tantrum. Brilliant.