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Economy Advantage-Uniqueness
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Economy Advantage-UniquenessMore ev Roberts 2012’ Market Watch, The Wall Street Journal “Will QE3 save us from another recession? http://www.marketwatch.com/story/will-qe3-save-us-from-another-recession-2012-07-17 In the wake of the June FOMC meeting minutes revealed last week, a handful of Federal Reserve members believe that more stimulus may be necessary. And with an economy teetering on another recession and stagnant economic growth — among other problems — there is an argument to be made that the only thing preventing us from seeing an economic tragedy mirroring 2008 is an injection of federal stimulus. Unfortunately, each round of quantitative easing produces diminishing returns, creates an artificial perception that our markets are healthy and does nothing to help Main Street, which is struggling the most. Many economists — including myself — did not think the economy was in a bad enough position to see QE3 the last time Federal Reserve Chairman Ben Bernanke spoke. Bernanke was quick to mention that while our economy is growing slower than he had hoped, America was not in such a dire economic position as to inject billions of dollars of federal money into the markets. So, with a dismal first half of the year behind us and important economic reports for June in, our best analysis into whether QE3 is around the corner is not necessarily looking at individual data points that may offer glimmers of hope, it is only the trend, or direction, of the data that matters. Final sales of domestic product peaked in late 2010. The economy as a whole slid from 3% growth in the fourth quarter of 2011 to just 1.9% growth in the first quarter of 2012. With the spate of weakness in recent manufacturing reports, it is likely that we will see second-quarter gross domestic product closer to 1.5% annualized growth, a very disappointing rate of economic growth a full three years since the recession. And to add insult to injury, looking deeper into that number, final sales peaked in 2010 following the conclusion of QE1 and have been on the decline ever since. To put into historical context, when final sales have fallen below 2% growth on an annualized basis, the economy has generally been in a recession.
http://www.westhawaiitoday.com/sections/news/nation-world-news/us-stocks-decline-economy-concern-overshadows-energy-gains.html U.S. stocks fell, dragging the Standard & Poor’ 500 Index lower for the seventh time in eight days, after the International Monetary Fund cut its global economic forecast and retail sales unexpectedly dropped. JPMorgan Chase & Co. lost 2.7 percent while Home Depot and Caterpillar dropped more than 1 percent to lead the Dow Jones Industrial Average lower. Equities pared losses as energy companies rose with the price of oil while Visa and MasterCard, the world’s biggest payment networks, gained at least 1.7 percent after agreeing to a settlement of at least $6.05 billion in a price-fixing case. The S&P 500 declined 0.2 percent to 1,353.64 at 4 p.m. New York time after earlier retreating as much as 0.6 percent. The Dow slipped 49.88 points, or 0.4 percent, to 12,727.21 Monday. “The retail sales gives you another indicator that uncertainty has showed up in the consumer side,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said. “We’re in a bit of the summer doldrums.” The S&P 500 is down 4.6 percent from a four-year high in April as economic data trails forecasts and investors brace for what is projected to be the first decrease in quarterly earnings since 2009. The Citigroup Economic Surprise Index for the U.S., which measures how much data from the past three months is beating or missing the median estimates in Bloomberg surveys, is at minus 64, near the almost 11-month low of minus 64.9 reached last week. U.S. retail sales dropped 0.5 percent in June, following a 0.2 percent decrease in May, Commerce Department figures showed Monday. The decline was worse than the most-pessimistic forecast in a Bloomberg News survey in which the median projection called for 0.2 percent rise. The IMF cut its 2013 global growth forecast as Europe’s debt crisis prolongs Spain’s recession and slows expansions in emerging markets. Growth worldwide will be 3.9 percent next year, less than the 4.1 percent estimate in April, the fund predicted in an update of its World Economic Outlook. Manufacturing in the New York region expanded in July at a faster pace than anticipated, signaling factories will keep contributing to growth. The Federal Reserve Bank of New York’s general economic index rose to 7.4 from 2.3 in June. The median forecast of 51 economists surveyed called for an increase to 4.0. Readings greater than zero signal expansion in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut. Earnings beat estimates at 21 of the 32 companies in the S&P 500 that have reported quarterly results so far, data compiled by Bloomberg show. Profits probably decreased 2.1 percent in the second quarter, the first drop in almost three years, according to a Bloomberg survey of analysts. JPMorgan Chase, the largest U.S. bank by assets, fell 2.7 percent to $35.09 after rallying 6 percent on July 13 as Chief Executive Officer Jamie Dimon predicted the company will still post record earnings this year despite a $4.4 billion trading loss in the second quarter. Economy Advantage-UniquenessMore ev-decline now Alter 2012’. DIANE ALTER, Contributing Writer, Money Morning “Recession 2013: An Ongoing Slide?” http://moneymorning.com/2012/07/16/recession-2013-retail-sales-figures-are-the-latest-sign-of-a-slowing-economy/ While economists continue to voice their concerns that the looming fiscal cliff is bound to throw America into a recession, the Economic Cycle Research Institute in America says we are already in one. The ECRI points out that the U.S. economy experienced outright contraction in the second quarter amid slumping job growth, weak retail sales, dismal broader trade sales and a moribund housing market. "I think we're in recession already," Lakshman Achuthan, co-founder of the ECRI told Bloomberg TV. "It's very rare that you know you're going into recession...It often takes some big hit on the top of the head," he continued, adding that recessions don't always have to be near Armageddon like collapses such as the one that reared its ugly head in the U.S. in late 2008. But the signs are clear and hard to miss. Achuthan's claim that we are already in a recession deviates from the median forecasts of economists surveyed byBloomberg which expects an annual growth rate of 2.2% this quarter and the next. Still according to Blomberg , Achuthan is on to something. As Bloomberg points out, factory output is declining, industrial production has dipped, manufacturing activity is dropping and consumer spending has stalled. What's more, even though GDP did grow in the first quarter, it is not a compelling indicator of the direction the economy is headed. For example, GDP grew in the last quarter of 2007, even as the worst recession since World War I began in December of that quarter. "Evidence is increasingly clear that the U.S. economy is slowing" Jim Baird, an investment strategist at Plante Moran Financial Advisors in Kalamazoo, Michigan, told Reuters.
http://moneymorning.com/2012/07/16/recession-2013-retail-sales-figures-are-the-latest-sign-of-a-slowing-economy/ For the third consecutive month, retail sales fell as demand waned for everything from cars and electronics to building material, another telling sign that the U.S. economy may be slipping back into a recession. The Commerce Department reported Monday that retail sales dipped 0.5% in June, much less than analysts' forecasts of a 0.2% rise. The decline marked the first time retail sales had fallen for three straight months since late 2008, near the height of the Great Recession. Most noticeable in the rash of declining sales was the 0.6% drop in motor vehicles and parts, an area that was widely expected to show an uptick. Also showing a sharp slump were receipts for electronics and appliances which fell 0.8%. Sales of building materials sagged 1.6%, and receipts at gasoline stations dried up some 1.8% even while gasoline price fell during the month. The report adds more fodder to the lingering hope that the Federal Reserve could launch another round of quantitative easing. The dismal commerce numbers also add to the recent wave of weak economic data. On Monday, the International Monetary Fund (IMF) cut is forecast for global economic growth and urged European policy makers to take more aggressive measures to curtail their crisis, while cautioning that China's economy is at risk for taking a hard fall. Meanwhile, Reuters reported a poll released on Monday that revealed American companies have tempered any plans to hire workers, while a growing number of firms believe the mess in Europe is hurting sales. The poll showed nearly half (47%) of companies polled believe their sales have suffered thanks to the Eurozone debt crisis.
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