obama has his ducks in a row for 2012

    By Oxy Mora on Fri, 08/12/2011 - 9:23am |

    Two days I wrote a blog about Obama's second chance to get it right. I especially highlighted some areas about the economy which might be very positive for Obama and which were possibly being overshadowed by doom and gloom. I am happy to report that I beat Joe LaVorgna of Deutsche Bank to the punch. He has just revised his 2011 GDP forecast up, to 4.5% for the year. Astoundingly enough, his forecast includes a year end unemployment rate of 7.8% instead of 8.8%.

    Now LaVorgna is claiming that he actually hinted at his revised forecast two weeks ago in comments in the U.S Economics Weekly. So let me make this perfectly clear. I have never read U.S. Economics. In fact I'll go so far as to say I never heard of the publication. So even if you did "hint", which I doubt, it wasn't the source of my economic insights. Joe, you sit in an ivory tower in N.Y. but I make a living trooping around to industrial companies in some of the world's toniest spots, like Wichita Falls, and reclaim their cast off products. Believe me, they have been cranking out the waste for the last few months.                               

    Comments

    And while I can forecast the economy, I can't operate a computer for shite, so I am continuing my blog here.

    Suffice it to say that where there is new waste, there is new inventory.

    LaVorgna's forecast rests on simple arithmetic which it seems the entire financial community overlooked--That is the recent percentage drop in the unemployment rate. While the drop seemed miniscule, the percentage drop of .8% in the rate was rare. In the two instances in 1950 when such a decline in the rate happened


    by Oxy Mora on Fri, 08/12/2011 - 9:29am

    the unemployment rate over the following 12 months dropped by 1.3%. I will admit that this is new information. But did I not mention the inventory snap back effect?

    LaVorngna:"The combination of strengthening demand and negligible inventory levels means that the restocking of goods should proceed at a faster pace this year relative to what we initially expected." Bingo.

    As far as the other ducks, they all pale by comparison to the economy and employment. But given these numbers, presumably the Republican's intended restraints on the economy aren't working, and given the strong public support for adding revenue to the deficit reduction mix, Republicans might want to rethink talking down the economy and restricting infrastructure spending. And Republicans might realize that the more they trash talk the President, the less effect it will have in an improving economy and more sick and tired the populace will become with the tea party's extremism.

    It's just one, er, two men's opinions so we could be wrong. But I'm feeling pretty good today, having laughed my arse off at the Republican circus last night and then sleeping with my first corporation.

     


    by Oxy Mora on Fri, 08/12/2011 - 10:09am

    I can see the political ad now:  A voiceover announcer says: "Obama has all his ducks in a row" ... fade in as the camera pans a long line of ducks, and pulls back to reveal they're on an unemployment line... (sigh)   All kidding aside, congrats on being so prescient, but I can't help feeling we are grasping at straws a bit in order to find some small bit of positive news for ourselves. Admittedly, it's much needed at the moment, but it seems too little, too late to me, then again, I'm not the most astute person around when it comes to economics (in case you hadn't noticed.)


    by MrSmith1 on Fri, 08/12/2011 - 9:59am

    I'm not astute either but I can count pallets of waste industrial product. Do you think it's too late and too little? Do you mean you're too fed up with the guy that this news doesn't move you, or it's too late to have an effect overall. I think we have forgotten that 14 months is a lifetime in politics.

    I must admit I didn't believe LaVorgna's numbers and wondered if it was a ruse, then heard it on Bloomberg radio. But I guess what I was trying to say the other day is that events have speeded up, market swings are exaggerated. And then everyone was saying how consumer spending had tanked, how could it happen so fast--but the corollary wasn't there--that it might bounce back just as fast. Anyhow, thanks for playing.


    by Oxy Mora on Fri, 08/12/2011 - 10:18am

    Don't underestimate the ability of the Pugs and their dino enablers to fuck things up by catastrophic cuts to the safety nets, inducing yet another economic contraction, and yes, I mean the stupid super committee.


    by jollyroger on Fri, 08/12/2011 - 10:47am

    Thanks, Jollyman. Maybe, I'm grasping at straws and Lavorgna is so out front of others on his projections one has to be suspect. 7.8 % by the end of the year seems impossible, maybe it's a misprint. However, if he's only partially right in some of the numbers he's seeing now it means that the debt ceiling debate did not by itself reduce consumer and business confidence all that much; and because the Republican strategy has been to kill confidence and with hold stimulus, it's fair to say the strategy hasn't worked. Seeing a better economy for Obama are they going to continue the strategy, I'm not so sure.

    I know it's not a popular view here but personally I'm not opposed to some reforms of S.S. and Medicare as long as the overall program remains in place. I don't think the reforms would take place soon enough to have an input on contraction.

    As a small business owner I'm looking at the so called tax reform and not necessarily not liking it. I'm going to research this more and the legislation hasn't even been written. But in a sense I see the elimination of loop holes and lowering the rates as very stimulative. The reason is that small companies generate jobs in the U.S. Large companies generate jobs elsewhere. My employees are in Wichita Falls and Fellows Balls, the good ole U.S. of A. The loop holes did me no good what so ever. But the lower tax rate will have an effect on my bottom line and my spending, company and personal. And I think the tax reform will be legitimate revenue as it will have to be scored by CBO.

    Please don't let it out of the bag that tax reform is stimulative.


    by Oxy Mora on Fri, 08/12/2011 - 12:14pm

    By too little, too late, I just meant that while you're right about 14 months being a lifetime in Politics, sometimes perceptions get quickly set into stone and facts to the contrary don't matter. Once the concrete has set, it'll require a big hammer to break it up.


    by MrSmith1 on Fri, 08/12/2011 - 12:17pm

    Right. The trajectory is too well set and the speed of it too fast. Having once had the con of a ship at sea and trying to turn it 180 degrees I was surprised at how long it took to do it and we were already at the mouth of San Deigo Harbor, cut off a guy's sword fish, got a nasty letter sent to the Captain and he explained how long it took to took to turn the ship around and then confined me to my state room for two weeks. About like that.   


    by Oxy Mora on Fri, 08/12/2011 - 12:49pm

    I often make the same point you do, that 14 months is a long time in politics. But that's a whole hell of a lot shorter than the 18 months to pull it out he had when we started this "it's a lot of months to the election" game ... and he's done nothing but lose ground. At the same time, 14 months really isn't squat in terms of a business cycle.

    I hope you are right. Not because I give a crap about Obama, but because that would mean people were getting back to work. Perhaps Obama's presence has finally yielded some miniscule value in that, at least momentarily, a Democrat appears to care about improving the economy. (not really though, this doesn't actually make you appear to give a shit about the economy; this only cares about Obama's election. Deep thought: if it helped Obama's election prospects, would you cheer increasing unemployment?).

    I think Mr. Smith may have it right though. If increase in production has not come with a commensurate increase in jobs, say if a company is working people for less pay and demanding more hours to keep the job (as many reports indicate is happening), the practical result is that the company will report record profits - while the community will still be underemployed compared to the employment that would have been provided by the same level of production before corporations were empowered to roll back a half-century worth of worker advances. That is pretty much what has BEEN happening for three years and why TV folks keep claiming the recession is over.

    Obama hasn't even been in the ballpark on a single unemployment prediction made since he took office, not sure why we're going to believe him this time. So far, what's been happening is that they release terrible numbers, then two months later revise them DOWNWARD, and the revisions have been increasingly significant. Almost like they are just pulling a political number out of their asses, and then quietly releasing the truth after it's too late for the markets to react.

    Again, I really hope you are right. But I'm not seeing where consumers will be getting the extra cash for this uptick in spending. And even if they do, Obama just shattered consumer confidence with all of his unfounded deficit hysteria. He shattered their confidence that they will have any retirement future by casting Social Security into doubt. He even shattered confidence that my generation will still have access to basic elder medical care. And we're still carrying the HCR albatross that is currently seeing insurance rates (and corporate profits) climb at astronomical rates. Like you, I'm no economist, but don't these sorts of conditions generally result in a scared consumer base holding on to every penny they can get?


    by kgb999 on Fri, 08/12/2011 - 12:29pm

    About the scared consumer base, it is truly the wisdom of the moment. Truth is, we don't know what caused the contraction. A large part of it might have been auto's related to supply chains in Japan. For what ever reason, there is an uptick. Anecdotally, Oppenheimer just upgraded Bed, Bath and Pet Smart. Oppenheimer is one of the best on the street. (Having just rescued a dog and been introduced to Pet Smart I can only agree that there is great proof there of discretionary income being put to use.

    Whatever the reason for the uptick and whether it is for real I don't know. But from the dim recesses of B school, long before just in time manufacturing, here's the concept of inventory and production multipliers. Say a slow period, inventories have been lowered, consumer demand low. An uptick occurs. The retailer who was stocking two widgets, selling one every other week and reordering one starts selling one widget each week. He reads the tea leaves, and re-orders two each week instead of one. The chain reaction continues until the manufacturers manage to fill the pipeline. The original retail sale multiplies many times over. The opposite of this effect causes contraction, for much the same reason. But if there is one thing a manufacturer isn't going to do it's miss a sale because he doesn't have enough direct labor.  All of this can happen in a matter of months and have a near term effect.

    As far as hysteria, my frustration with the process wasn't as big as my actual scare that the economy might tank via miscalculation. I definitely was not spending, except for my dog. But even though I am concerned about the market,etc. I don't have existential fear for the economy per se. Thus my confidence has gone up even though I am pissed off at the process.

    Sorry to be long winded but your comments were stimulative, to use a current term.


    by Oxy Mora on Fri, 08/12/2011 - 1:43pm

    I'm not disputing folks with discretionary income are spending money entirely. But I would argue that your hesitance to spend was mostly over concerns that specific negative outcomes might impact your *personal finances* in such a way that the current economic woes would expand to place you in financial distress individually. The "economy" is an abstract, nobody makes a decision based on "the economy." They decide based on *their* economy. If the wider economy falters in such a way you can be reasonably sure it doesn't negatively impact you, of course you will still spend.

    But it is difficult to ignore that with every day, that group seemingly includes less and less people. If you look at Arti's comment below, the thing about the factoids highlighted is that, for the most part, they can be attributed to an upper class in America that has a shit-ton of money to spend on baubles and firehouse-sale asset raids during this period of profiting from the economic distress experienced by a great number of Americans (distress, not ironically, caused directly by the exact people who have profited from it most, BTW). Which beings up an interesting observation; those who have developed careers that involve servicing the rich are probably one of the few sectors outside of the mega-money owners themselves doing quite well. However, imagining that equals fixing the economy is a delightfully Randian conclusion.

    Do you think if you were in a situation where your 401k had been wiped out in '08, now out of career work stuck in some minimum wage job (if lucky) and looking at retirement age a few years down the road ... you would feel the same confidence about your future personal economy that mentally allows you to spend in the wake of this debt deal that you feel in your current personal reality? Or, less dramatically, simply lost your pension and now doing 55s on salary (same salary that was paid for 40s before the downsize). In this context, I think a germane question is how typical your situation is as an indicator of the relative improvement in outlook for the millions and millions of Americans who have experienced or are on the edge of economic distress as this depression/recovery/recession/othermeaninglesssound we currently face progresses apace.

    My state was at around 20% of the population on food assistance last I checked (a few months back) ... and the number has been growing. I see there are two Americas at this point. I'm entirely glad you inhabit the one that isn't stuck in hell right now. Personally, I'm straddling the abyss somewhat - but still feel quite fortunate. Any way you slice it, 395,000 new jobless claims is an increase in economic suffering for a ton of people - that number is greater than the number of inhabitants in most American cities (it's 10 Coeur d'Alenes for example) - in a single week. That's apparently happening every week.

    While everything you say about B-School 101 seems right to me (not having actually taken B-School 101 not withstanding), I notice you don't address the concept of information and what could happen, say, if a business decided to put scarce capital into filling a pipeline going nowhere because folks in charge of assessing assess that the means of lying about the economy is justified by the ends of being reelected. We could be looking at a built-up deferred necessities purchases (pet care counts) combined with a high-end shopping spree. If there aren't any new jobs and no other identifiable source of sustained infusion of money into the working class, I simply don't see money for the working class to spend on a sustained basis. Even lucre is subject to the laws of thermodynamics ... you can't go over unity and get something from nothing (well, it is notable, and seemingly unmentioned, that low-grade counterfeit bills are flowing like water right now ... but that doesn't really count). We really could end up with  sizable unsold inventory depending on what it is you are seeing scale production increases in.

    Also. Be wary of folks flogging "improved" aggregate retail numbers that include skyrocketing fuel prices in the assessment. Masquerading that number as retail allows a factor that acts as a drain on every American family's personal economy to be absurdly construed as a positive contributor to an entirely different business sector. Fuel costs rob from discretionary spending that might otherwise bolster retail.

    Personally, I have to throw my lot in with the worker, and they are hurting. Badly. As a small businessman and entrepreneur, I *am* an American worker. We sustain each other - it is a symbiosis. It is very clear that if the broader work force falls, we all fall. It bothers me how much it seems Democrats really have decided the thing to do right now is lie about the distress so many workers are under to try and help political prospects instead of joining the effort to demand an aggressive agenda for creating an improved situation for all of us.  If that really is the way it turns out, I will be utterly ashamed that I worked to help the party acquire a position to do this to your fellow countrymen. A bad politician is one thing ... embracing dishonesty and celebrating it as a party is quite another.

    That said, I really respect your views in general regarding business. If your observations truly lead you to think we're on the cusp of some miraculous recovery, I totally think you are crazy, but damn I really hope you are accurately seeing something I don't.

    (now THAT'S long winded, :-)


    by kgb999 on Sun, 08/14/2011 - 6:12am

    Thanks for that great blog. Gotta take the rescue huntin' dog out to the country to run her rear end off cause she's driving me nuts.

    Later. Existential fear of economy tanking. And how I went negative net worth in my 50's doing art and had to start a company because no one hires an ex-executive in their 50's.


    by Oxy Mora on Sun, 08/14/2011 - 8:42am

    In 2008 the broad economy tanked due to a credit crunch. Small businesses were hurt by global events. Sales decline, banks call in loans, customers take longer to pay--a triple whammy. One of my clients is a division a large international. Monthly billings $10K. They emailed me, oh, we're extending terms from 30 to 60 days. Bingo. I just loaned a $1B company ten thousand dollars. That's real. I was concerned that a miscalculation in the debt fight might cause a repeat of 2008 and worse, causing the business to fail through no fault of my own. When the deal ceiling was raised I thought this level threat had been avoided. I wasn't as fearful at the personal level, but in my case it's difficult to separate the two.

    I think the division of wealth in this country is grotesque. I count myself in the upper middle class, no more. But, honestly, right now I would be happy to see the Affluent spend their butts off. For the moment anyhow it would lift a lot of small boats. Long term we need a reformer in the White House. Obama has made a ton of mistakes, of which Summers and Geithner were the worst ones. I can't see abandoning ship at this point in the game.

    Following 2008 businesses have been hoarding cash and cautious about building inventories. If they are building inventories now they are seeing something real in the pipeline. If they keep doing this for a few months, it's more than a trend. Still I think Lavorgna is way too far out front.

    Businesses have had a sweet spot in earnings for the reason that they are slow to bring back workers, working folks overtime. I didn't have any new hires this year but sales have been up, knock on wood, my folks are getting more overtime which they love, and total payroll is up. As things improve you have to hire new people unless you want to lose sales and customers. It could very well be that companies are on the cusp of hiring as we speak. I bought new equipment recently ahead of my needs because the 100% write-off is too hard to pass up; unless everything tanks, it is found money.

    I know what it feels like to be up shite creek in one's fifties. It's debilitating, humiliating. Somehow I picked myself up, started a company, lived in the industrial unit where I parked the trucks and bootstrapped it, begging, borrowing, stealing and running up credit cards till I thought there was no way in hell they could be paid off. One just has to get out there and keep trying. It's something like rock climbing. You can't go any further but if you don't you're dead.

    One vignette about that period. I was singing in a community chorus when some butt head suggested we all needed to get tuxedoes, which shot down the blue blazer I had bought at Salvation Army for about $5. I went to a thrift store and found a $50 used tux. It was blue serge, weighed about 20 lbs and had lapels like the flaps on a 747. When I tried on the trousers so help me to God I found a folded up twenty dollar bill. I went up front, told the guy I was down on my luck and would give him $25 for it. He hemmed and hawed and said o.k. I gave him the folded $20 and dug five ones out of my wallet.

    And that's about how I started a business.

     

     


    by Oxy Mora on Sun, 08/14/2011 - 2:14pm

     


    by Richard Day on Fri, 08/12/2011 - 1:53pm

    Here's what I like: they just pick themselves up and figure out what to do next. Then, the wind comes again, and they just pick themselves up and figure out what to do next. They persevere. You gotta respect that.


    by Verified Atheist on Fri, 08/12/2011 - 1:58pm

    A metaphor for recalling Scott walker.


    by Oxy Mora on Fri, 08/12/2011 - 2:04pm

    Soundtrack for this should be Kansas's "All We Are Is Ducks in the Wind."


    by Rootman on Sat, 08/13/2011 - 8:36am

    yesyesyes

    3 thumbs up from the Ukrainian judge.


    by Qnonymous (not verified) on Sat, 08/13/2011 - 10:43am

    It definitely looks like 2010. Let's hope not in 2012.


    by Oxy Mora on Fri, 08/12/2011 - 2:08pm

    I think we can confidently predict that even if Obama does absolutely nothing about unemployment, the unemployment rate will nevertheless improve over time between now and the election ... because that's what unemployment rates tend to do after a society has passed the pit of a recession.

    The issue is that the Democratic Party used to stand for an activist government that rolled up its sleeves in response to a profound recession and did things to put people to work, and did not indulge the passive Republican laissez faire acceptance of recessions as just "one of those things" that the government should sit by and watch as the private sector slowly puts itself back together and digs out.

    But Obama cares more about the rentier class and conservatives, and their obsessions with the size of government and the deficit.

    I hear Obama say things from time to time that suggests he cares a bit about the political issue of unemployment.  But I see little that tells me he cares in any deeper way about actual unemployed people.   If he really did have much feeling for the plight of the unemployed, it would be hard to imagine that he would respond to that plight with the lame and ineffectual policies he has pursued.  He's aloof from pain.

    Unemployment is Obama's Katrina - except that it affects a much larger swath of the country than Katrina did.  New Orleans has gotten better since then, no thanks to Bush.  And the unemployment picture will improve as well, no thanks to Obama.


    by Dan Kervick on Fri, 08/12/2011 - 4:11pm

    Dan, I share many of your frustrations. And Obama is just not a touchy feely guy. He is an intellectual with occasional brilliant rhetorical skills. I can't say that he doesn't care for unemployed folks because I can't get into his brain. The fact that GDP is growing instead of tanking helps the unemployed, so I can't say he has been no help to the unemployed. Did he make some major mistakes which are making him less effective than he would otherwise be? Yes, Summers and Geithner--couldn't stand either one of them. And we tend to leave out of the equation the denial by Republicans of additional stimulus and unemployment benefits, for which it does not seem fair to blame Obama. 


    by Oxy Mora on Fri, 08/12/2011 - 11:41pm

    Wasn't Obama the guy who was telling us three years ago that we were suffering from an "empathy deficit"?  Maybe he was projecting.

    Growing GDP should help the unemployed.  But Obama isn't doing anything to grow GDP.  After the initial stimulus, he turned his administration's focus toward attacking the deficit, and that austerity emphasis is a drag on GDP.

    What about all those state governments that are now hacking their budgets to pieces?  Is it Obama's view that those state governments were too large and need long-term cutting?  Or is it his view that the state governments were just about right and that their budget crises were temporary problems due to the revenue shortfalls caused by the recession?  Has he expressed an opinion?

    Progressive government and public sectors are under assault from Republican barbarians, and Obama has done nothing to help lead a counter-assault.


    by Dan Kervick on Sat, 08/13/2011 - 8:27am

    Thanks, Dan. Obama didn't create the shortfalls at the states, and states don't have much leeway to run deficits. I don't know O's entire history of comments about the states. I think that he should have been more in evidence in Wisconsin.

    And as far as "projection" is concerned, I wouldn't touch that with a 10 foot pole.


    by Oxy Mora on Sat, 08/13/2011 - 9:26am

    Of course Obama didn't create the shortfalls in states.  He didn't create the Gulf oil spill either, and he didn't create influenza, hunger and crime.

    But presidents are expected to be national leaders and problem-solvers who respond to crises and problems they didn't create by setting the national agenda and doing something about those problems.

    I don't know Obama's history of comments about the crisis in state budgets either.  The fact that neither of us knows his position is prima facie evidence that this is another problem Obama has chosen to neglect.


    by Dan Kervick on Sat, 08/13/2011 - 11:20am

    I agree that it is irrefutable evidence.

    By the way, did you go to the picnic where Bernie spoke. Maybe I missed your report back.

    I'm kind of a neighbor of yours in the upside down state next door. Don't get there much because of business requirements elsewhere. But I sure miss it.


    by Oxy Mora on Sat, 08/13/2011 - 1:09pm

    The States Right movement will love Obama.

    Where was the Federal Government?


    by Resistance on Sun, 08/14/2011 - 6:58am

    Unemployment rates fall as the recently unemployed lose their unemployment insurance and stop reporting that they are actively seeking unemployment. In short, rates fall as government gives up on people and they give up on themselves--moving to the new class of long term unemployed. They no longer get counted. They drop off of the radar. That helps Republicans like Obama and me.


    by The Decider on Fri, 08/12/2011 - 9:54pm

    Yes, you are two peas in a pod in many ways. But Obama has to play the hand he was dealt and if it means using phony employment numbers so be it. You are the one who caused this mess and he is just trying to clean it up. In particular he is trying to extract us from the two crappy wars you started and didn't finish. He is trying to keep Social Security from becoming a voucher program. So while you two are alike in some ways, his objectives are much more progressive than yours, although the relative difference is lost on many in the blogosphere. Even though there are still many fine people out of work and the lower employment numbers aren't good because they are phony, electing a Republican is worse than electing Obama (with the prospect of Perry being elected you might actually agree with me). The ends justify the means. You of all people should know that.   


    by Oxy Mora on Fri, 08/12/2011 - 11:29pm

    But Obama has to play the hand he was dealt and if it means using phony employment numbers so be it.

    Good lord I hope this is a case of meeting satire with satire. The tone makes me think you are dead serious though.

     


    by kgb999 on Sat, 08/13/2011 - 11:39am

    I was only trying to explain something to Decider in a way he could understand--given his utter lack of moral integrity.


    by Oxy Mora on Sat, 08/13/2011 - 1:19pm

    Greetings from meatspace, oxy. Your thread caught my eye and tempted me to log in again to this little corner of the doom-and-gloom-o-sphere where it's always the worst economy and era evah known to man. First I was pleased to see your name posting here again. Second you seem to have been thinking along similar lines to me today, though not 'zactly the same. 

    Glancing within the doom-o-sphere bubble the last few days, I was seeing many still bemoaning consumer contraction or whatever they like to call it.

    Meanwhile I was reading stuff like this, my bold highlighting:

    Macy’s and Polo Ralph Lauren Deliver Strong Quarterly Results,

    New York Times, August 10, 2011

    ...Macy’s, the midrange chain that also owns the fancier Bloomingdale’s, said Wednesday that it had its most successful second quarter in more than a decade, and that the company’s earnings and sales outlook for fall was even better than it had suggested earlier in the year.

    Polo Ralph Lauren also had upbeat news on Wednesday. The company said it was increasing its full-year sales projections, telling analysts that it expected sales growth to be in the mid- to high teens, versus the midteens it had projected earlier.....

    Macy’s strongest-performing categories were jewelry, watches, accessories like handbags, cosmetics and fragrances, along with men’s clothes and home, said Karen M. Hoguet, chief financial officer of Macy’s, in a call with investors.

    She also noted that with stylish items, customers were not particularly price-sensitive, and that Macy’s had been selling more items at their original prices, rather than having to mark them down....

    The “biggest surprise” in the Macy’s results was its improved projections for the full year, said a Citi analyst, Deborah Weinswig...

    Polo Ralph Lauren reflected similar trends. Full-price selling “worked so extraordinarily well” in the quarter, Mr. Farah said....

    A fuller picture of the stock market’s effect on retailing may emerge soon, with Nordstrom and Kohl’s reporting on Thursday, J.C. Penney and Dillard’s on Friday, and Saks Fifth Avenue and Wal-Mart on Tuesday....

    and similar stuff like this and this and this.

    And then I also read stuff like this:

    Upbeat Warren Buffett says he's been buying amid market downturn
    August 11, 2011 | 11:49 am

    Billionaire Warren Buffett said he has not seen anything that suggests an economic catastrophe is emerging and has been buying amid sharp declines in the stock market, according to an article on Fortune magazine’s website.

    “The lower things go, the more I buy,” Buffett said. “We are in the business of buying.”

    The Berkshire Hathaway chief executive told Fortune he’s been buying equities and looking to acquire big businesses in the days following what he called an unjustified downgrade of the U.S. credit rating, and the ensuing highly volatile swings in the major U.S. markets. He did not discuss what he has been acquiring.

    “Business has been coming back steadily, even more than the mood of the public," Buffett told Fortune....

    and this:

    Mortgages rates keep falling: 30-year nears record low
    By Les Christie August 11, 2011: 3:17 PM ET

    ....The low rates are sparking a rash of refinancing activity, according to the Mortgage Bankers Association. Last week, total mortgage borrowing, most of it refinancings, jumped nearly 22%. This week's activity could be even higher, according to Greg McBride, chief economist for Bankrate.com....

    ...."It's a crazy time," said Doug Lebda, the CEO of online lending exchange LendingTree. "I'd say rates can't get much lower, but I was saying that last week, too."....

    and finally this--once again, with my bold:

    Jobless Claims in U.S. Unexpectedly Decrease
    By Bob Willis - Aug 11, 2011 11:50 AM ET

    Claims for U.S. unemployment benefits unexpectedly dropped last week to a four-month low, signaling the job market is being hampered by a lack of hiring rather than more firings. The number of applications for unemployment insurance payments fell 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April....

    The median forecast of 48 economists surveyed by Bloomberg News projected claims would increase to 405,000. Estimates ranged from 390,000 to 450,000. The Labor Department revised the prior week’s figure to 402,000 from the initially reported 400,000.....

    “Our customers are saying they do not see a recession, they are however going to be very hesitant about hiring,” John Chambers, Cisco’s chairman and chief executive officer, said in a Bloomberg Television interview today. “Unfortunately I think it’s gonna be a very tough job market.”....

    American companies also found it difficult to sustain sales abroad. The trade deficit unexpectedly rose 4.4 percent in June to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed. The widening was paced by a 2.3 percent slump in exports, the biggest decline since January 2009, as overseas demand for everything from soybeans and plastics to industrial engines and generators decreased.

    The drop in foreign sales undermines one of the few remaining pillars of the recovery....

    “The real weakness was in exports and that’s consistent with slower growth in the rest of the world,” said Jay Bryson, a global economist at Wells Fargo Securities LLC in Charlotte, North Carolina. Exports’ contribution to economic growth “is going to be a little more shaky,” he said.....

    Now I am no expert on the only really worthy topic *OBAMA* nor am I that economically savvy. And I rely far too much on those lying thieving MSM newspapers and the like and having been reading enough woe-is-us-we-are-doomed-truth-light-way-o-sphere "facts."  So take this part-time ponderer of *OBAMA* with a generous heaping of salt. devil

    Seems to me a president of the U.S.A. would have access to similar sort of data before it was published. And might not really have all his ducks in a row on it, but rather, he might put a relatively risky bet down that he might have ducks in a row in the foreseeable future. I.E., being an optimist, he might bet that a recovery was starting. One that might be slowed by Europe's problems and other trade problems, but a recovery nonetheless. But then the &#!*& wingnuts carried on their debt limit dog and pony show too long and too far and combined with the %#@*&% Standard and Poor's spooked everyone including consumer confidence. Which is why such a president might be whining about such things now and trying to talk up the economic factors now


    by artappraiser on Sat, 08/13/2011 - 1:05am

    Crap. Clicking on one of your links wrong killed my whole response. Shorter: it seems one doesn't have to scratch too deeply to realize there isn't really much that actually constitutes good news here.

    Although, I guess only 395,000 people losing their jobs last week (that number will be revised upward, BTW) instead of 402,000 the week before is just awesome. (What's that? The better part of a million more out of work in the last two weeks? Win!). As is the fact that the same people who don't see a recession also don't think they are going to sell much .... so they specifically aren't even considering hiring. [For those keeping score at home, this likely means record corporate profits (no recession) but zero jobs for American workers still facing massive unemployment (who cares)].

    And one other thought on falling unemployment numbers.

    I think your conclusions are delusional regarding the state of the economy (and your characterization of the recent debt-ceiling fiasco) ... but hope you are right.


    by kgb999 on Sat, 08/13/2011 - 5:54am

    Hey, Artsy. Thanks for commenting and good to "see" ya! I wondered if you might be lurking just beyond the doom and gloom clouds. Gotta be careful stepping out from under those clouds into the sunlight, might get rained upon. wink

    Yours are very stimulative comments, indeed, and I'll be back later.


    by Oxy Mora on Sat, 08/13/2011 - 8:19am

    Yes, we all know the economy is much better for people with college educations, and for those who shop at Nordstrom's, Saks and the nicer departments in Macy's.  It's not so good for the people who shop at Walmart.


    by Dan Kervick on Sat, 08/13/2011 - 11:24am

    http://www.economicpopulist.org/content/retail-sales-july-2011


    by artappraiser on Tue, 08/16/2011 - 10:29am

    I thought Buffet's comment was relevant. What's driving business even though the mood of the public seems to indicate otherwise?The consumer confidence report was down a bunch. I don't know, maybe people are pissed off but they still have pent up demand and will keep spending. I can't explain the uptick, but it's there. Like it or not, the Affluent have a lopsided effect on total spending, total spending being 70% of the economy.

    From Obama's point of view the more the opposition carps, especially in the sense of betting against America, the more he may be able to boil them in it when it really counts, just before the election.

    Thanks again.


    by Oxy Mora on Sat, 08/13/2011 - 2:10pm

    Obama has his ducks in the row for 2012.  First, he's going to duck the economy.  Then he's going to duck Afghanistan.  Then he's going to duck Libya.  Then he's going to...

    I kid, I kid!

    Joe Lavorgna is a smart guy and mostly an optimistic sort.  I get his point though, industrious people tend to make things out of waste.  But, man, he sees it happening fast.  I think it could happen fast, but only if the government helped under acknowledged emergency conditions.  But maybe things need less help than I think.  Unemployment below 8% would certainly be welcome.

    Ever since Genghis' post on the subject, I've been wondering what Obama could say about the economy.  I think his best bet is that is opponent's message of austerity and debt brinksmanship will bring terrible pain to ordinary people.  But to do that, Obama has to separate himself from that message.


    by Michael Maiello on Sat, 08/13/2011 - 11:34am

    I cross referenced it several times thinking it was a hoax. If we are anywhere near 8% by the end of 2011 I will be amazed.

    He mentions cap ex spending. It's foolish to so extend my personal behavior but maybe some don't realize the tremendous incentive accelerated depreciation is. In my small company I decided to buy a new service truck last month. I'm ahead of the curve in terms of my needs. But that 100% deduction is as good as cash in my pocket. And I may do the same next year when it will be 50%. So two great tax deductions, one in 2011 and one in 2012. Obviously I would have gotten the tax deduction over 4 years in any case but the accelerated depreciation means I have the cash now and can hang on to it or reinvest in the business as required.

    Also, I mentioned somewhere here the different way tax reform cuts for a small business vs. a mega corporation. Since small businesses don't get the loop holes big ones do, a tax rate reduction would help those who are actually in position to generate jobs while punishing those who generate jobs overseas. So I think tax reform is stimulative.

    About messaging, if it's Perry, which unless Jeb jumps in I think it will be, a world of opportunity opens.


    by Oxy Mora on Sat, 08/13/2011 - 1:39pm

    The thinker Obama has it all figured out.

    Obama's first term

    First you run a doom and gloom scenario, allow the country to go to the deepest depths of despair.  Much like our Grandparents who were in the depression and then faced with the antics of Hitler, trying to rule the world. Of course blame it all on the previous administration or the plan doesn't work.

    You can't be the President blamed for the doom and gloom; then be declared the savior.  

    Everyone needed to sacrifice, it was rough time folks. 

    Obama's 2nd term 

    The War is over, Pent up demand, propels the Nation into the greatest boom period since after the War.

    Obama and company will be remembered as the President during the greatest boom period since the Post World War 2 period.

    How many peoples fortunes were sacrificed, so we could have a rebirth?

    Jubilation; the War on the middle class will be over; lets rebuild on the ashes.  


    by Resistance on Sun, 08/14/2011 - 7:26am

    General Electric

    General Electric is planning to move its 115-year-old X-ray division from Waukesha, Wis., to Beijing. In addition to moving the headquarters, the company will invest $2 billion in China

    and train more than 65 engineers and create six research centers. 

    This is the same GE that made $5.1 billion in the United States last year, but paid no taxes-the same company that employs more people overseas than it does in the united States.

    So let me get this straight. 

    President Obama appointed GE Chairman Jeff Immelt to head his commission on job creation (job czar). Immelt is supposed to help create jobs.

    I guess the President forgot to tell him in which country he was supposed to be creating those jobs.

    This email was sent to me, if it's true .........WTF?

     


    by Resistance on Sun, 08/14/2011 - 7:38am

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