Economy

Stock futures pop after GDP revision

NEW YORK (CNNMoney.com) -- U.S. stock futures popped Friday as investors digested a better-than-expected downward revision of second-quarter economic growth. Traders also awaited key speech from Federal Reserve Chairman Ben Bernanke on the economic outlook and monetary policy.

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"Economic growth was lowered, but the downward revision wasn't as sharp as we were expecting, so that's being perceived as a positive sign," said Art Hogan, chief market strategist at Jefferies & Co. "We also saw that consumer spending was revised higher, so there are some silver linings in the report."

Economy: The government revised its reading of second-quarter gross domestic product to 1.6%. That was down from the previously reported 2.4%, but still topped expectations.
http://money.cnn.com/2010/08/27/markets/premarkets/


these economists sure put a "glass half-full" spin on things....revised lower is LOWER is my book, nothing good about it.

Analysis: Dubai World sale of crown jewels seen as last option

Dubai World's willingness to sell prized assets such as ports operator DP World to pay down its debt pile is considered such a drastic move that analysts see it more as a last-resort bargaining tactic.

Documents obtained by Reuters this week revealed the surprising news that the debt-laden conglomerate was willing to let go of "strategic assets" such as DP World, Jebel Ali Free Zone and Dubai Maritime City (DMC) as part of a $19.4-billion fundraising effort as it tries to reach a restructuring deal with creditors by October 1.

By displaying its willingness to put these assets on the block, Dubai World is effectively offering creditors an insurance policy that if the restructuring plan runs into trouble, it will sell core, strategic assets.
http://www.reuters.com/article/idUSTRE67P2WJ20100826

How Housing Could Derail the U.S. Economy
Rising foreclosures and falling sales are discouraging potential buyers

Housing led the U.S. out of seven of the last eight recessions. This time it may kill the recovery.

On Aug. 24 the Chicago-based National Association of Realtors reported that July sales of existing homes plummeted 27.2 percent from June, the biggest monthly drop since recordkeeping began in 1999. Sales of new homes dropped to the lowest level on record.

The July numbers are another sign that home sales have collapsed following the expiration in April of a federal tax credit for buyers. The manufacturing-led expansion could theoretically take up the slack—except manufacturing is on the wane, too, with jobless claims rising and factory orders actually dropping once aircraft orders are excluded. "If foreclosures continue to mount and depress home prices, that could send the economy back into a recession," says Celia Chen, an economist who tracks the industry for West Chester (Pa.)-based Moody's Analytics.

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Meanwhile the Lasswells keep looking. "I don't see things getting better," Marion Lasswell says. "I expect prices to be flat for a long time."
http://www.businessweek.com/magazine/content/10_36/b4193010909727.htm

were we ever "out" of a recession?

BOE's Bean Says More Stimulus May Be Needed to Sustain Economic Recovery


Bank of England Deputy Governor Charles Bean said more monetary stimulus may be required to sustain the recovery as the aftermath of the recession continues to hamper the economy.

“The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off,” Bean said in a speech at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming today. “Further policy action may yet be necessary to keep the recovery on track,” but “normal times will surely return in due course.”

Bank of England policy makers have split on the need for an additional spur as the government’s budget squeeze overshadows the economy’s acceleration in the second quarter. Governor Mervyn King said Aug. 11 growth will be weaker than previously forecast as the U.S. economy cools and a debt crisis threatens the euro area, Britain’s largest trading partner.

http://www.bloomberg.com/news/2010-08-28/boe-s-bean-says-more-stimulus-may-be-needed-to-sustain-economic-recovery.html

For the young, unemployment hits record

While the national unemployment rate stuck at 9.5 percent this summer, the youth unemployment rate hit 19.1 percent in July.

It was the highest midsummer jobless rate for the 16-to-24 age group on records dating back to 1948, the U.S. Bureau of Labor Statistics said Friday.

The jobless rates for young people in July — typically the peak month for youth employment — jumped from 10.5 percent in 2007 to 14 percent in 2008 to 18.5 percent in 2009.

This year, fewer than half (48.9 percent) of that population group held jobs in July. That also was a record — for the lowest share of 16- to 24-year-olds to be employed in the month.



Read more: http://www.kansascity.com/2010/08/27/2182315/for-the-young-unemployment-hits.html#ixzz0xw84j9rf

The path to depression

Want to know what is really going on?
Investors are waking up. They are wiping the sleep from their eyes. Behold! No recovery.

Analysts and the commentariat are struggling to make sense of it. With record low mortgage rates, and after eight programs designed to boost up housing, for example, sales are still plummeting. July saw the biggest monthly drop in existing house sales since the Johnson Administration.

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But you, dear reader, you want to know what is really going on. So we will tell you.

We begin with a detail from yesterday’s news: credit card debt has dropped to its lowest level in eight years. This tells us that the de-leveraging of the private sector is real…and on-going. And as long as it lasts, you can forget about a “recovery.”

Instead, you should expect more on-again, off-again recession…with high unemployment, falling asset prices (stocks and real estate), weak sales and declining incomes.

This correction is a good thing. Consumers have too much debt. They’ll be better off when they get rid of half of it. But the feds want to fight this correction in the worst possible way. What’s the worst possible way? Adding more debt!

While the private sector de-leverages, the public sector leverages up. Eventually, this will have the result that everyone expects…bonds will crash, and the dollar will collapse…BUT PROBABLY ONLY AFTER PEOPLE STOP EXPECTING IT.

In the near term, the stock market is probably going down…it seems to be rolling over now. Yesterday, the Dow rose 19 points – a very weak bounce after so many down days.

When stocks go down, they will drag inflationary expectations. It will probably bring down stock markets in the emerging economies…possibly causing the Chinese economy to blow up…and bring falling commodities prices and deflation too. The idea of a “bond bubble” will disappear. People will see the “depression/Great Recession” as real…and permanent. They will try to protect themselves by buying US Treasury bonds. This will permit the feds to go further and further into debt.

Thus begins the world’s long day’s journey into night.

http://www.csmonitor.com/Business/The-Daily-Reckoning/2010/0828/The-path-to-depression

doom!!!!



my fave doomster..al gore

Roubini outlines the ”new normal”

New York University professor Nouriel Roubini said expectations of decoupling will not be met as economic slowdown in the US impacts China, Japan and the euro zone. The ”new normal” for ‘Dr Doom’, as he has come to be known after his accurate prediction of the onset of the US recession, is that even if there is no double dip it will still feel like recession.
http://www.domain-b.com/economy/worldeconomy/20100903_outlines.html

Experts see trouble ahead for developed world

Is the global economy out of the woods? Two years after near-meltdown, with the U.S. looking sluggish, equity markets groggy and Europeans fighting a debt crisis, experts gathered in Italy offered a generally gloomy outlook — especially for the United States and much of the industrialized world.
http://www.google.com/hostednews/ap/article/ALeqM5jEB_001ID1IooKGJBpeBVv_-C7bwD9I0J4P00

still in the woods!

Meredith Whitney Sees Big Job Cuts Coming to Wall Street

Meredith Whitney, who started the Meredith Whitney Group, said Tuesday that the as many as 80,000 jobs will be cut by securities firms in the next 18 months as revenue growth slows.

The reductions forecasted by Whitney would be about 10 percent of the current levels and will occur following the 2010 compensation payment. The former Oppenheimer & Co. analyst added that the payments will be “down dramatically.
http://www.streetinsider.com/Insiders+Blog/Meredith+Whitney+Sees+Big+Job+Cuts+Coming+to+Wall+Street/5952054.html

To "Stimulate"... but Not "Stimulus"

The president used the word "stimulate" throughout his news conference, but are his economic proposals a sign of a second stimulus? His initiatives from his first stimulus proved to be unpopular with voters and may cost Democrats at the polls.

On Friday's Washington Unplugged, Reid told CBS News Chief Washington Correspondent Bob Schieffer, "Even though the White House likes to claim that it saved or created somewhere in the vicinity of three million jobs, the American public doesn't seem to believe it... Robert Gibbs refuses to utter the word 'stimulus' in the briefings... [President Obama] also refused to use the word 'stimulus'... It's a word that's just taboo here at the White House."
http://www.cbsnews.com/8301-503544_162-20016114-503544.html

World Economic Forum to Present Smart Grid Report

Accelerating Successful Smart Grid Pilots” is a new World Economic Forum report that will be presented at an upcoming event to be held in Tianjin, China on September 13. The report, which was developed with Accenture and industry experts, underscores smart grids as a key enabler for a lower-carbon economy and as a way to meet growing worldwide energy demands.
http://smart-grid.tmcnet.com/topics/smart-grid/articles/100852-world-economic-forum-present-smart-grid-report.htm



“Summer Davos” in Asia
Annual Meeting of the New Champions 2010
The Annual Meeting of the New Champions, the “Summer Davos”, is the foremost global business gathering in Asia. Introduced in 2007, the Meeting is held in close collaboration with the People’s Republic of China and with the personal support of Premier Wen Jiabao.

Driving growth through sustainability is fundamental for global, national and business competitiveness in the 21st century. This year’s programme will focus on how to increase energy efficiency, lower carbon emissions, develop green technology and rebuild basic infrastructure.

It will also provide a systemic overview of key economic, industry and technological developments that will reshape business and society for the foreseeable future.
http://www.weforum.org/en/events/AnnualMeetingoftheNewChampions2010/index.htm



Program (WOW)
http://www.weforum.org/en/events/AnnualMeetingoftheNewChampions2010/Programme/index.htm

Driving growth through sustainability is fundamental for global, national and business competitiveness in the 21st century. This year’s programme will focus on how to increase energy efficiency, lower carbon emissions, develop green technology and rebuild basic infrastructure.

they dont know when to give up..

`Silent Heart Attack' for Pensions Driven by Yields

Corporate pension plans in the U.S. are falling behind future payouts to retirees by the most in a decade amid a slowing economy and the lowest bond yields on record.

The gap between the assets of the 100 largest company pensions and their projected liabilities widened by $108 billion in August from the previous month to a $459.8 billion deficit, actuarial and consulting firm Milliman Inc. said today in a statement.

The shortfall is “like a silent heart attack,” said Kenneth Hackel, president of research and consulting firm CT Capital LLC. “People aren’t recognizing the symptoms until the patient falls on the ground.”

http://www.bloomberg.com/news/2010-09-14/company-pension-funds-in-u-s-falling-behind-payouts-amid-low-bond-yields.html

liabilities will start to add up..SS for one and medibank?