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News on several fronts in June 2009. On housing, a month to month improvement but still stuggling compared to a year ago levels. The Commerce Department said that an increase in multifamily units led to housing starts jumping 17% in May from April to a 532,000 annual rate. Compared to ayear ago level housing starts was down 45% from May 2008. There were 10 times more homes for sale in April as sold that month, with the typical ratio at 6. With layoff, tight credit and rising mortgage rates laying aheavy hand on these markets, even as developers cut prices deeply to clear unsold homes. On Manufacturing. Industrial production fell 1.1% in May from April, according to the Federal Reserve. Capacity utilization fell to 68.3%. See the graph for the steep drop for auto and auto parts manufacturing. On inflation. The producer price index showed its largest decline in 60 years, according to a Labor Department report. The PPI was down 5% from one year ago, the biggest decline since 1949. It went up from April to May by 0.2%. Part of this was rising oil prices. The core PPI which excludes food and energy dropped 0.1% in May from April. Rising oil prices, a falling US dollar and stabilization in the economy are reducing defaltion risk. At the same time the sign that inflation is not taking root are clearly evident in the slack that is building up with the drop in the capacity utilization rate to 68%, and further declines expected as the auto industry shrinks in 2009, with the huge overcapacity worldwide in that industry. ...

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Portugal in 2012-2013 stands as a good case study of what is good and what is bad about austerity measures, about what makes sense and is needed and what does not make sense and is bad both in a fiscal sense and for growth. Patricia Knowsmann does a good job of bringing this out, from the hundreds of stories written about austerity vs growth in the media. During 2011-2012, the elected government of Passos Coelho has supported an EU-IMF-ECB program that reduced wages, raised taxes, privatized state owned companies and changed labor laws that reduced hiring by businesses. During this time the Portuguese have patiently accepted the program compared to other countries and the budget deficit is shrinking from 9.8% in 2010 to an expected 5% in 2012. The unemployment rate has gone up to 15%. Now a new plan by prime minister Coelho in September has created an uproar and sparked popular opposition to the austerity measures threatening what has been achieved in deficit reduction, including the credibility of the austerity program. The plan is to reduce the portion of salaries that employers contribute to the social security system from 23.5% to 18%, in the hope that employers would increase hiring. At the same time it increases the portion of salaries employees pay from 11% to 18%. Coelho was looking at Germany and Slovenia where employees pay more than 20% of salaries to Social Security. What he failed to look at was the situation in Portugal where workers and pensioners have lost about 24% of their income through wage cuts and tax increases. The new plan would reduce incomes even further. Portugal's small business owners expressed strong disapproval for the plan because it would mean a drastic drop in consumer spending. The president of a Portuguese shoe maker, Kyaia, with 600 employees, says it makes no sense to reduce companies contribution if the company can't sell enough shoes to keep its workers. Kyaia has already experienced a 25% decline in demand and its CEO Fortunato Frederico, says he cannot understand how a company can hire workers if demand declines. This impact on consumer demand and sentiment is a fact that policymakers cannot ignore throughout the eurozone as austerity measures are implemented, especially when demand has already declined to an unacceptable point. The move by Coelho ignored a study by Portugal's finance ministry and central bank that showed export businesses may be induced to hire from the savings in contributions, but the businesses serving the domestic market would simply take in the savings. The EU-IMF-ECB recognized this and suggested increasing taxes to pay for the reduction in employer contributions, which would also depress demand by reducing incomes further. Portugal's economy and business is not focussed on exports, small business makes up 97% of Portugal's companies and most of them do not export. The introduction of such a plan gives credibility to the idea that there is a transfer of wealth from workers to business under the austerity programs, which affects the credibility of the entire deficit reduction and competitiveness improvement programs. For Coelho it also means the strong opposition of a minority party in his coalition government and from members of his Social Democratic Party. Large demonstrations were held on Sept 15 in 40 cities in Portugal in the first large scale opposition to further austerity measures and the Coelho social security contribution plan. Capital markets in Europe also see a problem with such plans because it removes the essential element of popular acceptance of deficit reduction plans jeopardizing the entire program. After the failure to win popular acceptance in Greece capital markets see additional risks and failures as one too many for the eurozone. ...

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The coronavirus pandemic has pushed New York into a $8.7 billion deficit for the fiscal year that began April 1, 2020. A bipartisan bill in Congress would have given $160 billion to state and local governments in the $908 billion bill. 

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France's Health minister announces that health care workers will not be allowed to work after September 15, 2021 or receive a salary if they are not vaccinated. Health pass will be required to access bars, restaurants, trains and flights in France.

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No country has an elected parliament this big. Germany's Bundestag has 709 members of parliament. And this could swell to 900 says DW.com after September 26 elections. A look at the German parliament that reflects Germany's recent history.

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Even as China is investing more in the economy and workers are working fewer hours, the unemployment rate is increasing to 5.3% in Feb 2024, youth unemployment at 15% previously estimated at 22% in June 2023 before a new methodology was adopted.

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Super Tuesday happens on March 5 as Republicans vote in 15 state primaries including Texas and California. A Senate seat in California vacated by Diane Feinstein and a Republican house seat in the Central Valley of California will also hold Democratic candidate selection.

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Phoenix gets 13 days of extreme heat at 110 degrees. A place in southern Iran showed 132 degrees. About 61,000 people died in last summer's heat wave in Europe. This year the heat wave is worse than last year.

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US GDP growth annualized for the 1st quarter is reported to be 1.6% and inflation at about 2.8%. The prospects of continued strong growth and higher inflation suggests the Fed's Powell will not make any interest rate cuts in coming months.

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US China agreement on TikTok sale to American ownership as required by Congress, Scott Bessent announces that an agreement has been reached with China in negotiations for the transfer of ownership. China is concentrating its energies in negotiating tariffs that were kept at 30% by the US and 10% by China which hurt Chinese industry in industries where it has overcapacity.

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The NASDAQ index reached 5000 by April 2015, a level reached in the stock market boom in 2000. Yet investment strategists who were wary of the stock market in the period before the 2000-2002 collapse of the market see this market differently. The NASDAQ itself is not what it was in 2000, with the 2015 NASDAQ component stocks being different for the most part, and the healthcare and other sectors better represented in the index. Only three of the stocks in the top ten in 2000 are in the top ten today, including Microsoft. The S&P 500 trades in April 2015 at 18.5 times its company earnings for the past 12 months, compared to an historical average of 15.5, according to research firm Bespoke. A big part of the difference today is the investment climate of low inflation, which gives the U.S. Federal Reserve flexibility in raising rates. Low rates make bonds with lower yields less attractive, and increase the present value of future earnings. The yield of the 10 year U.S. Treasury was 1.917% on April 25, 2015. In April 2000 it was 6%, and in mid 2007 it was 5.3% before the financial crisis in the two periods. James Paulsen, chief investment strategist at Wells Capital Management oversees $347 billion in fund investments. He also was wary of the U.S. stock market in 1999, yet he does not see the similiar kind of risks today, and sees a long term bullish trend. The scenario he envisages is more of a pause or temporary decline. Paulsen has shifted money to European markets, as U.S. stocks are becoming more expensive relative to their European counterparts, a strategy that is being followed by other money managers since 2014. Higher price volatility is seen in the markets in 2015, with the S&P 500 up 2.9% for the first four months of 2015, and the Dow up 1.4%. ...

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Experts say Kuroda of the Bank of Japan still has some Finance Ministry DNA, as he is from Japan's Finance Ministry which has pushed for the consumption tax to be increased to 10% in 2015. Even though Kuroda favors aggressive monetary stimulus compared to others in the Finance Ministry, he shares the views of Ministry colleagues on the tax changes. LDP leaders in the Abe cabinet and Abe see the recession with 2 consecutive quarters of declining GDP for the 2nd and 3rd quarters of 2014, as good reason for delaying the next tax increase from the 8% already implemented in 2014 to 10% in 2015. Under Abe's revised plan the tax increase would be postponed till 2017. Abe referred to the different views on the tax increase in his announcement for a snap election in Dec. 2014 for a new mandate to pursue his Abenomics economic policies of Three Arrows. Kuroda for his part downplayed their differences saying fiscal policy was the mandate of the elected government.

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Herbert cites figures from the Center for Labor Market Studies at Northeastern University in Boston which divides households into 10 groups based on annual household income at looks at unemployment levels in eachfot 4th quarter 2009. The highest group with incomes of larger than $150,000 had unemployment of 3.2%, the next group at $100,000 to $149,999 at 4%, households earning $60,000 to $75,000 had jobless rate of 6.4%, with $50,000 to $59,000 a 7.8% jobless rate. Its only when you get $40,000 to $49,000 that you see jobless rates of 9%, that is close to the national average. The worst pain is in the lower middle class groups with the 7.8% and 9% unemployment and in the income groups of $12,500 to $20,000 which have 19.1% unemployment. For workers at the bottom the unemployment rate is 31%! The workers in service industries, such as food preparers, building cleaners, less educated, high school dropouts, blue collar workers, workers in the construction industry, many blacks and Hispanics, are all hard hit. This also gives some idea why the jobless situation does not cause the same anguish in the media coverage as most of it is concentrated among young people, immigrants, illegal immigrants, Hispanics, minorities, and in service and construction industry type occupations. This creates a fragile situation from a social cohesion perspective especially as the lower middle class is also in the same situation and this combined with the working class blue collar and service and construction workers is a large segmet of society....

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This Journal editorial points to a Philadelphia Fed study showing that students in the middle class with higher student debt are reluctant to start small business. The Fed study shows new firms with five employees declined by 17% on average for 2000-2010 in counties where relative student debt was up by 2.7%. The average student loan customer owes $28,000. Student debt has doubled from $547 billion in 2007 to over $1 trillion in 2015. As small business makes up about half of the private economy and generates 6 of 10 new jobs, the effects on small business show the damage being done rising student loan debt.

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Inida' slowdown from 9% to 6.7% growth rate is mainly the result of lower private consumption says the Economis, as the contribution to growth of private consumption dropped by half in 2008. Which is why it sees the handouts to consumers through tax cuts and welfare spending making sense in the short run, even as India's finances are stretched. After a 36% increase in government spending in this budget, the fiscal deficit is estimated to be 12% in 2009, including "off-budget" items. Increasing the efficiency of the fertilizer subsiies by putting it directly in farmer's hands instead of fertilizer makers is a priority, as this takes up 1.5% of GDP.

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In the second quarter 2011 Goldman's revenue from trading, bonds, commodities and currencies declined 53% to $1.6 billon from $3.37 billion in the prior year. Goldman's value-at-risk, or VaR, declined to $101 million from $136 million the prior year. This indicator measures the dollar amount Goldman has at risk on any day at its trading desks. Goldman plans 1000 job cuts. Goldman set aside $3.2 billion in the quarter for compensation and benefits, a decline from $3.8 billion the prior year. Goldman's CFO says it was harder to navigate the volatility in markets in 2011 because of the political issues that were very difficult to analyze or predict.

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Business investment has been extremely weak since the global financial crisis of 2008-2009. This covers spending on investment goods - on equipment, software, inventory accumulation, residential and nonresidential construction. Compared to the 1982 recession non residential fixed investment has staged a weak recovery. In the 2 years after the 1982 recession nonresidential fixed investment went up by 27%, whereas in the last 2 years it is up only 12%. Spending on business equipment and software declined twice as much in this recession as in the recession of 1982, according to Mankiw. The comparison with 1982 is because the U.S. experienced 10% unemployment during that downturn.

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A careful examination of the Case-Shiller 20 City Index shows that even though housing prices increased by 5.9% year to date through July 2012, when looked at year over prior year only 2 cities Minneapolis and Detroit show an increase over 6%, other than Pheonix at 16%. It increased only 1.2% over the prior year in July 2012. Sixteen cities showed increases, Atlanta, Chicago, Las Vegas and New York showed declines. For this reason the interpretation of this one month data should be done cautiously as it can be skewed by unusual factors such as lower short and foreclosure sales according to experts.

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Research in Motion's new CEO, Thorsten Heins, says he has revamped the leadership team and his focus will now be on execution. He says that when he joined the company in 2007 it operated more like a startup. Heins wants to see founder Lazaridis in more of a visionary role. Product cycle times will be shortened as the teams will be more focussed from now on, says Heins. Heins sees one key part of RIM's strategy being getting new phones into the hands of users. Most Blackberry users have older model phones and Heins says only 10-15% of users know about the Blackberry 7 phones.

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The IMF's own stress test of U.S. banks shows that the banks would need $76 billion to create the capital cushion needed. In particular regional and smaller banks have an exposure to commercial real estate loans. In an adverse scenario these banks would have to raise $8 to $13 billion. The IMF review pointed to the issue of coordinating action for the bank regulation, with the Fed, FDIC and state regulators needing to coordinate action. The CFTC and the SEC need to coordinate for regulating futures markets. The IMF's Christopher Towe says Congress failed to provide clear regulatory authority and left the system with overlapping authority.

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Apple shares which made a steep rise of over 50% with the introduction of the iPad in 2011, reaching over $600 by March 2012, fell by about 9% between April 9 and April 16, 2012. Apple faces questions about the extent of new innovations it can bring compared to the pace of innovation under CEO Jobs. How long it can maintain the high profit margins on the iPad and the iPhone before they are gradually eroded. And whether a lot of the growth in future years has already been priced into the price of the stock already, with the steep ascent in price in 2011-2012.

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Hispanics made up 14 million of California's population in 2010, whites 15 million and Asians 4.8 million. Whites and blacks declined as they moved to less pricey and more affordable states. Asian population continued to grow at rates of over 30% for the second decade, and a majority of residents in Orange County are now minorities. Hispanic growth slowed from over 40% between 1990 and 2000 to over 30% in 2010. Most of the growth in population in California has been in the inland areas such as Fresno and Riverside. The growth of the Hispanic population also means a shift in favor of the Democratic party in the state.

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Shiller says that his CAPE ratio for the U.S. stands at above 25 in 2014, from 23 in 2013, above the 20th century average of 15.21. He looks at possible reasons for the CAPE remaining above 20 for long period of about 20 years, except when it dropped to 13 following the 2008 financial crisis. CAPE is similiar to the price earnings ratio except it uses the average of the last 10 years earnings. Reasons he gives are low interest rates, high bond prices, Fed policy, and the lack of alternative investments in a low interest rate environment that puts more money into the stock market in the U.S.

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Mitsubishi Aircraft Corp. announces a test flight of the Mitsubishi Regional Jet for the second quarter of 2015. The plane seats 76-88 passengers and is designed for short haul flights. Deliveries would begin in 2017. This is Japan's effort to develop its aircraft industry. Mitsubishi has 375 orders. Bombardier of Canada and Embraer of Brazil dominate this segment of the market in a duopoly. Embraer is expected to retain its 61% of the market and Mitsubishi is likely to take 22% on the market for No. 2, with 4000 deliveries in the period 2017-2033, according to analysts. Shareholders in the company include Japan Development Bank and Toyota Motor.