Monthly Archives: October 2012
Mosler for Congress update
I sent the following to my international audience looking to a return to prosperity
for all of us, which I now send along to you here in the USVI to keep you well informed!
(note that ‘closing the output gap’ means ‘eliminating unemployment’)
They have known me for a very long time and have been most supportive:
First let me thank all of you who have contributed, and have become part of what could quickly become much more than just another seat in Congress!!!
Donations have exceeded $25,000 and at only $25/minute for radio and TV adds the incremental spending has indeed made a difference- thanks again!
There are three weeks to go an any additional contributions will immediately be used to add to the advertising and promotional efforts.
When I ask our volunteers ‘out of ever 10 people they speak to in their neighborhoods, how many say they are voting for me’ they all say more than half!
Friday in St. Thomas while walking to a UVI event I heard a loud ‘Mosler!’ and looked over to see a patrol car with the window down and the officer looking at me. As soon as I turned his way he said ‘Everyone’s voting for you this time, you’re going to win you know!’
I’ve been in 5 ‘debates’ so far, with the candidates on a panel taking questions from a moderator. I’ve just focused on what I’m going to do about each issue, both for the national economy and the USVI economy, while the other candidates have had no specific agenda apart from promising to work hard (and taking cheap shots at each other, of course!)
More and more the audiences seem to be responding with ‘your the only one who knows what to do’. And the ‘anti incumbent’ feeling in general is actually alarmingly high as conditions here continue to deteriorate. Our cost of electricity, for example, just went up to over 50 cents/kw, while government salaries that were already half the national average were cut 8%, with thousands of lost jobs due to the closing of the Hovensa refinery here on St. Croix and widespread government layoffs of nurses and teachers in an already grossly under served community.
I assure you that if I get in Washington will soon be aware of the hurricane that’s come up from the USVI. The Fed chairman will suddenly face ‘innocent’ questions of profound magnitude, such as, ‘Isn’t true that a $trillion deficit adds exactly that much to global dollar net savings, and not a penny less or a penny more, or these two gentlemen next to me from the CBO would have stay late at work looking for their arithmetic mistake?’ ‘Isn’t it true, that by your own regulatory standards, loans to the ECB collateralized with euro deposits would be classified as unsecured loans?’ ‘Given that you do the actual spending on behalf of Congress simply by crediting accounts, and therefore ability to pay, insolvency, and prior funding for Congress, unlike for Greece, is never an issue, and, again unlike Greece, for all practical purposes the Fed sets US interest rates by voting and not the market, what then, is the short term or long term risk posed by deficit spending? And many more. And with all of these questions serving the agendas of various members of Congress there is every incentive for them to be asked. And not to mention testimony and discussions on banking, budgets, and trade. Looking forward to gettng the job done/close the output gap!!!
If any of you want to contribute to ‘THE CAUSE’ remember the limit is $2,500 per person and checks can be made out to ‘Mosler For Congress 2012’.
You can also click here or paypay and further information.
All the best!!!
Warren
Romney to Take China ‘to the Mat’ on First Day in Office
I can’t even read this stuff any more.
And, worse, it ‘forces’ his opposition to take a harder stance as well.
Romney to Take China ‘to the Mat’ on First Day in Office
October 14 (Reuters) — Republican presidential candidate Mitt Romney on Saturday accused President Barack Obama of failing to “stand up to China” after the U.S. Treasury put off releasing a politically sensitive report on the currency policies of major U.S. trading partners.
“Four years after promising to take China ‘to the mat’ for its manipulative currency practices, President Obama has once again failed to live up to his word,” Romney spokeswoman Andrea Saul said in a statement released by the campaign office.
“We can’t afford another four years of President Obama’s failure to stand up to China. Mitt Romney will do it on day one of his presidency,” she said.
Swiss Central Bank Chief: Currency Intervention Rescued Economy
Yes, as it reduced demand in the euro zone
Swiss Central Bank Chief: Currency Intervention Rescued Economy
October 12 (Nikkei) — A year after the Swiss National Bank made a direct intervention in the the foreign exchange market to halt the overvaluation of the Swiss franc, Chairman Thomas Jordan told the Nikkei in a recent interview that the move helped to stabilize the country’s economy and stave off deflation.
French Industrial Production Unexpectedly Rose 1.5% in August
I know it’s a stretch at this point, but I keep looking for evidence their budget deficits are large enough to support GDP at current (depressed) levels.
And yes, further austerity works against this.
French Industrial Production Unexpectedly Rose 1.5% in August
October 10 (Bloomberg) — French industrial production unexpectedly rose in August, driven by manufacturing of transport equipment. Production gained 1.5 percent in the month from July, Insee said.
Italian Industrial Output Unexpectedly Rises 1.7% in August
October 10 (Bloomberg) — Italian industrial production unexpectedly rose in August. Output rose 1.7 percent from July, when it contracted a revised 0.1 percent, Istat said. Production fell 5.2 percent from a year earlier on a workday-adjusted basis, the 12th annual decline. The euro region’s third-biggest economy will probably contract 2.4 percent this year and 0.2 percent next, the government said last month. Industrial production fell 0.9 percent in the third quarter from the previous three months, employers lobby Confindustria predicted on Oct. 1. Output declined 0.3 percent in September from the previous month, according to the survey. Istat had originally reported a 0.2 percent drop industrial production in July.
Same goes for the UK:
U.K. Third-Quarter GDP Jumps the Most in Five Years, Niesr Says
October 10 (Bloomberg) — The U.K. economy grew at its fastest pace in five years in the third quarter after a rebound from one-off disruptions in the prior three months, the National Institute of Economic and Social Research said. Gross domestic product rose 0.8 percent, compared with 0.1 percent in the quarter through August, Niesr said. Underlying growth was weaker than suggested by the headline number, Niesr said. Stripping out distortions stemming from June’s extra public holiday for Queen Elizabeth II’s Diamond Jubilee, it measured the economy’s pace of expansion as closer to between 0.2 percent and 0.3 percent. “The strength of the figure for the three months to September is largely an artefact of special events,” it said.
Turkey Masses Troops on Syrian Border; Syria Slams Turkey
This is very serious.
And if Turkey intervenes and topples the regime it may be a case of out of the frying pan and into the fire.
Turkey Masses Troops on Syrian Border; Syria Slams Turkey
By Selcan Hacaoglu
October 9 (Bloomberg) — Turkey’s top general inspected newly deployed units on the Syrian border Tuesday following six days of firing by Turkish batteries against President Bashar al-Assad’s forces.
Turkey has deployed additional tanks, howitzers, and missile defense systems on the border since a Syrian artillery shell killed five people in the town of Akcakale on Oct. 3, prompting parliament to give the government a one-year mandate to send forces into Syria if necessary.
General Necdet Ozel, chief of the general staff, today inspected troops in Hatay province, which was hit by seven artillery shells or mortar rounds in the past week, state-run TRT television said.
General Hayri Kivrikoglu, chief of the land forces, accompanied Ozel along with several other senior officers, the state-run Anatolia agency said. Ozel will inspect troops in Akcakale tomorrow, TRT television said.
Tensions between the two countries have risen during the 19-month rebellion against Assad’s government, with Turkey offering support to the rebels.
These worsened in June, when Syria shot down a Turkish warplane it said was in its airspace and on Oct. 3, when the Syrian shell fired over the border killed two women and three children in Akcakale, triggering the cross-border exchanges.
Foreign Minister Ahmet Davutoglu told state-run television on Oct. 6 that Syrian Vice President Farouk al-Sharaa hadn’t taken part in massacres and could serve as interim leader if Assad leaves office.
‘Confusion, Blundering’
Syria’s Information Minister Omran al-Zoubi said yesterday that Davutoglu’s remarks reflect “obvious political and diplomatic confusion and blundering,” Syria’s state-run SANA news agency said.
“Turkey isn’t the Ottoman Sultanate; the Turkish Foreign Ministry doesn’t name custodians in Damascus, Mecca, Cairo, and Jerusalem,” he said.
Syrian forces have continued firing at rebels along the border even though Turkey has responded to artillery shells or mortars landing inside its territory.
At least 27 schools along the border areas in Akcakale remain closed due to fears they could be hit by an errant shell, Anatolia said today.
The two countries share a 911-kilometer (566 miles) border. Turkey, a member of NATO, has a 720,000-strong military, the second-largest army within the alliance.
Deputy Prime Minister Bulent Arinc said late yesterday that although Turkey has no intention to go to war with Syria, it is determined to use the mandate if needed.
‘Solid Ground’
“Concerning Syria, primarily in the face of international law, Turkey will continue to walk on solid ground,” Anatolia quoted Deputy Prime Minister Ali Babacan as saying during a news conference today.
Turkey shelters nearly 100,000 Syrian refugees in 15 camps along the frontier. Syria says Turkey lets rebels use the camps as a safe haven.
More than 30,000 people have died in Syria since the rebellion against Assad began in March 2011, according to the British-based Syrian Observatory for Human Rights.
The Local Coordination Committees in Syria said 31 people have died so far today, including 28 in Damascus and its suburbs.
Naimi Says Saudi Arabia, Gulf States Seeking Stable Oil Prices
This reads a lot like the Saudis have about run out of excess capacity?
Naimi Says Saudi Arabia, Gulf States Seeking Stable Oil Prices
By Deema Almashabi and Glen Carey
October 9 (Bloomberg) — Saudi Arabia, the world’s biggest exporter of crude oil, will help meet demand “fully” and will work with other member states of the Gulf Cooperation Council to try to stabilize prices, Oil Minister Ali al-Naimi said.
“We will work towards moderating the price,” al-Naimi told reporters in Riyadh today ahead of a conference of oil ministers from the council’s six members. “We will meet the market demands fully.”
Crude for November delivery climbed as much as $1 to $90.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.93 at 5:09 a.m. local time. Brent oil for November settlement gained 81 cents, or 0.7 percent, to $112.63 a barrel on the London-based ICE Futures Europe exchange.
Saudi Arabia is the largest nation in the GCC, a political and economic confederation that includes Kuwait, Qatar and the United Arab Emirates. The four states belong also to the Organization of Petroleum Exporting Countries. The GCC’s other members are Bahrain and Oman. Together, the council accounted for 24 percent of worldwide crude supply in 2011 and 30 percent of total reserves, according to BP Plc’s Statistical Review of World Energy, published in June 2012.
“Oil prices rose in March to levels not seen since 2008, which may adversely affect the global economy, particularly the economies of developing and emerging countries, as well as negatively impact global oil demand,” al-Naimi said in a speech at the conference.
“We continued our policy of allaying market fears, providing supplies when needed and limiting high price fluctuations during the ensuing months till this present day,” he said.
employment report
Karim writes:
In the FAQ section of the BLS website:
Why are there two monthly measures of employment?
The household survey and establishment survey both produce sample-based estimates of employment and both have strengths and limitations. The establishment survey employment series has a smaller margin of error on the measurement of month-to-month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000. However, the household survey has a more expansive scope than the establishment survey because it includes the self-employed, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. The household survey also provides estimates of employment for demographic groups
Other features of the HH survey are that it is MUCH more volatile and it is also never revised.
Last 3mths of data: Jul Aug Sep Avg
HH Survey -195k -119k +873k +186k
Establishment Survey +181k +142k +114k +145k
So despite often showing opposite signs month to month, over time these series tend to send the same message.
In terms of the data yesterday, a big chunk of the gains in the HH Survey came in part-time employment and in the 16-24 age group. One explanation is many students who went back to school also picked up jobs.
Fed Impact
First, count me as among those who think there is 0 chance these numbers were manipulated. For the Fed, for the reasons the BLS explains above, they look at both indicators, though they favor the payroll survey due to its greater sample size. Bigger picture the two indicators both tell a story of modest improvement in the labor market. Not the ‘significant’ improvement the Fed is looking for. The quirkiness of the monthly data is also why they have a tough time with specific numerical objectives on the unemployment rate, instead favoring the ‘we’ll tell you when we get there’ approach. So full steam ahead for QE3, especially as we journey closer to the edge of the fiscal cliff.
Cameron and Draghi continue to push austerity
I wonder what, if anything, it would take to reverse all this self inflicted global destruction.
Clearly evidence and theory isn’t enough.
Too often change comes from some form of ‘blood in the streets’
Draghi Says No Alternative to Austerity as Economies Shrink
By John Fraher and Jeff Black
October 9 (Bloomberg) — European Central Bank President Mario Draghi said there is no alternative to austerity as Italian and Spanish officials balk at asking for bailouts that may impose more budget cuts.
“It’s without doubt that the process of fiscal consolidation has depressed output in parts of the euro area,”
Draghi told lawmakers in testimony to the European Parliament in Brussels today. “But what’s the alternative? We need to do that, we need to do that in the best possible way, as effective and as short as possible, complying with basic grounds of social justice.”
European officials are pushing debt-strapped nations across southern European for more cuts despite the risk that they will worsen recessions gripping the region. Draghi last month said that the ECB is prepared to take the unprecedented step of buying unlimited quantities of Spanish and Italian bonds if they sign up to certain conditions.
At the same time, Italian Prime Minister Mario Monti said in an interview last month that uncertainty about what those terms will look like is making him and his Spanish counterpart reluctant to apply for help.
International Monetary Fund Chief Economist Olivier Blanchard today suggested bond yields in Spain and Italy may resume rising if the countries don’t meet investor expectations and seek aid.
Cameron Says U.K. Needs to Implement Plan A Plus on Economy
October 9 (Bloomberg) — Prime Minister David Cameron said the U.K. government needs to implement an economic policy that he called “Plan A Plus,” without abandoning its deficit-reduction strategy.
Cameron was speaking after the International Monetary Fund cut its U.K. economic outlook and said the government may need to ease its fiscal squeeze if Bank of England stimulus fails to help the economy gather momentum. The Washington-based lender said today it sees the economy shrinking 0.4 percent this year before expanding 1.1 percent in 2013. It previously projected growth of 0.2 percent and 1.4 percent in those years.
“What we need is Plan A Plus” Cameron told Sky News television today from his Conservative Party’s annual conference in Birmingham, central England. He said that means pursuing deficit reduction alongside adopting fiscal measures to help businesses as well as easing planning rules to spur enterprise.
His opponents in the Labour Party have called on Cameron to reduce the speed and depth at which he is imposing government spending cuts, saying the government should alter its course to a “Plan B.”
The IMF is “not advising us to change course,” Cameron told BBC Radio 5. “What they says is we should stick to our plans unless things get dramatically worse.”
He said that while “there are signs that the economy is rebalancing,” including an increase in private-sector employment, “we need to do more and we need to do it faster.”
Healing Process
The prime minister said the IMF’s move meant it was falling into line with other forecasters, underlining the need for the government to ensure that its plans to spur growth are “firing on all cylinders.
Speaking to BBC Radio 4’s “Today” program, Cameron said the government is doing everything it can to encourage growth and a “slow and difficult healing process” is now under way.
He said there will be a new crackdown on tax evasion and “aggressive avoidance,” when asked to give details of his promise to take further action to increase taxes on the rich.
Chancellor of the Exchequer George Osborne told the party conference yesterday the U.K. economy is “taking longer” to heal than hoped. Still, he pledged to “finish the job” of reducing the deficit and signaled that deep cuts to welfare will be needed after the next general election in 2015.
Cameron Says IMF Forecast for U.K. Coming Into Line With Others
October 9 (Bloomberg) —Prime Minister David Cameron said the International Monetary Fund’s decision to cut its economic outlook for Britain meant the IMF was falling into line with other forecasters.
Cameron told BBC television from his Conservative Party’s annual conference in Birmingham, central England, that the goverment needs to ensure that its plans to spur growth are “firing on all cylinders,” rejecting calls for more borrowing to fund extra spending. He pointed to an increase in private- sector employment as a sign that the government’s policies are working.
Saudi output
Demand for Saudi crude remained high as they post price and let quantity adjust.
So it looks like they are trying to keep prices in check even with demand getting reasonably close to their capacity limits.
And it’s not illegal for them to set the price of oil to best support their candidate of choice.
