That’s the BBC headline. My question is how accurate is it? We aren’t talking about a Western Democracy. This is almost the last of its kind, a communist state. It is easy to find numerous web sites discussing the lack of accuracy and inflated claims made by the Soviet Government during its time. Eastern European Communits countries have a similar dismal record of accuracy. When China’s Great Leap Forward had already become a disaster (1956) government statistics showed it to be a great success. Now that foreign investment, exports and international agreements are on the line, is the temptation less? It was explained to me over and over again by many news articles and “analysis” (sometimes even by my Chinese students) that China would be the big winner during the world economic crisis, that it was immune to economic downturn. If that is so, why did the Chinese Government create a 586 billion (U.S.) dollar stimulus package for its economy?

What about the issue of corruption? The only real information about the critical nature of corruption is anecdotal. Try these two stories. About 80% of the foreign money sent to help survivors of the earthquake in 2009 wound up in the hands of the government. Researchers estimate that 73 billion dollars a year are spent on government banquets.

How about this quote from the Carnegie International Endowment for Peace:

Failure to contain endemic corruption among Chinese officials poses one of the most serious threats to the nation’s future economic and political stability, says a new report from the Carnegie Endowment. Minxin Pei, an expert on economic reform and governance in China, argues that corruption not only fuels social unrest and contributes to the rise in socioeconomic inequality, but holds major implications beyond its borders for foreign investment, international law, and environmental protection.

Are Chinese economic statistics accurate? I have my doubts. What about the greater question? Is China going to be the next world superpower? My prediction is no. There are too many geographic, foreign policy, economic  and cultural difficulties for the country to maintain its stability for even the next decade.

James Pilant

Here is a list of banks that have failed.  140 in 2009 so far but the year isn’t over yet!

-Billy Ray

Normally when a business increases its debt load in relation to its ability to generate cash flow/value, financial stress increases, earnings become more volatile, and the cost to borrow additional capital increases.  This is pretty logical and should hold true for countries as well…. right?  The opposite  is currently happening- the US government’s cost of borrowing is falling as the debt/GDP level is increasing exponentially.  Take a look at the chart below that plots US National Debt/GDP on the right axis and the market yield on the 10 Yr US Treasury (constant maturity) on the left axis.  Something’s gotta give- either US Treasury rates will sky-rocket, our national debt will be reduced relative to US output, or US Gross Domestic Product must start to grow above normal….. Where are you putting your chips? (click on chart below)

 -Billy Ray

Here is recent Real GDP per capita which is thought to be the best measure, or one of the best measures to gauge standard of living in the US.  It has leveled out in the last couple of quarters.  The question is has it peaked?? (click on the image to get a clear view)

-Billy Ray

Hello Friends here we come up with an extension of our previous blog, ECONOMIC INDICATORS… “Leading the World” Part 1.

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Economic Indicators - Leading the World Part 2

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In previous Blog, we had touched upon the aspect like

what are Economic Events & Indicators and important sources of data provider for calculating & determining economic indicators.

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However in this Blog, we would try to know about the classified categories of Economic indicators in details and what is Time Era.

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Classified Categories:

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1. Leading indicators:

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These indicators are to forecast trends of the overall economy.

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The indicators included in the figure are:

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interest rate spread, M2 money supply, average manufacturing work week,

manufacturers’ new orders, S&P 500, average weekly unemployment claims,

vendor performance, housing permits, consumer expectations and

manufacturer’s new orders for non-defense capital goods.

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2. Lagging indicators:

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An indicator to generate transaction signals or to confirm the strength of a given trend.

It is a measurable economic factor, for example, corporate profits or unemployment that changes after the economy has already moved to a new trend.

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3. Coincident indicators:

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It provides information on the current state of the economy.

For example, coincident indicators move up when GDP is growing and down when GDP is shrinking.

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This indicator varies directly with, and at the same time as, the related economic trend.

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The four economic statistics comprising the Index of Coincident Economic indicators are

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- Number of employees on non-agricultural payrolls,

- Personal income less transfer payments,

- Industrial production,

- Manufacturing and

- Trade sales.

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Time Era:

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Knowing when each piece of information will be released is important to successful trading.

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The economic calendars are found on many websites.

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These figures helps to decide how to trade using these events, it can help explain unanticipated price actions during those periods.

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These indicators play a vital role in determining the trend or movement of the stock market & the commodities futures.

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It has been seen many times that when a positive data of these indicators like GDP or Industrial Production comes into picture & looks promising,

the trade of currencies like Euro, USD, INR; precious metals like Gold, Silver, base metals of Copper, Zinc, Lead show a positive move & short-term rally immediately.

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Stay Tuned for more and more on this

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However For More latest Industry,Stock Market and Economy News Updates, Click Here

The data in the chart below is taken directly from the Fed’s website.  (click on the chart to get a better view)

The gold is public (government) net savings, pink is private net savings, and blue is total net savings.  We’re headed deeper and deeper into uncharted territory. 

-Billy Ray

World demand is expected to once again eclipse supply in 2010.  $4/gal coming soon to a gas station near you. 

-Billy Ray

Tegning illustrerer det danske velfærdssystem

English version

Det danske velfærdssystem byggende fortrinsvis på skattebetalinger og offentlige udgifter over livsforløbet var dømt til undergang fra begyndelsen. Et system kan ikke bygge på en let forseelig underskudsmodel, der skal delfinansiere udgifterne over skatterne, og som samtidig tillader forbruget heraf at være privat individuelt bestemt.

Det viste sig tillige at indvandringen pr. individ fra ikke-vestlige lande koster det offentlige, i sidste ende virksomhederne 2,5 mill. kr. i gennemsnit over livsforløbet, hvorimod en dansker kun belaster med 750.000 kr. i gennemsnit. Forskellen er altså en faktor 3,3 gange. Sidstnævnte beregninger stammer direkte fra Børsens referat af Velfærdskommissionens arbejde i artikel 1. december 2005.

Lad den grønne oval nedenfor illustrere den danske offentlige sektor og den blå den private frie, samhandlende sektor.

Det kan ikke lade sig gøre at forcere udviklingen fra det øverste venstre til nederste strukturelle størrelsesforhold, fordi den offentlige sektor dræner den private sektors muligheder for meget til fornyelse og ekspansion sammen med alle andre omkostninger. Hvis vi ønsker fortsat at have en offentlig sektor i det lange løb af cirka den størrelse vi har nu, skal der ske en reduktion af den offentlige sektor midlertidigt.

Der er ingen vej uden om.

Den røde pil viser den umulige eller den ideologiske vej. De sorte pile viser den mulige vej. Der er ingen andre veje. Sker omstruktureringen ikke meget snart, selvom det nærmest ser umuligt ud under forudsætninger om den øgede internationale konkurrence kombineret med velfærdens voksende finansieringsproblem, der særligt stammer fra den voksende ældreandel og den samtidigt faldende tilgang til arbejdsstyrken plus elitens selvskabte fejlskud til løsning af dens selvskabte fertilitetsproblemer – indvandringen fra Sydasien, Mellemøsten og Afrika, illustreret ved beregningerne i første afsnit –  går landet naturligvis i økonomisk kollaps.

Opsving er noget politikerne bestiller – f.eks. via øget belåning af boligmassen.

Hvor langt nede vi allerede befinder os: Prøv en af Dagbladet Information inspireret gennemgang

Jo flere år løsningen udskydes desto værre bliver kollapsen.

Det er ren matematik.

Og hovedprincippet har i den korte version af udviklingen været : Gældsætning for enhver pris, på langt sigt er vi alle døde. Fra 1968 var der en generation overalt i Vesteuropa, der forstod og hvis princip det var at leve efter en sådan opskrift. Alle generationens ideer skulle realiseres uanset gældsætningen, mente de. Nu går 68-generationen på pension, men det er et spørgsmål om denne generation ikke har nået at gøre sit regimente arveligt. Men givet er det alligevel, at 68-generationens hovedhjørnesten, det skattefinansierede velfærdssystem, sammen med den internationale konkurrence nok skal sende os på en sidste deroute, som allerede er godt i gang, før et nyt opgør eller et nyt internationalt pengesystem. Dette hænger sammen med at visse universielle økonomiske love er lige så sikre som tyngdeloven.

I recently posted this article 15 Quick stats on women workers http://wewomen.wordpress.com/2009/11/11/15-quick-stats-on-us-women-workers/ and got a request in comment to provide comparative data on men/women weekly wages in various occupations. I started looking for that information. I expected the similar quick stats on men workers, unfortunately didn’t find anything which clearly stated. But found a report from Bureau of Labor Statistics for USUAL WEEKLY EARNINGS OF WAGE AND SALARY WORKERS THIRD QUARTER 2009.( See complete Report :http://www.bls.gov/news.release/pdf/wkyeng.pdf), which compares the weekly wages among men and women in US on some professions. Please see below a table summarizing the same:

Men weekly wages 2009. SRC: Bureaue of Labor Statistics

The key highlights of the BLS report are:

• Among the major occupational groups, persons employed full time in management, professional,and related occupations had the highest median weekly earnings—$1,259 for men and $913 for women. Persons in service jobs earned the least.
• Women who usually worked full time had median earnings of $657 per week, or 80.9 percent of the $812 median for men. The female-to-male earnings ratios were higher among blacks (95.3 percent) and Hispanics (95.2 percent) than among whites (80.0 percent) or Asians (82.6  percent).

Looks a dissappointing facts buts that’s what stats say… So next all girls whenever you try to negotiate for your salary , ask for salary in par with men for that position. Dont be afraid to ask for that, as internally you know, if both men and women are doing the same job , women can do equally well:-)…

This is scary, but you have to see this.  Click on this link and press play to see how/where the employment situation has deteriorated over the past two years. Nasty.  Based on the map, farming is where it’s at right now.

Om engangsudbetaling på kr. 100.000 har interesse…

over en bredere front skal naturligvis sættes i forhold til, hvad de ellers opnår ved at forblive i landet

Indledningsvis må vi oplyse at førtidspensionen i Danmark udgør kr. 13.895 pr. mdr. for enlige. Og huslejen for de første 60 kv.m. bolig kan højest andrage 20 procent af pensionen; det offentlige betaler resten. For indvandrerpar følger taksten reglerne her : Jf. http://www.clh.dk/pjecer/jobmedtilskud/doc4.html: “Efter de nye regler om førtidspension er der kun én ydelsestype af førtidspension, som kan tilkendes personer mellem 18 og 65 år. Efter 1. januar 2004 modtager enlige kr. 13.895 pr. måned. Personer, der er gift/samlevende, vil modtage kr. 11.810 (hver) om måneden. Begge beløb er skattepligtige og påvirkes af eventuelle indtægter…”

Vi mener enhver, der modtager et sådant beløb månedligt bliver voldsomt forgyldt, men dette skal selvfølgelig sammenlignes med, hvad man selv har til rådighed, og hvad man yder for det. Fattigdom i denne forbindelse er dog sjofelt at komme ind på, medens en kassedame lytter med.

http://danmark.wordpress.com/2009/06/10/flere-og-tidligere-paa-pension-ikke-vestlige-slaar-ikke-ganske-uventet-rekorden/

I Århus modtog knap 1/3 af alle ikke-vestlige 40-64 årige kvinder førtidspension i 2008 – svarende til 32,1 procent

På landsplan er antallet førtidspensionister blandt indvandrerne blevet knap tredoblet på 10 år i følge Berlingske

Integrationsudgifter: F.eks. antallet af indvandrere på førtidspension i Århus er steget med 99,7 % på fem år.

Et besøg i Gellerupparken i Århus, hvor Aamund erfarede at 8.000 ud af 10.000 indbyggere er på overførselsindkomster

I TV2-Øst den 14-10-2009 kl.8:01 læses: At mere end hver femte indvandrer var fattig i 2005 – svarende til 22,8 procent.

I 1996 var tallet kun 10 procent, skriver Århus Stiftstidende.

- nu forstår vi, at de simpelthen forsvandt fra jobcentrene og jobmesserne under den aktive arbejdsmarkedspolitiks begyndelse.

Mange fejl i kommunerne:

“Den Sociale Ankestyrelse, der holder tilsyn med området, har i flere tidligere undersøgelser konstateret, at kommunerne begår mange fejl i deres sagsbehandling, når de vurderer, om en ansøger skal have førtidspension, ligesom der også sker mange fejl i forbindelse med tildeling af fleksjob. Senest har Statsforvaltningen i Syddanmark i 2008 gennemgået 95 sager om tilkendelse af førtidspension. I 51 pct. af sagerne var der så alvorlige fejl, at afgørelsen enten ville være blevet ændret, eller sagen ville være sendt tilbage til kommunen til en ny behandling. Typisk er fejlene, at kommunen slet ikke har testet, om ansøgeren kunne varetage et job, eller ikke har udtømt alle behandlingsmulighederne…”

Supplement antal førtidspensionister og andre på overførsel

Derudover vil Politiken nu tilbyde specielt irakere kr. 32.000 pr. måned. Om den kan få overklassen til ved indsamling at finansiere alternativet til hjemsendelse for flere nationers borgere er et åbent spørgsmål, der måske på et tidspunkt skal kunne sidestilles lidt med beslutningerne i folketinget, hvis ikke dette et for meget forlangt.

Der er flere kilder

Det er ser ud til at integrationen gør dem fattige

På denne baggrund er det endnu mere usikkert, om kr. 100.000 som engangsudbetaling vil få immigranterne (de afviste og de andre) til at pakke klunset permanent og vende næsen hjem.

Vi mener simpelthen det for sent at klare hjemsendelserne i større antal ved at yde dem et engangsbeløb på kr. 100.000. Måske er det netop derfor det først besluttes nu, og at det ikke skete for 15 år siden, ligesom alt det andet.

Politiken fanges vel ikke af Lissabon-traktatens bestemmelser om racisme

More and more US citizens are using credit cards to pay their taxes.  No wonder Uncle Sam is eager to unfreeze the credit markets.  I came across some research that showed the number of taxpayers paying taxes through card-based payments grew at a compound annual growth rate of 47% from 2001 through 2006! The IRS started letting people pay with credit after the passage of the Taxpayer Relief Act of 1997.  This means the government is more in debt than it seems.  Think about it…  In 2009 the budget deficit is expected to be in the $1.9+ trillion neighborhood, and part of the tax revenue it does receive (that effectively fills part of the deficit hole) is borrowed money!  This is a screaming warning sign that we need to cut government spending and taxes before something breaks.  By the way, people aren’t (or shouldn’t) paying taxes using plastic because it’s more convenient or the rewards because if you pay using this method, the processing companies charge 2.6%.

-Billy

Is it possible that mother earth is continuously generating hydrocarbons?  The abiogenic theory suggests that it is possible.  Is it possible the intense heat of the earth’s core is continuously generating hydrocarbons?!?  I think it’s possible given the evidence we’ve found in remote, tough-to-access places (Saturn’s moon and the core of the earth, both which we have not explored thoroughly and are basically “new frontiers”).  What would the price of oil do if it was learned that this is the case?!?!!  It would plummet and oil companies would be pedaling a true commodity whose source is almost never-ending.  The oil companies would have an enormous interest in keeping that fact (if the case) from coming to light.  How about that for a conspiracy theory…

-Billy Ray

The NY Times came out with an article suggesting that the latest GDP release is fraught with errors.  Big surprise right?  I questioned the validity of these numbers in earlier posts (see here and here), not because I’m smart (clearly not the case), but because I don’t trust the government. 

-Billy Ray

Again, I don’t think this is much of a surprise to anyone, but the government’s jobs report that attempted to determine the amount of jobs created by the stimulus is phony and the numbers are overblown.   Some of the glaring misstatements are here.  The lack of job creation to this point can be attributed (at least partly) to the way in which government intervention occurred- mostly through direct government spending as opposed to mostly through tax cuts.  If 100% of the government relief came in the form of tax cuts, a large portion of the stimulus would be flowing through the economy.  But as of June-end, only 5% of the stimulus package passed in Feb 2009 had been doled out.  Meanwhile, a % of the stimulus is being diverted to pay government administrative workers to determine who/which projects qualify for the money.  This money is going to non-productive activities, while the 100% tax-cut scenario completely avoids this step and money goes to US citizens who can/do make investments in productive, value-add activities.

-Billy Ray

It turns out the number of jobs created by the government’s stimulus package has been overstated.  This story comes on the heels of the government GDP report that showed the economy grew at a much quicker pace than expected.  I remain apprehensive, so should you.          

-Billy Ray

http://online.wsj.com/article/SB125500350907673117.html?mod=djemITPE

BRUSSELS — European Union governments are divided over a plan to extend antidumping tariffs on Chinese and Vietnamese shoe imports, in a standoff that gives insight into how companies’ global supply chains have restrained protectionism in the global economic downturn.

The 27-nation bloc agreed to impose tariffs on shoes from the two countries in 2006 under pressure from a coalition of shoe manufacturers and governments, led by Italy. Now, as a decision looms on whether to extend the duties, opposition from governments and manufacturers in other European countries has grown, and so have prospects for a showdown.

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Det er fortryllende at man i EU virkningløst bekæmper den internationale konkurrence med importafgifter, som det er sket de seneste tre år, når det drejer sig om billige sko. Når nu der er uenighed blandt de 27 medlemslande om en eventuel udvidelse af denne importafgift på varer fra lavlønsområderne, er det særligt i øjnefaldende for de demokratisk indstillede, at vi altså ikke skal kunne efterspore denne uenighed nærmere.

This decade we’ve witnessed many events that were once thought to be unrealistic including the massive implosion of the housing market.  Well, it doesn’t look like we’re out of the woods yet.  According to Zillow and Economy.com, about a quarter of all homes in the US are underwater, that is, their market values  are less than the mortgages currently outstanding.  An even more dour report released by Deutsche Bank recently suggests that close to half of all US homes will be upside-down by early 2011.  Financial organizations coined the phrase “strategic defaults” in an attempt to describe the residential mortgage default environment we’re in.  Then again, the 0% fed funds rate, low mortgage rates (being held down by the government’s “thirst” for mortgage backed securities), and government spending programs may help prevent the Deutsche scenario (but at what cost??).

-Billy Ray

Consumer spending numbers and the unemployment rate for August were released this week.  Consumer spending shot up by 1.3%, the biggest jump in 8 years.  “Cash for Clunkers” is largely responsible for the enormous hike in spending.  Meanwhile, personal incomes edged up only 0.2%, which means that the savings rate dropped by over 1%.  Unemployment numbers were released today that showed non-farm payrolls fell by 263,000, much worse than 180,000 analysts were expecting.    The government is pushing us to spend, give up our savings all the while jobs are still evaporating like a puddle of water in the desert sun.  This is the scenario that got us into trouble in the first place, and now we’re headed back in that direction.   By the way, does anyone else find it suspicious that personal incomes, according to the government, keep moving up in this slash and burn job market?

-Billy Ray

Depression, Monetary Destruction, and Seaking the Path to Sound Money

2009: declines of 2.7% for the U.S., 4.2% for the euro area and 5.4% for Japan.

What is caused by the eroding but demanding papers? What is caused by the real economy, for example the international competition and the needed but lacking reconversion? That’s the questions!

1929-1933: FDR followed up on Hoover’s attempted inflation by closing the banks and plotting an unprecedented inflation that ended in the paper money we use today. So strong was the faith in inflation that his administration even mandated turning in all gold to the government. It was a desperate move that only made matters worse.

So it is in our own time. Chronicling the actions of the Fed since the onset of the 2008 meltdown and following has been harrowing, for it reveals an amazing parade of folly. It’s as if we’ve learned nothing from the long history of inflation and hyper-inflation.

What is needed is an international monetary system – we have had none since 1971.
The speculators and therefore the masses have gold on the minds in spite of the fact that gold never secured anything in an international sound way.The speculators just want to secure their jobs as speculators, the masses echoes the media – ‘at best’ – run by the speculators.

The following article of mine was just published as the cover story of the October 2009 issue of China Brief magazine.  Anyone who has not been following China’s economy that closely, and would like a quick way to catch up to speed on the main developments and issues this past year, may find it a useful summary.  A pdf version of the published article can be found here.

Growth, but Hidden Pitfalls
by Patrick Chovanec

Video:
http://online.wsj.com/video/iran-in-hot-water-over-nuclear-disclosure/2C147612-AE3A-43C5-97FB-8CEC5DB57871.html?mod=djemITPE

http://www.berlingske.dk/article/20090925/verden/90925002/

Danskerne er verdens lykkeligste folk,

fordi vi har ‘gratis sygesikring’

En populær amerikansk TV-vært hævder, at danskerne er verdens lykkeligste folk, fordi de har ”gratis sygesikring,” og det har sat sindene i kog. Smiler danskerne på grund af socialisme?

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Vi kan tilføje at det også er gratis at komme med ambulancen, og det er selvfølgelig gratis at blive behandlet på hospitalet. Det hænger sammen med at læger, ambulancefolk og sygeplejersker og andet sundhedspersonale i Danmark arbejder som frivillige eller slaver, d.v.s. de får ingen løn. Det er derfor det er gratis.

Ja, vi har et skattefinansieret velfærdsystem med metastaser til alle kanter af tilværelsen, og det sidste nye er at velhavere får et nyt miljørigtigt tag på huset med tilskud fra staten, d.v.s. pengemiddeloverførsel fra fortrinsvis de mindst købedygtige, for staten har ingen andre penge,  end dem staten selv udsteder ud af den blå luft.

Det har været vejen i Danmark i to generationer nu, og resultaterne skulle Larry King også hæfte sig ved, inden han fortsætter eventyrhistorien om denne uvirkelige samfundslivsstil, som danskerne aldrig har bedt om, og som altså nu er blevet grundigt afprøvet på virkeligheden:

http://www.lilliput-information.com/engvelg.html (English version)

http://www.lilliput-information.com/velg.html (dansk version)

Resultaterne har vist sig. Vær så god at spise.

This blog discusses the importance of railroad activity as an economic indicator in the eyes of Warren Buffett.  I live on a street adjacent to RR tracks and can say there has been much less activity over the past year compared to when I moved to the area in 2006. 

-Billy Ray