Sunday, November 22, 2009

More Good News

From Mish: Deflation Returns To Japan; Black Hole Madness In U.S.
"While the Fed appears split over its exit strategy, even arch-hawk Richard Fisher of the Dallas Fed said the sheer scale of excess plant will curb prices and wages for a long time. Capacity use in manufacturing is near a post-war low of 67.6pc."

From Reuters  Recession shows shortcomings in U.S. economic data

The most likely culprit is the so-called "birth-death" model, which the Labor Department uses to estimate how many companies were created or destroyed......
Government data has difficulty gauging the health of smaller firms because there are simply too many of them, leaving officials to rely on surveys and models that are hit and miss.
Jan Hatzius, an economist at Goldman Sachs in New York, thinks that is distorting not only the employment data, but also figures for retail sales, durable goods and even the biggest economic indicator of all -- gross domestic product.
"Our conclusion is that if small firms aren't captured well in the advance GDP data, the economy may be growing less quickly than suggested by the recent official data," he wrote in a recent note to clients.

 From Calculated Risk:   States: Seriously Delinquent Mortgages vs. Unemployment Rate
Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.


We are just starting to hear the drumbeat for a second stimulus, but given the anemic, and really questionable   GDP reported last Qtr. ( expected to be revised down to 2.8 this week) it no doubt will encounter a tough fight . At best, it will take awhile to get enacted and likely require another inflection point before it gets done.




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