Posted on 03/05/2012 9:02:52 AM PST by SeekAndFind
So much for a fast start to the recover in 2012. A week after announcing the worst durable-goods orders report in three years, the Commerce Department’s report on factory orders and shipments in January show the worst outcome in sixteen months:
New orders for manufactured goods in January, down following two consecutive monthly increases, decreased $4.8 billion or 1.0 percent to $462.6 billion, the U.S. Census Bureau reported today. This followed a 1.4 percent December increase. Excluding transportation, new orders decreased 0.3 percent. Shipments, up eight consecutive months, increased $4.1 billion or 0.9 percent to $463.6 billion. This followed a 0.8 percent December increase. Unfilled orders, up twenty-one of the last twenty-two months, increased $5.4 billion or 0.6 percent to $917.9 billion. This followed a 1.5 percent December increase. The unfilled orders-to-shipments ratio was 6.10, up from 6.04 in December. Inventories, up twenty-seven of the last twenty-eight months, increased $3.9 billion or 0.6 percent to $614.7 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent December increase. The inventories-to-shipments ratio was 1.33, unchanged from December.
Inventories, on the other hand, continued to increase — a bad sign as demand drops:
Inventories of manufactured durable goods in January, up twenty-five consecutive months, increased $2.4 billion or 0.6 percent to $372.5 billion, revised from the previously published 0.7 percent increase. This was at the highest level since the series was first published on a NAICS basis and followed a 0.3 percent December increase. Machinery, up twenty-two consecutive months, had the largest increase, $0.9 billion or 1.5 percent to $61.5 billion. Inventories of manufactured nondurable goods, up four of the last five months, increased $1.5 billion or 0.6 percent to $242.2 billion. This followed a slight December decrease.
Reuters actually nails the problem in its analysis:
New orders for factory goods dropped in January by the most in over a year and businesses cut orders for new capital goods, suggesting one of the drivers of the economic recovery faltered at the start of the year.
The Commerce Department said on Monday orders formanufactured goods fell 1.0 percent, a less steep decline than the 1.5 percent loss expected by private forecasters in a Reuters poll. Still, it was the biggest decline since October 2010.
Many economists think the expiration of some tax breaks on capital spending at the end of 2011 led businesses to bring forward investments.
The problem is that the gimmicky tax break in 2011 for capital investments — pushed by the Obama administration and many Republicans as well — didn’t address the key issues in the stagnation since the June 2009 end of the Great Recession. Like so many other temporary tax changes, the one-year tax break on capital purchases only accelerated capital purchases that would have taken place anyway. This tax break was a larger-scale version of Cash for Clunkers, and it had the same effect, which was to steal demand from future quarters, and that’s exactly what we have seen from both January reports.
Thanks to the ambiguity of tax policy, energy prices, and regulation in the marketplace, perhaps especially the ambiguity in regulations like Dodd-Frank and ObamaCare, capital investors can’t price long-term risk at all. That means that they can’t make informed decisions on capital investment for business expansions and new-business creation, and so their capital stays on the sidelines. Until we quit tinkering with gimmicky, temporary tax breaks and reform the long-term tax codes, we’re not going to see robust and sustained economic growth.
I’ve said it before and I’ll say it again: The Obama that will be running for president will be the Obama of late summer/fall of 2012, not the Obama of late winter/spring of 2012.
We’ll be in a completely different environment. The GM sales, caused by dealers massively bumping inventories, will be a distant memory. Gas prices, Greece defaulting along with other PIIGS related events. The lies about the economy being exposed, as reality allows them to age. It will be much, MUCH uglier by election time.
Which is why I’ve said, for two years now - and feel stronger about it today - that Obama will not finish his term. We are in the calm before the storm. A better analogy would be that we are in the eye of the storm, and it has greatly increased in power since we entered the eye.
Sounds about right.
Which one, the first or second?
And this gets to the root of why what we’ve been told is based on lies:
http://www.youtube.com/watch?v=zPkTItOXuN0
The Hedonics part is laughable. They really think we are stupid and, sadly, in most cases they may be right. Maybe “ignorant” is a better word though.
This is so depressing. I’m just getting back on my feet after the housing bubble burst (I was a finish carpenter and stair builder) and I am so worried that the economy will tank again and my sales will die. I am just a woodworker but I could fix this economy. It’s simple. Get the hell out of our way and let us do our thing. You are “equalizing” us to death.
—Which one, the first or second?—
His only term.
Caveat: If, for some crazy reason, elections really are suspended, this will fall under Obama not finishing his term, for he will no longer be “president”. He will be something else.
I hope you’re right, but I’m far more worried about dragging Baraq out of the WH after he’s lost the election.
I’d think the probability of this egomaniac leaving before Jan 2013 is minimal. Remember the only other real horsepower in the Dem party is the Clintons, and the Chicago mob is blackmailing them over Arkancide.
If the market corrects itself, housing is going to drop another 50% or so. Then we’ll really have a problem. The only thing keeping it up is the cheap credit funded by deficit spending, and Fed money printing, and (about to go hyper) inflation. The longer we kick the can, the bigger the collapse will be. That’s a fact, jack.
When I saw the headline, I thought they were talking about
former Rush advertisers!
You said...
“Obama will not finish his term’
I disagree. His ego is too big
What ... no “green shoots”??? :O
Which is why I’ve said, for two years now - and feel stronger about it today - that Obama will not finish his term. We are in the calm before the storm. A better analogy would be that we are in the eye of the storm, and it has greatly increased in power since we entered the eye.””
If it gets the tyrant removed, I pray you are right. If he gets another 4 years and keeps the RAT machine in congress going, we are finished. I am not optimistic.
People Aren’t Smart Enough for Democracy to Flourish, Scientists Say
The democratic process relies on the assumption that citizens (the majority of them, at least) can recognize the best political candidate, or best policy idea, when they see it. But a growing body of research has revealed an unfortunate aspect of the human psyche that would seem to disprove this notion, and imply instead that democratic elections produce mediocre leadership and policies.
The most incompetent among us serve as canaries in the coal mine signifying a larger quandary in the concept of democracy; truly ignorant people may be the worst judges of candidates and ideas,
“Which is why I’ve said, for two years now - and feel stronger about it today - that Obama will not finish his term.”
I have thought that as well but am not sure how it will all play out - there are so many scandals brewing, any of which could topple him. Fast & Furious, the increased scrutiny of his background, the Brietbart tapes...coupled with continuing high gas prices and the uptick in unemployment numbers for February which the media will bury...
The irony is that Obama was never anything more than a convenient pawn in the hands of those who pull his strings but he is too arrogant to realize it. When they finally try to throw him under the bus, it could get interesting!
I will gladly suffer thru $5 gas prices if it defeats the skinny monster...
There won't be enough time.
Right now, the economy is going swimmingly. So much so, that RINO pundits like George Will have already conceded victory to Obama. Obama will be cruising to the Convention.
But by the time reality sets in, it will be too late to put a different nominee in place. And, even if they succeed in doing it, it won't matter, not least because the peeps will stay home.
That's when we take over and swing a wrecking ball into eight decades of social progress
.
—The irony is that Obama was never anything more than a convenient pawn in the hands of those who pull his strings but he is too arrogant to realize it. When they finally try to throw him under the bus, it could get interesting!—
The Hudsucker Proxy without the hoola hoop?
:-)
—I will gladly suffer thru $5 gas prices if it defeats the skinny monster...—
Me too. The same thing that got us into this mess - the electorate voting their wallets - could give us a reprieve. For a year or two.
——He will be something else.——
Alternatively, he may not be
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