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FT: Caterpillar’s CEO Warns of Economic Uncertainty

“The global economic outlook is more uncertain now than at the start of the financial crisis in late 2008, chief executive of Caterpillar, Doug Oberhelman, said on Monday.

The CEO of the world’s largest maker of construction equipment also predicted that it could take another five years before Europe’s economy begins to see growth again.

“There’s never been a more unpredictable set of tea leaves than right now. Even in 2008 and 2009, U.S. housing was already dying and had been for two years. We saw that,” Oberhelman is quoted as saying in the Financial Times.

“I don’t think the situation is as grave as it was in 2008, but the uncertainty, the storm clouds are around things that none of us know about — like what will happen with the political situation in Europe,” he said.

Oberhelman is cited as saying that barring Europe, most big economies looked unlikely to contract, although he said it was not clear whether they would grow significantly.

Source

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Petroleum Deliveries Lowest Since September 2008; Weakest July Demand Since 1995

“While the Achilles heel to the endless “economic data” BS coming out of China may be its electric production and demand, both of which show a vastly different picture than what the Beijing politburo’s very wide brush strokes paint, the US itself is not immune from indicators that confirm that anything the BEA dishes out should be taken with a grain of salt. One data set that we showed recently that paints a drastically different (read slowing) picture of the US economy which we noted recently is railcar loading of waste and scrap for the simple reason that “The more we demand, the more waste is generated by that production.” Of course, the propaganda manipulation machinery only focuses on the “entrance” of production, and completely ignore the “exit.” But an even far more important metric of the general health of the US economy may be none other than broad energy demand, in the form of petroleum deliveries and gasoline demand. ”

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$GS’s Cohen Puts Out a Massive Chart Porn Presentation on What is Really Happening in the Global Economy

Goldman Sachs investment strategist Abby Joseph Cohen is out with a massive presentation on the state of the world economy and investment environment.

Cohen’s presentation looks at the state of several key economic and financial market metrics in key countries around the world and discusses her outlook for the rest 2012 and beyond.

  • Cohen says investors should “expect quarterly volatility linked to weather, inventories, energy prices and global factors including European activity.”
  • However, she also says she “does not expect additional deceleration” in U.S. economic data.
  • The presentation concludes with an interesting discussion about the rise of environmental risk in financial markets.”

See presentation here

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Germany and Italy Lead in Eurozone Exports, Exports Grow by 0.4% Despite Widespread Recession

“Euro-area exports rose for a second month in June, driven by a surge in shipments from Germany, as companies tapped into emerging markets to offset declining demand at home.

Exports from the 17-nation currency bloc advanced a seasonally adjusted 2.4 percent from May, when they gained 0.4 percent, the European Union’s statistics office in Luxembourg said today. Imports stagnated in the period and the trade surplus widened to 10.5 billion euros ($13 billion) from 6.8 billion euros.”

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The Current Recovery is the Weakest Since WW2

“WASHINGTON (AP) — The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression.

Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.

The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.”

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Empire Manufacturing Survey Shows Over 50% of Companies Polled are Not Hiring Due to ‘Uncertainty’

 

“From today’s Empire Fed report comes this survey question, which reveals that over 50% (!) of firms surveyed say that “uncertainty” is causing a negative impact on hiring plans.

The future is always uncertain, so we’re not sure what this means, but, it’s pretty big.”

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Wen Jiabao Says China Can Meet Growth Targets

“Chinese Premier Wen Jiabao said the country is capable of meeting this year’s growth target as positive signs emerge, even as “downward pressure” remains on the world’s second-largest economy.

“We have the conditions and capabilities to fulfill this year’s economic and social development target,” Wen said during a two-day inspection tour to eastern Zhejiang province, the official Xinhua News Agency reported today.”

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U.S. Economic Confidence Stays Low — Gallup

“The latest data from Gallup indicates that confidence in the U.S. economy remains near January levels of -27. The index has been wobbling in a tight range of -23 to -29 since late May. Gallup’s confidence index consists of two parts, one which assesses current conditions and one that assesses the economic outlook.”

Read more

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Six Euro Nations Fall Into Recession as GDP Contracts Across The Region

“The euro-area economy shrank in the second quarter after the worsening debt crisis and tougher budget cuts forced at least six nations into recessions.

Gross domestic product in the 17-nation currency bloc fell 0.2 percent from the first quarter, when it stagnated, the European Union’s statistics office in Luxembourg said today. That’s in line with the median estimate of 35 economists in a Bloomberg survey. The contraction was softened by stronger-than- forecast growth in Germany, the region’s largest economy.”

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France manages to side step contraction 

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A Quick Update On The Only Economic Datapoint That Really Matters

I really really like this relationship but wish someone would chart it back much further.

Want to know what’s going to happen in the stock market (and by extension the Presidential election)?

Just keep your eye on weekly initial jobless claims.

The recent improvement in claims perfectly mirrors the recent improvement in the stock market, and going back over 5 years, the relationship remains pretty much perfect.

See the article and graph here.

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Economists See Budget Impasse Blocking Growth

Most economists surveyed by USA TODAY have little faith a divided Congress will adequately address looming tax increases and spending cuts, significantly hampering economic growth well into 2013.

The standoff in Washington, along with the global economic slowdown, threatens a U.S. economy that otherwise would be gaining steam on a strengthening U.S. housing market and improving private-sector balance sheets, economists say. The survey of 50 leading economists was conducted Aug. 3-8.

Read the rest here.

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School Bonds Could Trigger Fiscal Shock

“A decade ago, San Diego county in California was at the cutting edge of some dangerous financial games.

As the housing boom got under way, bankers and mortgage brokers became adept at flogging subprime loans to households across the area using “innovative” structures. That episode, of course, ended in tears, not just in San Diego but elsewhere in America.

Now, some new financial games have come to light involving a dangerous cocktail of innovation and debt. This time, it is not private households involved but public sector bodies – specifically, schools.”

Full article

 

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Implications of 10-yr Bond Rates Hitting New 50-day Highs Along With SPX

Rob Hanna from Quantifiable Edges is out with an interesting study that examines what happens when 10 year bond rates hit a new 50 day high at the same time the S&P 500 is making a new 50 day high. Well worth a read.

Read the article here.

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Growth in Japan Expected to be Cut in Half on Slowing Exports

 

“Japan’s economy probably grew last quarter at half the pace of the previous three months, a slowdown analysts predict is deepening as Europe’s debt crisis and the yen’s gains erode exports.

Gross domestic product expanded an annualized 2.3 percent in the three months through June, compared with 4.7 percent in the first quarter, according to the median estimate of 24 economists surveyed by Bloomberg News. The Cabinet Office will release the report on Aug. 13.”

Full article

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Chinese Export Growth Misses Expectations, Worries Mount Over Quick Recovery

“The export figures show that it’s hard to improve China’s economy in the short term,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “There are definitely expectations for more reserve-ratio requirement cuts and other measures to boost the economy, but I doubt they will be effective. There are limited tools the government can use.”

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Industrial Output Unexpectedly Falls in China

China’s industrial-output growth unexpectedly slowed in July to a three-year low while investment and retail sales missed estimates, raising pressure on Premier Wen Jiabao to step up efforts to support expansion.

Factory production increased 9.2 percent in July from a year earlier, the National Bureau of Statistics said today in Beijing, below all 32 analyst forecasts in a Bloomberg News survey. Inflation cooled for a fourth month and producer prices fell for a fifth month, separate reports showed.”

Full article

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STUDY SAYS WORLD BEER PRODUCTION HITS NEW HIGH

via AP

TOKYO (AP) — A new report says the world’s appetite for beer hit a new high last year, with China leading the way.

The report released Wednesday by the research arm of a major Japanese brewery said it was the 27th consecutive year that beer production marked an increase. It attributed the rise to robust demand in Asia and developing countries.

KEEP READING 

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