“* Overhaul could boost housing, productivity, tax revenue

* Reforms could boost growth 0.8 pct point a year-economist

* Some argue gains to economy won’t be significant

* Report says gov’t should raise money by auctioning visas

* Guest worker program seen essential part of any reform

By Edward Krudy

NEW YORK, Jan 29 (Reuters) – The sluggish U.S. economy could get a lift if President Barack Obama and a bipartisan group of senators succeed in what could be the biggest overhaul of the nation’s immigration system since the 1980s.

Relaxed immigration rules could encourage entrepreneurship, increase demand for housing, raise tax revenues and help reduce the budget deficit, economists said.

By helping more immigrants enter the country legally and allowing many illegal immigrants to remain, the United States could help offset a slowing birth rate and put itself in a stronger demographic position than aging Europe, Japan and China.

“Numerous industries in the United States can’t find the workers they need, right now even in a bad economy, to fill their orders and expand their production as the market demands,” said Alex Nowrasteh, an immigration specialist at the libertarian Cato Institute.

The emerging consensus among economists is that immigration provides a net benefit. It increases demand and productivity, helps drive innovation and lowers prices, although there is little agreement on the size of the impact on economic growth.

President Barack Obama plans to launch his second-term push for a U.S. immigration overhaul during a visit to Nevada on Tuesday and will make it a high priority to win congressional approval of a reform package this year, the White House said.

The chances of major reforms gained momentum on Monday when a bipartisan group of senators agreed on a framework that could eventually give 11 million illegal immigrants a chance to become American citizens…”

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“(Reuters) – Retail sales should rise 3.4 percent this year, down from 4.2 percent growth in 2012, as higher payroll taxes cut into discretionary spending for consumers, the world’s largest retail trade association said on Monday.
The National Retail Federation forecast includes sales at most traditional retail categories including non-store, auto parts and accessories stores, discounters, department stores, grocery stores, and specialty stores, and excludes sales at automotive dealers, gasoline stations, and restaurants.”

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“Approximately 95 percent of world trade occurs by sea.  However, little is known about the world’s shippers because only a fraction are traded publicly.

In her new book Dynasties Of The Sea, CNBC’s Lori Ann LaRocco profiles 21 of the biggest players of the notoriously secretive shipping industry.

LaRocco also got the priceless insight of these players who are intimately familiar with what’s going on in the world economy.

“One of the biggest themes that came out of this book is how these shipping titans are worried about the health of the global economy and the bloated balance sheets of the United States and Europe,” LaRocco says.

From the book, we pulled some key quotes from the biggest players of the shipping industry.

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“Japan’s consumer prices fell for the seventh time in eight months, underscoring the risk that the central bank may struggle to reach a 2 percent inflation target unless it implements new easing measures earlier than planned.

Consumer prices excluding fresh food fell 0.2 percent in December from a year earlier, the government said in Tokyo today, matching the median estimate of 23 economists surveyed byBloomberg News. Bank of Japan (8301) Governor Masaaki Shirakawa said today that meeting the target would not be easy and that central banks need to be alert to financial bubbles.

Deputy Economy Minister Yasutoshi Nishimura said in an interview yesterday that reaching the inflation target announced this week will be difficult without more easing, as he endorsed further yen weakness. Minutes of a December BOJ meeting released today show that some members were in favor of making asset purchases in the first half of 2013 to support an economy that contracted in the second and third quarters of last year.

“There is no doubt that the 2 percent target is too high,” saidYuichi Kodama, Tokyo-based chief economist at Meiji Yasuda Life Insurance Co. “The BOJ will have to implement much looser measures.”

The yen fell, heading for a record stretch of weekly losses against the dollar. The currency was 0.2 percent lower at 90.50 per dollar as of 4:14 p.m in Tokyo. The Nikkei 225 Stock Average closed 2.9 percent higher, while the Topix Index capped its longest weekly winning streak since 1973.

The BOJ said this week that it will shift to Federal Reserve-style open-ended asset purchases from January 2014 and target the achievement of 2 percent inflation “at the earliest possible time.” The central bank’s forecasts this week showed inflation at 0.9 percent in the year starting April 2014.

Buy Bonds…”

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“Research firm Markit Economics reported that the flash U.S. purchasing manager’s index (PMI) rose from 54 in December to 56.1 in January, the highest index reading since last March. This is a preliminary reading for January; the final reading will be published on February 1. Readings above 50 indicate expansion relative to the previous month, while readings below 50 indicate contraction.
The output, new orders, new orders, new export orders and employment subindexes were all expanding in January, and at a faster rate than in December. Oddly perhaps, the backlogs of work contracted from 50.3 in December to 49.5 in January, and the stocks of finished goods continued to show contraction even though the rate improved from 48.7 to 49.6. Another positive sign was the expansion in manufacturers’ purchases, which rose from an index reading of 49.8 to 51.5…”

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“A gauge of future U.S. economic activity rose in December, pointing to an improvement in growth despite an ongoing political fight in Washington over fiscal policy.

The private Conference Board said on Thursday its Leading Economic Index gained 0.5 percent to 93.9 last month, afterbeing unchanged in November.

A drop in new claims for jobless benefits helped drive the gain, as did an increase in new building permits.

“A pickup in domestic growth is now more likely,” said Ken Goldstein, an economist at the Conference Board….’

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“The International Monetary Fund cut its global growth forecasts and now projects a second year of contraction in the euro region as progress in battling Europe’s debt crisis fails to produce an economic recovery.

The world economy will expand 3.5 percent this year, less than the 3.6 percent forecast in October, the Washington-based IMF said today in an update of its World Economic Outlook report. While the fund projects growth this year increasing from last year’s 3.2 percent pace, it expects the 17-country euro area to shrink 0.2 percent in 2013, instead of growing 0.2 percent as forecast in October.

“Is Europe on the mend? I think the answer is yes and no,” IMF Chief Economist Olivier Blanchard said in a video released with the report. “Something has to happen to start growth.”

For the global economy, “this is better, but it is not great,” Blanchard said at a press conference today. “In particular, the growth numbers are not enough to make a dent to the unemployment rate in advanced economies.”

The IMF foresees Spain leading the contraction in the euro area, while growth slows in Germany, the region’s largest economy.

World Index

The MSCI All-Country World Index fell 0.2 percent to 1,391.21 at 11:00 in New York. It’s climbed 15 percent in the last six months. The euro fell 0.3 percent, trading at $1.3289.

“It’s clear that financial markets are ahead of the real economy. The question is whether they are too much ahead or not,” Blanchard said. “What we know is that it always takes some time for financial markets’ optimism to feed to the real economy and at this stage there are still obstacles to it.”

While measures to stem the debt turmoil last year helped boost financial markets around the world and decrease sovereign bond yields from Spain to Greece, European officials now still face a recession and unemployment at a record 11.8 percent in the euro area. The IMF warned that the region still poses a “large” risk to the rest of the world if efforts under way to strengthen its economies and work on a banking union slip.

Economic Contraction…”

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“China’s manufacturing is expanding at the fastest rate in two years, according to a private survey of companies, bolstering prospects that economic growth will accelerate for a second straight quarter.

The preliminary reading of a Purchasing Managers’ Index (SHCOMP) was 51.9 in January, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News.

The data suggest that China’s expansion at the start of 2013 will equal or exceed its 7.9 percent clip in the fourth quarter. Sliding Japanese exports and below-forecast growth in South Korea reported today underscore Asian economies’ dependence on China as austerity measures in Europe limit demand.

“Despite the still-tepid external demand, the domestic- driven restocking process is likely to add steam to China’s ongoing recovery in the coming months,” Qu Hongbin, HSBC’s chief China economist in Hong Kong, said in a statement.

Asian stocks extended losses after North Korea threatened to conduct a nuclear test. The Shanghai Composite Index fell 0.8 percent, retreating from gains of as much as 1.8 percent. The MSCI Asia Pacific Index of stocks dropped 0.1 percent as of 4:05 p.m. Tokyo.

Japan Exports…”

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“BOSTON (Reuters) – Top U.S. manufacturers sounded a confident note about their expectations for 2013 on Wednesday as fears of the year-end “fiscal cliff” faded into memory.

Textron Inc , whose Cessna unit is the world’s biggest maker of corporate jets, laid out an earnings forecast that would represent growth of about 12 percent, while larger peer United Technologies Corp , which makes Otis elevators, Carrier air conditioners and Sikorsky helicopters among other products, reiterated a projection that its profit would rise about 13 percent.

Executives at each company said demand is recovering after a year-end pause in ordering, when customers worried about a budget standoff that could have triggered large spending cuts and higher taxes in the United States.

“We probably have had more order activity than we’re used to seeing at the beginning of January,” reflecting orders that had been delayed, Textron Chief Executive Scott Donnelly said on a conference call with analysts. “We’ll see a degree of uncertainty in the jet market as Washington works through its fiscal challenges, but we believe demand will solidify as those uncertainties are reduced.”

The Providence, Rhode Island-based company, which also makes Bell helicopters and EZ-Go golf carts, said it expects sales of its Cessna corporate jets to pick up this year.

Budget battles continue in Washington even after the White House and Congress averted a possible year-end crisis that economists called the “fiscal cliff” with warnings of another possible recession.

But the current battle seems less daunting to executives in the face of other signs of a recovering economy.

“What we see in the economy in the U.S. is that the rebound in the housing market is really having a pull-through effect on the rest of the economy,” said Greg Hayes, chief financial officer of United Tech, in an interview. “Commercial construction is coming back. We saw particular strength in North America and Asia, not as much of a story in Europe, as you can imagine.

The U.S. housing slump set the 2007-2009 recession in motion and a slow recovery in that market has been one important drag on a long, sluggish recovery. Recent government data have shown a pickup in demand, with a report last week showing housing starts surged to a four-year high in December.

‘PATH GETS EASIER’…”

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“Fourth quarter earnings season is in full swing.

According to FactSet, just over 10 percent of companies in the S&P have reported their financial results, and two thirds have beat expectations on revenues and estimates.

However, these announcements are about more than EPS.  Through their press releases and earnings calls, these companies reveal what’s really going on in the world from their unparalleled perspectives.

We’ve listened to the latest earnings calls and read through the earnings call transcripts to fill you in on what executives are saying about the world and where it’s headed.

Generally speaking, companies are bullish on China, bearish on Europe, and increasingly trying to cope with regulatory and technological changes.

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“Brazil’s inflation in mid-January rose more than forecast by all economists surveyed by Bloomberg, as price pressures remain strong even with the economy struggling to pick up speed.

Prices as measured by the IPCA-15 price index rose 0.88 percent in the month through mid-January, the national statistics agency said in a report published on its website. That was higher than every forecast from 38 economists surveyed by Bloomberg, whose top estimate was for an increase of 0.86 percent, and whose median forecast was for 0.82 percent. Mid- month inflation has exceeded the median estimate from economists for seven straight months.

Annual inflation accelerated for the fourth straight month to 6.02 percent from 5.78 percent in mid-December.

Brazil’s President Dilma Rousseff has labored to pull the world’s second-largest emerging market out of a slowdown that has lasted more than a year by cutting taxes to spur consumption and industry and pressuring commercial banks to lower rates. The central bank since August 2011 has cut the benchmark rate by 525 basis points, the most of any Group of 20 nation.

The central bank estimates that gross domestic product in 2012 expanded 1 percent, down from 2.7 percent the year before. Finance Minister Guido Mantega on Dec. 27 said the economy will grow 3 percent to 4 percent this year….”

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“Russian industrial production unexpectedly slowed in December to the weakest pace in eight months, showing the slumping economy failed to pick up momentum last quarter.

Output at factories, mines and utilities rose 1.4 percent from a year earlier, the slowest pace since April, compared with 1.9 percent in November, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 17 economists in a Bloombergsurvey was for a 2 percent advance.

Industrial output in the world’s largest energy exporter is stabilizing at weak levels as the economy cools, the central bank said this month. Stagnating output may support the government’s calls for monetary stimulus and cheaper money to boost growth, which was the weakest in the third quarter on an annual basis since the recovery from a recession began in 2010.

“With the important exception of oil, external demand is weak,” Jacob Nell, chief economist for Russia at Morgan Stanley (MS) in Moscow, said by e-mail before the report. “Fears of a return of a second wave of the crisis are keeping domestic consumers and businesses cautious.”

Economic growth slowed to 2.4 percent in the fourth quarter compared with the same period a year earlier from 2.9 percent in July-September, according to the median estimate of 15 economists in a Bloomberg survey. The government should seek to increase growth to a stable 5 percent pace, Prime Minister Dmitry Medvedev told a conference in Moscow last week.

Rate Arguments…”

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“Spain’s recession deepened in the last quarter of 2012 after Prime Minister Mariano Rajoy’s government approved its fifth austerity package in a year to reduce the second-largest budget deficit in the euro area.

Gross domestic product shrank for a sixth quarter, contracting 0.6 percent from the previous three months, when it slipped 0.3 percent, the Bank of Spain said in an estimate in its monthly bulletin today. Fourth-quarter GDP matched the median forecast in a Bloomberg News survey of 26 economists.

Output may have contracted 1.3 percent in 2012 as budget cuts weighed on economic activity, the Madrid-based Bank of Spain said. While it’s not yet clear if Spain will meet its 2012 deficit target set by the European Union, satisfying this year’s goal “will require a very ambitious additional fiscal effort from the central government and the regions,” it said.

Rajoy is seeking to avoid a full bailout as a slump in the euro area’s fourth-biggest economy enters its fifth year, undermining efforts to meet EU targets. The European Central Bank’s pledge to provide support to nations struggling to bring down yields may curb borrowing costs until a recovery, he said last month.

‘Extremely Weak’…”

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“South African inflation accelerated to a seven-month high of 5.7 percent in December as food prices rose, supporting expectations the Reserve Bank will keep borrowing costs unchanged tomorrow.

The inflation rate climbed from 5.6 percent in November, Pretoria-based Statistics South Africasaid on its website today. The median estimate in a Bloomberg survey of 23 economists was 5.7 percent. Prices advanced 0.2 percent in the month.

All 21 economists surveyed by Bloomberg predict the Reserve Bank will keep the benchmark repurchase rate at 5 percent tomorrow to support the economy while curbing price pressures from a weaker rand and rising food costs. The central bank’s goal is to keep inflation within a range of 3 percent to 6 percent.

“Food prices have been creeping higher, housing, fuel and power and transport have been pressured, but core inflation remains well-behaved,” Razia Khan, the London-based head of Africa economic research at Standard Chartered Plc, said in e- mailed comments. “With a substantial negative output gap, policy will remain accommodative for some time. We seeinterest rates on hold throughout 2013.”

The rand has dropped 4.6 percent against the dollar since the beginning of the year, the worst performer of 16 major currencies tracked by Bloomberg. The price of wheat increased 4 percent on the South African Futures Exchange in the period….”

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“The Federal Reserve Bank of Richmond has released its Regional Survey of Business Activity. The bank showed that the service sector activity improved and was bolstered by nonretail services. It also showed that the current outlook is now more optimistic. Unfortunately, the reading overall for January was negative and well under expectations.

Today’s overall index was -12 for the Richmond Fed’s survey for January, lower than a reading of 5 in December and lower than the Bloomberg consensus of 5 as well. The range of estimates from Bloomberg’s economist polling group was 3 to 13, so this was worse than all expectations. The only good news is that the Richmond Fed reading is generally considered to be a confirming of trends in general rather than a leading market indicator.

Manufacturing shipments were -12 in January, versus 6 in December. The services index was 13 in January, versus -2 in December. Retail revenues were -8 in January versus -13 in December. Below were some general comments from the report…”

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“One report from the Federal Reserve Bank of Chicago is the National Activity Index for the month of December, which was released this morning. It is somewhat misleading by the name because it is a regional Federal Reserve branch issuing the report but it is a national report.

The index came to only 0.02 in December. Bloomberg had a consensus reading of 0.28 and a range from economists of 0.10 to 0.50. The reading in November was 0.27. The three-month average increased marginally but remained in negative territory at -0.11.

Of the four components making up the index, two were positive. Employment stood out at 0.09, versus a prior reading of -0.02. The lagging areas were in consumption and housing and in production….”

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Many people are now fully believing in a true recovery. Admittedly, it seems the data has been getting better in dribs and drabs. Dribs and drabs is precisely the problem. All the data we collate comes to us in dribs and drabs.

As humans it is hard wired in our brains to hope, be optimistic, to offset negativity with something positive in the moment that we can grab onto. 

It is only when you take a step back and look at the complete picture should we realize where we came from and where we are headed. When looking at the entire picture one begins to understand the gravity of our economy and reality at hand. Take it from the S&P, the road ahead is not looking so hot!

While i remain hopeful and optimistic that the future will bring better times not just for myself , but for the country as a whole; I have a hard time swallowing all the data and digesting it away as trivial.

The following presentation is a collection of graphs and facts that snowball into a real horror story.

It is presented in a neutral fashion with little opinion outside of being amazed and alarmed of the state of the statistics.

When taken in as a whole body of results, it can not be shrugged off or talked away like the pundits on t.v. who keep pounding into our brains that the recovery is real, getting better, etc.

It also justifies the fears of the blogosphere.

Remember everything is about timing.

At this time when the  markets are starting to hit new highs we have talk about currency wars, repatriation and hoarding of gold by central banks, small investors unanimously jumping into equities, millionaires coming back to the tables, analysts agreeing about it being the best time to invest, etc.

Perhaps “doing what ever it takes,” as a remedy is really what is ultimately killing us.

Central banks should be feeding all of society as opposed to the banks who take our grandchildren’s money to bid up the prices of all assets while being stingy in the lending department to society.

While i believe the S&P could go as high as 1525ish -1550 it would be foolish not to hedge yourself and to be ready for a major correction.

As a last note, i think it is time for all corporations to follow the $COST model.

If all corporations followed this model we would have a healthier society and could look forward to a real recovery. After all, the rise of the middle class is a major component to the success of this empire. Bifurcation, having a two class system will only end in the fall of the empire.

Greed is no longer a good thing!

Cheers on your weekend !

If you click the title it will bring you to youtube and you can then full screen the video. Definitely recommended to view all the charts properly.

[youtube://http://www.youtube.com/watch?v=bYkl3XlEneA 450 300]

 

[youtube://http://www.youtube.com/watch?v=n2bYJQFQMs8 450 300]

 

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“Rail traffic is bumpy as usual at this time of year so its’ not easy to take away much from this week’s swing, but we saw a big reversal from last week’s dip as intermodal traffic jumped 10.4% versus last year.   The 12 week moving average is up to 1.92% which is still consistent with a weak economy….”

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“It’s pretty incredible how well data from Macau correlates with the broader Chinese economy. It really is a lock-stop, real-time indicator.

Anyway, from Morgan Stanley, here’s year-over-year revenue growth of Macau VIPs.

China is back. Enough said.”

 

Morgan Stanley

Read more: http://www.businessinsider.com/a-chart-of-vip-revenue-growth-in-macau-might-be-the-only-china-chart-you-need-2013-1#ixzz2IKkkp4Zq

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“U.K. retail sales unexpectedly fell in December as consumer uncertainty extended into the key Christmas trading season for British stores.

Sales including fuel declined 0.1 percent from November, when they stagnated, the Office for National Statistics said today in London. The median forecast of 22 economists in a Bloomberg News survey was for a 0.2 percent increase. Household goods fell the most in almost three years. From a year earlier, total sales rose 0.3 percent.

The data underscores the weakness of Britain’s high streets in a week that saw HMV Group Plc (HMV), the U.K.’s biggest seller of CDs and DVDs, and movie rental chain Blockbuster Entertainment Ltd. enter administration. GfK NOP’s measure ofconsumer confidence fell in December as the economy struggled to recover from a recession. Some of the nation’s largest utilities have raised electricity and gas prices, squeezing households.

“The festive period was fairly lackluster for the high street,” saidVicky Redwood, an economist at Capital Economics in London. “With consumers’ real pay still falling, demand is unlikely to improve in the foreseeable future.”

Excluding December 2010, when cold weather curbed consumer spending, the annual increase in sales last month was the weakest for a December since 1998, the statistics office said.

The pound extended its decline against the dollar after the report. It was trading at $1.5936 as of 11:40 a.m. in London, down 0.4 percent from yesterday….”

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