Just when you thought you'd heard everything...
Treasury Department official says the US is not in a recession
WASHINGTON (Thomson Financial) - A US Treasury Department official told reporters today that the US is not in a recession, in part because economic growth continues to be positive.
'I don't think we're in a recession and the data suggests that we're not,' Treasury Assistant Secretary for Economic Policy Phillip Swagel said in a press briefing today. He pointed to GDP, which has yet to turn negative over the last few quarters, although growth has been sluggish. Meanwhile, business investment and orders for capital goods have continued to expand. He also noted that initial measures of retail sales in May are somewhat positive, which suggests slow but sustained spending.
He said that the rise in unemployment reflects an increased labor force participation, an observation many economists have made since the report was released this morning.
He also said that high food and energy prices are 'not good news,' but that inflation outside of those areas is 'still contained.'
Do they have random drug testing at the US Treasury? "...the rise in unemployment reflects an increased labor force participation..."? And I thought a rise in unemployment meant fewer people had jobs. Guess I don't know everything after all... LOL! Not in a recession...yeah, right.
Unemployment Jumps to 5.5%, On Its Way to 6%
For the record, "March was revised down by 7,000, and April by 8,000. We've now had four consecutive months of downward first revisions, and also four consecutive downward second revisions - unusual strings that support the picture of a weakening employment trend." (The Liscio Report)
And the birth/death model? This month it added in an estimated 217,000 new jobs. But looking into the details, the model suggested that 42,000 construction jobs were added. The survey showed lost jobs in construction, but the birth/death model added more construction jobs than were lost. Given the current economic climate, that is highly improbable. Ditto for the 77,000 in leisure and hospitality. Do we really think 9,000 jobs were added in financial services or another 9,000 in small manufacturing start-ups?
The reality is that we probably saw a decrease in jobs of at least 100,000. The market was upset with 40,000. What will it do when the monthly number prints 100,000 later this year? And it likely will. The Federal Reserve projects that unemployment will rise to 6%. That means there are a lot more jobs to be lost. And that is if unemployment stops at 6%, which would be a very mild recession indeed.
-By John Mauldin, Millennium Wave Advisors
In other words, the jobs market is a WHOLE LOT WORSE than we are being lead to believe. Which means it is probably going to get a WHOLE LOT WORSE than we are being lead to believe. Somebody get Bumbling Ben on the horn and ask him if he'd like to retract that "somewhat better growth in the second half" statement he made last week. He's not answering the phone? Check the roof of the Fed Building...
I have given Bumbling Ben's bluster last week about a "strong dollar" some thought, and I'm convinced that this was a panic move by a desperate man. The Fed Head is NEVER supposed to comment on the "strength" of the Dollar. That dishonor is reserved for Treasury personnel. Remember, "constitutionally", ONLY the Treasury is to "control" the currency.
So Bumbling Ben shows up last week and claims the Fed is finished lowering interest rates in the interest of protecting the US Dollar and preserving the Treasury's "strong Dollar" policy. "Inflation now threatens the Dollar", our reviled national money manager tells us.
No kidding Ben. Did the lights just come on over at the Fed, or did you just crawl out from under a rock? I think Ben is quickly realizing the consequences of running the printing presses and throwing funny money from the helicopter he inherited from the Bubble Master Greenspan. He believes that if he talks tough, he can reverse the errors of his ways. It's all bluster Ben. Calling after the horses after they run out of the barn isn't going to bring them back. You better start shopping for a robe Ben. It won't be long now before the currency markets and Gold expose the Emperor Money Changer, naked as a jaybird, and lacking even the credibility of a sub-primer borrower. Ben, you and all your pals know the Dollar is just about past the "point of no return" and that your only option is to blow smoke, and hope you can escape on the high seas of liquidity before the lynch mobs form and chase you down.
Ben knows there are huge bank blowups staring the Fed in the face, and the Fed is now near powerless to stop them. The credit/banking crisis is far from over... No one is buying your BS any longer Ben. No one is buying the BS statistics the US Government shovels out every month. The jig is up Ben, and you know it. And that's why you've come forward with your "new" views on inflation and the need to protect the Dollar. The US Dollar is about to go down in flames. Ben you'd have better luck blowing on a forest fire. All the bluster you can muster isn't going to save the Dollar now. Bumbling Ben's Last Stand: The Strong Dollar Policy. History will not be kind to you Ben.
Credit crisis still not behind Wall Street
NEW YORK (AP) -- The chief executives at the world's biggest financial institutions might have been a bit too optimistic by declaring we may be nearing the end of the global credit crisis.
Investors continue to worry that the pain might not be over for financial companies -- and that the market as a whole will suffer until investment banks release quarterly results later this month.
Analysts say they are scrutinizing every move the financial sector makes to determine when the elusive rebound will happen. And, after five days of more bad news for banks and brokerages, they are still no closer to answers.
The Philadelphia Stock Exchange/KBW Bank Index gave up more than 5 percent of its value in the past week, hitting a 52-week low. Though many thought the credit crisis was in the rearview mirror, the market has felt some pretty strong reverberations.
Wall Street began the week with high-level shake-ups at Washington Mutual Inc. and Wachovia Corp. Standard & Poor's downgraded the two biggest bond insurer, MBIA Inc. and Ambac Financial Group Inc., and also cut its ratings on Lehman, Merrill Lynch & Co. and Morgan Stanley.
Pressure on the US Mint and the CFTC regarding Silver manipulation grows:
US Mint Issues False Statement on Silver Bullion Sourcing
Open Lawyer's Letter to Bart Chilton, CFTC Commissioner
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