Tuesday, July 16, 2013
(Reuters) - German analyst and investor sentiment unexpectedly worsened in July, reflecting economic tensions in the euro zone and a global slowdown that is hitting exports, a survey showed on Tuesday.
The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment fell to 36.3 from 38.5 in June, well below the consensus forecast in a Reuters poll of analysts for a rise to 39.6.
The reading sent the euro lower against the dollar and safe-haven Bundfutures to a session high.
"The ZEW index turned out surprisingly bad. That is not a good sign for the euro zone and shows that not everything in Germany is as rosy as people think," said Sebastian Sachs at Metzler Bank.
Economists said a slowdown in China was particularly worrying for Germany's traditionally export-driven economy, which until recently has managed to offset weaker demand in Europe, struggling with its debt crisis, with stronger sales in emerging markets.
A bastion of strength in the early years of the euro zone crisis, the German economy shrank in late 2012 and had a subdued start to 2013, narrowly avoiding a recession. The recent picture has been mixed.
Exports fell the most since late 2009 in May, hit by weaker demand in Europe and now in China, too. Industrial orders and output tumbled.
Bosch ROBG.UL said on Tuesday it had cut the working hours of about 1,800 employees in Germany in response to weak demand for industrial and building technology.
A nasty combination of heat and humidity will hug much of the eastern United States in a giant, sweaty embrace this week.
Temperatures in the Northeast, Mid-Atlantic and Midwest will reach the 90s for the next few days, but that's not the bad part. Heat indices are expected to soar well past 100 degrees, the National Weather Service said.
Heat indices represent how hot the weather feels, based on the actual temperature and humidity.
A heat advisory was in effect Tuesday for parts of Massachusetts, Connecticut and Rhode Island, as well as much of Michigan. Yes, Michigan.
The sauna-like conditions could shift westward mid-week, covering a large swath of the central and eastern United States, forecasters said.
Meanwhile, "monsoonal moisture will increase across the southern High Plains, with flash flooding possible," the weather agency said.
"The rain and extensive cloud cover will also keep temperatures across the region quite cool for this time of the year, with some areas over 20 degrees below their average July temperatures" in parts of west Texas, Arizona and New Mexico.
100 years ago, Death Valley set a scorching record
(CNSNews.com) - According to the Daily Treasury Statement for July 12, which the U.S. Treasury released this afternoon, the federal debt that is currently subject to a legal limit of $16,699,421,095,673.60 has stood at exactly $16,699,396,000,000.00 for 56 straight days.
That means that for 56 straight days the federal debt has remained approximately $25 million below the legal limit.
Even though the portion of the federal debt that is subject to a legal limit has not changed in almost two months, the Treasury has continued to sell bills, notes and bonds at a value that exceeds the value of the bills, notes and bonds it has been redeeming.
The “public debt subject to limit”--as the Treasury calls the portion of the federal debt that is legally limited by Congress--first hit $16,699,396,000,000.00 at the close of business on May 17.
Up to that point in fiscal 2013, according to the Daily Treasury Statement, the Treasury had already redeemed approximately $4,776,995,000,000.00 in U.S. debt instruments (bills, notes and bonds) that had matured. At the same time, the Treasury had issued $5,354,508,000,000.00 in new debt instruments. That means that, on net, as of May 17, the part of the federal government’s debt publicly circulated in instruments likes bills, notes and bonds had increased $577,513,000,000 for the fiscal year.
As of the close of business on July 12, the latest day reported by the Treasury, the Treasury had redeemed approximately $5,848,194,000,000.00 in debt and issued approximately another $6,477,293,000,000.00—meaning the publicly circulated debt has increased by a net of $629,099,000,000 so far this year.
Thus, over the past 56 days, the net value of U.S. Treasury Securities circulating in the public has increased by $51.586 billion ($629,099,000,000 minus $577,513,000,000).
How could the value of extant U.S. Treasury Securities increase by $51.586 billion during a 56-day period when the federal government’s debt subject to the legal limit set by Congress has remained constant at $16,699,396,000,000.00—just $25 million below the legal limit?
On May 18, the day after the debt began its long stay at $16,699,396,000,000.00, Treasury Secretary Lew sent a letter to House Speaker John Boehner. In the letter, Lew said the Treasury would begin implementing what he called “the standard set of extraordinary measures” that allows the Treasury to continue to borrow and spend money even after it has hit the legal debt limit.
How many days did Lew think he could keep the debt just under the debt limit while the Treasury continued to borrow money?
“The effective duration of the extraordinary measures is subject to considerable uncertainty due to a variety of factors, including the unpredictability of tax receipts, changes in expenditure flows under the sequester, and the normal challenges of forecasting the payments and receipts of the U.S. government months into the future.”
Lew went on to say, however, that “it is now clear that the measures will not be exhausted until after Labor Day.”
If that prediction is correct, it will mean that the Daily Treasury Statement will continue to peg the “debt subject to limit” of the United States at exactly $16,699,396,000,000.00—or just $25 million below the legal limit—for another month and a half.
If the Treasury then says, sometime in September, that it can no longer hold the debt subject to limit at exactly $16,699,396,000,000.00 but must default on the bills of the federal government if the Republican-controlled House of Representatives does not vote to increase the legal debt limit, the Treasury will then be forcing a battle with the Republican House over the debt limit at the same time that the current continuing resolution, which funds the government until Sept. 30, is set to expire.
In his May 18 letter, Lew warned Boehner that the Obama administration would not negotiate with the House to curtail spending in exchange for giving Obama new authority to borrow additional money.
“I want to reemphasize what the president has said repeatedly regarding any threats to cause default in order to extract policy concessions from the Administration,” Lew warned. “We will not negotiate over the debt limit.”
Tomorrow, the U.S. Treasury will again report that the public debt subject to limit is exactly $16,699,396,000,000.00.- See more at: http://cnsnews.com/news/article/treasury-debt-has-been-exactly-1669939600000000-56-days#sthash.quLsRNlv.dpuf
Former US ambassador to the UN says every day that goes by "puts Israel in greater danger," urges Israel to stop waiting.
“Israel should have attacked Iran yesterday – every day that goes by puts Israel in greater danger, every day Iran makes more progress,” John Bolton, a former US ambassador to the UN, told The Jerusalem Post in an interview on Monday.
“I can understand why Israel wants us to take action, but the longer Israel waits for something that is not going to happen, the greater the danger Israel is in,” the senior fellow at the American Enterprise Institute said.
The US and Israel cannot expect to have perfect intelligence about Iran’s nuclear capabilities, but if Israel attacked Iran after it gained that capability, there could be “nuclear retaliation,” he said.
During his first term, President Barack Obama implied that the US would not resupply Israel with weapons used in attacking Iran, Bolton said. He added that overwhelming congressional support would have forced the issue of resupplying Israel in any case.
Now he thinks the situation has changed and the issue is whether the US would take the necessary measures to make the case that Israel was acting legitimately in self-defense.
The interview, coming a day after Prime Minister Binyamin Netanyahu said Iran was approaching the red line he set out at the UN last September, constituted a warning that Israel could attack Iran as a last resort to prevent it from gaining nuclear weapons capability.
Asked about the chances that the US president would order an attack before any Israeli one, Bolton responded skeptically, “It would take a character transplant for Obama to order a US attack.”
A fundamental shift is taking place in the U.S. economy. In fact, this transition is rapidly picking up momentum and is in danger of becoming an avalanche. The percentage of full-time jobs in our economy is steadily declining and the percentage of part-time jobs is steadily increasing. This is not a recent phenomenon, but now there are several factors which are accelerating this trend. One of them is Obamacare.
The truth is that Obamacare actually gives business owners incentive to cut hours and turn full-time workers into part-time workers, and according to the Wall Street Journal and other prominent publications this is already happening all over the United States. Perhaps this is part of the reasons why the U.S. economy actually lost 240,000 full-time jobs last month.
In a recent article entitled "Restaurant Shift: Sorry, Just Part-Time", the Wall Street Journal explained the choices that employers are faced with thanks to Obamacare...
The Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Some companies have said the requirement could increase their costs significantly, although others have played down the potential hit.The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.
Thankfully the implementation of this aspect of Obamacare was recently delayed, but a lot of employers are saying that it won't make a difference. They know that it is coming at some point, and so they are already making the changes that they feel they will need to make in order to comply with the law...
Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern."Does the delay change anything for us? Absolutely not," Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. "We won't start hiring full-time people."
This is very sad, because we have already been witnessing a steady erosion of "breadwinner jobs" in this country.
It is very, very difficult to support a family if you just have a part-time job or a temp job. But those are the jobs that our economy is producing these days.
In fact, if you can believe it, the second largest employer in the United States is now a temp agency. Kelly Services is actually the second largest employer in the country after Wal-Mart.
Isn't that crazy?
And full-time employment continues to lag far, far behind part-time employment. The number of part-time workers in the United States recently hit a brand new all-time record high, but the number of full-time workers remains nearly 6 million below the old record that was set back in 2007.
For much more on this, please see my previous article entitled "15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast".
At this point, employees are increasingly considered to be expendable "liabilities" that can be dumped the moment that their usefulness is over.
For example, employees at one restaurant down in Florida were recently fired by text message...
It's bad enough losing your job, but more than a dozen angry employees say they were fired from a central Florida restaurant via text message.Employees at Barducci's Italian Bistro said they lost their jobs without notice after the restaurant suddenly closed and are still waiting for their paychecks.
This shift that we are witnessing is fundamentally changing the relationship between employers and employees in the United States. The balance of power has moved very much toward the employers.
Most employers realize that there is intense competition for most jobs these days. If you get tired of your job, your employer can easily go out and find a whole bunch of other people who would be thrilled to fill it.
So why has the balance of power shifted so dramatically?
Well, for one thing we have allowed millions upon millions of good paying jobs to be shipped out of the country. Now American workers literally have to compete for jobs with workers on the other side of the planet that live in nations where it is legal to pay slave labor wages.
This should have never happened, but voters in both major political parties kept voting for politicians that were doing this to us.
Now we all pay the price.
Another factor is the rapid advancement of technology.
These days, businesses are trying use machines, computers and robots to automate just about everything that they can. The following example comes from a recent Business Insider article...
On a windy morning in California's Salinas Valley, a tractor pulled a wheeled, metal contraption over rows of budding iceberg lettuce plants. Engineers from Silicon Valley tinkered with the software on a laptop to ensure the machine was eliminating the right leafy buds.The engineers were testing the Lettuce Bot, a machine that can "thin" a field of lettuce in the time it takes about 20 workers to do the job by hand.The thinner is part of a new generation of machines that target the last frontier of agricultural mechanization — fruits and vegetables destined for the fresh market, not processing, which have thus far resisted mechanization because they're sensitive to bruising.
So what happens when the big corporations that dominate our economy are able to automate everything?
What will the rest of us do?
How will the middle class survive if they don't need us to work for them?
Over the past couple of centuries, we have witnessed several fundamental shifts in our economy.
Once upon a time, a very high percentage of Americans worked for themselves. There were millions of farmers, ranchers, small store owners, etc.
But then the industrial revolution kicked in to high gear and big corporations started to gain more power. Millions of Americans went to work for these big corporations, but it was okay because they paid us good wages to work in their factories and the middle class thrived.
Unfortunately, the big corporations have realized that things have changed and that they don't really need us anymore. They can replace us with technology or with super cheap labor overseas.
So that leaves the rest of us in quite a quandry. Very few of us own our own businesses. In fact, the percentage of self-employed workers in the United States is at an all-time record low. And the number of us that are needed by the monolithic corporations that dominate our system is dropping by the day.
All of this is very bad news for the middle class. The only thing that most of us have to offer is our labor, and the value of our labor is continually declining.
Unless something dramatic happens, the future of the middle class looks very bleak.