Bear Market


How to Start a World War

August 30, 2013 by · Leave a Comment 

Syria seems like a cake walk after Iraq and Afghanistan.  But there are a few things different here. Iran and Russia are backing Syria.  Go ahead and fire a few missiles into Syria.  It’s a little like your neighbor beating his wife and you decide to empty your handgun into his home to get him to stop. It isn’t going to end there, now is it?

Since there is a little bit of a time delay before the strike, Iran and Russia have the time to move a few armaments to Syria for its defense.  It’s a little like Spain before WWII.  Everyone got to test their new weapons. Iran feels threatened because of the US’s position on nuclear weapons as well as Israel’s threat of a first strike.

We’ve meddled in Iraq, Libya, Egypt, Afghanistan and all we have done is taken a stable government which  never even had a hope of being a Democracy, and destroyed the institutions that could keep order.  Afghanistan will be like Viet Nam.  200,000 immigrants will be moved to the US. Otherwise they will be executed when we leave.

If Obama launches a missile attack, I fully expect a reprisal attack on our vessels in the Mediterranean.  And I would expect that the launches would be from Syrian soil, but not necessarily by the Syrians.    The question you have to ask, do our naval ships carry gas masks?

The people in the Arab world are very poor.  They want a reason for why they live in poverty.  The answer is, the Great Satin is extracting from their labor the wealth that would have been theirs.  Any military  success by Syria against US vessels, could rally the Arabs and make shambles of  governments in the region.

 What we need to realize here, is that we are at a point to where we could start WWIII.  And without using any gas, 4 billion people could starve to death in a nuclear winter, because some US President had a red line that was not to be crossed.  Give me a break. War is about killing people.  If you’re not any good at it, you lose.

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2013Q2: Faster GDP Growth

August 30, 2013 by · Leave a Comment 

Messages from the external and government sectors

The second release of the 2013Q2 NIPA figures [0] suggests faster (2.5 ppts. versus the initially estimated 1.7 ppts.), albeit still modest growth. However, would be a mistake to conclude that fiscal drag is unimportant.

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Figure 1: Log GDP, in bn. Ch.2009$, SAAR, July release (red), August release (blue). Source: BEA.

Now consider the fact that in fact the government spending (all levels) on goods and services declined even more than first estimated.

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Figure 2: Log government consumption, in bn. Ch.2009$, SAAR, July release (red), August release (blue). Source: BEA.

With these revised figures, all levels of government continue to subtract from overall growth (in a mechanical sense) – although not as much in the two previous quarters. This is notable because the previous reading for 2013Q2 had indicated state and local spending had turned around to contribute to, rather than deduct from, growth.

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Figure 3: Contributions to real GDP growth, in percentage points, SAAR, of non-government sector (blue), defense (red), Federal nondefense (green), and state and local (purple). Source: BEA.

The external sector shifted from a contribution -0.81 ppts to zero, thus accounting (once again in a mechanical sense) for the entire increase in estimated growth.

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Figure 4: Contributions to real GDP growth, in percentage points, SAAR, of non-government sector (blue), defense (red), Federal nondefense (green), and state and local (purple). Source: BEA.

The revisions in exports and imports are shown in Figures 5 and 6.

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Figure 5: Log exports of goods and services, in bn. Ch.2009$, SAAR, July release (red), August release (blue). Source: BEA.

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Figure 6: Log imports of goods and services, in bn. Ch.2009$, SAAR, July release (red), August release (blue). Source: BEA.

Lower imports contribute to current quarter growth, in an accounting sense. However, they can also signal slower GDP growth going forward, insofar as the marginal propensity to import is positive. One might also look to cues from certain types of imports. Capital goods are sensitive to expectations of future demand, so the fact that capital goods imports are flat is a bit troubling.

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Figure 7: Log capital goods exports (blue), and imports (red), in bn. Ch.2009$, SAAR. NBER recession dates shaded gray. Source: BEA, and NBER.

Growth in capital goods exports (blue line) is encouraging, if only because of the low expectations for rest-of-world demand.

Returning to the government sector, it’s important to recall government spending on goods and services doesn’t summarize the entire effect of spending cuts. Transfers have also been reduced. Figure 8 illustrates the drag coming from a reduction in government expenditures (spending, transfers) relative to GDP.

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Figure 8: Log government total spending to GDP ratio (blue), and to potential GDP (red). Total spending measured as sum of real government consumption and nominal transfers deflated by personal consumption deflator. Potential GDP is February 2013 CBO measure in Ch.2005$, adjusted by the ratio of 2011 GDP measured in 2005 and 2009 units. NBER defined recession dates shaded gray. Source: BEA, second release, CBO Budget and Economic Outlook, NBER, and author’s calculations.

In sum, it’s a good thing that growth was revised up, but it could be yet faster with a sensible fiscal policy.

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India Kharif sown area crosses 1000 lakh ha

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The details of the area covered by crops so far and that covered during this time last year is provided below in a table

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K+S to announce cost cuts to secure profitability, liquidity

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CEO Norbert Steiner says he will announce steps to improve efficiency at the company in order to secure profitability and liquidity.

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Chalco posts $102 million first-half net loss

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The result compared with a net loss of 3.25 billion yuan in the six months through June 2012.

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Gold erases week’s gain after UK rejects Syrian action

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The gold price fell $15 in London trade Friday morning, reversing the last of the week’s 2.5% gain.

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Shaft Sinkers preferred bidder for Kazchrome shaft

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International shaft sinking and underground construction specialist, reports being the preferred bidder for a Kazakh chrome mine, and has also reported an 80% plus increase in half year earnings.

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SA gold miners confirm strike to start from Tuesday

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The companies say NUM has served notice of a strike over wage demands starting from the night shift on Tuesday.

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Polyus Gold slumps to loss on $469m impairment charge

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The leading Russian gold miner tumbled to a first-half net loss after taking a $469 million impairment charge.

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Ecuador/Codelco to create JV to explore Llurimagua reserves

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Ecuador has no mining industry to speak of and is seeking to attract investment to tap its large copper, gold and silver reserves.

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