Certain central bankers are coming out of the closet admitting that their favorite shenanigans—ultralow interest rates and printing money with utter abandon—can’t solve the very problems they were designed to solve, which has been obvious for a long time. What they’re not yet admitting massively, though some are starting to hand out hints, is just how much havoc these policies are wreaking.
Jobs
The Big Lie
by Wolf Richter • • Comments Off on The Big Lie
Since the lousy jobs report, there has been a veritable orgy of Fed Speak with juicy morsels and contradictions, interspersed with leaks and rumors, that climaxed today with Chairman Ben Bernanke’s words of wisdom. It whipped markets into a frenzy, drove the Dow up 500 points, knocked yields to historic lows, and caused gold, the safe-haven, to bounce up and down like a rubber ball. And everyone was eagerly waiting for the big lie.
Squeezing The Fed From Both Sides
by Wolf Richter • • Comments Off on Squeezing The Fed From Both Sides
The ugly jobs report gave Mitt Romney what he’d been waiting for: a huge boost. He’s out making hay, calling it “devastating news for American workers and families.” An army of Republican talking heads swarmed over the land and pummeled President Obama with the jobs report. And just as Republicans see victory edge closer, shrill voices are calling for the Fed to launch the next round of quantitative easing. Collision alert!
Taking Bosses Hostage: A Labor Negotiating Tactic In France
by Wolf Richter • • Comments Off on Taking Bosses Hostage: A Labor Negotiating Tactic In France
At 2 p.m on Thursday, the final day of the annual wage negotiations that were going nowhere, Bruno Ferrec, the man in charge of the nine Fnac stores in Paris, was “retained” by 120 of his employees at a conference room at the Hotel Ibis in Paris. “For now, we do not know when we will let him go,” said the representative of the CGT, one of the unions involved in the negotiations. And the police did nothing.
German Unemployment Obfuscation
by Wolf Richter • • Comments Off on German Unemployment Obfuscation
One of the hardest things to get in this world is a truthful, or at least a somewhat realistic, or at the very least a not totally fabricated unemployment number. Every country has its own bureaucratic madness in pursuing obfuscation. And Germany is no exception. Official unemployment dropped to a two-decade low in January, but a recreational dive into the Federal Labor Agency’s monthly report reveals another story.
Suddenly, a Sharp Deterioration in the Job Market
by Wolf Richter • • Comments Off on Suddenly, a Sharp Deterioration in the Job Market
Hullabaloo broke out after the Bureau of Labor Statistics reported that a surprisingly robust 243,000 jobs were created in January, and that the unemployment rate was 8.3%. Cynics, academics, BLS heretics, hype mongers, and politicians waged a media battle over these numbers that President Obama serenely trotted out as validation of his policies. Even Rush Limbaugh jumped into the fray. Alas, suddenly, there is a sharp deterioration.
Manufacturing Supercars in America
by Wolf Richter • • Comments Off on Manufacturing Supercars in America
Supercar enthusiasts went into a tizzy when Honda announced that it would bring its Acura NSX back to life. Design and manufacturing would be shifted from Japan to Ohio. And much of the production would be exported. It won’t add much volume to Honda’s production, but it will be a technology showcase. And a precursor that the math of manufacturing in America is changing.
The Inexplicable American Consumer Takes A Breath
by Wolf Richter • • Comments Off on The Inexplicable American Consumer Takes A Breath
Consumer optimism has been rising from the morose multi-year low in August and has reached levels not seen since, well, May. It whipped hope into a froth. Rising confidence would pump up consumer spending, which would pump up everything else. But the inexplicable American consumer, the toughest creature out there that no one has been able to subdue yet, had other plans.
California’s High-Speed Rail To Nowhere
by Wolf Richter • • Comments Off on California’s High-Speed Rail To Nowhere
For medium distances, high-speed rail is faster than flying. It’s hassle-free and comfortable. And it benefits the economy. But not the way California is doing it. The hullabaloo about funding the skyrocketing costs of linking LA and the Bay Area ignores a huge economic problem: once again, taxpayers are asked to create jobs overseas. Contenders: Germany, Japan, France, and China.
The Trade Debacle With China
by Wolf Richter • • Comments Off on The Trade Debacle With China
The US trade deficit with China will hit a record $300 billion for the year, a big hit to the economy. It’s politically convenient to blame China, particularly its yuan policy. But the driver is a broad strategy by US corporations to shift an increasing range of economic activities to China. And now a trade war has broken out. Politicians, have a word with your corporate sponsors!