Monday, March 31, 2014

Morgan Stanley says Economy Growth Potential Now 2 percent

Morgan Stanley: Economy's Growth Potential Is Now 2 percent - Business Insider: "A new report from Morgan Stanley argues that potential growth for the economy is now just around 2%. The report argues that drops in productivity and Labor Force Participation mean a new, slower growth track than what we're used to. This has significance for monetary policy, as there may not be as much "slack" in the economy as the Fed believes. Sorry. We're not going back to the old normal. At least that's according to Morgan Stanley...."

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Monday, March 24, 2014

The Middle Class, Steadily Eroding

The Middle Class Is Steadily Eroding. Just Ask the Business World. - "...“Those consumers who have capital like real estate and stocks and are in the top 20 percent are feeling pretty good,” said John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers. In response to the upward shift in spending, PricewaterhouseCoopers clients like big stores and restaurants are chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers. “As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Mr. Maxwell said. “You don’t want to be stuck in the middle.”..." (read more at link above)

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Monday, March 17, 2014

A warped, distorted, flipped Housing Market?

The housing market may need a closer look --

WARPED, DISTORTED, MANIPULATED, FLIPPED HOUSING MARKET Washington's Blog: "The report from RealtyTrac last week proves beyond the shadow of a doubt the supposed housing market recovery is a complete and utter fraud. The corporate mainstream media did their usual spin job on the report by focusing on the fact foreclosure starts in 2013 were the lowest since 2007. Focusing on this meaningless fact . . . is supposed to convince the willfully ignorant masses the housing market is back to normal. It’s always the best time to buy!!! The talking heads reading their teleprompter propaganda machines failed to mention that distressed sales (short sales & foreclosure sales) rose to a three year high of 16.2% of all U.S. residential sales, up from 14.5% in 2012. The economy has been supposedly advancing for over four years and sales of distressed homes are at 16.2% and rising. The bubble headed bimbos on CNBC don’t find it worthwhile to mention that prior to 2007 the normal percentage of distressed home sales was less than 3%. Yeah, we’re back to normal alright. . . ." (read more at links above)

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Monday, March 10, 2014


A must read --

Next-shoring: A CEO’s guide | McKinsey & Company: " . . . Something of equal moment is occurring today. As we settle into a “new normal” catalyzed by the global financial crisis, the ensuing recession, and an uneven global recovery, traditional arbitrage models seem increasingly outmoded.1 For some products, low labor costs still furnish a decisive competitive edge, of course. But as wages and purchasing power rise in emerging markets, their relative importance as centers of demand, not just supply, is growing ... A next-shoring perspective emphasizes proximity to demand and proximity to innovation. Both are crucial in a world where evolving demand from new markets places a premium on the ability to adapt products to different regions and where emerging technologies that could disrupt costs and processes are making new supply ecosystems a differentiator. Next-shoring strategies encompass elements such as a diverse and agile set of production locations, a rich network of innovation-oriented partnerships, and a strong focus on technical skills...."

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Monday, March 3, 2014

US Industrial Rebound Myth

FOR all the hoopla, the United States has gained just 568,000 manufacturing positions since January 2010 — a small fraction of the nearly six million lost between 2000 and 2009. That’s a slower rate of recovery than for nonmanufacturing employment. “We find very little real evidence of a renaissance in U.S. manufacturing activity,” a recent Morgan Stanley report stated, echoing similar findings from Goldman Sachs. (source infra)

The Myth of Industrial Rebound - "...Manufacturing would benefit from the same reforms that would help the broader economy: restructuring of our loophole-ridden corporate tax code, new policies to bring in skilled immigrants, added spending on infrastructure and, yes, more trade agreements to encourage foreign direct investment and help get closer to Mr. Obama’s seemingly unattainable goal of doubling our exports. Those who see a brighter manufacturing picture for the United States argue that wages are rising more rapidly elsewhere, not just in China and Brazil but also in Japan, Germany and France. But just like the “feel good” stories, celebrating this fact ignores the reality that the flip side of wages’ rising faster elsewhere means they are rising more slowly here. And that is the essence of our challenge: In a flattened world, there will always be another China."

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