Let's begin with the shipping news. If nobody is buying your trucks, you don't need to rent a vessel to carry that shiny new 18-wheeler to its new owner. Hence the Baltic Dry Index, which tracks the cost of shipping goods and commodities, fell below 1,000 this week for the first time in six years.
Slow Boats From China
Put another way, it is now almost 90 percent cheaper to ship goods over the oceans than it was at the beginning of the year. And because the huge vessels known as capesize ships can't currently charge much more than their daily operating cost of about $6,000 per day, their captains have slowed down to economize on fuel and save money, to about 8.68 knots from 10.33 knots in July, according to data compiled by Bloomberg.
It appears that excluding transportation, Durable Goods dropped 1.1% and excluding defense, they dropped 0.6%.
So, it appears new orders for aircraft came in and saved the day, otherwise, the report is more in line with a recession.
Inventories were also up:
Inventories of manufactured durable goods in September, up fourteen of the last fifteen months, increased $1.2 billion or 0.4 percent to $340.2 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent August increase.
As expected, GDP falls 0.3% in the 3rd quarter, but that's a little better than what was forecast, a 0.5% contraction.
GDP has risen 0.8% in the past year.
Economists expect the economy to contract in the final three months of this year and the first three months of 2009, with the nation's unemployment rate pegged to rise near the 8% mark. It would be the longest contraction since 1975.
What is more subtle, the focus is on consumer confidence and spending, in the headlines and analysts. Once again, not on production, which is on life-support.
I know that the concept of Peak Oil is controversial, but this is significant.
Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.
Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed.
You would think that the sheeple would have been able to buy a clue by now. It turns out that most of them are still traveling on the river Denial.
Almost half of U.S. homeowners think their homes are insulated from the broader national decline in prices, according to a survey by real-estate Web site Zillow.com.
Despite a financial crisis, market volatility and continued indications of declining home prices, 17% of homeowners told Zillow they think their own home's value stayed the same over the past year, while 32% said their home has appreciated in value. Zillow estimates that nearly three-quarters of homes have lost value in the past 12 months.
Canadian and Mexican Trade NAFTA (TN) professionals can now apply for a U.S. work visa lasting up to 3 years under the North American Free Trade Agreement (NAFTA).
The U.S. Department of Homeland Security has increased the maximum period from one to three years.
This makes it equal to the initial period of admission given to H-1B professional workers.
Eligible TN non-immigrants may now be allowed to receive extensions of stay in increments of up to three years instead of the prior maximum period of stay of one year.
The TN visa category is open to Canadians and Mexicans with at least a bachelor’s degree or similar professional qualifications working in areas such as accountancy, engineering, science and teaching.
The Chosen Ones. I flipped on the local news late last night and saw a local bank CEO announce they have received millions of money from the bail out even though they don't need it. Images and drawings trying to explain how giving taxpayer money to some of the most consumer unfriendly banks would help the taxpayer abounded from the infomercial newscast. Arrows and redirects flooded a white board where one could have written corporate public relations B.S. clip in it's place. Paulson is helping the worse bank in Oregon, notorious for old growth timber clear cutting. The CEO said he would probably use the money for acquisitions, consolidation.
The potential for deterioration in economic conditions, given the contraction in credit, may also affect budget conditions this year - Ryan
They are now seeking private investment:
We all benefit from a deep, liquid Treasury market, and SIFMA and the Treasury Markets Practices Group have the opportunity to take a leadership role in devising and implementing private-sector solutions to current challenges
Remember just 17 months ago when Fed Chief Ben Bernanke told us not to worry about housing?
The subprime mess is grave but largely contained, said Federal Reserve Chairman Ben Bernanke Thursday
Just one month before that Treasury Secretary Paulson said: "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained. All the signs I look at" show "the housing market is at or near the bottom."
The biggest laugher of all, was Bernanke's prediction two months later, when he said: "Some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems."
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