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Worrying Economic Signs

While some in the media continue to indulge the fantasy that we are in a booming recovery (Shep Smith on FOX is one of these clowns), the actual news is disturbing and alarming. First, there is Japan:

GDP data reveal Japan mired in recession . . .
The yen has fallen by about 16 per cent against the dollar since November, when the election that brought the new government to power was called

So, what does this mean? Apart from Japan being in a recession, the falling yen means that any US exports to Japan are likely to decline. At the same time, products produced in Japan–e.g., cars, become cheaper. As an important trading partner of the United States, this suggests we will end up importing more from Japan while selling them less of our goods and services. That is not a recipe for job creation in the United States.

Well, what about Europe? Surely things are looking up there? Nope.

News last Friday reported that German and French economies contracted sharply:

BERLIN/PARIS – Europe’s two largest economies, Germany and France, both shrank markedly in the last three months of 2012, suggesting the eurozone has slipped deeper into recession and throwing a first quarter recovery for the bloc into doubt.

The German economy contracted by 0.6 per cent on the quarter, official data showed on Thursday, its worst performance since the global financial crisis was raging in 2009. France’s 0.3 per cent fall was also slightly worse than expectations.

Worryingly for Berlin, it was export performance – the motor of its economy – that did most of the damage.

“In the final quarter of 2012 exports of goods declined significantly more than imports of goods,” the German statistics office said in a statement.

Back revisions to the French figures showed its output fell by 0.1 per cent in each of the first and second quarters of 2012, meaning the country has already experienced one bout of recession in the past 12 months.

Let’s look at the data for 2012. These Countries represent 67.82% of U.S. Imports, and 56.84% of U.S. Exports in goods.:

Country Name Year to Date in Billions of U.S. $

Canada 616.00
China 536.23
Mexico 493.98
Japan 216.43
Germany 157.31

United Kingdom 109.75
Korea, South 101.20
France 72.44
Brazil 75.81
Saudi Arabia 73.79

Recession in Europe and Japan is not good news for U.S. job creation and economic growth. There also is concern that China’s international economic activity is dragging–underperforming in December and January. Similar news from Canada:

The Bank of Canada and Prime Minister Stephen Harper acknowledged Wednesday that their recent economic projections have proven too rosy.

For Harper, this will complicate his government’s budget-making and make it harder to get jobless Canadians back to work.

And here at home? The scheduled tax increases and public spending cuts due to kick in starting March 1st early could suck $600 billion out of the economy. And the hits will keep coming. Forbes offers this “cheery outlook:”

Starting next year the ACA imposes a new $100 billion tax on health insurance. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.

· The health insurance tax is larger than the device tax and the prescription drug tax combined.

· The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.

· The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.

The sluggish economy is not confined to the United States. It is a global reality and the outlook is not promising. At what point will Americans finally decide to hold Obama accountable for his incompetent and harmful economic policies?

  • nannasin smith

    it was also slightly worse than expectations.
    CA3140

  • no_longer_a_democrat

    Mr. Johnson,

    I follow this website, it has to be one of the best on the web in terms of keeping track of real stats on how bad Americans are really doing and its only getting worse…the articles they post seem pretty informative.

    http://theeconomiccollapseblog.com/

  • no_longer_a_democrat

    Com’on now! its all Boooosh’s fault!

    no blaming the Messaih Barry!

  • HELENK2
  • HELENK2
  • HELENK2
  • HELENK2
  • HELENK2

    http://iowntheworld.com/blog/?p=172980

    just confirmed obots are real

  • HARP2
    • HELENK2

      during his whole time in office backtrack has shown more concern for OTA other then Americans

  • HELENK2

    http://freebeacon.com/obamas-cyber-dodge/

    seems like backtrack’s cyber report will be a lot of hot air, signifying nothing

  • HELENK2

    http://thehill.com/blogs/defcon-hill/operations/283981-pentagon-tells-congress-it-will-furlough-800k-civilian-workforce

    pentagon tells congress it will furlough 800k civilian workforce.

    question.

    how many civilian contractors does the military have in the ME?

    How much did having a smaller all volunteer military and using civilian contractors cost this country?

    with all the sequester talk I was wondering if this made a difference

  • foxyladi14

    At what point???? Never as long as he gives them FREE stuff.

  • Ian McCloud

    The U.S. is not an export driven economy. Exports represent only 14% of U.S. GDP. Europe only represents 20% of all U.S. exports, so at most about 2% of the U.S. economy. China has actually been doing better than most thought recently.

    The U.S. has had some of the strongest GDP growth over the last three years amongst all OECD countries. Stronger, as you point out, than Japan and all the countries in Europe. That must tell you that Obama has been doing something right versus all these other countries.

    A recovering housing market in the U.S. will swamp any negative impact from slower economic growth in Europe or Japan. The only thing we have to worry about is the austerity that is being pushed by the GOP. Your GOP continues to want to torpedo the U.S. economy with their failed economic policies and holding the gun to America’s head with their faux deficit and debt concerns.

    The U.S. stock market is at near a record high (suggesting a more positive outlook) and interest rates remain at near record lows (suggesting no particular worry about the fiscal state of the U.S.). Most economic indicators have been improving, despite the GOP’s best efforts to destroy the recovery. 2013 GDP expectations among economists is +2.5% to +3.0% or an improvement over 2012.

    ““The fact that we are seeing a combination of rising home prices and a bottoming out of foreclosure prices is a very good sign the housing recovery is taking hold,” Mayer said. “This is the very first time in the long housing recession that the two are happening at the same time.”

    “In the week ending February 9, the advance figure for seasonally adjusted initial [unemployment] claims was 341,000, a decrease of 27,000 from the previous week’s revised figure of 368,000.”

    That is the lowest level of weekly unemployment claims since early 2008.

    The logic of your overall comment above makes no real sense. First you say all these external economies will put pressure on the U.S. and then you say the domestic policies of Obama are hurting the economy. Which is it? The outside global economy or is it Obama’s domestic agenda? The reality is the U.S. is doing relative very well despite the economic challenges in Europe and Japan. Obama’s domestic policies have resulted in the U.S. economy doing much better than all these other country economies. Record corporate profits, record high stock market, housing prices recovering, unemployment falling, auto sales are at pre-recession levels, taxes are at record low levels, a stable financial system, a federal deficit that has fallen by a record amount or 40% from its peak in 2009 (Bush’s last budget year), etc. You lost the economic argument in November. You have no more arguments.

    • Lemuel Vargas

      We will see when the Obamacare has done its damage to us in the coming years. WE WILL SEE when all the deficit spending of the Obama admin has impacted us and our progeny no longer has the ability to pay our obligation. Then we will see who is right and who is wrong.

      • Ian McCloud

        There is no proof that “Obamacare” will have any negative impact on the economy. The CBO says it will actually improve the deficit. You only have to look at Massachusetts. Healthcare reform was almost entirely based on Romneycare.

        Massachusetts experienced no negative impact to their economy when Romneycare was inacted.
        The deficit has gone no where but down under Obama. In Bush’s last budget year of 2009 the deficit was -$1.45 trillion. It is expected to be under -$1.0 trillion in 2013, a +40% drop, which would be the biggest decline in the deficit ever in such a short period of time.

        All you so-called “conservatives” got is fear-mongering and no solutions. It is getting old and you will keep losing elections with this BS.

    • Popsmoke

      Your arguements all look good on paper. But reality is an entirely different picture.
      1st. No one can use the stock market as a judge of the economy. For that matter the dice table at any Vegas casino would be an economic indicator.
      2nd. Housing is getting some what better in SPECIFIC markets only.
      3rd, using China as any example against Euorpean or US financial and labor systems is like comparing a Caddy to a Red Flyer.
      4th. Profits? Sure BUT there is NO REINVESTIMENT coming from those profits which have more peaks and valleys than the rockies.
      5th and finally…. NO REINVESTMENTS? NO JOBS!
      We can play the numbers game all we want. But the food pantry rolls are increasing, not decreasing…

      • Ian McCloud

        Not sure what the point of your reply post is. Are you suggesting the U.S. economy is not improving? Are you supporting Larry Johnson’s claim that the U.S. economy is in trouble? Larry Johnson has been predicting a double dip recession for three years now. He has been completely wrong on his political pronouncements on the economy for years. That is what happens when you mix pure political ideological BS or hate Obama 100% of the time with economics. The public does not buy Larry Johnson’s or Romney bullshit.

        1) Yes, the stock market can entirely be used as a gauge of the economy. It reflects the earnings potential of companies. It is the best indicator we have of what the “free market” thinks of the near-term economic potential of the U.S. and its corporations.

        2) Actually the housing market, whether it is reflected in new building permits, house prices, house sales, foreclosures, lumber sales, home builder corporate earnings, etc., is showing significant signs of recovery right across America. Some of the hardest hit areas like Florida, Nevada and Arizona are showing some of the strongest turnarounds.

        3) China has largely been driving much of the growth in the global economy for the last decade. 12 months ago people were worried about a “hard landing” for China. However, more recently growth has begun to pick-up in China, which bodes well for the global economy.

        4) Actually there has been plenty of corporate investment. Corporate fixed direct investment has come back a long way in the last three years. Record corporate profits are only a very good thing for the economy. As demand picks-up in the U.S., corporates will increasingly invest and spend their cash hordes. Bodes well for future growth.

        3) The employment picture in the U.S. continues to improve. Jobless claims are at early 2008 levels and the unemployment rate continues to fall. After revisions we have been adding on average over 200,000 jobs in each of the last several months.

        • Popsmoke

          You are kidding? What you are doing is cherry picking weekly claims are tring to tie them into long term leading economic indicators. Nice try though..
          The stock market is nothing more than a coincident indicator of sentiment towards equities. Its a poor choice as an economic indicator and the lag indicators can prove that. This is economics 101.
          The economy is stuck in the mud. The only thing we are doing is rocking it back and forth..

          • Ian McCloud

            So weekly unemployment claims are not a measure that tells us whether the unemployment situation is improving or not? Get real…
            The economy is improving and in fact just about every recent economic indicator tells us that that improvement is accelerating.
            The stock market reflects the attitudes and opinions of millions of investors. It is the closest thing we have to a true free market forward looking economic indicator. I though you “conservatives” believed in the “free market”. And the stock market has had an historic positive run under Obama. Few Presidents have seen a higher run in the stock market.

            • Popsmoke

              You conservatives? Right! Try those who know what they are talking about. Not someone pushing talking points.

              http://robertreich.org/post/1050316182

            • Popsmoke

              PS: Johnson points to weekly’s and compares them to actuals. Show me your actuals and the legimate sources they come from. That is a big difference than what your doing. The stock market should not be use as a primary economic indicator. Unfortunately, its the only source of investment at this time. Poor choice as an indicator….

  • HELENK2

    anybody watching Greta???

    congressional staffers taking overseas trips paid for by foreign
    governments. both sides of the aisle over 800 known trips in the last 6 years. dems inserted exemption in the ethics bill to get around it.

    later the video should be up

  • HELENK2
    • getfitnow

      From Clinton to Kerry …. incompetent to incompetent squared.

  • HELENK2

    just heard that General John Allen is retiring from the Military. will not be head of NATO. Says it is due to family health problems

  • HELENK2

    http://weaselzippers.us/2013/02/19/obama-federal-prosecutors-will-let-criminals-go-if-sequester-cuts-go-through/

    today’s backtrack threat if sequester cuts go through.

    yesterday it was lead paint

    today criminals go free.

    should we start keeping a running list of all the horrible things backtrack says will happen due to HIS sequester???

  • HELENK2

    http://www.theblaze.com/stories/2013/02/18/why-is-mexico-asking-the-u-s-senate-for-a-registry-of-u-s-gun-owners/

    a giant WTF you have to be kidding

    Mexico wants a registry of all US gun owners in states near their border

  • HELENK2

    http://www.americanthinker.com/2013/02/total_destruction_of_the_us_an_interview_with_larry_grathwohl_part_1.html

    I have believed this for a long time.

    what bomber billy ayers could not do with a bomb, he is doing with obama

  • HELENK2

    off topic

    http://www.thegatewaypundit.com/2013/02/outrageous-tsa-assaults-and-harasses-crippled-three-year-old-girl-in-wheelchair-video/

    why are we allowing this in our country. since when should a parent have to stand down and watch their kid be molested and abused by some government worker pervert. no child should have to go through this and no parent should have to allow it

  • foxyladi14

    The Dow is up.And so is gas.

  • HARP2

    Most of Obama`s statements have an expiry date……usually 24 hours.

    • foxyladi14

      Right Harp lol

  • Ian McCloud

    The U.S. is not an export driving economy. Exports represent less than 20% of U.S. GDP.

    The U.S. has had some of the strongest GDP growth over the last three years amongst all OECD countries. Stronger, as you point out, than Japan and all the countries in Europe. That must tell you that Obama has been doing something right versus all these other countries.

    A recovering housing market in the U.S. will swamp any negative impact from slower economic growth in Europe or Japan. The only thing we have to worry about is the austerity that is being pushed by the GOP. Your GOP continues to want to torpedo the U.S. economy with their failed economic policies and holding the gun to America’s head with their faux deficit and debt concerns.

    The U.S. stock market is at near record high (suggesting a more positive outlook) and interest rates remain at near record lows (suggesting no particular worry about the fiscal state of the U.S.). Most economic indicators have been improving, despite the GOP’s best efforts to destroy the recovery.

    ““The fact that we are seeing a combination of rising home prices and a bottoming out of foreclosure prices is a very good sign the housing recovery is taking hold,” Mayer said. “This is the very first time in the long housing recession that the two are happening at the same time.”

    “In the week ending February 9, the advance figure for seasonally adjusted initial [unemployment] claims was 341,000, a decrease of 27,000 from the previous week’s revised figure of 368,000.”

    That is the lowest level of weekly unemployment claims since early 2008.

    • DianaLC

      Keep trying because I know you’ll need that job in the WH basement.

      • Ian McCloud

        Always the censorship on NQ. Whenever someone pushes back you simply delete their comments or ban them. Says a lot about the strength of your arguments, if you are so afraid of someone with an opposing view. Completely lame, childish and shows you are an empty suit. All talk.. You conservatives are all the same. Full of BS. You talk a good game about rights and constitutions but you are the first to band free speech and opposing views.

        • DianaLC

          You progressives are all the same. I didn’t delete your comment. I just didn’t have time to go into a lengthly counter argument, as you would have the figurative cotton in your ears anyway.
          I have a close progressive relative. Whenever he tries to start a political discussion, if anyone starts to counter, he will just interrupt and stop the discussion he started because he doesn’t like the way it’s going.
          If you think we can’t understand your supposed overwhelmingliy strong points for your case, that’s your problem. I have lived a long time, probably lots longer than you have. I have seen and lived in a good economy. This is most definitely a failing economy compared to what I’ve experienced. My parents lived through the depression. They always said they didn’t realize as they had always been poor as children of stoop labor immigrants. But they went on to fulfill the American dream and make life open up for their children and grandchildren because the econmy was a thriving economy.
          Sadly it’s become apparent to me that I can’t make things better for my children and grand children in this piss poor economy. So go ahead and use your “factoids” supplied to you by your left-wing handlers and think I’m stupid.
          Last time my IQ was checked, it matched what the left was touting as your fearless leader’s supposed IQ and then some.
          Go away!

          • Ian McCloud

            “This is most definitely a failing economy compared to what I’ve experienced.”

            The economy failed under your Republicans. Obama has spent four years trying to clean up your mess. Now he is focused on cleaning up the deficit mess that your generation and your Republicans are responsible for. You guys raided the piggy bank to pay for your cushy lifestyle and “good economy”. You have no reason to bitch and complain as you do, given your generous tax-payer funded retirement. You are part of the problem and a hypocrite.

            • DianaLC

              You are just so freaking stupid, and that is why we don’t like you here. If you really knew what you were talking about you would not say something to me like “your Republicans.” From the first time I could vote in ’70 I voted mostly Democrat. But I was a moderate Democrat. I was more liberal on social issues but never CRAZY like some progressives on financial issues. This is a well-known fact by most olther son this site. I know that Larry was usually Republican but backed Hillary. This is a site peopled by people of various political affiliations. I am currently an “unaffiliated” voter in my state, and leaning libertarian right now.

              I live a comfortable, not cushy, lifestyle. I could be living a more comfortable one if I had not decided to help an out-of-work son (through no fault of his own) during the last few months. He did not show up in the unemployment figures as he never took unemployment benefits. He struggled for almost ten months taking part-time temp and full-time tem jobs before he found finally a job at a local company. So in that he showed up on the “improved” employment figures. But it was not enough to meet all his expenses without losing his home, etc. Most of his spare time was spent looking for work. He lost those months of building his 401k and lost his health insurance. And he certainly will do all he can to avoid the government one now.

              I am not in debt. I earned a BA and an MA all while working and paying my way so that I would not be in any debt afterwards. I was helped by the fact that my education as I was growing up had not been corrupted yet by progressives (anarchist want-to-be killers) like Obama’s good friend Ayers. (Look him up and read his ridiculous “education professor” ideas.) Instead, I had intelligent, well-educated IN THEIR ACADEMIC FIELDS (i.e., not just in education jargon) teachers while I was in high school so that I was able to earn a full-tuition and fees scholarship as long as I maintained a B+/A- average. I was, by the way, a granddaughter of immigrants who escaped the bolsheviks who confiscated their farms in Russia and later by their mismanagement in those stupid factory farms and community farms (using city workers who knew nothing about farming) created major famines in Russia.

              I have worked hard my whole life, sometimes working a full-time job and two part-time jobs on the side as I raised five children, three not my own. I never minded working, and I always could find work easily as the economy was working.

              Bush got us into too much debt, but just open your eyes and see that the much greater debt that Obama keeps wanting us to take on is going to keep the country in chains (to use Biden’s words) for generations to come.

              Obama is the most ignorant, inexperienced, incompetent, POTUS I have ever lived under. He is the most ideological radical, communistic in his leanings. As a granddaughter of people who escaped that mess in Russia and who called America the “Good Stepmother,” it breaks my heart to see the way Obama is taking our country.
              I am as angry at the Republicans as I am at the Democrats for not being better and for being, in many ways, as corrupt.
              But one thing I do know is that Obama is most definitely not the answer to our problems and is a great deal the result of and the symptom of the corruption of the way our government has become.
              You out to take your bliners off and actually do some good research into just how little Obama has actually accomplished on his own, without the help of big money like that from Soros. And, you ought to read up a little on Soros too.

  • getfitnow

    Maybe when they can’t get access to the quality health care they need.

    And what is the incentive to become a doctor. Nurses will be able to provide some of those services. Why not spend less time training and at a lower cost and just become a nurse?

    http://online.wsj.com/article/SB10001424127887324880504578296902005944398.html?mod=WSJ_Opinion_LEADTop

  • KenoshaMarge

    Obama will never be held accountable so long as people continue to see what they want to see and believe any bullshit shoveled at them by the MSM.

    Politicians are less concerned with the welfare of the country than their own party’s political welfare.

    People swallow blatant lies about how good the party they support is and how evil the other party is. Adults acting, and voting, like adolescents refuse. You can’t fix a problem if you refuse to see it.

    Perhaps when the pain becomes top bad to ignore the population will wake up. Unfortunately we haven’t educated our young people well enough that they know what to do about much of anything. There just isn’t an app for that.

    • elizabethrc

      Ignorance is rampant in America. I just wish the image of Obama playing while America burns weren’t so analogus to Nero and his fiddle. We appear to have our very own Nero.
      So now Obama wants to spend some 3 billion dollars ‘charting’ the human brain? Is this even remotely what we elected him to do? I naively thought our presidents were to oversee the wellbeing of the citizens and the country. Now he wants to play mad scientist? Well, at least he’s got the ‘mad’ part down pat.

  • HELENK2

    http://www.the-american-interest.com/article.cfm?piece=1381

    something to think about what happens if China and Russia fall?

  • HELENK2
  • HELENK2
  • HARP2

    Damn that Jarret.

  • Malcolm_Reynolds

    Not as long as the US media is controlled by race-baiters.

  • DianaLC

    Nobody is accountable in America. It’s become the land of excuses, peopled with so many idiots who have great self-esteem and thus never second guess any belief they had before and still have to the point that they will believe the economy is the fault of Mitt Romney because he is too wealthy, despite the fact that Fat Al Gore is now wealthier than Romney.

  • Van_Dessel

    Never

  • Popsmoke

    Oh Joy….