The outsized financial sector in the US continues to weaken the real economy by over-utilizing intellectual and capital resources, and twisting public policy to its own greedy benefit. Even worse, the efforts of the co-opted and corrupted central planning bureaucrats and politicians to support, rather than reform, the financial sector is triggering a nasty monetary inflation and just making our problems worse.
Things will not improve until fundamental reforms are made in the market processes which have become distorted over the past thirty years by the wealthy elite and Wall Street financial corporations.
The political process in the US needs new blood, new outlook, a new respect for the protection of the Constitution, and politicians less saddled down by special interests, favors, and past bad behaviour that allows others to control them. We can send Washington a message.
You have been played for a fool. Get over it, and do something. Send the pampered politicians packing. They have turned our trust into their personal trough. The first step will be to vote almost all Republicans and the Democratic leadership out of office in the fall elections.
The skeletons in their closets have become anchors on the Republic.
Manufacturing in Philadelphia Region Shrank in July
By Courtney Schlisserman
July 17 (Bloomberg) -- Manufacturing in the Philadelphia region shrank in July for an eighth straight month as orders and employment sank. (The Philly Fed report is an important bellwether for the national manufacturing report, and a key barometer of the real economy - Jesse)
The Federal Reserve Bank of Philadelphia's general economic index "improved" to minus 16.3 from minus 17.1 in June, the bank said today. Negative readings signal a decline. The measure averaged 5.1 last year. (The quotation marks on 'improved' are mine. That is not an improvement. It is a statistical flucuation in an undeniable and serious contraction in activity, but it was also 'worse than expected' which they forget to mention until later - Jesse)
The housing recession, now in its third year, has depressed demand for building equipment and materials and hurt consumer spending. Demand may keep slowing in coming months after the government finishes distributing tax rebate checks, indicating factories won't rebound.
''We're going to continue to see declines in manufacturing output,'' said Kevin Logan, senior market economist at Dresdner Kleinwort in New York, in an interview with Bloomberg Television. ''As manufacturers see the final demand for their products go down and inventories go up, they have to slow production and that means less employment.''
Economists forecast the gauge would improve to minus 15 this month, according to the median of 56 projections in a Bloomberg News survey. Estimates ranged from a minus 22 to minus 5.
Another report today showed builders began work in June on the fewest single-family homes in 17-years, signaling the real- estate recession continues to deepen. A change in the building code in New York led to a jump in construction of condos and apartments in the Northeast that unexpectedly propelled overall housing starts up 9.1 percent, the Commerce Department said.
More Claims
First-time claims for jobless benefits rose last week, the Labor Department also reported. Rising benefits reflect a weakening job market.
The Philadelphia Fed's measure of new orders was little changed at minus 12.1 from minus 12.4 last month. The shipments measure dropped to minus 8 from minus 6.7.
An index of prices paid climbed to 75.6, the highest level since 1980, from 69.3. A gauge of prices received decreased to 28.8 from 29.7, the Philadelphia Fed report showed.
''The pricing numbers are important too because it indicates that we're in a period of stagflation,'' said Dresdner's Logan. In the 1970's, the U.S. had 10 percent inflation and 10 percent unemployment, he said. Now, ''we're looking at 5 percent unemployment and 5 percent inflation. It's a sort of stagflation light.'' (Too bad the numbers are seriously dampened by government antics. Its more like 10 and 10 - Jesse)
Boosting Prices
U.S. Steel Corp., the second-largest U.S.-based metal producer, will boost prices for flat-rolled steel by $40 to $1,100 a ton, to pass on rising costs, two people familiar with the matter said July 11.
Fed Chairman Ben S. Bernanke told lawmakers in semiannual testimony earlier this week that inflation risks have ''intensified.'' At the same time, he dropped his June assessment that risks to the economic expansion had diminished, indicating policy makers aren't ready to raise interest rates to contain prices.
The Philadelphia Fed index measuring the manufacturing outlook for the next six months dropped to 18 from 21.3. (The outlook is negative - Jesse)
Today's report follows one by the New York Fed earlier this week that showed manufacturing in that state shrank less than forecast this month.
Exports
International demand has helped some factories keep running, preventing production from falling as much as in past economic downturns. The U.S. trade deficit narrowed in May as exports increased 0.9 percent, the Commerce Department said on July 11.
The Institute for Supply Management's factory index averaged 49.3 in the first six months of this year. During the 2001 recession, it averaged 43.5. Readings less than 50 signal contraction.
The Fed reported yesterday that industrial production rose 0.5 percent in June, more than forecast, helped by a jump in utility output and increased manufacturing of autos and computers.
Some manufacturing companies are prospering. Allegheny Technologies Inc., a metals maker that supplies Boeing Co., earlier this week boosted its profit forecast for the second quarter.
Allegheny is benefiting from ''our product, market, and geographic diversification,'' Chief Executive Officer Pat Hassey said in a statement.
