December 7, 2012: Pearl Harbor Day “A day that will live in infamy”
Take a moment to pray for and give thanks to all those who have served, fought, fought and died and who have been mentally or physically wounded protecting the freedom we enjoy. Be aware of their supreme sacrifice.
In economic and metalworking news this week the second revision to third quarter GDP comes in at 2.7% following a growth rate of 1.3% in the second quarter. 2.7% is actually near decent growth but I am not acquainted with anyone in steel distribution or manufacturing who is experiencing decent growth. 2012 has been a disappointment in my opinion.
Economic Consultant to PMPA (Precision Machined Products Assn) provided his take on some of the numbers:
3 Quarter GDP
“The biggest changes came from higher exports (which are vulnerable) and much higher inventory accumulations. That’s bad, because companies will curb production to avoid an unwanted buildup of stocks on shelves. So that faster growth in Q3will be followed by weaker growth in Q4.”
“Psst. Keep this under your hat. If you track the exact same indicators that the National Bureau of Economic Research (NBER) uses to assess expansions, contractions, and turning points, you would see that they are clearly off their highs. The definition of a recession is a broad based decline of the economy lasting more than a few months. We are seeing a broad based decline-that’s what the indicators are designed to reflect. But the time dimension hurdle has not yet been breached. At a minimum, the recovery is fragile, and this is going into a Fiscal Cliff. Situation the WILL raise taxes and cut some spending (contractionary moves), the recession odds are rapidly rising.”
I agree with most of this but: since we have not breached the “time hurdle”, this is but a warning, a loud one.
The last recession ended nearly four years ago. This is no longer a recovery but the close of the business cycle.
The situation in Washington regarding the fiscal meltdown is at a standstill. The president is adamant on raising taxes on the top two percent of earners, republicans are adamant on not raising rates but have suggested other methods of increasing revenues. They shall continue arguing until we fall over the cliff……
More numbers…
Construction spending in October 2012 was up 1.4 percent from the revised September 2012 estimate and up 9.6 percent from October 2011.
On December 3 the Wall Street Journal reported the US manufacturing sector fell back into contraction last month and employment weakened sharply. According to data released by the Institute for Supply Management (ISM), the purchasing manager’s index unexpectedly fell to 49.5 in November from 51.7 in October. A reading below 50 indicates shrinking activity.
October 2012 new orders for manufactured durable goods increased 0.8 percent. Shipments rose 0.4 percent, in filled orders increased 0.3percent and inventories rose 0.1 percent.
Dr. Ken Mayland’s thoughts on the ISM numbers:
“Manufacturing was off in November, but was it a work interruption due to Hurricane Sandy, or part of a historic trend? The PMI has been below 50 for four of the last six months….manufacturing has gone flattish for fundamental reasons.”
A Fish Tale
Yesterday I caught and released my first pacific blue marlin. Though not weighed, the first mate estimated it at 200#. Felt bigger than that to me……
Seriously, took me 20 to 25 minutes to tame the beast. We had had a slow day, catching only one Dorado after 3 or 4 hours of trolling. Around 1pm after stuffing down a couple of burritos, I cracked a beer and was just scanning the waters when the left rigger went off. I quickly handed the beer to my buddy and as I hopped into the fighting chair the mate made sure of a good hook set, handing me the rod. I looked down, watching the 80# test line scream off the reel. Within seconds the fish was 500 yards behind the boat, jumping through the air, violently shaking his head to lose the hook. The mate and captained both yelled “Blue Marlin” and the fight was on. What a gas! The best part? Releasing the fish, unharmed but tired, back into the blue depths of his home.
God bless America
