Mish's Global Economic Trend Analysis

China Flash PMI at 2-Year High; Don't Expect Too Much More
Why I'm a Deflationist Who Likes Gold - Interview on Goldmoney
Top Gaining and Losing Jobs in the "Recovery"
Let Elderly People 'Hurry Up and Die', says Japanese Finance Minister; "Heaven Forbid if You are Forced to Live"; Shades of Dr. Kevorkian

China Flash PMI at 2-Year High; Don't Expect Too Much More

Posted: 23 Jan 2013 06:54 PM PST

China manufacturing PMI is at a 24 month high. At 51.9, it's not all that much to get terribly excited about, nor is it all that unexpected.

Nonetheless, conditions show a temporary rise following a lengthy bout of contraction.

The HSBC Flash China Manufacturing PMI™ shows Operating conditions improve at the quickest pace in two years.

Key Points

Flash China Manufacturing PMI™ at 51.9 (51.5 in December). 24-month high.
Flash China Manufacturing Output Index at 52.2 (51.9 in December). 22-month high.

Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:

"At 51.9, January's HSBC China manufacturing PMI rose for the fifth consecutive month to the highest level in two-years, heralding a good start to the New Year. Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases. Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."

"Steam to the Recovery?"

I will take the other side of the steam to the recovery thesis. You cannot build much steam on inventory replenishment with weak (and weakening) external demand. Any steam needs to come from internal demand, and not internal demand caused by artificial stimulus measures.

Unfortunately artificial stimulus is all there is. I commented on this uptick in advance. For discussion, please see in Pettis: Nine Things to Watch in 2013; Unwarranted Outbreak of Optimism in China and Europe; The Great Rebalancing.

All is not what it seems. With China, it seldom is.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Why I'm a Deflationist Who Likes Gold - Interview on Goldmoney

Posted: 23 Jan 2013 11:40 AM PST

On Tuesday I had a nice opportunity to Chat with GoldMoney's Andrew Duncan.

I explain why I am a deflationist who likes gold, why most of the Austrians went wrong in ignoring credit, how hyperinflationists are too US-centric in their approaches, and why credit events are more likely (at least in the short-term) to happen in Japan, China, or Europe.

I also discuss currency wars, the deflationary forces of robots on jobs and the balance of trade. On the humorous side, I answer the question as to what I would do if I were put in charge of the Fed.

Click on the top link for more GoldMoney podcasts.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Top Gaining and Losing Jobs in the "Recovery"

Posted: 23 Jan 2013 09:21 AM PST

This is part three in a series of articles on jobs gained and lost since December 2007.

The first article was an interactive map from Tableau: Job Gains and Losses in the Recovery by Job Type (Healthcare, Education, Mining, Construction, Finance, Real Estate, etc).

The second article Job Gaining and Job Losing Industries 2007-2012 displayed data in an interesting pie chart fashion by Salil Mehta who has a blog on Statistical Ideas.

This article contains another look at the data, but focus is on jobs gained or lost in the recovery.

Data for all three posts is courtesy of Economic Modeling Specialists.

The recession ended in June of 2009, but the data I have is annual. Data in the following charts uses December of 2009 as a proxy for the start of the recovery. Once again, pie charts are by Salil Mehta.

Click on any chart for sharper image.

Top Losing Jobs in the Recovery

Top Gaining Jobs in the Recovery

For comparison purposes here are the December 2007 thru December 2012 charts once again.

Job Gaining Industries 2007-2012

Job Losing Industries 2007-2012

Notes

From 2007 thru 2012, 12 industries lost jobs.
Since December of 2009, there were only 5 industries that lost jobs (and utilities only barely).
As far as government jobs go, we can certainly afford to lose more.
Information was a solid job loser every period

Gainers vs. Losers Analysis

If one listens to all the ads from for-profit schools as well as retraining hype from President Obama, one might actually think we need more IT training. As I have stated repeatedly, one cannot retrain a brick-layer into a programmer. Besides, there is a vast sea of skilled programmers (already trained) who do not have a job.

I don't have a breakdown of healthcare and social services jobs, but the distinction between nurses, social workers and temporary care givers in terms of pay is without-a-doubt dramatic. I expect the economy added far more lower paying jobs than it did high-paying registered nursing jobs.

Accommodation and food service jobs certainly tend to be low-paying jobs. Indeed, many food service jobs are part-time only, with no benefits at all. I suspect most waste management jobs are low-paying jobs as well.

Compare the job gains in the recovery with job losses since 2007.

Construction, manufacturing, and information tend to be relatively high-pay jobs. In the period 2007-2012 the economy shed roughly 2.36 million construction jobs, 1.98 million manufacturing jobs, and 380,000 information jobs (a total of 4.69 million high-paying jobs). Note that construction and information lost jobs even in the recovery.

Simply put, the US shed more high-paying jobs in the recession than the economy gained jobs of any kind (high or low-paying) in the recovery.

Involuntary Part-Time Employment

Part-Time Job Analysis

Its better to have a part-time job than no job. However, it's certainly better to have a full-time job than a part-time job if one is seeking full-time employment.

Roughly an additional 5 million workers went to involuntary part-time employment during or shortly after the recession. Only about one million of those jobs are now full-time, not necessarily in the same field, or at the previous pay scale.

Unemployment Rate Artificially Low

The official unemployment number is artificially low because it does not include any of the following:

Involuntary retirement to collect social security
Involuntary part-time-employment
Involuntarily education (e.g. kids remaining in school because there are no jobs)

My simple definition of unemployment is anyone who wants a jobs, is physically able to work a job, and does not have a job. By that definition, unemployment would certainly be North of 10%, and likely North of 11% (not even counting involuntary part-time employment).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

I am hosting an economic conference in April, in Sonoma.
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Let Elderly People 'Hurry Up and Die', says Japanese Finance Minister; "Heaven Forbid if You are Forced to Live"; Shades of Dr. Kevorkian

Posted: 23 Jan 2013 12:05 AM PST

Taro Aso, Japan's Finance Minister who has a serious problem with foot-in-mouth disease says Let Elderly People 'Hurry Up and Die'

Taro Aso said on Monday that the elderly should be allowed to "hurry up and die" to relieve pressure on the state to pay for their medical care.

"Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government," he said during a meeting of the national council on social security reforms. "The problem won't be solved unless you let them hurry up and die."

Aso's comments are likely to cause offence in Japan, where almost a quarter of the 128 million population is aged over 60. The proportion is forecast to rise to 40% over the next 50 years.

To compound the insult, he referred to elderly patients who are no longer able to feed themselves as "tube people". The health and welfare ministry, he added, was "well aware that it costs several tens of millions of yen" a month to treat a single patient in the final stages of life.

In 2008, while serving as prime minister, he described "doddering" pensioners as tax burdens who should take better care of their health.

In 2001, he said he wanted Japan to become the kind of successful country in which "the richest Jews would want to live".

He once likened an opposition party to the Nazis, praised Japan's colonial rule in Taiwan and, as foreign minister, told US diplomats they would never be trusted in Middle East peace negotiations because they have "blue eyes and blond hair".

Shades of Dr. Kevorkian

Judging from the insensitive nature of comments on health issues on top of all his previous gaffes, Aso is clearly unfit for office.

However, a couple things he stated make perfect sense. For example "Heaven forbid if you are forced to live on when you want to die."

That is the way I personally feel as well. It brings to mind Dr. Jack Kevorkian

Jacob "Jack" Kevorkian commonly known as "Dr. Death", was an American pathologist, euthanasia activist, painter, author, composer and instrumentalist. He is best known for publicly championing a terminal patient's right to die via physician-assisted suicide; he claimed to have assisted at least 130 patients to that end. He famously said, "dying is not a crime".

In 1999, Kevorkian was arrested and tried for his direct role in a case of voluntary euthanasia. He was convicted of second-degree murder and served eight years of a 10-to-25-year prison sentence. He was released on parole on June 1, 2007, on condition he would not offer suicide advice to any other person.

Dr. Jack Kevorkian's "60 Minutes" Interview

Please consider Dr. Jack Kevorkian's "60 Minutes" Interview which contains a video of Dr. K. himself injecting a patient who suffered from Lou Gehrig's disease, with a dose of lethal drugs.

Of all the interviews he conducted for "60 Minutes," Mike Wallace often said none had a greater impact than this one.

Dr. Jack Kevorkian had long been a public advocate of assisted suicide for the terminally ill. From 1990 to 1998, he claimed to have helped end the lives of some 130 willing subjects. In September of 1998, Dr. Jack Kevorkian videotaped himself injecting Thomas Youk, who suffered from Lou Gehrig's disease, with a dose of lethal drugs.

Whose Decision Is It?

To me this is a decision best left between an individual and a doctor, or an individual (and their family), and a doctor. I have signed papers saying I do not want to be artificially kept alive in certain situations.

When my mother died of cancer, my father was asked by the doctor "do you want us to try and revive her?" I faced a similar setup myself, when my wife Joanne died.

Terri Schiavo Case

Let's not forget the Terri Schiavo Case. By any practical measure, Terri Schiavo was dead. She had no functioning brain. Yet it took a 7 year battle for her husband to get the right to remove her feeding tube.

George Bush signed legislation to keep her alive. in 2003 Florida Governor Jed Bush signed "Terri's Law" forcing the state to keep a dead woman breathing against the wishes of her husband.

Many of the statements by Taro Aso are of a different nature but some reflect attitudes regarding interference by government that we have seen in the US.

What About Costs

Finally, there is an issue with costs. Even if someone wants to be kept alive, what are the bounds on costs? Does it make sense to spend millions of dollars to keep someone alive for another year?

At what point do we say "you get food, comfort care, and pain relievers" but that's it?

I do not have a precise answer but I can precisely say we need to have a serious discussion on the topic.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Wednesday, January 23, 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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