Tuesday, July 28, 2009

CAPACITY UTILIZATION TELLS THE STORY


* We are near a RECORD (not even shown here) going back DECADES of SLACK in our manufacturing capacity levels.
I ask you dear readers, how is it that China can BOAST of 7% GDP growth in an environment where US Consumers are retrenching, saving, and the manufacturing capacity ALREADY IN PLACE here has near record slack? In CHINA they already have tons of idled capacity, facturies shut down ,workers set out, not much better elsehwere in world, WHERE is all that CHINESE lending, stimulus going to?
The Chinese stock market is up near 90% this year! that's where it's going, isn't that how you FEED a BUBBLE?
13 Million flat screens sold in China 2008, on pace to sell 24 Million in 2009 (source NPR's All Things Considered 7/27) It is said the GOV is going into RURAL areas and handing out COUPONS for HUGE discounts for durable goods, TV's.....must be fun to sit around the shack watching STATE run TV....don't think they get WHO WANTS TO BE A MILLIONAIRE or the BACHELOR.....
Now Zero Hedge published this important read of which is 72 pages long, I emplore you to download and read every page, it goes fast as 1/2 is filled with charts.
Has the US Consumer (you and me and them) REALLY changed his modus operandi? The savings rate is moving up and new credit issued of Consumer Debt is falling.......is this the backdrop for a new worldwide economic expansion?
I challenge and enjoy any and all comments given in a thoughtful reasonable manner, there is not one reality or perception, but it helps to have the FACTS to back up any opinion.
The market staged a BRILLIANT rally weeks after 911 !! The market had been shut down for a week after the attack. Calls for PATRIOTISM and NOT SELLING went on deaf ears....but when that was done it looked like the worst was over only to fall to NEW LOWS in 2002 until THE BOTTOM.....and this decline in 2009 broke THAT BOTTOM.
The data and stats are close to the worst in this countries history. There is litterally NO MARKET for the toxic assets accept US, the FED buying them back.
How is it that LONG TERM interest rates have stayed LOW, despite the greatest expansion in DEBT and fiscal irresponsability in the world?
US debt issuance as far as THE EYE CAN SEE, and for some time to come, yet a 10 YEAR Treasury Note yields about 3.7% !! doesn't sound like inflation.....
D

2 comments:

Anonymous said...

Once China is finished "absorbing" their artifical stimulus programs, then lets take another check-point. Their financial state run communications program reminds me of the their Bejing olympic games where the state controlled government rid the streets of rif-raf, covered up old store fronts with newly erected walls and even tried to stop the pollution and rain with artificial means.

I have to go back to the cold war Soviet TASS media for comparison. Then again, the mainstream US financial media has become a TASS of sorts as well. I find them all very tiring and annoying with their foolish programming.

China, India and others have their work cut out for themselves to keep inflating and trying to maintain this year over year strong growth facade.

Bubbles always blow up. Trade these markets at your own peril. Despite the dollar going down, cash is still king. A little gold and a little oil when oversold but cash is still king. Then again when hasn't it been king.

D said...

Cash is king to the Chinese, who ow use it to buy world assets and bubble up their own economy.

But it is taking a TREMENDOUS amount of money to boost their economy to the reported 7% compared to not long ago 10% rate....law of diminishing returns and it is taking more and more just to remain in place, not even to grow.

It would be great to cheat destiny.....amazing how the same OLD tools of the FEd and GOV are used no matter what the issues are.
And do people really look at CHinese economy as a capitalist movement?

Where does someone turn to in this country to hear a bit of sobering truth? not MSM, one of the reasons I started my blog, and my hope to reach some people and open their minds and search for any bit of reality instead of one being handed to them.

Small to medium size businesses are n the FIGHT of their lives for survival.... but we threw all our money into baling out the connected....ahhh.
Take care,

Duratek