Go to the source: Mish’s Global Economic Trend Analysis

As everyone should know by now, my main concern with unions is specifically with public unions. While I do not care for unions at all, and never have, at least with private unions, someone other than corrupt politicians buying votes is bargaining at the other end of the table.

In the case of public unions, if politicians strike a bad deal, taxpayers foot the bill. In the case of private corporations, if management strikes a bad deal, the company goes bankrupt, shareholders take a hit, or the jobs move elsewhere, as soon as the contract is up.

Except in few cases every now and again, private unions just cannot seem to understand this simple economic fact.

Machinists Union Pickets Cessna Aircraft

The Kansas Wichita Eagle highlights the typical union response, public or private, in Cessna’s initial offer to Machinists includes wage cut

Machinist union members at Cessna Aircraft picketed near the company’s plant in southwest Wichita on Thursday to protest jobs being sent outside the city.

Members fought strong, gusty afternoon winds and carried signs that read “Keep it Made in Wichita,” “Outsourcing is Treason” and “We built the Air Capital,” as they picketed at K-42 and Hoover roads. Some carried American flags.

Cessna and the Machinists union are in the midst of contract negotiations. The current contract expires Sept. 19. About 2,300 hourly workers at Cessna are covered by the agreement. Hawker Beechcraft also has reopened negotiations with the union as it considers sending work to Louisiana, Mississippi and outside the country.

Cessna’s initial proposal is for a 10-year agreement that cuts wages 4.2 percent, weakens job security, replaces the pension plan with a 401(k) plan and increases the share of the cost of health insurance paid by the workers to 30 percent, said union spokesman Bob Wood.

“There’s no job security in the current proposal,” Wood said.

“Wichita is based on aircraft,” said Cynthia Hise. “If you don’t get a good contract….” Darren Hise finished her sentence. “It’s going to hurt the whole economy in Wichita.”

Reflections on Job Security

Here’s the deal. The Hise’s and the union in general, appears ready willing and able to “hurt the whole Wichita economy” if they do not get what they want.

I have to ask “How stupid is that?”

The answer is “tremendously stupid”.

It is far better to have a good paying job and no job security than no job at all and no prospects of a job. That’s what it boils down to, and like it or not, that is the economic reality.

I do not know what salaries are, but a 10 year contract with only a 4.2% pay cut does not strike me as a bad deal. Those who think otherwise need to compare it to the alternative: seeing all the jobs go to Louisiana, Mississippi, or outside the country.

By the way, wouldn’t residents of Louisiana and Mississippi be very grateful for those job, regardless of what the salary was? I think so. So the bottom line is this mess, is the unions would be to blame and only the unions to blame if Cessna moves elsewhere. The union will also be responsible for wrecking the entire local economy if it happens.

Take the contract and run! It’s for 10 years! Because …. You Don’t Know What You’ve Lost Till Its Gone, Then It’s Too Late. In this case, it will be gone forever.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Go to the source: SurvivalBlog.com

The biggest reason most of the folks we come across in our daily lives have no idea what is coming (the basic collapse of the American infrastructure) is the fact that they are “still sleeping.”  The iPods, Lady Gaga, American Idol, and You Tube silliness all work well to keep the masses sleeping.  This might be a good thing, in a way.  If nothing else, it buys the rest of us time to continue to prepare.  And if enough people do wake up, it will actually accelerate the inevitable.  But that is okay, since it is going to happen anyway.  And perhaps more people will survive to rebuild our nation.      

I personally believe it is too late to turn this sinking ship around.  The Euro will crash literally any day.  The Dollar and Yen will fall right behind it.  The best we can hope for is that the crash and subsequent reset won’t last too long.  I think at least one generation, maybe two, will really be in the hurt locker.  I believe the current administration wants a partial crash so they can more fully seize power and instill their way of life. 

But I think they underestimate how bad the collapse will be.  Even if they thought of calling Chinese Troops to quell rioting, the rest of the world (probably China, too) will have there hands full. 

I still find myself reeling (mentally) when I contemplate the probable loss of life that will occur in such a scenario.  I’ve been trying to plant seeds with folks I come in contact with.  But it seems to have little effect.  But I am also careful not to sound like a right-wing nut job.  Not because I care what people think about me, but I don’t want to make myself a target. 

It is my hope that those of us who survive will keep some historical records, so when the country (world?) rebuilds it can be on a more mature, more stable foundation.  I have hundreds of hours of lectures on CD about world history, religion and philosophy that I acquired from a company called “The Teaching Company”  And while I am not an overly religious man (I’m nearly an atheist but enjoy Buddhist-style meditation, my wife is a Christian.) I do see the positive aspects of Christianity on a society.  Or, as is the case these days, the negative effects of its absence. 

But my point of today’s piece is how I became awake of the dangers coming our way.  In the process of talking about that, I will point out why I think most people remain asleep.  It’s worth noting that radio and TV personality Glenn Beck is a great source of information.  It seems he knows what is going on.  And I wish to point out, I developed my opinions about the world before I had even heard of Glenn Beck.  Once I woke up, I began searching the AM  radio dial to see if anyone was talking about this sort of stuff.    

My life has been an interesting one.  Heck, I could (and hope to) write a book about it.  But I’ll try to keep the background info brief.  My biological father abandoned our family of five when I was seven (and the oldest of the kids).  I started cutting grass and washing cars at 8 years old.  I’m sure I wasn’t very good, but I made lots of “pity” money.  And it helped install a good work ethic.  I was also a scared kid who turned to drugs and alcohol to try and quiet my mind at a young age.  By 28 years of age, I was a washed-out bum who couldn’t get (or hold) a job.

So I cleaned up my act, and by 41 years of age had mortgages on four properties in Southern California.  One being a beachfront condo, the other being a cabin in the mountains (Yes a “cabin in the mountains”.  But don’t get ahead of the story.).

All was going well, not a cloud on the horizon.  Aside from the two above-mentioned properties, our other two properties were preschools.  Our flagship operation had been full, with a waiting list, since 1978.  I was dabbling in Restaurant Consulting and Real Estate.  We rent out our beach condo weekly to folks who want to vacation on the beach in Southern California. 

As a part-time Realtor, I knew the housing bubble was going to pop.  But hey, I was not going to be selling anything for 15 to 20 years, so I wasn’t worried.  I had no idea of the world-wide consequences the bubble bursting would have. 

Then September of 2008 came along.  My previously full school was now 20 children under-enrolled.  At an average of $800 per month, per child, I was losing $16,000 a month!  Needless to say, we tanked badly.  We just barely stayed afloat. 

Now believe it or not, this didn’t wake me up!  I still had no idea of the world I really lived in.  My view of Washington and Sacramento had always been this – “Oh, they are all crooks.  As long as they leave me alone and let me make a living, what do I care?” 

But now that my life had fallen apart (financially speaking), I found myself searching for answers.  I couldn’t understand how I had been so blind-sided.  How did I not see the collapse and recession coming?  What else didn’t I know?  It was really this exact sort of fear and worry that had led me to drugs and alcohol when I was 13 years old.  Obviously that wasn’t an option now, but still I had to figure it out. 

In August of 2009, my wife and I needed a break (A few years back we had been going on two cruises a year.  My how times change.  At least I can say I saw a lot of the Northern Hemisphere, Hawaii and some of the Caribbean.)  So we took a week to drive through the beautiful state of Nevada. 

Well, the night before the trip I had been reading an article about the [then] upcoming movie 2012
with John Cusack.  The article was about “survival nuts” in Montana and Texas and their radiation suits and all the other survivalist stuff.  At the time, I thought of them (now me) as fringe nut-jobs.  But one sentence caught my attention.  It was a fellow in Texas who was telling the interviewer how he was stashing gold and silver to barter with “when the economy collapsed.” 

Since my own “economy” had collapsed 14 months before, I knew all about that. 

So as my wife and I hit the road, over our Starbucks Coffees I said, “So honey, if the U.S. and/ or world economies collapsed, what would we do?”  She didn’t answer for a long minute, maybe two.  Then she said, “Well, we’d just go to the cabin.”  To which I answered, “Yeah, then what?” 

For the rest of our week driving through the beautiful, but desolate and remote state of Nevada we began to talk-out all of the things we would need to live a life even remotely like the one we live now. 

Fast forward to now.  We are nearly set.  We’ve spent $2,000 or so on canned goods at Costco.  Our deep-freezer is full of meats I’ve gotten on sale.  At my current residence I have 20 gallons of frozen citrus juice from my orchard ready for bugging out.  We have vitamins for 12 people to last a year.  We have enough non-hybrid seeds to plant four acres.  We’ve had solar power installed at the cabin.  We even have a couple of portable solar generators.  Since I am not handy, I’ve gotten a carpenter and an electrician to join my tribe.  I also have a friend who hunted a lot in his youth.  He provided all the “lead rations” and “high-speed delivery systems” that we’ll need.  We are still a little light on medical / first-aid stuff.  But I’m working on that.  And we did all of our prep a little at a time, on a shoestring budget.  The solar was the only thing I had to max out the credit cards for.  Unfortunately I couldn’t afford gold, but I found a coin shop that sells silver at a buck over spot, so I’ve gotten 200 ounces of that.  I also have about 10 gallons of cheap store-brand liquor that I have bottled in little pint-size water bottles for bartering.    

But none of that could have happened if I had not “woken up”.  I hope this article might wake up someone who hasn’t had the rug pulled out from under them yet.  Because those are the people who are still sleeping.  And the main-steam media isn’t going to wake anyone up.  The current administration certainly isn’t going to do it.  In fact, they need us to stay asleep. 

Now, you might be saying, “But Lew, I don’t have a mountain cabin to flee to.”  Most don’t, so you’re not alone.  I would recommend getting some canned food, bottled water, and some firearms for defense.  Look at how you can best fortify wherever it is that you call home.  Gently “feel out” your neighbors to see where there heads are at.  A small, tight community of a few houses will fair better than trying to go it alone. 

In closing, I hope I have at least caused someone to “wake up” to the dangers that surround our current Western Society.  And don’t just take my word for it.  Do your own research.  The web is full of info on this subject.  I like SurvivalBlog.com and OffTheGridNews. Take care, and good luck to you.  Thanks, – Lew B.            

Go to the source: Prepare!

One of the frequest readers to Prepare (Frugal UK, shout out!), asked if the obsession with the end of the world was an American thing. In relation, there does not seem to be the same concern in the UK.

Fair question. Here’s my take on it…

I don’t have any numbers of how many “preppers” there are in the US. And I don’t know how many people are concerned about the end of the world. Fortunately, that sort of data is not collected by pollsters and that’s good news because most die hard preppers don’t want anyone to know what they are up to.

How did it get started?

Go back to the Cold War. America was locked in a multi-national tug of war with the Soviet Union. The stakes were high; both had large land and sea forces and a stockpile of nukes if matters got out of hand.

For the first time, Americans were faced with the prospect of a foreign nation being able to lob bombs on their cities from a variety of locations – land, sea and air. Up until then, the US had two oceans separating them from the problems Europe and Asia had dealt with for hundreds of years – war and potential occupation.

From the late 50’s to the mid 1960’s, America embarked on a national campaign of “civil defense”. Government and individuals would prepare shelters in the event of nuclear war and would stock those shelters to ride out fallout from atomic weapons. Americans began stockpiling food (canned and dry goods), water, batteries and other supplies into their basements or backyard fallout shelters. The “prepper” was mainstream and lived in the suburbs.

With the 1970’s, the civil defense movement waned (for a number of reasons) as Americans drifted through detente and turbulence at home. Then, with the recession of the late 70’s, Americans discovered that the post WWII system of robust economic growth was collapsing and when combined with rapid social changes and constant confrontation abroad with the Soviet Union and new regional powers, had the forboding feeling that doom was imminent.

The American self image was shaken. Not only could we be attacked by what seemed, a much more powerful Soviet Union, our institutions of work, marriage and community were clearly not as strong as they appeared to be in the previous generation.

Whether it be riots in the late 60’s, the deterioration of the American city, rampant crime, inflation, or corruption, American was not what it used to be and its best days seemed to be behind it.

Americans dug inward. Prepare for the worse, but hope for the best. During this period, from the late 70’s to the end of the 80’s, America and American culture, began prepping for the end of the world.

Not only was the modern survivalist movement born, but pop culture reflected the growing concern and facination Americans had with the apocalypse. Books like “The Stand” were published. Movies like “The Road Warrior” and “Red Dawn” were blockbusters at the theatres.

The 80’s post-apocalyptic movement settled down with the advent of the 1990’s and the end of the Soviet Union. But with the same era, came a host of new concerns. The potential for an overbearing, insidious federal government, encroachment by the United Nations, the rise of terrorism overseas and the potential for some sort of Balkan style dissolution of the US in the near future.

And then the decade ended with the single event which most defined the modern, post-Cold War prepper movement: Y2K. The collapse of a computer based society due to an oversight in software coding.

Overnight, millions of people who normally would be concerned with the latest news on the nascent Internet or the value of their stock portfolio became concerned about a technology induced shutdown of Western civilization. A remote rural retreat, a stack of gold coins and canned goods sounded pretty good to a society faced with the sudden and disasterous loss of all power, communications and transport.

Of course, the event never happened, but shortly afterwards, 9/11 did. America, after thirty years of internal anxiety saw their worse fears realized. War had come to their shores.

Again, sales in stored foods and bottled water went up, but so did demand for gas masks and Geiger counters. A rural home would not attract the attention of terrorists they thought, and so once again, a remote location seemed appealing to millions.

Toss in ten years of natural disasters, fires, blackouts and terror threats and the world becomes a pretty scary place.

Today. Take everything which has happened in the past generation and combine it with the current economic and social climate in the US and one has to wonder why the whole country is not digging a fallout shelter in the backyard and pulling the door closed behind them.

To be fair, Most Americans go about their business and are more concerned about keeping their job (most likely urban), paying their mortgage (most likely suburban) and keeping the lights on than they are about a foreign army marching down their street or a plague depopulating the earth.

However, whether it is a national best seller like “One Second After” or Tivo’ing a Discovery Channel documentary on 2012, Americans continue to be open to that little voice in the back of their head which tells them to “fill up the car before the weekend, grab that extra case of water at the grocery store or make a run to the warehouse store to do a little shopping…”

After all, it can’t hurt – just in case.

And that might explain why we do the things we do here in the US.

Go to the source: The Survival Mom

Just in case any of you are in harm’s way this hurricane season, I wanted to post Leon Pantenburg’s excellent article for maintaining a supply of healthy drinking water during a flood.  The more methods you have to collect water, the less likely you are to become dangerously dehydrated.

image by jcantroot

An  irony of floods is that muddy, filthy water inundates everything, but there is generally a shortage of anything to drink! If you are stranded in an area surrounded by standing water, you may be able to adapt a desert survival skill to gather potable water.

A drinking water shortage situation happened in my hometown of Ames, Iowa, in August. Heavy rains caused the Skunk River and Squaw Creek to flood parts of the city, including my alma mater,  Iowa State University.

To add to the flood problems, several water mains broke. This left many parts of Ames without any potable water whatsoever.  Because the disaster was localized, emergency agencies were able to truck in water quickly.

But what would happen in a Hurricane Katrina situation, where people were stranded by flood waters for long periods of time? In those situations, staying hydrated in the heat becomes incredibly important.

“In priority order, after shelter and the need to defend your body temperature, preventing dehydration is the survivor’s next most important necessity,”  says survival expert Peter Kummerfeldt.

In some areas, drinking water can be found in vines.  Another way to gather drinking water during a flood might be to set up transpiration bags, a method typically considered a desert survival technique.

Transpiration bags use the condensation principle to gather water. Photo by Peter Kummerfeldt.

“Using clear plastic bags to enclose living vegetation and capture the moisture transpired by the leaves can be an effective method of collecting water,” Kummerfeldt says. “Any time you have a plastic bag and living vegetation it should work.”

This survival  technique relies on a process called transpiration, which goes on constantly during the daylight, in deserts and swamps alike.  During transpiration, trees absorb moisture through their roots and evaporate water through openings in their leaves, according to USGS Science for  a Changing World.  Trees tend to transpire more with increased temperatures, sunlight intensity, water supply, and size.  When it gets too hot, though, transpiration will shut down.

This water vapor can be collected by enclosing as much living, leafy vegetation as possible within a clear plastic bag, Kummerfeldt says, and sealing the opening shut with a cord or duct tape.

“The vegetation should be given a vigorous shake before placing it in the plastic bag,” Kummerfeldt advises. “This is to remove any insects, bird droppings or other materials that might contaminate the water.”

The amount of water produced in a transpiration bag will depend on many environmental factors. Photo by Peter Kummerfeldt.

Within a short period of time, water will begin to condense on the inner surface of the bag, collect into water droplets and drain to the lowest point of the bag.

Water quantity depends on the amount of moisture in the ground, and vegetation type.  Other factors affecting water production include the amount of sunlight available (it doesn’t work at night), the clarity of the plastic bag, and the length of time the process is allowed to work.

“It is not uncommon to find two or three cups of water, and sometimes much more, has accumulated over a six-to-eight hour daylight period,” Kummerfeldt said.

The best way to remove the water without disturbing the bag, he added, is to insert a length of vinyl aquarium hose through the neck of the bag down to the lowest point where water will collect. (This should be done during assembly of the apparatus) The water can then be sucked out or possibly siphoned into a container.

“When enclosing vegetation in the plastic bag it is advisable to place chicken egg sized stone in the lower corner where the water will collect” Kummerfeldt said. “The weight of the stone creates a separation between the enclosed plant life and the water and keeps plant saps from contaminating the water.”

“You can’t count on large quantities of water being produced in individual transpiration bags,” Kummerfeldt cautions. “But you must do everything you can to stay hydrated.”

© 2010, thesurvivalmom. All rights reserved.

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Go to the source: Mish’s Global Economic Trend Analysis

One year ago the official unemployment rate was 9.7%. Today it is 9.6%.

One year ago U-6 unemployment was 16.8%. Today U-6 is 16.7%

click on chart for sharper image

For more details on the jobs report, please see Jobs Decrease by 54,000, Rise by 60,000 Excluding Census; Unemployment Rises Slightly to 9.6%; A Look Beneath the Surface

For all the trillions of dollars in stimulus and additional trillions of dollars in bank bailouts and trillions of dollars of expansion of the Fed’s balance sheet, this is all we have to show for it.

Moreover, the economy is clearly slowing already by many economic reports including new home sales, existing home sales, the regional Fed manufacturing surveys, sentiment measures, and consumer spending trends. The only major discrepancy is ISM.

This week, none of that matters. However, I would like to point out that bear market rallies end, not on bad news, but on good news. It will be interesting to see how much more good news there is, and the market’s reaction to it.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Go to the source: The Market Ticker

Yes.  Funding terrorism.  Funding nations that are on the restricted list.

No, really.

Nine banks have been caught up in the probe, and some are in discussions to settle, according to a person familiar with the case. Three have already. Last month, Barclays PLC in London agreed to pay $298 million and admitted to allowing payments on behalf of clients in Cuba, Sudan and other countries. Lloyds Banking Group in London and Credit Suisse Group in Zurichbanks that operated extensive transfer systems for Iranian clientshave agreed to settlements totaling $350 million and $536 million, respectively.

Settle?  SETTLE?

Let me guess – this was some rogue banker in some satellite office, and there was no systemic knowledge or involvement by the banks involved, right?

Uh, wrong:

These weren’t rogue operations. The investigators discovered that the banks ran dedicated units to systematically aid the undetected transfer of money through the U.S. banking system. They did that by removing identifying coding on fund transfers so they could evade automated U.S. bank computer systems designed to spot money flowing from a sanctioned state.

These are serious criminal acts folks.  This money gets people killed.  Literally.  It buys guns, it buys missiles, it buys bombs.  Bombs, guns and missiles that are then used to shoot at our troops and those of our friends.

Credit Suisse, according to court records, removed Iranian names, addresses, telephone numbers and identification codes from payment messages sent to U.S. financial firms. In some cases, the bank then replaced the information by using names such as "Order of a Customer" or "Credit Suisse."

Why do these institutions still have US banking charters? 

Why do their executives not stand on indictments?

Why do we, the people of this country, permit this?

This isn’t the first time crimes like this have been talked about in the media or the Ticker over the last few years.  Indeed, we’ve had banks laundering money for Mexican Drug Cartels, we had banks that were involved in elaborate scams to rip off taxpayers in Jefferson County Alabama, and we have had other unsavory acts by these institutions.

If I pull something like this I don’t get fined, I go to prison.  I get a felony record to go with it.  I don’t get a fine that amounts to a tiny fraction of one percent of my market cap. 

Hell, if I could traffic in money to pay for missiles in Iran and if caught I’d be fined, say, $200 - a tiny little fraction of a percent of my net worth – sure, I’d do it.  I could make hundreds of thousands or even millions doing this for years, and eventually, well, I’d have to pay some "tax" for my sins in the form of a fine to the widdle liddle gubbermint.

This sort of crap makes a mockery of our justice system and our laws.  We have sat back as citizens and watched these institutions not only do things like this, but rip off the taxpayer with dodgy municipal finance deals that ultimately land the other people involved in the hoosegow, while they, when they get caught, simply pay a tiny little fine (in comparison to the value of the firm) and nobody that works for the bank goes to prison.

You want to know why these things keep happening?

It’s because we the people refuse to insist – and back it up with strong political action – that the banks involved in these sorts of scams be charged and that every single employee and officer involved in either doing it or covering it up goes straight to jail, while we revoke the US charter of any foreign institution involved in this sort of crap.

When will you wake up America?

Go to the source: Total Survivalist Libertarian Rantfest

Go to the source: Totally Ready

Henry Ford said: “Whether you think you can’t or think you can, you are right”

Many have fallen into the trap of thinking they can’t when it comes to self reliance and emergency preparedness. That is just not true. Anyone and everyone can and should be setting goals and becoming better prepared to handle life’s challenges. When we fail to prepare and an emergency hits that challenge is magnified by the fact that we just don’t know what to do. Some give up and let the government or family worry about the problem. Some sink into deep depressions and make very poor choices. The truly wise call a friend and ask for help in pulling themselves out and preparing so a crisis can never catch them off guard again.

I am often told by people that they don’t have the money to prepare. Many preparations don’t take money, just a little time. I have been told they don’t have room to store food or supplies. Sure you do. I have discussed this at length here and in our newsletter and it is always a huge part of the discussion when I do a personal consultation. You just need to learn to think like those designers on TV who redo small apartments. I have seen them do wonders with 400 square feet. You can do the same and we can help.

Yesterday was a very upsetting day for me. My computer was giving me all sorts of trouble and my newsletter was lost. I apologize to all our subscribers for being a day late and also to you that I did not get our second of 30 tips posted. I do not want to get behind so today you get two!

Review…

Tip #1:  Find an out of area contact.

Today’s Tips

#2: Since we are still worried about hurricane Earl hitting the east coast today we are going to gather maps. Take time today to go through the glove box, file cabinet or other hidden places and pull out all the maps you have lying around. Get several different colors of highlighters and mark at least three different routes out of the city in which you live and end at the home of your out of area contact. If you can’t find maps call you city Chamber of Commerce or check your state’s government website and see if they can mail you free maps. You can also go on line and print maps there.

#3: Collect all the flashlights in your home, car and and hidden recesses. Check  to make sure they are all working properly. Make note of any batteries you need to purchase. Remove the batteries from all except the one you use often and store them with the flashlight but not in it. In the car your batteries should be in a plastic bag inside your auto kit along with the flashlight but never inside it. Batteries can explode or leak ruining your flashlight. I always keep two sets of batteries just in case one set has a leaker. I have had this happen twice within the past year and one of the batteries was in a flashlight I used often and it was ruined.

Our September Newsletter is out and I think it’s a great one! In this edition:

Let’s Play…a look at things to do during a power outage to keep sane.

Food Safety…keeping foods safe during a power outage.

Frozen Food During a Power Outage, when to save and when to throw away.

Dutch Oven Cooking…How to Control the Temperature

Haybox Cooking…one more way to cook when the grid goes down.

Recipes: This month all the recipes are from 1850. They are fun and easy to make and perfect during power emergencies, after all our great grandparents didn’t have electricity!

If you are on the east coast of the United States be sure to check out the preparing for Hurricane Earl post!

**Five Days** until my new radio show!! Don’t forget to let me know what you’d like to hear! Would you like to be a guest on the show?

*****I am looking for callers who would like to participate in an online consultation.*****

Get all your questions answered for the needs of your family, not generalities, specific to your family size, needs, budget, and space.

Send me a note and we’ll make it happen! carolyn@TotallyReady.com

Subscribe to our Newsletter: http://blog.totallyready.com/announcing-the-totally-ready-newsletter/

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Back issues: Totally Ready Newsletters July 2009- June 2010

Go to the source: Mish’s Global Economic Trend Analysis

This morning the BLS reported a decrease of 64,000 jobs. However, that reflects a decrease of 114,000 temporary census workers.

Excluding the census effect, government lost 7,000 jobs. Were the trend to continue, this would be a good thing because Firing Public Union Workers Creates Real Jobs.

Unfortunately, politicians and Keynesian clown economists will not see it that way. Indeed there is a $26 billion bill giving money to the states to keep bureaucrats employed. This is unfortunate because we need to shed government jobs.

Birth-Death Model

Hidden beneath the surface the BLS Black Box – Birth Death Model added 115,000 jobs, a number likely to be revised lower in coming years. Please note you cannot directly subtract the number from the total because of the way the BLS computes its overall number.

Participation Rate Effects

The civilian labor force participation rate (64.7 percent) and the employment-population ratio (58.5 percent) were essentially unchanged from last month’s report. However, these measures have declined by 0.5 percentage points and 0.3 points, respectively, since April.

The drop in participation rate this year is the only reason the unemployment rate is not over 10%. The drop in participation rates is not that surprising because some of the long-term unemployed stopped looking jobs, or opted for retirement.

Nonetheless, I still do not think the top in the unemployment rate is in and expect it may rise substantially later this year as the recovery heads into a coma and states are forced to cut back workers unless Congress does substantially more to support states.

Employment and Recessions

Calculated Risk has a great chart showing the effects of census hiring as well as the extremely weak hiring in this recovery.

click on chart for sharper image

The dotted lines tell the real story about how pathetic a jobs recovery this has been. Bear in mind it has taken $trillions in stimulus to produce this.

June, July Revisions

The change in total nonfarm payroll employment for June was revised from -221,000 to -175,000, and the change for July was revised from -131,000 to -54,000.

Those revisions look good but it is important to note where the revisions comes from. The loss of government jobs in June was revised from -252,000 to -236,000 and July from -202 to -161,000.

Major Discrepancies

The BLS jobs report for August does not match ADP payroll estimates. Moreover, neither the BLS jobs report nor the ADP jobs report is consistent with the hot ISM number reported Wednesday. Both the BLS (details below) and ADP have a decline in manufacturing employment while ISM had a rise.

Please see Rosenberg says “ISM Flunks Sniff Test “; Cashin calls ISM “an Outlier”; ADP, Other Data Does Not Confirm for more details that suggest the ISM number is nonsense.

Part-Time Employment

The number of involuntary part-time workers increased by 331,000 over the month to 8.9 million. In January, the number of employees working “part-time for economic reasons” was 8.6 million.

Now for this month’s report ….

July 2010 Report

Please consider the Bureau of Labor Statistics (BLS) July 2010 Employment Report.

Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).

Unemployment Rate – Seasonally Adjusted

Nonfarm Payroll Employment – Seasonally Adjusted

Since September 2009, temporary help services employment has risen by 362,000.

Establishment Data

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Highlights

• 54,000 jobs were lost
• 19,000 construction jobs were added
• 27,000 manufacturing jobs were lost
• 38,000 service providing jobs were added
• 67,00 retail trade jobs were added
• 20,000 professional and business services jobs were added
• 45,000 education and health services jobs were added
• 13,000 leisure and hospitality jobs were added
• 121,000 government jobs were lost. Of them, 143,000 were temporary census workers

Note: some of the above categories overlap as shown in the preceding chart, so do not attempt to total them up.

Index of Aggregate Weekly Hours

Production and non-supervisory work hours rose .1 to 33.5 hours (from a revised lower hours total of 33.4 hours). Average hourly earnings rose $.03 at $19.08.

Birth Death Model Revisions 2009

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Birth Death Model Revisions 2010

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Birth/Death Model Revisions

The BLS Birth/Death Model methodology is so screwed up and there have been so many revisions and up it is pointless to further comment other than to repeat a few general statements.

Please note that one cannot subtract or add birth death revisions to the reported totals and get a meaningful answer. One set of numbers is seasonally adjusted the other is not. In the black box the BLS combines the two coming out with a total. The Birth Death numbers influence the overall totals but the math is not as simple as it appears and the effect is nowhere near as big as it might logically appear at first glance.

BLS Black Box

For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth and death of businesses (not individuals).

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another.

Household Data

The number of unemployed persons (14.9 million) and the unemployment rate (9.6 percent) were little changed in August. From May through August, the jobless rate remained in the range of 9.5 to 9.7 percent.

The number of long-term unemployed (those jobless for 27 weeks and over) declined by 323,000 over the month to 6.2 million. In August, 42.0 percent of unemployed persons had been jobless for 27 weeks or more.

In August, the civilian labor force participation rate (64.7 percent) and the employment-population ratio (58.5 percent) were essentially unchanged.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 331,000 over the month to 8.9 million. These individuals were working part time because their hours had been cut back or because they were unable to find a fulltime job.

[Mish Note: In January the number was 8.3 million]

Persons Not in the Labor Force

About 2.4 million persons were marginally attached to the labor force in August, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the
survey.

Table A-8 Part Time Status

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The key take-away is there are 8,860,00 workers whose hours may rise before those companies start hiring more workers.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

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Grim Statistics

The official unemployment rate is 9.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

It reflects how unemployment feels to the average Joe on the street. U-6 is 16.7%, up .2 from last month.

Looking ahead, there is no driver for jobs. Moreover, states are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. Those cutbacks will weigh on employment and consumer spending for quite some time.

Expect to see structurally high unemployment for years to come.

Keep in mind that huge cuts in public sector jobs and benefits at the city, county, and state level are on the way. These are badly needed adjustments. However, economists will not see it that way, nor will the politicians.

Recap

The private sector hiring increase of 67,000 is very weak for a recovery. That number is not enough to keep the unemployment rate steady. However, the unemployment rate comes from the Household Survey (a phone survey), not from actual payroll data.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Go to the source: The Market Ticker

Now this isn’t good…

"The NMI (Non-Manufacturing Index) registered 51.5 percent in August, 2.8 percentage points lower than the 54.3 percent registered in July, indicating continued growth in the non-manufacturing sector but at a slower rate.

Still growth, so good, right?  Uh, there’s a problem, and it’s internal.

the Employment Index decreased 2.7 percentage points to 48.2 percent, reflecting contraction after one month of growth. The Prices Index increased 7.6 percentage points to 60.3 percent in August, indicating that prices increased significantly in July.

Prices up and employment down.

Note that services are 60% of our economy, and now we have a report that says that employment is contracting in that part of the economic spectrum.

Now in contraction are both employment and new export orders, which is a horrifying development from a trade-balance perspective.  The latter is going to cause problems with trade balance…..

Backlogs are also to parity at 50.5, while imports are now at 50.5 as well, so there’s no growth there either – only balance.  Finally, inventory is too high.

This is the worst number since January, which registered a 50.5, and is a monstrous drop from last month, which measured 54.3.  Coming into the end of year (holidays anyone?) and particularly when one considers that services are a big part of getting goods to stores and such, this appears to validate the anecdotes that I’ve been hearing the last couple of weeks where service demand (particularly in the freight sector) absolutely went into the toilet during the last two weeks of August.

I was scratching my head at the manufacturing ISM yesterday, since it flew in the face of the Fed surveys and the anecdotal evidence that I had in various sectors, particularly freight.  This report appears to confirm the anecdotes.  Worse, it appears that it may be validating one of my fears with the ISM manufacturing numbers – the inventory build may well be involuntary, (as I noted last night) and if so, big trouble is right around the corner.

It certainly appears that the pump monkeys got a bit ahead of themselves with their chortling over "no double dip."  I’d say the jury isn’t back on that one yet folks…..

Incidentally, I happen to agree that we won’t have a double-dip, but for a different reason: I don’t believe we ever left the recession in the first place!