July 3, 2013

More Pablum From Politico’s Gerstein: ‘Obama Strikes Cautious Balance on Egypt’

Josh Gerstein at the Politico is on the opposite of a roll today. This afternoon (noted at NewsBusters; at BizzyBlog), Gerstein was barely done covering how “U.S. eases away from Egyptian President Mohamed Morsi” when the military announced that Morsi had been deposed by the military, ultimately in favor of, according to the Associated Press, a temporary “government of civilian technocrats.”

This evening, he’s trying to position Obama as a great thinker weighing his options instead of as the guy who has been on the wrong side of freedom and democracy ever since Morsi assumed dictatorial powers in late November of last year, which should be brought up every time someone falsely claims that Morse headed a legitimate, democratically elected government (bolds are mine):

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AP Continually Trumpets ‘Best in 5 Years’ Economic News, But Ignored Two Grim Milestones in Today’s Service Sector Report

I suspect that a number of people are tired of the establishment press telling us how so many economic reports have “best in” or best since (specific month in) 2008 (or 2007)” figures, especially the ones that still don’t reflect what anyone would consider acceptable in normal economic times. Just a few examples include housing starts, housing permits, new home sales, existing home sales, initial unemployment claim, and the unemployment rate.

That doesn’t bother me too much, though the press missed quite a few “best since” figures during the Bush 43 presidency. What’s intensely annoying is when “worst since” figures, which the press studiously identified during the Bush era, hit them in the face in today’s economy and are downplayed or ignored. A pretty good example was today’s Non Manufacturing Index from the Institute for Supply Management, which, at 52.2%, hit its lowest point since February 2010, and had two key components which were the worst in almost four years. Christopher “Gone Are the Fears That the Economy Could Fall Into Another Recession” Rugaber at the Associated Press, aka the Administration’s Press, reported the primary decline but ignored the components while trumpeting an uptick in the employment line item (bolds are mine throughout this post):

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What a Joke: Politico Tries to Run Interference For Obama’s Last-Minute Morsi Switcheroo

Apparently, one pathetic last-minute speech by Eqypt’s Mohammed Morsi was sufficient to convince President Barack Obama, who has spent several days and untold amounts of worldwide capital defending the Muslim Brotherhood leader’s staying on the job in the face of what may have been the largest pro-democracy demonstrations in human history.

The Politico frantically tried to run interference for Obama opportunistic change of heart today, running an item which was apparently called “U.S. Eases Away from Egyptian President Mohamed Morsi.” The item was up so briefly that it was quickly replaced, while the headline just mentioned still remains in the browser window’s title bar:

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USAT Email: ‘Morsi ousted as president; Egypt constitution suspended’

Filed under: National Security,Taxes & Government — Tom @ 3:46 pm

The linked article isn’t as clear-cut:

Morsi’s fate unclear as army tightens grip on Egypt

In what opponents bitterly described as a “coup,” Egypt’s military moved tanks and troops into Cairo on Wednesday to prepare for the almost certain ouster of President Mohammed Morsi only minutes after he rejected their ultimatum to yield to the political demands of mass protests or step down.

In imposing its deadline two days ago, the military had warned that if Morsi did not act, they would step in to suspend the constitution and Islamist-dominated parliament and set up a civilian leadership council.

The state news agency reported late Wednesday that the army plan, to be announced shortly, would include a brief short period of interim rule to be followed by presidential and parliamentary elections.

The agency said opposition figure Mohammed ElBaradei and religious leaders, who met earlier in the day with the army chief of staff, would issue the statement spelling out details of the plan.

Members of his Muslim Brotherhood say his whereabouts are uncertain as communications are disrupted between the country’s top civilian leaders.

… The clampdown came only hours after a meeting between army chief Gen. Abdel Fattah al-Sisi and ElBaradei, Egypt’s leading democracy advocate, who represents the opposition National Salvation Front coalition and the youth groups leading anti-Morsi protesters.

Also in attendance to discuss the military’s proposed political “road map” were Sheik Ahmed el-Tayeb, grand imam of Al-Azhar mosque, and Pope Tawadros II, patriarch of Egypt’s Coptic Christian minority.

Members of the Muslim Brotherhood and the Freedom and Justice party members say they refused an invitation to take part in the meeting.

That’s okay. Terrorists won’t negotiate with others, so there’s no reason to negotiate with terrorists.

My hopefully wrong prediction is that we’ll see the Muslim Brotherhood more visibly become the terrorist group they have always been.

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UPDATE: Liberal Kirsten Powers (HT PJ Tatler) –

PowersTweetOnObamaEgypt070313

June ISM Non Manufacturing: 52.2%, Down from 53.7% in May and Missing Expectations of 54.2% (UPDATE: Combined Index Lowest in Almost 3-1/2 Years)

Filed under: Economy — Tom @ 10:09 am

Predictions are for a reading of 54.4% vs. 53.7% in May.

Here’s the Institute for Supply Management’s report — and we have a pretty big “oops” (bolds and most paragraph breaks added by me):

Economic activity in the non-manufacturing sector grew in June for the 42nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The NMI™ registered 52.2 percent in June, 1.5 percentage points lower than the 53.7 percent registered in May. This indicates continued growth at a slightly slower rate in the non-manufacturing sector.

The Non-Manufacturing Business Activity Index registered 51.7 percent, which is 4.8 percentage points lower than the 56.5 percent reported in May, reflecting growth for the 47th consecutive month.

The New Orders Index decreased by 5.2 percentage points to 50.8 percent, and the Employment Index increased 4.6 percentage points to 54.7 percent, indicating growth in employment for the 11th consecutive month.

The Prices Index increased 1.4 percentage points to 52.5 percent, indicating prices increased at a faster rate in June when compared to May. According to the NMI™, 14 non-manufacturing industries reported growth in June. (out of 18 — Ed.)

Respondents’ comments are mixed about business conditions depending upon the industry and company. The majority indicate that growth has been slow and incremental; however, it is still better year over year.

The key GDP-driving components all stayed above the 50% expansion cutoff, but 2 of the 3 fell significantly:
- Business activity/Prodcution — 51.7, down from 56.5
- New Orders — 50.8, down from 56.0
- Backlog of Orders — 52.0, up from 51.5

I suspect that the weighted combined indices are at the lowest level in quite a while, and am looking into that right now.

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UPDATE: The NMI itself is the lowest level since the 51.7% in February 2010.

At 52.04, the combined index — weighted 12% for manufacturing and 88% for non-manufacturing, which was the relationship several years ago (I’ll check on that shortly to see if it’s changed at all) is the lowest since 50.97 seen in January 2010 (Feb. 2010 was 52.18):

ISMconsolidatedIndixJune09toJune13

With the caveat that the indices are of sentiment and don’t represent “hard” economic data, it looks like Recovery Summer, at least in any meaningful sense from the vantage point of purchasing managers, has been cancelled for the fourth year in a row.

UPDATE 2: Additional observations from Zero Hedge

The New Order components was absolutely destroyed printing at 50.8, down from 56.0, and the lowest since July 2009. Furthermore, Business Activity tumbled from 56.5 to 51.7, far below consensus of 56.8, and the lowest since November 2009. The only good indicator on the face of this absolute devastation was the Employment index which mysteriously rose by 4.6 to 54.7, the highest since February: those part-time jobs must sure be accretive to businesses.

UPDATE 3: Manufacturing is 11.9% of GDP, according to the National Association of Manufacturers. I’m not going to change the chart above for 0.1%, but I will note that it changes the two comparison points above to 50.96 and 52.05, respectively, and it leaves the “worst in 41 months” claim intact. A gentleman I spoke with at ISM agrees that it’s conceptually accurate to include everything else, including the government’s portion of GDP, as part of “Non-Manufacturing.”

Initial Unemployment Claims (070313): 343K, Down From Revised 348K Last Week; NSA Claims Down Almost 10% From Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 9:26 am

Predictions were for 345K seasonally adjusted claims.

Here the DOL annuncement:

SEASONALLY ADJUSTED DATA

In the week ending June 29, the advance figure for seasonally adjusted initial claims was 343,000, a decrease of 5,000 from the previous week’s revised figure of 348,000. The 4-week moving average was 345,500, a decrease of 750 from the previous week’s revised average of 346,250.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 333,920 in the week ending June 29, a decrease of 2,595 from the previous week. There were 369,826 initial claims in the comparable week in 2012.

This year’s seasonal adjustment factor of 97.4 is a bit lower than last year’s factor (98.8) for the same week. If last year’s factor had been used on this year’s raw claims, seasonally adjusted claims would have been 5,000 lower (333,920 divided by .988) is 338K, rounded).

This report was neutral. Especially after building in a typical 2k-3k rise after revisions, there’s no reason to believe things are getting much better or worse.

June ADP Employment Report (070313): +188K Private-Sector Jobs; See Conference Call Notes

Filed under: Economy — Tom @ 8:12 am

Predictions are for an increase in private-sector employment of 160,000, per Business Insider.

The topside page at ADP with the magic number will be udpated at 8:15 a.m.

Programming note: I’m going to sit in on the ADP conference call at 8:30, so my unemployment claims post won’t go up until after 9.

UPDATE: I can’t get through to the site, but Business Insider says the number is 188,000.

HERE’S the announcement:

Private-sector employment increased by 188,000 from May to June, on a seasonally adjusted basis.

Highlights:
- Small businesses (1-49 employees) +84,000
- Medium businesses (50-499 employees) +55,000
- Large businesses (500 or more employees) +49,000

Last month was revised down by a puny 1,000 to 134,000.

Now, on to the call. If there are noteworthy comments or answers to questions, I’ll add them below.

Mark Zandi’s comments:
- Number was “solid” — guessing at 175K for overall employment pickup in Friday’s BLS report.
- reflects what’s been happening consistently for 2 years.
- Job market is “remarkbly stable” and is “encouraging” despite “fiscal headwinds” … “quite gracefully” haven’t caused the harm expected. (zheesh — Ed.)
- GDP could suggest weakening in jobs growth, but not yet.
- “Fiscal headwinds” should fade by year-end.
- Also expected weakening b/c of health care reform prep among smaller businesses, and there’s “some evidence of that” is certain sectors. But had anticipated more and it “hasn’t shown up as clearly” as originally thought. Yesterday’s one-year delay in employment mandate “augurs well.”
- He thinks the unemployment rate will drop by 0.5% during each 12-month period (June 2014 7%, June 2015 6.5%), which might signal the end of QE as Bernanke is predicting, which will cause interest rates to go up.
- Final comments — Gain are broad-based, construction jobs picked. Fingerprints of housing recovery are helpful. Vehicle sales are “back to normal” (?????–Ed.) “Today’s numbers … are quite encouraging.”

Q&A (Zandi throughout):
- There has been indication of “some slowing” in small businesses (50 employees and lower), but “not as clear” this month. HC reform is having “very modest” impact, not to the degree detractors are claiming. (He did acknowledge the possibility that those claiming job growth would have been better, but basically says, “You can’t prove that.” Still a possible “cloud” in future)
- (based on my question) Not in a position to evaluate Full-time vs. part-time job growth, it is a possibility that this is happening (move to more PT), but hrs./employee os not changing. Is looking into getting better data to break out in future reports.
- Anticipates possibility that some labor force growth increase may slow down the unemployment rate decline.
- Interest rate jumps before job market improves could pose a problem. Housing market is key to all of this working out. Fed must manage increases in LT interest rates, and can’t let them happen before job market really recovers.
- Fed tapering might start in 3-6 months, and interest rate increases shouldn’t happen for 2 years.
- (Christian Science Monitor questioner wondering why “fiscal headwinds” didn’t hurt) Zandi say surge in stock market helped offset (???? — Ed.), gave businesses a reason to “hang tough”; “surge” in house prices has also been important to consumer spending. Oil prices have been down all year, which is a big plus for all households. (on what planet? — ed.) Thinks govt. jobs data in recent months might soften after revisions. GDP is “pretty soft.” Q213 GDP growth is tracking at 1.6%-1.7%, and he’s blaming tax increases and spending cuts for that.

Wednesday Off-Topic (Moderated) Open Thread (070313)

Filed under: Lucid Links — Tom @ 6:05 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

Positivity: Lincoln bishop — strengthen faith to restore religious freedom

Filed under: Positivity — Tom @ 6:00 am

From Lincoln, Nebraska:

Jul 2, 2013 / 12:07 am

The recent threats against religious freedom are an opportunity for the faithful to grow closer to God through prayer, fasting and penance, said Bishop James C. Conley of Lincoln, Neb., in a recent column.

“When God’s people start living like everyone else, there is trouble in store,” he said in a June 27 article for the Southern Nebraska Register.

Throughout the Old Testament, he explained, we see that as the Israelites wandered from God, they were made captive by pagan nations.

“The Lord takes no pleasure in the oppression of his people. But he permits it, to call us back to faithfulness,” he said.

Even today, believers must turn back to God and remember that “we have been set apart for God’s sacred purpose.”

The Church must continue to serve God, he said, otherwise we risk “becoming captive to hostile powers.”

“We know what it looks like when the Church forgets her holiness: Daily discipleship gives way to weekly churchgoing. Tough demands of the Gospel are ignored. Prayer, fasting, and penance are bypassed.”

Already we see the threats against religious freedom, Bishop Conley said, in the form of government and cultural movements that oppose natural law.

“This, I suspect, is the deeper cause of the many present threats to religious freedom in America,” he observed. “When Catholics spend six days of each week living like everyone else, we find that our right to practice our faith in everyday life starts to come under threat and even disappear.”

“The prophets tell us that this is no coincidence,” the bishop warned. …

Go here for the rest of the story.