'A Huge Delta'

Need more proof that the so-called recovery is a fraud? Here it is, courtesy of a post at the Wall Street Journal's Real Time Economics blog, in a post entitled "CFOs: Revenue Surge Needed to Boost Hiring":

Despite double-digit gains in corporate earnings over the past six quarters, it would take much stronger-than-expected revenue growth for businesses to be comfortable adding employees, according to a new survey.

 

Chief financial officers at large North American companies polled by Deloitte LLP said it would take a 20% surge in revenue before they felt comfortable adding to their payrolls.

The quarterly survey released Thursday found that nearly half of respondents would seriously consider adding employees if revenues rose 20%, but few would be moved by a 5% increase. A 10% bump in revenue would only be a major hiring consideration for 11% of CFOs.

Worse yet, perhaps, actual growth isn’t expected to reach such heights: respondents estimate top line growth at North American companies will be just 8.2% this year. (This is, however, a rosier picture than the fourth quarter when respondents forecast 6.5% for the coming year.)

“There’s a huge delta around what CFOs are expecting it to take for hiring to come back and what actual growth is,” said Sanford Cockrell III, national managing partner of Deloitte’s CFO Program.

In my view, the news also proves a few other things: many of our leaders are incompetent or liars, tabloid astrologers have more forecasting ability than most equity traders, and corporate America is oblivious to the pain that their greed, selfishness, and short-sightedness will soon bring their way.

Comments

[Doable Finance]

For now, that seems to be an unreachable goal. If the financial chiefs are forecasting correctly, it might be sometime that we see some real gain in employment.

[US stock market]

Leading economist in the US market claims that the US stock market has the potential to rise over 50% in the next couple of years. He recommends buying options, or to be fully invested in stocks but buy protection through out of the money put options, for example S&P puts.

[Dave]

Businesses aren't started with the goal of hiring workers. The goal is to make money. For what reason would management in their right mind hire employees that they can't afford? So the unemployment rate goes down?

Most small businesses today are just trying to stay in business. Adding employees who aren't needed and can't be afforded will simply place all the employees jobs and even the business itself in jeopardy.

Considering the crew we have in Washington running the show and current economic conditions - what prudent, conscientious management team wouldn't take a "wait and see" approach to hiring?

[Dig Deeper]

Be careful about watching top line growth as measured in dollars. Given our current inflationary climate this should grow automatically. As a financial professional working exclusively in manufacturing for the past 20 years the key determinant in hiring is and always will be demand as measured in units of output; houses, vehicles, etc. Unfortunately, you will find that metric rising much slower pushing hiring furhter out than most expect.

[Sandra]

Of course it's bogus! Or have you ever thought that our economic situation was actually getting better???

[The scope is on us....bulls eye!]

Here's The Setup For The Con Of The Decade

"That's exactly backward: the entire point is for Mr. and Mrs. Taxpayer to pay high yields on Treasury debt, owned by the Financial sector's Oligarchs. The Con is to stripmine the public coffers, then impose higher rates and "austerity", buy the debt with the cash plundered from the public, and then sit back and enjoy risk-free returns as taxes are raised on the remaining tax donkeys. Inexpensive Bread and Circuses (SNAP food stamps and the political theater of the two parties staging a partisan "fight to the death") will keep the peasantry entertained and complicit."

http://www.zerohedge.com/article/guest-post-heres-setup-con-decade

[Nemesis]

http://www.bls.gov/news.release/cpi.nr0.htm

Reported CPI is accelerating at 3- and 6-mth. annualized rates of 5.7% and 4.2%.

http://research.stlouisfed.org/fred2/data/DSPI.txt

DPI is growing at 3- and 6-mth. annualized rates of 6.3% and 4%, implying CPI-adj. rates of 0.6% and -0.2%.

http://research.stlouisfed.org/fred2/data/PCE.txt

PCE is growing at 3- and 6-mth. annualized rates of 5.4%, implying CPI-adj. rates of -0.3% and -1.2%.

http://research.stlouisfed.org/fred2/data/A576RC1.txt

Wages and salaries (56% of DPI) are growing at 3- and 6-mth. annualized rates of 3.4% and 3%, or CPI-adj. rates of -2.3% and -1.2%.

http://research.stlouisfed.org/fred2/data/M2SL.txt

M2 is growing at 3- and 6-mth. annualized rates of 4.5% and 4.7%, or CPI-adj. rates of -1.2% and 0.5%.

http://research.stlouisfed.org/fred2/data/INDPRO.txt

IP is growing at 3- and 6-mth. annualized rates of 6.8% and 4.5%, or CPI-adj. rates of 1.1% and 0.3%

http://www.cbo.gov/ftpdocs/120xx/doc12041/December_MBR_Jan2010.pdf

http://www.cbo.gov/ftpdocs/121xx/doc12126/MBR_April_2011.pdf

Federal gov't spending (including personal transferS) is growing at ~22% annualized in Q1 (~5% contribution to annualized Q1 nominal GDP), which is ~14% after adjusting for CPI (3.5% to annualized GDP less CPI).

http://www.consumerindexes.com/

Thus, 70-72% of the US economic activity is contracting in CPI terms, suggesting that outside of gov't and production/investment (snapback from the depression-like trough), housing and household income and spending (as reflected by the CMI at the link above) are not growing or in recession in real terms.

This will not be apparent in official gov't pre-election-year propaganda until 1-2 qtrs. hence from the revisions and the GDP and PCE deflators catching up to PPI and CPI, largely associated with rising energy costs and the effects on PCE and on profits and investment later in '11.

In this context, the stock market is discounting 3.5-4% real GDP when 0.3-1.4% is the implied trend rate for '11 YTD (as in '08 and late '79 and early '80).

But, as always, none of this matters until it does . . .

[Top on down...complete fail!]

Taibbi: Justice Dept Has No Appetite To Take ANY Cases Against Wall Street Executives

http://www.ritholtz.com/blog/2011/04/taibbi-justice-dept-has-no-appetite-to-take-any-cases-against-wall-street-executives

[Guest]

If you redo the survey and ask about total workers hired, you will get a very different answer than if you querry about US workers. Many firms have off-shored most of their unit dependant tasks (i.e. touch labor, much of the first line of customer support), so what Deloitte is really asking is "How much does your business need to grow before you will increase your administrative and Home Office staff?" Quite a lot is the answer, and it is not surprising.

[Nemesis]

Happy Tax Day (well, Mon. officially this year)!!!

Friends, consider that it takes until after Sept. each year for the typical US household to have any net income after all taxes, mortgage/rent, and cost of auto transportation (car payment, gasoline, maintenance, insurance, etc.). Most of us get three months' worth of wages, salaries, pension, or transfer income to spend, which does not take into account utilities, out-of-pocket sick care costs, and so on.

Moreover, the bottom 80% of US households avg. $80,000 of net wealth or less, of which 70-75% is in the form of unreal estate equity of falling property values.

That leaves the typical US peasant-debtor net wealth of no more than $18,000-$19,000, which is no more than 40-45% of the annual median US household income.

Thus, at least 80% of Americans are now, or will become, utterly dependent upon federal gov't elder transfer payments in late life promised by a de facto insolvent gov't destined to become grimly austere in the decades ahead.

If you have not done so, and you are not well informed about Peak Oil, net energy, population/ecological overshoot, and the Olduvai Theory, I strongly suggest that you become informed ASAP and prepare to reduce your liquid fossil fuel consumption by 50-75% over the next 10-20+ years.

This will require doubling and tripling up for housing, auto transport, utilities, food, etc., increasing persons/household from 2.5 to 4 or higher; reducing autos/household to an avg. below 1; and cutting per capita standard of material consumption back first to the levels of the 1950s-60s, then 1920s-30s, and for the bottom half of US households a decline back to the mid- to late 19th century.

It sounds implausible or impossible, but that's because the mass media, politicians, e-CON-omists, CEOs, advertisers, and celebrities aren't telling you about it the likely implications of Peak Oil and population overshoot. That you don't know means you are not prepared to know "why" the emerging events are happening and thus are susceptible to being duped into blaming the Demon-crats, Republi-CONs, Al Qaeda, terrorists, fat finger checks, natural disasters, OPEC, Iran, vengeful tribal desert sky gods, Satan, Liberals, Conservatives, global warming (or cooling), climate change, and who knows who or what else. ("Ecological footprint" and "carbon footprint" are euphemisms and inescapable indirect references to population overshoot, although population growth is perhaps among the last great taboos.)

What they won't tell you is that the underlying intractable structural problems the US (and world) faces started at least 25-40 years ago when US domestic oil production peaked and began its inexorable decline to date, resulting in a multi-decade-long, Boomer-related, peak-Oil Age era of deindustrialization and financialization of the US economy.

Now we face the increasing structural effects of global peak oil production and peak and falling oil exports and net energy, as well as peak population and ecological overshoot of the planet's carrying capacity on an unprecedented scale.

There is no political ideology or economic theory that has any prescriptions for what we face, apart from the ability of ecological/biophysical economics to explain why conventional economic theories are fatally flawed and to suggests some alternative approaches.

Why do I post here on a relatively obscure, albeit laudable, Web site (no offense intended in the slightest to Mr. Panzner)? One must do anything and everything one conceives practically possible to get the word out to as many people as possible as soon as possible to encourage a critical mass of awareness and to overcome the cognitive dissonance (owing to fixed cultural and ideological memes conditioned by religion, mass media, etc.) in a timely fashion; otherwise, sufficient time required to prepare and successfully adapt to the onset of the post-Oil Age will be lost forever, setting up tens of millions of us to be utterly unprepared, fearful, irrational, and reactive, increasing the probability that we will succumb to barbarism when it is not necessary (or certainly not desirable, one hopes).

[kevinearick]

Credit & Magnetic Effect

Credit from authority is welfare in return for conforming behavior, positive feedback, which sets up the black hole. All the people flipping and refinancing, getting money for no real work, naturally spoiled their children into a vegetative entertainment state, breeding them into empire zombies. Now that they are all addicted, the banks reverse the motor, and seize all the property, by lowering marginal income, inflating commodities, and depressing real estate. Inflation and deflation nets to 0.

When they reverse the engine, all the incorporated communities importing food and energy at massively subsidized prices get hyperinflation whiplash. Not only is authority ignorant of where credit needs to go, but it also naturally penalizes those not participating in the zombie economy, increasing the size and speed of the black hole casino.

Adjust accordingly. Just like you cannot find God through authority, you cannot allow authority to channel credit through your personal life … neither a creditor nor borrower be. When you have surplus, give it to those being denied credit, a little at a time at first, and see if it finds its way back to you.

If you confine your “mistakes,” which become investments in intelligence, to your person, and otherwise help others, creating multiplier effects, you will naturally create an orbiting system around yourself. Most television evangelists, politicians, and CEOs do the opposite; they present themselves as personally virtuous and otherwise create large negative effects on others, who willingly walk into the ponzi casino, largely because they are specifically bred to seek something for nothing – the sinners going to church so they can re-energize to sin ever more the next week.

It’s all in the programming, but your hardware ramping makes the fusion/fission reactor possible. I am not giving you the blueprint to work off because I want you to have an equity stake rather than a short-term gain in your new governance models, which requires the thinking this planet needs, and will be a portfolio of independently operating magnetic centers with orbiting cylinders of delay mechanisms with increasing dimensions.

Like 3 phase electricity, authority reverses by running the economy on cylinders, like the motor in your car. A depression/crash occurs when you cause simultaneous reversal, by extending and contracting cylinder cycle times. The extent depends upon how long you lock it up.

If you place a hundred skaters on a rink, they will soon begin skating in the same direction of their own volition, with a few exceptions, in each direction over time, depending upon individual magnetic effect. Design with troubleshooting in mind to create the largest possible middle class.

[sharonsj]

The media is the main reason Americans are so fucking stupid. Last week el Rushbo said: "Helping the poor does not make America great. Helping the poor, throughout history, is a failed experiment." That's the conservative attitude about anybody who isn't rich.

By the way, el Rushbo, despite claiming he knows everything, is completely wrong. It is an absolute fact, based on archeological evidence, that even the cavemen took care of their elderly and sick.

Oh, and at the same time, conservatives blame the lessening of charitable giving on the liberals. Maybe one of you Tea Partiers could explain that one to me?

[Jim A]

Guest had a thought among the comments above. Most of our corporations just have headquarter staff left, all of the workers jobs have gone to China. During the prosperity credit bubbles, federal, state, and local governments larded up with added staffing, high pay and benefits. Now the foundations of our illusions are crumbling.
Barack and the Democrats in congress shored up the government sector for the last two years with mindless out of control spending. But it has been to no avail. Because they did nothing to help the private sector businesses.

[kwark]

Our "leadership" in Congress and Mr. Obama are are certainly not incompetent. They're VERY good at political theater - what passes for governing these days. The show they're providing involves a whole variety of distractions, from pointless wars to impassioned "debate" about the value of further tax breaks for the wealthy. They're definitely liars though as your posts demonstrate.

[Nemesis]

Remember, the rentier-financier oligarch caste (top 0.1-1% of households by net wealth and income) do not need the productive economy, as they earn perpetual economic rents from owning financial capital (~$21 trillion today, which is 150% of US nominal GDP) and the compounding interest, dividends, and capital gains from debt-money expansion of 6-7% in perpetuity; that is, until '08.

http://www.oftwominds.com/blogapril11/setup-con-of-decade4-11.html

Now that private debt-money can no longer grow, i.e., the bottom 80-90% peasant-debtor caste cannot pay back what they had to borrow to sustain their material standard of consumption to be able to afford to work, the rentier-financier oligarchs are now using the sovereign debt-money full faith and credit to bail their losses and as collateral to lever up private equity buyouts and to buy farmland, commodities (leveraged futures, primarily), and private mercenary security and paramilitary forces. They care little that the debt-money liabilities that they are encouraging to sustain their legitimacy and power will render eventually the sovereign state bankrupt and unable to tax the peasant-debtor caste to pay the interest and redeem the US gov't debt in perpetuity.

The top 0.1-1% rentier-financier oligarchs need the gov't for protection and to plunder the labor product of the masses. Once the gov't can no longer issue more debt-money obligations and the Fed print debt-money to sustain the process, the gov't defaults, shrinks by some stunning amount, social programs and transfers to individuals will be cut and then eliminated. The military, vital central gov't functions, "homeland security", and the federal courts will be maintained at the expense of everyone and everything else.

No Medicare. No Social Security. No Medicaid. No unemployment payments. State and interstate highways will be toll roads. Public utlities will be privatized. Police forces will disband to be replaced by private security for the oligarchs.

Private and public sick care will collapse from lack of incomes and tax receipts to afford it. Professional middle-class physicians, clinicians, attorneys, engineers, accountants, etc., will become proletariatized, experiencing a collapse in their socioeconomic status and security.

I can envisage a time in the not-too-distant future when most corporations will contract and revert to private ownership (after the stock market crashes 80%+); and the top 0.1-1% will own (directly and indirectly) most of the gov't and corporate debt; and they will demand that virtually all social programs be eliminated and public lands be sold to them at pennies on the worthless dollar. The result will be a kind of "neo-feudal, private corporate-state" in which virtually everything of potential economic value is owned by the top 0.1-1%, including water, arable land, ports, rivers, structures, gold, mineral rights, and so on.

As such, to get glimpses of the future, imagine "Soylent Green", "Rollerball", "Clockwork Orange", "Nineteen Eighty-Four", "This Perfect Day", "Mad Max", and "Z.P.G." (Zero Population Growth), if you can (for the younger readers, read the novels or watch the videos, if you are unfamiliar), as I suspect that this is where the human ape society is heading.

[Little Red Ridinghood meet big bad wolf]

Paul Ryan's $30 Trillion Burden, Where Is Peter Peterson?

A transfer this large to the insurance industry and health care providers would have an enormous impact on the living standards of our children and grandchildren. But none of the endless group of Peterson funded organization -- the Concord Coalition, the Peter G. Peterson Foundation or even their invented presidential candidate Hugh Jidette -- have issued any warnings about the devastating impact that the Ryan plan will have on the living standards of our children and grandchildren. This silence could even cause one to question the sincerity of Mr. Peterson and his employees.

http://tpmcafe.talkingpointsmemo.com/2011/04/16/paul_ryans_30_trillion_burden_where_is_peter_peter/

[standard deviation]

Herbert Hoover

Jimmy Carter

Obama

.

[Fu]

Massive Rise In livestock Thefts Reported In Britain
http://www.liveleak.com/view?i=dbc_1303083880

[sharonsj]

So the scientists finally found that bee colony collapse was caused by pesticides. The pesticides in question have been banned in Europe, but of course the crap is still being used in the U.S. Why? Because Congress is bought and owned by corporations.

Not enough bees means a lot less fruits and vegetables. If you think $4 for a cauliflower is outrageous now, wait until a cauliflower is as rare as a four-leaf clover. So we can't eat any fish from the Pacific (Japanese radiation). We can't eat tuna (mercury). We can't each anything from the Gulf of Mexico (BP oil). You won't be able to afford beef either (corn is going for ethanol).

Finally, the media isn't covering the foreclosure crisis any more. This year there will be more foreclosures than last year, along with more bankruptcies and more banks going under. There is no recovery and I wonder how long it will take for the truth to come out?

[Where the hell is superman?]

...but Captain Courageous in no where to be found.

Captain Obvious (S&P) vs. Captain Oblivious (Tim Geithner)

The flashing fuchsia elephant at the core of our economic, and thus budget problems – remains the response to the financial homicide imparted by the big-banks and abetted by the Federal Reserve and the Treasury Department. There was a choice to be made in Washington in the fall of 2008 - smack Wall Street into place, do a good-ole free-market – you fail if you deserve to fail, we’ll protect consumer assets and that’s it maneuver - and deal with possibly intense, but definable fall-out for a short period. Or - lavish bailout upon guarantee upon subsidy upon asset purchase upon the lowest rates in our nation’s history on Wall Street, and wring the very possibility of a recovery out of the general economy from the get-go. Of course, the brilliant minds of our exceedingly-privileged, out-of-touch, economic leadership decided on the former, and are acting their asses off to pretend that that decision, in itself, wasn’t the cause of the economic problems that followed, from Main Street anemia, to commodity inflation to international disdain and a weak currency that has no right to even have the purchasing capacity it still does.

http://www.nomiprins.com/thoughts/2011/4/18/captain-obvious-sp-vs-captain-oblivious-tim-geithner.html