More manufacturing job loss for Korea. This has been all planned.
From Xinhua:
Samsung Electronics, the world's largest maker of memory chips, planned to build a semiconductor plant in China to produce NAND flash memory chips based on 10- nanometer class technology, the economy ministry said Wednesday.
According to the Ministry of Knowledge Economy, Samsung submitted an application for the factory construction to the ministry on Dec. 6, before getting approval Wednesday. The ministry made the decision after holding two meetings of the industrial technology security committee in a bid to assess the potential technology leaks and the need for the firm to expand to China.
Samsung planned to start building the plant within the first half of this year after being approved by the Chinese government, according to the ministry. The company aimed to begin the factory' s operation in the second half of next year.
The Chinese plant, where 10-nano class NAND flash memory chips were planned to be manufactured, would be able to produce 100,000 wafers of 12-inch size per month after being built. Samsung began operating its latest factory in South Korea from September last year to mass produce 20-nano NAND flash memory chips.
http://news.xinhuanet.com/english/sci/2012-01/04/c_131342127.htm
Wednesday, January 4, 2012
Reserve Currency Status Doesn’t Last Forever
From Zero Hedge:
Simply put, "it does not last for ever" should be ringing in the ears of every investor in the world with more than a few millisecond return horizon. And neither do any and all chartalist conventions which rely on the articial construct of reserve permanence, for one simple reason - being artificial, means the theory is flawed from the beginning. But it is JPMorgan's Michael Cembalest who frames it the best, "I am reminded of the following remark from late MIT economist Rudiger Dornbusch: 'Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.'"
http://www.zerohedge.com/news/worlds-reserve-currency-whats-past-epilogue
Simply put, "it does not last for ever" should be ringing in the ears of every investor in the world with more than a few millisecond return horizon. And neither do any and all chartalist conventions which rely on the articial construct of reserve permanence, for one simple reason - being artificial, means the theory is flawed from the beginning. But it is JPMorgan's Michael Cembalest who frames it the best, "I am reminded of the following remark from late MIT economist Rudiger Dornbusch: 'Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.'"
http://www.zerohedge.com/news/worlds-reserve-currency-whats-past-epilogue
Tuesday, January 3, 2012
World Bond Issuance to Top $8 Trillion as Rally Seen Fading
From Bloomberg:
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.
Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg.
The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. Coming after a year in which Standard & Poor’s cut the U.S.’s rating to AA+ from AAA and put 15 European nations on notice for possible downgrades, the competition to find buyers is heating up.
“The buyer base for peripheral Europe has obviously shrunk at the same time that the supply coming to the market is increasing, which is not a good combination,” said Michael Riddell, a London-based fund manager at M&G Investments, which oversees about $323 billion.
Investors should be most worried about the period after the ECB’s second three-year longer-term refinancing operation scheduled in February, according to Ignis’s Thomson.
“The amount of liquidity that has been supplied by central banks, with more to come from the ECB in February, suggests the first couple of months will be a sort of phony war as far as the supply is concerned,” Thomson said.
http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.
Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg.
The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. Coming after a year in which Standard & Poor’s cut the U.S.’s rating to AA+ from AAA and put 15 European nations on notice for possible downgrades, the competition to find buyers is heating up.
“The buyer base for peripheral Europe has obviously shrunk at the same time that the supply coming to the market is increasing, which is not a good combination,” said Michael Riddell, a London-based fund manager at M&G Investments, which oversees about $323 billion.
Investors should be most worried about the period after the ECB’s second three-year longer-term refinancing operation scheduled in February, according to Ignis’s Thomson.
“The amount of liquidity that has been supplied by central banks, with more to come from the ECB in February, suggests the first couple of months will be a sort of phony war as far as the supply is concerned,” Thomson said.
http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html
Charting the Extinction of American Disposable Income
From Zero Hedge:
It was the best of times, it was the worst of times. Given today's excitement at a rallying equity market, we are already hearing chatter on raising GDP estimates even though macro data is benefiting from standard seasonal improvements. However, while these good times are rolling for some (who, we are not sure), Sean Corrigan (of Diapason Commodities) points to our real disposable income. The man on the street's spend-ability has seen the worst five years' growth in half a century. For four decades, US real per capita disposable income has risen at ~20% a decade. For the average working man, that is a doubling of disposable income in a typical working life. The last 5 1/2 years, however, have seen no change whatsoever - the worst performance in at least half a century.
http://www.zerohedge.com/news/charting-exitinction-american-disposable-income
It was the best of times, it was the worst of times. Given today's excitement at a rallying equity market, we are already hearing chatter on raising GDP estimates even though macro data is benefiting from standard seasonal improvements. However, while these good times are rolling for some (who, we are not sure), Sean Corrigan (of Diapason Commodities) points to our real disposable income. The man on the street's spend-ability has seen the worst five years' growth in half a century. For four decades, US real per capita disposable income has risen at ~20% a decade. For the average working man, that is a doubling of disposable income in a typical working life. The last 5 1/2 years, however, have seen no change whatsoever - the worst performance in at least half a century.
http://www.zerohedge.com/news/charting-exitinction-american-disposable-income
30 Statistics That Show the U.S. Middle Class Is Dying
From Zero Hedge:
Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing. The statistics that you are about to read prove beyond a doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012.
The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades. Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families. Every single day, more Americans fall out of the middle class and into poverty. In fact, more Americans fell into poverty last year than has ever been recorded before. The number of middle class jobs and middle class neighborhoods continues to decline at a staggering pace.
The following are 30 statistics that show that the middle class is dying right in front of our eyes as we enter 2012....
#1 Today, only 55.3 percent of all Americans between the ages of 16 and 29 have jobs.
#2 In the United States today, there are 240 million working age people. Only about 140 million of them are working.
#3 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.
#4 Since the year 2000, the United States has lost 10% of its middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
#5 According to the New York Times, approximately 100 million Americans are either living in poverty or in "the fretful zone just above it".
http://www.zerohedge.com/contributed/30-statistics-show-middle-class-dying-right-front-our-eyes-we-enter-2012
Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing. The statistics that you are about to read prove beyond a doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012.
The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades. Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families. Every single day, more Americans fall out of the middle class and into poverty. In fact, more Americans fell into poverty last year than has ever been recorded before. The number of middle class jobs and middle class neighborhoods continues to decline at a staggering pace.
The following are 30 statistics that show that the middle class is dying right in front of our eyes as we enter 2012....
#1 Today, only 55.3 percent of all Americans between the ages of 16 and 29 have jobs.
#2 In the United States today, there are 240 million working age people. Only about 140 million of them are working.
#3 According to CareerBuilder, only 23 percent of American companies plan to hire more employees in 2012.
#4 Since the year 2000, the United States has lost 10% of its middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
#5 According to the New York Times, approximately 100 million Americans are either living in poverty or in "the fretful zone just above it".
http://www.zerohedge.com/contributed/30-statistics-show-middle-class-dying-right-front-our-eyes-we-enter-2012
Monday, January 2, 2012
Euro Zone Manufacturing PMI Showing Fifth Month of Contraction
From Reuters over Yahoo Finance:
Euro zone manufacturing activity declined for a fifth consecutive month in December, although at a slightly slower rate than November's 28-month record low, a survey showed on Monday, suggesting the decline would continue in the early months of 2012.
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose slightly in December to 46.9 from November's 46.4, but marked its fifth month below the 50 mark that divides growth from contraction. It was unchanged from an earlier preliminary reading.
Survey compiler Markit said levels of production and new orders fell in all of the euro zone countries covered by the survey for the second month running.
"Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5 percent in the final quarter of 2011," said Chris Williamson, chief economist at Markit.
"The survey also points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing."
The euro zone economy is already stuck in a recession that will last until the second quarter of 2012, Reuters polls of economists suggested last month. They forecast the economy will probably see no growth this year.
Business and consumer confidence in the currency bloc has been eroded by a weakening global economy and by euro zone policymakers' failure to make progress on resolving the euro zone debt crisis. Austerity measures imposed to try and cut high debt levels in the currency bloc risk further undermining euro zone economies this year, analysts say.
The new orders component of the December PMI survey also picked up slightly, to 43.5 in December from 42.4 the previous month, but it remained weak and Markit warned of a persistent and worrying divergence in order levels and output.
"Worryingly, new orders are falling at a far faster rate than manufacturers have been cutting output, meaning firms have been reliant on orders placed earlier in the year to sustain current production levels," said Williamson.
"This is particularly evident in Germany, and suggests that operating capacity will be slashed in coming months unless demand revives."
http://finance.yahoo.com/news/euro-zone-manufacturing-downturn-extends-090015380.html
Euro zone manufacturing activity declined for a fifth consecutive month in December, although at a slightly slower rate than November's 28-month record low, a survey showed on Monday, suggesting the decline would continue in the early months of 2012.
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose slightly in December to 46.9 from November's 46.4, but marked its fifth month below the 50 mark that divides growth from contraction. It was unchanged from an earlier preliminary reading.
Survey compiler Markit said levels of production and new orders fell in all of the euro zone countries covered by the survey for the second month running.
"Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5 percent in the final quarter of 2011," said Chris Williamson, chief economist at Markit.
"The survey also points to a strong likelihood of further declines in the first quarter of the new year, with producers cutting back headcounts, inventories and purchasing."
The euro zone economy is already stuck in a recession that will last until the second quarter of 2012, Reuters polls of economists suggested last month. They forecast the economy will probably see no growth this year.
Business and consumer confidence in the currency bloc has been eroded by a weakening global economy and by euro zone policymakers' failure to make progress on resolving the euro zone debt crisis. Austerity measures imposed to try and cut high debt levels in the currency bloc risk further undermining euro zone economies this year, analysts say.
The new orders component of the December PMI survey also picked up slightly, to 43.5 in December from 42.4 the previous month, but it remained weak and Markit warned of a persistent and worrying divergence in order levels and output.
"Worryingly, new orders are falling at a far faster rate than manufacturers have been cutting output, meaning firms have been reliant on orders placed earlier in the year to sustain current production levels," said Williamson.
"This is particularly evident in Germany, and suggests that operating capacity will be slashed in coming months unless demand revives."
http://finance.yahoo.com/news/euro-zone-manufacturing-downturn-extends-090015380.html
The Most Significant Developments of 2011 with Trends in 2012
From Jesses’ Café:
As always the four great variables in human history are weather, disease, war, and religion. The first two are of God and the latter of men.
Weather spans a wide range of natural phenomenon including earthquakes, and similarly religion includes secular movements and philosophies such as fascism and communism, essentially godless religions that involve the ordering of the relationship of the individual with a higher power that is not supernatural.
As I am comfortable with stagflation as an economic forecast, stocks most likely will not perform well in real terms. However, they could be targeted by the Fed as they implement nominal GDP growth and it puts more weight on selective inflation within the stagnant real economy.
http://jessescrossroadscafe.blogspot.com/2011/12/most-significant-developments-of-2011.html
As always the four great variables in human history are weather, disease, war, and religion. The first two are of God and the latter of men.
Weather spans a wide range of natural phenomenon including earthquakes, and similarly religion includes secular movements and philosophies such as fascism and communism, essentially godless religions that involve the ordering of the relationship of the individual with a higher power that is not supernatural.
As I am comfortable with stagflation as an economic forecast, stocks most likely will not perform well in real terms. However, they could be targeted by the Fed as they implement nominal GDP growth and it puts more weight on selective inflation within the stagnant real economy.
http://jessescrossroadscafe.blogspot.com/2011/12/most-significant-developments-of-2011.html
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