Monday, May 16, 2011

Mixed NYS manufacturing survey results

As I've said before, I don't like following the Empire manufacturing index because I don't believe it is a good representation of all industries in the US, but the market is watching the data so we should at least look at the numbers.

The general business conditions index fell ten points to 11.9 and the new orders index fell five points to 17.2.

The more disconcerting number has to be the prices paid index which rose to 69.9, its highest level since mid-2008. This is the second highest level ever fore prices paid and the run up of prices looks eerily similar to the increases we saw in 2008 right before the Lehman collapse.

You'll probably see lots of headlines on the US breaching it's debt limit today (I'll cover that in a separate post sometime this week), but another misleading headline seems to be making it's way around the intertubes - SOCIAL SECURITY LOST A TRILLION LAST YEAR!

Hmmm, not exactly.

What the trust fund said was that the level of unfunded liabilities grew by about $1.1 trillion last year (from $5.4 trillion to $6.5 trillion). This is a STAGGERING sum, but it is not that the fund LOST a trillion, but rather some of the inputs into their formulas have changed for a projection over the next 75 YEARS. Remember the government economists that projected budget surpluses for 2000-2020 back in 1998? How did that work out? The point is that any forecast is difficult but a 75 year forecast is little more than a dart thrown at a dartboard.

Social Security is well funded as it exists today but increasing disability claims, longer life expectancy due to medical advances and lower contribution rates due to the great recession are all going to impact the long-term viability of Social Security in the year 2085.

I'll keep posting stories on Fukushima and maybe someone will remember that this is probably the story of the year, if not the decade. However, in our twitterfied culture we can't be bothered to focus on a story that takes more than 8 minutes to review.

Tokyo Electric Power Co. said fuel in other reactors at its damaged nuclear plant may have melted, after confirming rods in the No. 1 unit had fallen from their assembly, potentially delaying plans to resolve the crisis.

“The findings at the No. 1 reactor indicate the likelihood that the water level readings in the other reactors aren’t accurate,” Junichi Matsumoto, a general manager at the utility known as Tepco, said today. “It could be that a meltdown similar to that in the No. 1 reactor has occurred.”

I can guarantee you that more people in the US were concerned about the Sony PS3 network outage than the Fukushima reactor this weekend. :(


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