Latest musings by Chuck Butler…
“Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.
I guess I have more in common with a Chinese student than you would have thought, because I would have been laughing out loud too!
There’s a story running on the news wires this morning that the U.S. recession ended in May… Wait a minute! Did the ISM Manufacturing Index soar back to the expansion number of 50 in May? No… How does 42.8 sound? Now… We have to go back to January of 2008, when I kept writing about how the U.S. had entered a recession, although the Gov. officials (read dolts), and the NBER, the official recession caller, said otherwise… The reason I was so adamant about the recession at that time is that the ISM Manufacturing Index number slipped below 45, for the second consecutive month… My research over the years showed that any time that happened, the NBER would follow it up months later with a call that we had entered a recession!
So… “is this time going to be different?” I think NOT! And… By the by… That saying really gets my blood boiling, as it reminds of the dolts that kept saying that about 8 years ago!
And here’s how I view this manufacturing thing… First of all you have to deal with delays and such, but in a simplistic view… The dollar was strong through February, and the ISM Manufacturing Index was in a free fall… That makes sense, right? The cost of exports was increased, thus it affects manufacturing… But… The dollar began its current decline on March 1st… And by May, the ISM is recovering… Dollar down, manufacturing up… Want to have manufacturing a part of an economic recovery? Guess what needs to happen… Awww… You know the answer!
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