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Recent picture of US (pictured to the left) and THEM (right)
Today was one of those interesting days when we get to see in stark contrast the difference between THEM - the investor class who derive sustenance by sucking the essential fluids from their host economies, and US - the worker class who make things, sell things or service things.   It was a great day for US and it was celebrated by THEM as if it were catastrophe.  Lets look under the hood for a second. *BTW I am writing this at 2:14PM so things will be different by 2:15PM but we live in the now, publish in the future.

A COUPLE OF DATA POINTS TO CELEBRATE

- This morning the Dept of Labor told us that unemployment claims dropped a whopping 32K to a mere 300,000 lucky souls.  This is the lowest number in 7 years.  It is a meaningful  statistic that often forecasts robust job growth, the kind of growth economists have been predicting for this Q2 of 2014.  It made me smile, especially because that means more/better jobs for real people and it doesn't hurt that I am long on the S & P.

- Then this afternoon, as a bouquet to deficit hawks and Keynsian cheerleaders alike  we hear this:

WASHINGTON (MarketWatch) — The U.S. budget deficit narrowed sharply in March, the Treasury Department reported Thursday, as tax receipts climbed and government spending fell broadly.

The government’s shortfall was $37 billion, down 65% compared to the March 2013 deficit of $107 billion.

In March, the government’s receipts of individual and corporate taxes were both higher. Total receipts were up 16% compared to March 2013. Spending, meanwhile, fell 14% in the month. Outlays were lower in most budget categories, including defense, education and agriculture.

Oh My Freakin' Gawd!  The deficit drops 65% year/year... that's great!  It's because of a huge increase in taxes plus some belt tightening... GREAT!

Now on Planet Sane this would be swell news to THEM,

The Masters Of The Universe Haze A Sad
because, well, it's all great news, right?  I mean it's good to have less people laid off, right?   It's good to have less government debt right?  More taxes implies more taxable income, right?

*And the answer would be "right".

However on the planet of THEM (capital: Meadow Lane, Southhampton NY. Population: Dozens darling)  this news doesn't mean squat.  As of this moment (now 2:39PM) the Dow index is down by a huge 1.29%, the S & P is down a staggering 1.67% and the Nasdaq is in catastrophic territory, 2.73%.  This isn't jump ledge stuff and it will all rebound in a matter or hours, days or weeks.  A mote in God's eye.

Why is it down?  Chew on this friendo:

(Chinese) Exports fell 6.6% from a year earlier, slower than the more-than-18% tumble in the previous month, but widely missing a Dow Jones-survey consensus for a 4.2% gain.
Reasons are many but primarily it has to do with the strong Yuan and self-defeating trade policies in Beijing (read: we want our TPP).  Just an example, today it was stated that Chinese solar cells will be 20% more expensive.  Walmart isn't getting the margins they used to on truckloads of crap.  It isn't worth the fuel oil to ship American's For Prosperity commemorative baseballshalf way around the world.  

Well that explains it.  THEM might be faced with paying American's to make, sell and fix stuff.  Our economy may be heating up but Chinese exports are way down.  THEM has a sad :(

If you didn't lose your job today, or perhaps got a better job making, selling or servicing American goods or people DON'T CELEBRATE!  There's a THEM out there who is afraid they might lose a geo-economic point tonight.  Literally dozens of people in the USA are disappointed in todays news and for that we should all be profoundly sorry.

Jimminy Crickets, corporations are people too DARNIT!

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Comment Preferences

  •  You misunderstand... (4+ / 0-)

    This:

    The government’s shortfall was $37 billion, down 65% compared to the March 2013 deficit of $107 billion.

    Is the rate at which our debt grows not total acrude debt, but rate of change. Whats so sickening is just taking 5% off our astronomical military budget would take us from the red to the black.

    But they would first take the bottle from ever need babies hands than make one less weapon of war. Maybe i'm the crazy one, but to me that beyond even insanity to willfully self destructive.

    Our government is an embarrassment at almost every turn, raw greed backed with a sociopathic indifference to the repercussions from these self destructive policies.

    Over 700 billion each and every year and no nation is really such a threat from our already highly advanced massive (in weapons and equipment not people) military. Traditionally governments only ate their resources on such a relative scale during times of war. We have reached a new level of civilization where all the social hardship of overblown military budgets can now be experienced with out all the messiness of actual war.

    When the Republicans are in power they get what they want and when the Democrats are in power they still get what they want. At what point do people finally see it is just theater? ~ Me

    by fToRrEeEsSt on Thu Apr 10, 2014 at 08:26:00 PM PDT

  •  I suspect that (0+ / 0-)

    the job numbers are just rebound from the winter slowdown. Not that that's a bad thing, it just means we're still at the same pace we've been for the last couple of years.

    The lower deficit is disturbing, although the article cited goes on to say

    A Treasury official said that with calendar-related adjustments, the deficit would have been more than twice as large in March. Because March 1 was on a weekend, for example, certain payments that usually would have been made in March were instead made in February.
    That would be better, but a $413B deficit (<2.5% GDP) barely covers the demand leakage from our current accounts deficit. This means any growth would have to come from reduced private sector savings, which would add more drag in future years.

    The deficit should be made much larger (>$1T) by reducing or eliminating the payroll tax and increasing spending on infrastructure, education, non-Carbon energy, and entitlements.

    I'm also in favor of reducing the defense budget and raising taxes that fall mainly on the top 5% of the income/wealth distrubution (including a financial transactions tax). These policies will reduce the deficit (and aggregate demand) in the short term, but should result in better income and wealth distributions over the medium and long terms.

    ...if you plant ice you're gonna harvest wind. (RH/JG)

    by telebob1 on Fri Apr 11, 2014 at 12:14:52 AM PDT

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