Industrial Insight

Germany exports and manufactures…

November 24, 2010
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http://www.washingtonpost.com/wp-dyn/content/article/2010/11/23/AR2010112306280.html?nav=hcmoduletmv

How Germany got it right on the economy

By Harold Meyerson
Wednesday, November 24, 2010

But then, Germans have something to honk about. Germany’s economy is the strongest in the world. Its trade balance – the value of its exports over its imports – is second only to China’s, which is all the more remarkable since Germany is home to just 82 million people. Its 7.5 percent unemployment rate – two percentage points below ours – is lower than at any time since right after reunification. Growth is robust, and real wages are rising.

Manufacturing still accounts for nearly a quarter of the German economy; it is just 11 percent of the British and U.S. economies (one reason the United States and Britain are struggling to boost their exports). Nor have German firms been slashing wages and off-shoring – the American way of keeping competitive – to maintain profits.

One key to Germany’s miracle is the mittelstand, as the family-owned small and mid-size manufacturing firms that dominate the economy are known.

When the downturn hit Germany in late 2008, manufacturing firms’ business declined the most, but subsidies from a government program called kurzarbeit allowed firms to keep their workers part time rather than lay them off. “Fifteen to 20 percent of our workers were on kurzarbeit,” Klaas Hubner, a former member of the German parliament and owner of the mittelstand company that includes AWS Achslagerwerk, told me.

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Golden decade for steel castings?

November 23, 2010
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http://mjperry.blogspot.com/2010/11/2010-2015-strongest-6-year-period-of.html

Sunday, November 21, 2010

2010-2015 Could Be The Strongest Six-Year Period of World Real GDP Growth in a Generation


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One part of our employment/economy is growing, regulators….

November 23, 2010
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http://innovationandgrowth.wordpress.com/2010/11/22/tsa-and-the-obama-bush-approach-to-regulation/

Mandel on Innovation and Growth

TSA and the Obama-Bush approach to regulation


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copper up, more mining….

November 22, 2010
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http://www.forbes.com/2010/11/19/goldman-sachs-commodities-copper-markets-gold-bhp-billiton-freeport-mcmoran.html

StreetTalk With Bob Lenzner

Stick With Commodities But Be Nimble In 2011 Says Goldman Sachs

Robert Lenzner, 11.19.10, 05:37 PM EST

You can start by being bullish about copper. There are only four days of copper supply on the London Metals Exchange and Shanghai. So, the State Council-funded Strategic Reserve Bureau (SRB) has been buying copper to build up its inventory during these last several volatile trading sessions. Iron ore and thermal coal prices have been holding firm in China as well. In contrast, China is believed to be selling zinc and aluminum out of its inventory.

So don’t let the headlines about China putting on the brakes put you out of your preferred commodity plays for 2011. At least one British bank in China believes it’s possible the Chinese will decide on a total ban of all commodity exports as they already have done in rare earths in order to control their economic short-term destiny.

Goldman Sachs’ commodity research mavens predict that copper will be selling at an average price of $11,000 per metric ton, a sensational 35% return from the current level around $8,200 a ton. Goldman predicts “exceptionally large deficits (in copper) over the coming year.”


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Our federal budget problem…

November 22, 2010
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http://www.washingtonpost.com/wp-dyn/content/article/2010/11/21/AR2010112102277.html

Our burgeoning budget and the politics of avoidance

By Robert J. Samuelson
Monday, November 22, 2010

To understand our predicament, glance at the table below. It shows federal taxes and spending as a share of GDP for 2006 (the last “normal” year before the slump) and projections for 2020 and 2035. The Social Security, Medicare and Medicaid forecasts – reflecting current benefits – come from the Congressional Budget Office. Other spending categories are held constant as a share of GDP. There’s no room for big emergencies or new programs. Though crude, the resulting numbers capture the mounting pressures.

The federal budget as share of GDP

2006 2020 2035
Spending 20.1 24.2 28.9
Social Security Medicare,Medicaid 8.3 12.4 17.1
Defense 3.9 3.9 3.9
Other spending 6.2 6.2 6.2
Net interest 1.7 1.7 1.7
Taxes 18.2 ? ?
Deficit 1.9 ? ?

It’s scary. From 2006 to 2035, federal spending goes from 20 percent of GDP to almost 29 percent. Social Security, Medicare and Medicaid (including Obamacare) account for all the increase. The reasons: More elderly people and climbing health costs. In 2035, the 65-plus population will be 93 percent larger than in 2010. Paying for bigger government would require a tax increase of about 50 percent. If we want to avoid a tax increase – while honoring existing Social Security and health-care benefits – we’d have to cut all other programs by about 80 percent. (And these figures are probably optimistic, because interest on government debt is assumed to remain low.)


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here is where the money goes…

November 16, 2010
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http://online.wsj.com/article/SB10001424052748704506404575592900454547226.html

Tracking Your Federal Tax Dollars

  • By LAURA SAUNDERS


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nuff said?

November 16, 2010
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http://www.acting-man.com/?p=5504#more-5504

The Dominoes Are Toppling

November 15th, 2010 | Author: Pater Tenebrarum


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returns on equities and stocks could be poor…. Sorry forgot the graph

November 16, 2010
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returns on equities and stocks could be poor….

November 16, 2010
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http://www.hussmanfunds.com/wmc/wmc101115.htm

*/November 15, 2010 /* */*/The Cliff
/*/**/
/*/John P. Hussman, Ph.D.
All rights reserved and actively enforced./

The chart above underscores the relationship between high current profit margins and poor subsequent earnings growth. The blue line shows U.S. corporate profits as a percentage of GDP (left scale), which is currently just over 8% and at the highest level since 2007. The red line depicts subsequent 5-year growth in profits, but on an /inverted /right scale (higher values are more negative). In effect, it should not be a surprise if present levels of corporate profits are followed by /negative /profit growth over the coming 5 years. Indeed, the 2009 burst of stimulus spending is most probably the only factor that has prevented profit growth from being negative over the most recent 5-year period.


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We need GDP growth in excess of 3% to lower unemployment.

November 11, 2010
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http://politicalcalculations.blogspot.com/2010/10/how-gdp-affects-unemployment-rate.html
October 6, 2010
How GDP Affects the Unemployment Rate

Finally, we find we average dividing line between positive and negative changes in the unemployment rate occurs with a real GDP growth rate of 3.1%. That means in order to make the unemployment rate fall, at least on average, the real rate of GDP growth in the U.S. must be greater than 3.1%.


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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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