2012 February 09 | timiacono.com

Inflation Rebounds in China

Overshadowed by other news today – the Greek debt deal, the U.S. housing foreclosure deal, and the Bank of England deal to print up another 50 billion pounds or so for the greater good – comes word of a surprise increase in the inflation rate in China as detailed in this Reuters report and as depicted below.

Of course, you never know what to believe in the economic data from China, but, if the government says inflation is 4.5 percent, you can bet that it’s at least that high. There too, food prices are rising at an uncomfortable pace and one possible solution that policymakers should look into is to encourage the populace to buy more iPads and less pork.

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Jobless Rates and Conspiracy Theories

Caroline Baum takes a look at the many widely varying interpretations of last week’s labor report in this commentary at Bloomberg, breaking those interpretations down into just a few groups – Democrats, Republicans, and conspiracy theorists, reserving the harshest criticism for the black helicopter crowd.

At the far end of the politicization spectrum are those who believe the government cooks up the numbers in some dark corner of the Labor Department basement. It’s as if these folks decreed, “There shalt be no good news as long as Obama is president, the federal government is expanding and the Federal Reserve is printing money and debasing the dollar.”

I have a message for them. It’s not the data that are politicized. It’s the interpretation.

Friday’s report inspired an outpouring of accusations of “fraudulent employment statistics” and long screeds on updated population estimates from bloggers (ZeroHedge and the Economic Collapse) and editorial writers (the Washington Times) alike.

The household survey for January incorporated new information from Census 2010. Previous months were unrevised. Simply put, there is a December/January break in all the series that rely on the new estimates.

If the December data had been updated for the population- control effect, the civilian non-institutional population would have increased 175,000 in January, a typical month-to-month change, not the 1.7 million without the adjustment.

The composition of the population changed, as well. Conspiracy theorists seized on the 1.2 million increase in those “not in the labor force.” Adjusted for an apples-to-apples comparison, the number fell by 75,000 in January. That’s because the population increase was concentrated in persons 55 and over and in the 16-24 year-old age bracket: a population less likely to be in the labor force than the general population. (Tables B and C on Page 7 of the Employment Report outline these effects.)

My impression has always been that the conspiracy theorists are somewhat apolitical – or at least apolitical when compared to the many political types that only dabble in economics and finance. Of course, I could be wrong.

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A Deal on Greek Debt?

Clearly, “imminent” was a poor choice of words last month to describe a deal between the Greek government, their EU/ECB/IMF overlords, and Greek bondholders that would facilitate the next round of bailout money in order that the Greeks avoid a messy default next month, but, this morning, some are using that word again as a deal might finally get done.

Here’s where things stood as of last night as Greek officials deliberated:

Understandably, Reuters appears to be confused by what’s going on in this very fluid situation. Between the time that this URL was copied for the links post a few minutes ago until the time it was posted, the title changed from “Greece heads to Brussels empty-handed” to “Greek political leaders agree on bailout reforms: sources”, however, they were careful not to use the word “imminent” in the updated story.

Thursday Morning Links

MUST READS
New doubt over Greek bailout plan – BBC
Greek death spiral accelerates – Telegraph
Greek political leaders agree on bailout reforms – Reuters
States Negotiate $26 Billion Deal for Homeowners – NY Times
Will $26B Foreclosure Deal Help the Housing Market? – ZillowBlog
BOE Adds 50 Billion Pounds to Stimulus on Euro ‘Concerns’ – Bloomberg
China inflation spike pricks policy easing expectations – Reuters
Standard & Poor’s: U.S. Faces Downgrade If No Plan – Bloomberg
Sarkozy Most Unpopular as Election Nears – Bloomberg
Why Wall Street Should Stop Whining – Taibblog
A nation of moochers – Washington Times
No, America isn’t broke – yet – MSN Money

MARKETS/INVESTING
Oil near $99 as investors eye Greece, US demand – AP
Gold holds firm as Greek hopes lift euro – Reuters
The insiders are selling heavily – MarketWatch
Defensive Stocks Lose for First Time Since 1999 – Bloomberg
Wall St. Seeks to Delay CFTC Limits on Speculation – BusinessWeek
Has Order Resumed in the Stock Market? – Political Calculations
Massive rise in China gold imports – policy controlling the price? – Mineweb
Precious metals prices dictated by investment at the margin – Mineweb
Gold too volatile to act as reliable inflation hedge – Reuters
Gold miners need gold above $1,650 to keep nose above water – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
Black Helicopters Hover Over Economic Reality – Bloomberg
Jobless Decline Masks Drop in U.S. Labor Force – Bloomberg
World Food Prices Rose Most in 11 Months on Oilseeds, Grains – Washington Post
ECB leaves benchmark interest rate unchanged at record low 1.0 percent – Washington Post
China’s Unexpected Holiday Inflation Pickup May Limit Easing Room – Bloomberg
The World from Berlin: ‘Could the Germans Survive a Crisis like Greece’s?’ – Spiegel
More QE is barking up the wrong tree – Telegraph
How Big Will the ECB’s Next Liquidity Injection Be? – CNBC
Forecast: Drops in Home Values Less Severe in ‘12 – WSJ
Lenders own $30B in California single-family homes – OC Housing News
The Limits Of Monetary Policy Call For Moral, Sound Money – Forbes
The Fed is NOT a Hedge Fund – BullionVault

 
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