# II - Its the "Kondratieff," STUPID!!

If this were a game show between the PEC (Professional Economist Class) and the rest of us who are trying to survive out here in the hinterlands, and the first question asked was:

"What is wrong with the US economy that aggregate demand is persistently falling?"

Then the PEC  would be struck by dumbfound silence; for, they are totally non-plussed, confused and befuddled.

While those of us who know our economic history, and understand that there do exist generational and secular cycles that ultimately can NOT be obviated by the FED, would correctly answer:

Its the "Kondratieff," STUPID!!


All of the following and much worse aggregate economic data and indicators are directly attributable to JUST the first of three waves of the Super Tsunami “Kondratieff” Long-Wave that swept all throughout the world in 2007-2009.

Are you and your company ready for wave #2 of the “Kondratieff” that will engulf the entire world after the “Great Deception of 2012” has run its course?

Gross Says U.S. Nearing Recession as BlackRock Sees Fed Step

Bloomberg; By Shamim Adam and Masaki Kondo - Jul 17, 2012 5:11 AM ET

“Bill Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co., said the U.S. is approaching a recession as BlackRock Inc. (BLK) expects the Federal Reserve to take more steps to support growth.

…That followed data earlier this month showing American employers added fewer-than-estimated workers to payrolls. Goldman Sachs Group Inc. (GS) and Deutsche Bank AG cut forecasts for U.S. growth.

…The U.S. is “approaching recession when measured by employment, retail sales, investment, and corporate profits,” Gross, who manages the $263 billion Pimco’s Total Return Fund (PTTRX), wrote on Twitter yesterday. ….

Everything ‘Weaker’

… “Pretty much everything is way weaker,” Ewen Cameron Watt, chief investment strategist at the BlackRock Investment Institute, told reporters today in a teleconference from London. “There will be some more action from the Federal Reserve, but not probably dramatic action in a sense of massive stimulus.”

…Deutsche Bank chief U.S economist, Joseph LaVorgna, reduced his forecast to 1 percent from 1.4 percent.

“The sharp downward momentum in the economy” increases the probability of further Fed easing either in the form of another round of quantitative easing or other nonconventional measures, LaVorgna wrote in a note yesterday. …”

Retail Purchases in U.S. Unexpectedly Decrease 0.5%

Bloomberg; By Alex Kowalski - Jul 16, 2012 4:30 PM ET

The 0.5 percent drop followed a 0.2 percent decrease in May, Commerce Department figures showed today in Washington. The decline exceeded the most pessimistic forecast in a Bloomberg News survey that called for a median 0.2 percent gain in sales. Other r

Department figures showed today in Washington. The decline exceeded the most pessimistic forecast in a Bloomberg News survey that called for a median 0.2 percent gain in sales. Other reports today showed manufacturing in the New York region picked up this month and U.S. inventories increased in May.

The retail figures prompted economists at Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse to lower their forecasts for economic growth in the second quarter.

….

“People are just pulling back, and you’re not likely to see a significant pickup from here,” said Michael Carey, chief economist for North America at Credit Agricole CIB in New York. “This was certainly a slowdown from the first quarter.”

American employers added fewer workers to payrolls than forecast in June and the jobless rate stayed at 8.2 percent, a report from the Labor Department showed on July 6.

… “A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee’s goal,” according to the record of the Federal Open Market Committee’s June 19-20 gathering released July 11 in Washington. …”

 

U.S. Stocks Fall as Economy Concern Offsets Energy Rally

Bloomberg; By Inyoung Hwang - Jul 16, 2012 2:50 PM ET

“U.S. stocks fell, dragging the Standard & Poor’ 500 Index lower for the seventh time in eight days, after the International Monetary Fund cut its global economic forecast and retail sales unexpectedly dropped.

General Electric Co. lost 1.1 percent, sending industrial shares to the biggest drop among 10 groups in the S&P 500, after Morgan Stanley reduced its recommendation on the stock. Equities pared losses as energy companies rose with the price of oil while Visa (V) Inc. and MasterCard Inc., the world’s biggest payment networks, rose at least 1.9 percent after agreeing to a settlement of at least $6.05 billion in a price-fixing case.

The S&P 500 declined 0.1 percent to 1,355.38 at 2:49 p.m. in New York, trimming a drop of as much as 0.6 percent. The Dow Jones Industrial Average slipped 27.82 points, or 0.2 percent, to 12,749.27 today. …”