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Thursday, August 21, 2014 1:53 AM

Japan PMI "Strongest Since March": Does That Mean "Strong"?

The spin in media reporting, in both directions (but typically bullish), is pervasive.

Here is a case in point. Markit reports Japan PMI Points to Strongest Manufacturing Expansion Since March.

Does "strongest since March" mean "strong"?

Here are the Key Points:

  • Flash Japan Manufacturing PMI™ at 52.4 (50.5 in July). Modest improvement in growth registered in August.
  • Flash Japan Manufacturing Output Index at 53.2 (49.8 in July). Output increased at solid pace.

A few charts will put this into perspective.

click on chart for sharper image

It seems to me that Japan has been treading water above and below the 50-50 expansion-contraction line for years (mostly below since 2007).

Will this surge prove to be more lasting than any of the others?

If so, please don't credit Abenomics. Instead, I propose the recovery is due to trend exhaustion, in spite of Abenomics.

Mike "Mish" Shedlock

12:41 AM

China Manufacturing PMI Treads Water

Chinese manufacturing is once again treading water, barely above contraction according to the HSBC Flash China Manufacturing PMI.

Key points

  • Flash China Manufacturing PMI™ at 50.3 in August (51.7 in July). Three-month low.
  • Flash China Manufacturing Output Index at 51.3 in August (52.8 in July). Three-month low.

click on chart for sharper image


Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said ...

The HSBC Flash China Manufacturing PMI moderated to 50.3 in August, down from 51.7 in July. Both domestic and external new orders rose at slower rates compared to the previous month. Meanwhile, disinflationary pressure returned as input and output prices contracted over the month. Today's data suggest that the economic recovery is still continuing but its momentum has slowed again. Therefore, industrial demand and investment activity growth will likely stay on a relatively subdued path. We think more policy support is needed to help consolidate the recovery. Both monetary and fiscal policy should remain accommodative until there is a more sustained rebound in economic activity.”

Mish Translation of Comments

China PMI has gone nowhere. The last uptick Qu raved about is now in the ashcan. Thus, Qu wants more "policy support" AKA loose money from the China central bank to "consolidate the recovery".

Mike "Mish" Shedlock

Wednesday, August 20, 2014 3:33 PM

Election Jackpot Scratch and Sniff: LA Proposes Free Lottery Tickets if You Vote; Romney Says Obama Worse Than Expected

Turnout in some Los Angeles elections is so low that LA Considers Giving Citizens Lottery Tickets if they Vote.

With as few as 8% of registered voters showing up to vote in some recent elections, the Los Angeles Ethics Commission has urged the City Council to consider improving turnout with a lottery pilot program. No actual vote would be required, but those participating would have to show up at the polls to participate. There was no decision on what the grand prize for participating in the democratic process. “Maybe it’s $25,000, maybe it’s $50,000,” Ethics Commission President Nathan Hochman told The Los Angeles Times. “That’s where the pilot program comes in—to figure out what...number and amount of prizes would actually get people to the voting box.”

It would seem that almost any prize would draw more voters than are currently participating in municipal elections. Only 23% of registered voters cast ballots in the 2013 mayoral election, according to the Times.

Detractors of that initiative, and the Los Angeles proposal, say it would bring people to the polls who were interested only in the prize, not in the issues.

“That might produce better results,” Fernando Guerra, a researcher at the Center for the Study of Los Angeles at Loyola Marymount University, told Southern California Public Radio. “There is no data to show that uninformed voters make worse decisions than informed voters.

Los Angeles is also considering a more mundane solution to the problem of voter turnout. It’s looking at moving its municipal elections to even-numbered years to coincide with state and federal elections.
Is there any data that says it matters how people vote?

Speaking of which, look at the pathetic choices in the last presidential election. Romney vs. Obama how did it matter?

Romney Says Obama Worse Than Expected

The laugh of the day is Mitt Romeny Claims Obama Worse Than Even I Expected.

It's easy enough to cite failures of Obama. There are dozens of them. But at no point in the interview did Romney say what he would have done differently.

For starters, Obamacare is Romneycare no matter how much he tried to distance himself from that simple fact. Would Romney have given arms to Syrian rebels like Hillary proposed? Would the US be at war with Iran now since Iranian sanctions did not do a damn thing?

Would we be at war with Russia? Economic war with China? In what ways would anything be different under Romney?

Might Things Under Romney Actually Be Worse?

On the military front, I suspect we would be in more wars. We would also be in more trade wars if Romney did what he said with China.

Would anything on immigration have passed in a split Congress?

In what ways, others than birth control, abortion, and the like, would anything be different under Romney?

"None of the Above"

Is it time to consider adding "none of the above"as an option on every ballot? And if "none of the above" wins, should we just do away with the office?

That would actually give people a reason to vote.

The problem with such proposals is the only safe politicians will be in gerrymandered districts.

Some propose term limits. But how does that help in a district that votes overwhelmingly for the same political party every year, and the candidates are all clones of each other?

"If voting changed anything they'd make it illegal"

That phrase has been attributed to Mark Twain, but more likely it belongs to anarchist Emma Goldman.

You can pay people to vote, but what we really need is non-gerrymandered, real choices, not politicians owned by party demagogues, not politicians bought and owned by special interests.

Given the Supreme Court ruled corporations are people, and given special interest groups bribe politicians with huge campaign contributions, I don't see any impetus for reform unless and until there is campaign finance reform and non-gerrymandered districts.

Nonetheless, I keep hoping. I have voted in every national election since the age of 18.

Mike "Mish" Shedlock

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