Dec

6

10:00 *ACTIVITY AT 58.9%; NOV. NON-MANUFACTURING ISM REPORT 10:00 *U.S. NOVEMBER ISM NON-FACTORY INDEX ESTIMATE WAS 55.5 10:00 *U.S. NOVEMBER ISM NON-FACTORY INDEX AT 58.9 AFTER 57.1 10:00 *U.S. NOV. ISM NON-FACTORY INDEX RISES TO 58.9 FROM 57.1 10:00 *U.S. OCT. DURABLES ORDERS FALL 8.2%; NON-DURABLES FALL 0.3% 10:00 *BUSINESS ACTIVITY AT 58.9%; NOV. NON-MANUFACTURING ISM REPORT 10:00 *U.S. OCTOBER FACTORY ORDERS DECLINE LARGEST SINCE JULY 2000 10:00 *U.S. OCT. FACTORY ORDERS COMPARE WITH FORECAST 4.2% DECREASE 10:00 *U.S. OCT. FACTORY INVENTORIES RISE 0.4%; SHIPMENTS RISE 0.1% 10:00 *U.S. SEPT. FACTORY ORDERS RISE 1.7%; REVISED FROM 2.1% RISE 10:00 *U.S. 10-YEAR NOTE YIELDS 4.4520 PERCENT 10:00 *TREASURIES DECREASE AFTER RELEASE OF NON-MANUFACTURING REPORT 10:01 *DOLLAR TRADES AT $1.3314 PER EURO, 114.87 YEN 10:01 *DOLLAR GAINS VERSUS EURO AS SERVICE INDUSTRY INDEX RISES

Neither does it take into account the quantity theory of money, where if one sector is reduced, that is because another has risen: p1 x Delta q1 + p2 x Delta q2 = 0. The declining share of our GNP that manufacturing holds is part of a secular trend of less skilled manual labor requirements being replaced by more highly skilled, humanistic roles. Because outsourcing is a common part of this trend, as well as just-in-time inventory management, the normal statistical problems of assessing monthly figures can become confounding. The mistake that “Doc” Greenspan and his 90 year old followers make is in believing that the value of the American economy can still be measured in the blast furnace statistics they used to study in their youth, and still look at in the bathtub…

This pessimism on the US economy and the need for manufacturing is based on many other fallacies too, and what an opportunity it provides, when durable orders or factory orders go down, for Doomsdayists who have not studied choice and substitution to try and bear down the markets. This is all for much the same reasons that Doomsdayists hate immigration — the more obvious/material things are so much easier for them to try to understand.

 


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