DOW OPENS HIGHER, THEN EASES – AT 9:59 A.M. ET: The Dow rose as much as 150 points over yesterday's close in early trading today, but then eased back and is now about even. At the same time, America got some further grim economic news. From Bloomberg:
The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas.
The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009.
U.S. shipments of capital equipment and industrial supplies fell in June, which may reflect the start of a cooling in the global economy. Some companies like Caterpillar Inc. (CAT) remain optimistic that demand for American-made goods will be sustained, helped in part by a weaker dollar.
“Sluggish U.S. demand growth this year has restrained imports,” Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report. “The export trajectory remains respectable.”
COMMENT: It's pretty clear that we are in an economic position that may last for years, dimming the hopes of the post-9/11 generation. The issues are worldwide, and there are even weaknesses starting to show in Asia.
One of the things we must stand guard against right now is the inevitable bad ideas that will come down the pike, especially from social ideologists, aided by their disciples in journalism. Get out your nonsense meters – stronger terms can be used – and insert the AA batteries.
August 11, 2011