The 'End of Tunnel' Syndrome

There are many forms of ‘Mad Cow’ disease; almost all of them only a reaction to the actual illness. Canada filed Suit with the WTO because of American country-of-origin labeling demand which limits their Sales, but the article does not mention Japanese and European refusal to purchase Meat processed through Plants which process untested Meat. Is it a Trade war? Yes! Everyone is trying to sell as much as they can in a slowing Market, and Concepts of Free Trade wane in such an environment. Canadians cannot expect much of an indemnity from such American practice, as long as the attitude of Japan and S. Korea continue on processed Meat. The EU, by the way, have regulations which require the Pork labeling to gain Sales which are disappearing anyway. The humor consists of the fact that Canada sells to both Europe and Asia, and wants to eliminate the labeling solely to gain position in these Markets while dumping inferior Meats upon the American Public.

The ISM (Institute of Supply Management) said that manufacturing activity fell to 36.2 on their index where anything less than 50 means the economy is in contraction. The National Bureau of Economic Research has finally admitted that We have been in Recession since December 2007; only a half-year late according to my estimate. Overnight Oil futures actually dropped below $48 a barrel as Nymex trading finds a lack of Investment capital ever since August. The real trouble comes in the fact that declines are still more rapid than Economists predict, they very conservative with the Numbers; not wanting to promote greater panic than already exists. The National Bureau advises that the slump will last until the middle of 2009, but neither Private Sector activity or Government policy is geared to bring Us out of Recession even by then.

Mike Shedlock shows that California suffers from Overspending; the fact being that other States are in about as much trouble. The real problem pressuring all States is the methods of Taxation adopted over the Republican years: where Taxes were reduced to eliminate all revenue reserves, while Taxes were redirected so that lack of Production performance first reduced Tax payments before all else. States now need revenues and possess no way to raise those funds. Mish’s Solution is to cut Waste at State level, ordinarily a good thing, but disastrous within a Recessionary climate. Right now I am in the ‘Wringing of Hands’ stage in consideration of the economy, but will have to devise something soon! lgl