However, what the press release mentions but does not highlight are the following two statistics:
Compared with one year earlier, shipments were down 19.5%, and excluding defense orders, they were down 21.1%.
New orders were down 28.4% year on year, and were down almost 30% (29.6%) excluding defense.
Think of the irrelevance of a 3% month to month gain in the face of this cataclysmic decline. If the value of a stock dropped from 100 to 70 in one year, how good would you feel if in the thirteenth month you owned it, the price rose to 72?
Also, in what is becoming much too common for comfort, in the larger category of all manufactured goods (not just durable goods), new orders volume was revised downward by $5 Billion, to $347 Billion. Why is it that all the revisions are downward?
Let us remember that February 2008 was not some wild boom time. For new non-defense order to be down 30% year -on-year is unbelievable. The term "recession" appears inadequate, thus this blog channels Herb Stein from the Ford Administration and calls this downturn a banana.
In the face of numbers such as this, and failed government bond auctions today in the U. K. and recently in Germany, Governments are going to have to tighten their belts and share the pain.
How can anyone believe that the markets will let the U. S. Government throw vast sums of money into financial companies as well as auto manufacturers without the pain being felt by the owners (shareholders) of those companies and those who have been getting interest payments by lending money to those companies (bondholders)? And even if the markets would allow it, what is fair about such a scheme?
The truth is that we need to rebuild our economic and financial structures by consuming less than we produce. That's the old-fashioned way: you earn money (profits or wages), then you save what you can, then you try to do productive things with the savings. You don't help yourself by borrowing money from poor Chinese and you certainly get nowhere by simply printing it.
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