Mish's Global Economic Trend Analysis

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• Governor Chris Christie Strongly Praises Obama's Response to Sandy; Could Christie's Comments Tip the Election?
• Japan Manufacturing PMI Falls to 18-Month Low
• NY Subway May Take Weeks to Restore Service, 5 Million Affected; 80 Flooded Homes Destroyed by Fire; Stunning Flood and Fire Images
• Greece Coalition Splinters, Austerity Vote Delayed, PM Warns of 'Chaos'; Another Puppet Show or Is This For Real?
• 670,000 Without Power in NYC; Flood Crests 13.88 Feet, Besting 1960 Record of 10.02 Feet; Wall Street Flooded

Governor Chris Christie Strongly Praises Obama's Response to Sandy; Could Christie's Comments Tip the Election? Posted: 30 Oct 2012 11:01 PM PDT Here's a headline story including an interview on Fox news that caught me by surprise: New Jersey Chris Christie Praises Obama, Doesn't 'Give a Damn' about Election Day The presidential candidates have canceled all campaign events on Tuesday, but Republican New Jersey Chris Christie seemed to be stumping for President Barack Obama by appearing on several networks to praise the federal response to Hurricane Sandy. In an interview on NBC, Christie called Obama "outstanding" for expediting relief efforts. He also told MSNBC that Obama "deserves great credit. He gave me his number at the White House and told me to call him if I needed anything," Christie said. The New Jersey governor even took his message to Fox News, saying that Obama had helped "tremendously." "I spoke to the president three times yesterday," he explained. "He called me for the last time at midnight last night asking what he could do. I said, if you can expedite designating New Jersey as a major disaster area that that would help us to get federal money and resources in here as quickly as possible to help clean up the damage here." Chris Christie Video Will Christie's Comments Tip the Election? New Jersey, Christie's home state is solidly in the Obama column. However, storm-damaged Virginia is in a virtual dead heat. Praise from Governor Christie certainly cannot hurt Obama's election chances. Mathematically, I do not believe Romney can win if he loses either Ohio or Virginia. Romney certainly cannot win if he loses both of them. Here is question of the day: Is this genuine praise or is Christie looking to run for president in four years? I suggest both. Regardless, widespread perception that Obama is doing a good job in response to Sandy, fueled by gushing praise from Christie may be enough to tip Virginia into the Obama column, and the election right with it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish Click on Image to Learn More Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Japan Manufacturing PMI Falls to 18-Month Low Posted: 30 Oct 2012 08:15 PM PDT The Japanese economy continues to skid as evidenced by the October Japan Manufacturing PMI™ Key points Output and new orders both down at sharper rates Employment falls at fastest pace since July 2009 Average output charges pared to steepest degree since December 2009 Summary October's PMI data indicated a further deterioration in the performance of the Japanese manufacturing sector. Orders and output both continued to fall during the month, while evidence of rising excess capacity led to a first reduction in employment for half a year. Manufacturers also intentionally cut back on their stock holdings as order books deteriorated and the outlook remained uncertain. Production and new orders both fell at similarly marked rates during the latest survey period. Panellists reported that the car industry was a particular source of softer demand. Overseas new orders also fell during the month, the seventh successive month that a decline has been recorded. As volumes of new orders and output fell further in October manufacturers were again able to make significant inroads into their work outstanding. Nearly a quarter of the survey panel indicated that backlogs were down in October and, with spare capacity seemingly rising, a number of companies also chose to lower their staffing levels. I have little to add that I have not said before numerous times. The entire global economy is heading South in a major way, and Japan is in serious trouble given its monstrous debt levels. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

NY Subway May Take Weeks to Restore Service, 5 Million Affected; 80 Flooded Homes Destroyed by Fire; Stunning Flood and Fire Images Posted: 30 Oct 2012 11:41 AM PDT Hurricane Sandy has moved on but the damage remains. The following picture of Times Square posted on Gizmodo caught my eye. Fortunately, it does not look real. Lights should not be on and there would be debris everywhere. However, the Metra chairman did say water was "literally up to the ceiling" at one downtown station, so take this image and use your imagination, adding dead rats, debris, and whatever else suits your fancy. Bloomberg reports the New York Subway System May Take Weeks to Recover From Flooding. Restoring service on New York subway lines that have been flooded could take weeks, said Mortimer Downey, a former MTA executive director and current board member of the Washington Metropolitan Area Transit Authority. "From the New York viewpoint, they've got a lot of work ahead of them," Downey said in an interview. "It's going to be days and possibly weeks." He declined to estimate what the recovery may cost because there's no precedent for the work that will need to be done. Previous reports said the New York city subway would remain closed for 14 hours to four days. Unprecedented Challenges Reuters reports Sandy leaves unprecedented challenges for New York City subways The giant storm Sandy wreaked havoc on the New York City subway system, flooding tunnels, garages and rail yards and threatening to paralyze the nation's largest mass-transit system for days. "The New York City subway system is 108 years old, but it has never faced a disaster as devastating as what we experienced last night," Joseph Lhota, the chairman of the Metropolitan Transit Authority, said in a statement early on Tuesday. He later said that water was "literally up to the ceiling" at one downtown station. All seven subway tunnels running under the East River from Manhattan to Queens and Brooklyn took in water, and any resulting saltwater damage to the system's electrical components will have to be cleaned - in some cases off-site - before the system can be restored, MTA spokeswoman Deirdre Parker said on Tuesday. At dawn, emergency crews were assessing the damage to tunnels and elevated tracks. Restoring the system is likely to be a gradual process, Parker said. "It's really hard to say which areas will come back first," she said, adding it will likely be a combination of limited subway and bus service. "It will come back gradually." The storm brought a record storm surge of almost 14 feet (4.2 meters) to downtown Manhattan, well above the previous record of 10 feet (3 meters) during Hurricane Donna in 1960, the National Weather Service said. ABC Video Link if Video does not play: Sandy Floods NYC Subway System 80 Flooded Homes Destroyed by Fire The Huffington Post reports At least 80 Flooded Houses Destroyed By NYC Blaze. A huge fire destroyed 80 to 100 houses in a flooded beachfront neighborhood Tuesday, forcing firefighters to undertake daring rescues and injuring three people. More than 190 firefighters contained the blaze but were still putting out some pockets of fire more than nine hours after it erupted. As daylight broke, neighbors walked around aimlessly through their smoke-filled Breezy Point neighborhood, which sits on the Rockaway peninsula jutting into the Atlantic Ocean. Electrical wires dangled within feet of the street. Click on preceding link for a video and images of the fire. The economic losses from Sandy will far exceed the physical damages. Ridership losses on the NY subway alone will be catastrophic. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Greece Coalition Splinters, Austerity Vote Delayed, PM Warns of 'Chaos'; Another Puppet Show or Is This For Real? Posted: 30 Oct 2012 09:39 AM PDT In Greece, Prime Minister Antonis Samaras coalition has split. The result is yet another delay in an austerity vote required for the next tranche of loans to Greece, and the PM warns of 'chaos'. Greece's conservative Prime Minister Antonis Samaras is at odds with the Democratic Left party, a coalition partner, which is threatening to vote against the new austerity measures unless labor reforms included in them are scrapped. Samaras formed a coalition with the traditional rival Socialists and the Democratic Left after general elections in June. In a statement, the prime minister said he had "exhausted all the available time" to try and reach a consensus. "The problem is not whether we (introduce) this measure or that measure. On the contrary: It is what we would do if no agreement is reached and the country is led into chaos." Unemployment in Greece has topped 25 percent, with rapidly worsening poverty that has prompted the Democratic Left to harden its position. "There are certain issues for us that are fundamental — like labor issues," Theodoros Margaritis, a senior member of the Democratic Left party, told private Skai television. "The dilemma is with Mr. Samaras. Does he want a left-wing party in his government or not? Does he want our consent on certain issues or does he want to proceed alone? If he wants, he may proceed alone." Cracks in Greece's coalition government are likely to be tested late Tuesday when lawmakers are set to vote on a privatization bill. The new law would give the government broader powers to privatize public utilities, but is facing growing dissent from deputies in the Socialist party and Democratic Left. Another Puppet Show or Is This For Real?   Is the inevitable about to happen or is this simply another puppet show for the masses? Having seen so many puppet shows only to see the leftist puppets succumb to warnings of chaos or worse, I simply do not know. However, when this coalition finally does splinter to smithereens, the radical left will win the next election and promptly tell the Troika to go to hell. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

670,000 Without Power in NYC; Flood Crests 13.88 Feet, Besting 1960 Record of 10.02 Feet; Wall Street Flooded Posted: 30 Oct 2012 01:12 AM PDT The good news for New York City is the storm crest has peaked. The bad news is the cleanup will take days, or longer, and much of the city is blacked-out. Please consider Hurricane Sandy's Waters Flood Blacked-Out New York City. Hurricane Sandy sent floodwater gushing into New York's five boroughs, submerging cars, tunnels and the subway system and plunging skyscrapers and neighborhoods into darkness. Two deaths were reported in Queens and more than 670,000 were without power in the region as of 11:30 p.m. local time yesterday, according to Consolidated Edison Inc. The company cut electricity to some areas to save its equipment and a transformer exploded at a plant on 14th Street, blacking out others. New York University evacuated its Langone Medical Center when it went dark and backup systems failed. After the storm's tide crested about 8 p.m., the East River topped its seawall in the Financial District and flowed up Wall Street in a torrent that turned avenues into canals and intersections into lakes. Flooding took over Brooklyn's Red Hook neighborhood, submerging cars to the roof, while the Gowanus Canal overflowed and tree limbs plummeted. A flood gauge at Battery Park, at the southernmost end of Manhattan, registered at 13.88 feet as of 9:24 p.m., beating the modern record of 10.02 feet in September 1960 during Hurricane Donna, the National Weather Service said. The Metropolitan Transportation Authority was investigating water entering a subway tunnel in Lower Manhattan, said Charles Seaton, spokesman for the largest U.S. transit agency, which stopped its 24-hour system for weather for only the second time in its 108-year history. There's no way to tell when the system run again, he said. The Lincoln Tunnel was the only major crossing in and out of Manhattan by about 8:30 p.m. The Brooklyn Battery Tunnel and the Queens Midtown Tunnel both had flooding, according to Ortiz. Anything electrical that salt water touches is likely ruined. If those subway systems were badly-flooded, there are going to be serious repercussions. We will know more Tuesday morning. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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