Mish's Global Economic Trend Analysis

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• So Much For Today's Surprising "Drop" In Weekly Jobless Claims; California Forgot to Report 30,000 Claims; What We Learned Today
• Secessionist Candidate Will Overwhelmingly Win Mayoral Race in Antwerp, Belgium
• $210,000 Cow Milking Robot; Presenting the "Astronaut A4 - A Natural Way of Milking"; How Far Off is the Completely Robotic Farm?

So Much For Today's Surprising "Drop" In Weekly Jobless Claims; California Forgot to Report 30,000 Claims; What We Learned Today Posted: 11 Oct 2012 04:50 PM PDT For the second time in less than a week surprising jobs numbers came into play. This morning the Labor Department reported a four-year low of 339,000 first-time claims. Some claimed this validated last Friday's jobs report, a silly notion because the two are not that closely related and a single week of data is meaningless. I still think Friday's jobs report will be revised away, but I am positive today's "surprising" report will be (for the simple reason California forgot to report 30,000 claims). Please consider Jobless Claims Data Skewed Downward. Initial jobless claims, which are a measure of the number of people recently laid off, fell by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years. But the Labor Department spokesman said the numbers were skewed by one large state that underreported its data. The spokesman declined to identify the state, but economists believe California is the only state large enough to have such a significant impact on the overall numbers. According to the spokesman, the reason that state's claims numbers fell short was because the state left out a pile of unprocessed claims related to seasonal factors around the beginning of the fourth quarter, which began Oct. 1. In a research note, Stephen Stanley of Pierpont Securities summed up the data: "In short, this reading is worthless in terms of informing on the general economy." Actually, the report isn't worthless, it's simply erroneous. Add back in 30,000 claims and the number is 369,000 right about where it has been for some time. Is there a conspiracy here? Once again the answer is no. This large state has a history of reporting "volatile" numbers at the beginning of quarters and that the Labor Department has complained and tried to work with the state to more accurately report its claims but with little success. "There is no explanation" for the volatility. "We have tried and tried to work with them. It's like playing hardball with them," the spokesman said. The spokesman said that the unprocessed claims are likely to show up in the numbers in the next week or two. "We should see some sort of catch up." What We Learned Today The labor department did not confirm the state was California but who else can it be? We did learn one useful piece of information today: The first couple weeks of every quarter are likely to be seriously messed up by under-reporting of claims from California. 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.

Secessionist Candidate Will Overwhelmingly Win Mayoral Race in Antwerp, Belgium Posted: 11 Oct 2012 11:46 AM PDT With every down-tick in the European economy (and many more will follow) eurosceptic and secessionist candidates pick up support. Consider Antwerp Belgium where secessionist candidate Bart De Wever seems untouchable in Antwerp. Antwerp is the biggest Flemish city outside Brussels has half a million inhabitants. The present Mayor is the socialist Patrick Janssens, who faces a fierce battle against the popular Flemish nationalist leader Bart De Wever. If the polls come true, Mr De Wever will take it with ease. The N-VA has been credited with 37.2% of the votes, against 27.7% for the list of Patrick Janssens, a joint venture between socialists and Christian democrats. An individual poll also puts Bart De Wever ahead, leading Mr Janssens by 10%. Antwerp Politician Rides Secessionist Wave The Financial Times reports Antwerp Politician Rides Secessionist Wave. The moderate nationalist leader of the New Flemish Alliance party (NVA), Mr De Wever has turned a local ballot in Belgium's business heartland into a referendum on independence for Flanders and the latest polls suggest there is momentum behind his call for secession. Mr De Wever believes victory in Europe's second largest port city will revive the call for Flanders' secession from Belgium just as Spain's economic crisis has done in Catalonia. Lex Moolenaar, a veteran political analyst for the Gazet Van Antwerpen, the city's daily, said an NVA victory would be a historic event in Belgium: "It would enlarge NVA's power at the regional and national level . . . the next natural step would be towards seeking the independence of Flanders." Mr De Wever wants to exploit Flemish resentment at subsidising poorer parts of Belgium and believes the upsurge in secessionist sentiment in Catalonia will help his cause. As I have said many times ... Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected. Antwerp is just a mayoral election. But we have seen the same sentiment in numerous regions in Spain. Eventually, something major will happen at the national level. Moreover, when sentiment does change nationally, that change will be sudden, unstoppable, and of course "unexpected" by the bureaucrats now in charge. 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.

$210,000 Cow Milking Robot; Presenting the "Astronaut A4 - A Natural Way of Milking"; How Far Off is the Completely Robotic Farm? Posted: 11 Oct 2012 09:02 AM PDT Farmers seeking to eliminate nearly all labor associated with milking cows can take a look at the Lely Astronaut A4 system. Cows walk into a chamber attracted by higher quality food, the machine attaches itself to the cow, measures output quality, temperature, and when finished the cows walk out. There is no manual labor or oversight. Farmers can sleep in or do other chores. Bloomberg reports on the $210,000 Cow-Milking Robot The A4 does not require a human being at any point in the milking process, leaving farmers free to cook dinner, work the books, or play Parcheesi. That's because no one has to move a cow into the milking box. The animal goes there on its own because it knows there is feed there (the cows are fed traditionally, but the A4 contains higher-protein food, and cows are really good at knowing what they're eating and, more important, what they want to eat). The front of the box has a trough where a cow can eat a measured amount of grain while it's being milked. The A4 scans a cow's collar to determine which cow it is. The machine has a full history of that cow's milk production and feeding habits, based on previous visits, and can tailor the amount of feed the cow receives and the rate of pulsation at the teat to produce the most milk. The A4 also knows the cow's milking schedule: If a cow tries to come back for milking too soon after the last session, the feed trough swings away, the gate opens, and the cow will walk out of the box. If a cow hasn't come through the system in a while, the A4 will alert the farmer. Once a cow is in the box, a carbon-fiber and stainless-steel robotic arm moves under the cow, scans it with lasers to find the teats, and attaches four teatcups in a matter of seconds. A video camera mounted above the cow measures the animal's position in three dimensions. Should the cow move in any direction, the robotic arm will move in concert. The A4 can handle about 180 milkings a day, which usually translates to 60 cows milked three times daily. Total cost for a single unit, installed, is around $210,000. And the crazy thing was this: After seeing this fully automatic, 3D-camera-enabled, laser-scanning, carbon-fiber-equipped, spectral analyzing system, $210,000 didn't seem all that much to me. Completely Robotic Farms The A4 is described as a "Natural Way of Milking". I fail to see anything "natural" about it. However, it certainly looks like a fantastic way of lowering labor costs and increasing productivity. How far off is the completely robotic farm where driverless machines till the soil and plant crops, and driverless combines harvest the corn, wheat, and soybeans? In many respects, for some crops, it's already here. Farm and Ranch Guide reports Combine 'speaks' to driverless tractor pulling grain cart September 30, 2012 Corn and soybean harvest is gearing up at farms throughout the Midwest. At a few farms in Iowa and Illinois this harvest season, there will be less manpower than usual operating the big machinery out in the fields. At first glance, there doesn't seem to be anything out of the ordinary going on. But look closer and you'll see there's no one driving the tractor. Driverless tractors are becoming all the rage these days. A few companies are developing their own driverless tractors, realizing that harvesting and planting are labor-intensive and there isn't always labor available these days. But many of the driverless tractors being manufactured are small single units. Kinze Manufacturing, based in Williamsburg, Iowa, is the first company to have complete autonomous planting and harvesting technology utilizing regular-sized tractors and combines that communicate with each other, said Rhett Schildroth, product manager for Kinze Manufacturing. "This is really state-of-the-art technology that works in real time to seed or harvest a crop," Schildroth said. The Kinze driverless technology is placed in the combine and tractor and both machines communicate with each other so harvest runs smoothly, he said. The Kinze system can plant, fertilize, and harvest crops. It operates by GPS and comes with sensors that can detect objects (hopefully like children, dogs, deer and the like). This is an over-simplification of course but let me ask: Farm workers? Who needs em? 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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