Excerpt from one of the cheerleading sources Bloomberg
By Jana Randow
Nov. 13 (Bloomberg) -- Germany’s economic recovery accelerated in the third quarter as government stimulus programs fueled company spending and a rebound in global trade boosted exports.
Gross domestic product increased a seasonally adjusted 0.7 percent from the second quarter, when it rose 0.4 percent, the Federal Statistics Office said in Wiesbaden today. The median estimate in a Bloomberg News survey of 35 economists was for growth of 0.8 percent. French GDP gained 0.3 percent in the quarter, Finance Minister Christine Lagarde said. That’s half the increase forecast by economists.
From a year earlier, the economy shrank 4.8 percent when adjusted for the number of working days. The government last month raised its economic outlook, forecasting expansion of 1.2 percent in 2010 after a 5 percent contraction in 2009.
2. Goldman confirms my assumption that a 2nd stimulus package will be thrown into the mix and as they rightly point out it will be done for opportunistic political means and not with the motivation to help the people. If the latter one was the motive America might never had ended up where it is and the first aid package had been structured differently. I do agree with Rosenberg and Whitney that we are not any close to the end of the job losses as they hint to a 12-13 % scenario for the official jobless rate - I rather think it could even go further unfortunately. Outright new hiring is hard to see since companies do adjustments with temp workers so far hence in best case they turn them in to full time employees but in the meantime we had many announcements of big companies doing more cuts. That should hit second tier and third tier suppliers double hard as they need to make adjustments as well and have as an adding negative momentum no chance for financing an expansion even if they wanted to. The job situation will deliver a poor holiday season sales against all high hopes which might lead to drastic adjustments in the 1st quarter next year. The numbers presented by Goldman would not do the trick though I see a much bigger flooding of the Mainstreet with printed money. They need to do a structural shift away from globalization back to jobs in America to create new jobs but instead they will allow Wallstreet to pay a record bonus as jobless rates rise towards the 11% mark this year.
Excerpt from zerohedge
Goldman On Why A Second Stimulus Is Merely Months Away
Earlier today, Goldman came out with a harbinger piece on why a second stimulus announcement is essentially a formality. The administration has already promptly forgotten the lessons from the recent elections which were a failure for the Democrats, and a resounding vote against incremental deficit spending. The people spoke, and they will have no more of it. Alas, Obama is now stuck: any action he does to create jobs and to rope consumers back into the clearance sale stores, will be met with increased political disapproval and risk of a major failure at both the mid-term and next presidential elections. Yet, courtesy of his economic think tank, he can not leave the status quo as the current situation leaves the economy on an untenable course of 12%+ unemployment. In this case the lesser of two evils is moot as both have the same likelihood of making the "change you can believe in" campaign one for the history books prematurely.
Two More Signs that Additional Fiscal Support Is Coming
Since Congress enacted the American Recovery and Reinvestment Act (ARRA) in February, there has been intermittent discussion of a “second stimulus bill” (never mind the fact that ARRA was in fact the second bill; the first one was enacted in 2008). However, officials who raised the possibility of additional stimulus always quickly backtracked or made clear that they were not actually proposing additional fiscal support. This has begun to change. We point to two particular statements in the last few days:
1. Senate Majority Leader Reid (D-NV) was quoted in The Hill newspaper (a Capitol Hill-focused publication) yesterday indicating that the Senate will consider a “jobs bill” in early 2010. It’s not clear what such a bill might include, or how large it might be.
2. President Obama announced this morning that the White House would convene a "job creation forum" in December. While the event clearly serves a public relations purpose, the scheduling of such a high profile event implies there probably will be some new proposals to go along with it.
This may be the set up for yet another round of springtime stimulus in 2010, to be crafted in December and considered by the Congress in its second session early next year. Interestingly, this is the same timetable we've seen in each of the last two years-- policy formulated internally in December, debated publicly in January, enacted in February. If we do see a replay late this year and early next year, it seems likely to take a bit longer, and meet more resistance than the last two stimulus packages, which moved surprisingly quickly through the legislative process due to broadly held bipartisan concerns over the state of the economy.
As outlined in last Friday's weekly, we expect $250 billion (bn) in further fiscal support over the next three years, including $75bn in 2010. However, we have generally assumed that most of this would come from extension of current law policies, as opposed to new stimulus measures, for two reasons: (1) over the last several months there has been little appetite for explicit "stimulus," though there remains broad support for certain targeted policies, like the homebuyer tax credit and unemployment benefits just enacted into law (worth $45bn of the expected $250bn); and (2) the prior stimulus package included most of the obvious ways to stimulate the economy, so extending them is a more natural next step than coming up with new provisions.
However, last week's employment report seems to have changed sentiment in Washington (and last week's election certainly played a role as well, insofar as it highlighted the electoral challenges for congressional Democrats that were already evident in public opinion polls). So while another explicit "jobs" bill looked like a long shot a week ago, the notion seems to have gained momentum since. While the path such a measure may take over the next few months is highly uncertain, among the (oversimplified) implications of a more explicit stimulus effort early next year we see the following:
1. New measures would become easier to pass. If Congress actually takes up a new stimulus package, it becomes somewhat easier to enact new measures, rather than just extending unemployment benefits or some of the other things under consideration. A hiring tax credit, lending incentives, and some way to provide additional timely benefits to consumers in 2010 appear to be front of mind for staff trying to present options to their members of Congress, though there don't seem to be many concrete ideas at this point.