France and Germany Lift European Economy

FRANKFURT — The European economy bounced back with unexpected strength in the second quarter after contracting sharply at the beginning of 2009, data released Thursday showed, offering the clearest evidence yet that a searing recession is drawing to a close.

The economy of the 27-nation European Union shrank at an annual rate of 1.2 percent in the three months that ended in June, while the 16 countries that use the euro, the common European currency, registered an annualized 0.4 percent decline in economic activity during the period. That contrasted with a shrinkage at an annual pace of 1 percent during the same period in the United States.

Despite being in negative territory, the European data underscore a sharp recovery from the first quarter of this year, when both the E.U. and the euro zone saw a 2.5 percent contraction, or a 10 percent annual rate. Underlying the surprisingly strong reading were solid performances in France and Germany, both of which grew by 0.3 percent in the second quarter, compared to the first, government data showed Thursday.

Germany, Europe’s largest economy, will still probably see its gross domestic product contract by about 6 percent for the full year, economists say. But the surprise expansion — most economists had expected a flat or slightly negative reading — underscores how German exporters are benefiting from growth in Asia and what may be a bottoming of the downturn in the United States.

“An export-driven, ‘V’-shaped recovery in the second half of this year is in the pipeline,” said Andreas Rees, chief German economist at UniCredit.

Germany’s economy expanded 0.3 percent from the previous quarter, ending a run of four straight quarters of contracting output in Germany, putting an end to the nation’s recession in its most technical sense. The modest expansion in the second quarter amounted to an annual growth rate of 1.2 percent.

News last week that German exports leaped 7 percent in June over the previous month foreshadowed a strong reading on gross domestic product.

But unemployment is expected to rise sharply later this year, as a raft of government programs that kept people on private payrolls begin to expire. Despite the recovery, German exports in June were down 22 percent compared to a year earlier.

The unemployment question is feeding a debate among economists about whether Europe will experience a V-shaped recession, or whether rising joblessness will drag down consumption and shake consumer confidence, leading to another dip later this year — a so-called “W-shaped” expansion.

“You might get something resembling a ‘W’ simply because of the strength of the rebound,” said Erik Nielsen, chief Europe economist at Goldman Sachs in London. “It’s almost mathematical after the deep trough.”

The year 2010 will be much more uncertain, and could find Europe lagging behind the United States, where recent data indicated that the recession may have ended. Despite the passage of bank rescue plans and modest stimulus packages, Europe has generally failed to restructure its financial system, most economists argue, portending greater problems next year.

“We will really see the difference in recoveries next year,” said Thomas Mayer, chief Europe economist at Deutsche Bank in London. “That will be when the U.S. bounces back more quickly than Europe.”

By CARTER DOUGHERTY

國際媒體報導 台灣災民批評政府反應過慢 Pressure Mounts on Taiwan Govt Over Mudslide Rescues

（中央社記者黃兆平紐約12日專電）莫拉克風災重創南台灣，各國關懷協助與捐款不斷湧至，國際主流媒體今天持續報導風災後續消息，關注焦點放在災民對政府反應過慢的批評聲浪，以及總統馬英九成為眾失之的。

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上週末重創南台灣的莫拉克風災，連日來引起美國媒體關注，報導篇幅持續擴大。

「紐約時報」發自台北的報導指出，風災過後，馬總統成為災民指責目標。當馬總統踏進南台灣一處偏遠鄉村學校足球場時，憤怒的災民將他團團圍住，指控政府反應太慢，電視清楚直播當時景況。

　　報導說，這場台灣過去50年最嚴重的風災，對去年以懸殊票數贏得總統大選的馬總統而言，已經成為很不愉快的政治經驗。

　　 隨著死傷人數不斷升高，紐時指出，這場風災已成為攸關馬總統政治生涯成敗的測試點，提供反對陣營批評的糧秣，以及狼吞虎嚥的媒體無法抵抗的影像題材。

「華爾街日報」也說，救難人員雖然不斷增加，但死傷人數也倍增，外界批評政府反應過慢，要求披露風災死傷消息的聲浪也愈來愈大。

這篇發自台北的報導說，災民與媒體以批判眼光抨擊政府救援及反應過慢，焦點針對馬總統。軍方及救援單位因應這次風災的協調能力也顯然不夠。

華爾街日報指出，外界批評馬總統不頒布可以讓政府徵調更多人員與設備的緊急命令，政府也拒絕接受國際組織的援助。

報導還說，台灣媒體終日充斥災民對抗馬總統的影像，很多災民甚至認為總統的回應很馬虎。

CISHAN, Taiwan (Reuters) - Pressure mounted on Taiwan President Ma Ying-jeou on Thursday to speed up operations to rescue hundreds of residents of remote mountainous villages buried or stranded in the aftermath of typhoon Morakot.

The official death toll in Taiwan stood at 108 after the worst floods in decades washed out roads, snapped bridges, sent dwellings crashing into rivers and forced authorities to deploy hundreds of helicopters for rescue missions.

Morakot has shattered infrastructure in Taiwan's south, a stronghold of the opposition Democratic Progressive Party (DPP). The widespread damage will likely worsen already bleak forecasts for third-quarter economic contraction in Taiwan.

"The KMT is not proactive enough in addressing the suffering of the people," said DPP spokesman Cheng Wen-tsang, referring to the president's Nationalist Party, or Kuomintang.

"The reaction to the disaster is too slow and messy. We should have a better plan based on Taiwan's search-and-rescue experience, but Ma Ying-jeou wasn't prepared. And that shows that his people lack experience."

Some residents challenged Ma as he toured relief operations sites, saying his government should have accepted international help to expedite the rescue process.

"The United States, Japan, Singapore and mainland China have offered financial assistance and we welcome that," Ma told them.

SURVIVORS FOUND IN MOUNTAINS, VILLAGES

Rescuers found 6,500 people who had been stranded near Alishan, a scenic mountain spot, and more than 500 in the town of Liouguei in stricken Kaohsiung county. But hundreds remained unaccounted for in remote areas.

Internet services were being restored, but repairs to undersea cables could take two months. [ID:nTP133784]. Disaster officials said months of work would be needed for some roads, while other reconstruction could take a year or more.

At a rescue hub in Cishan, patience was running thin among relatives waiting for days for news of family members in the path of mudslides that flattened villages such as Hsiao Lin and Namahsia.

"How can they be so slow? Clearly they should be sending more helicopters, right?" said Yan Min-rong, 29, as he pored over lists of survivors.

Regional resentment at the authorities was apparent.

"It's too slow. They don't care about the south. They just care about the north," said Chen Fu-rong, head of a funeral association in Kaohsiung, as she stood alongside bodies of victims.

The military has deployed more than 34,000 personnel and 382 helicopters, it said on its website (www.mnd.gov.tw). Ma and top government officials have been touring affected areas.

"The disaster is huge and many bridges were smashed. Vast numbers of people have been affected and the weather has been very bad," said Tseng Ching-liang, an army colonel in Cishan.

Helicopters have frequently been reduced to hovering over devastated areas and throwing down thick ropes to hoist stranded villagers to safety.

Bad weather has made even such operations difficult. One helicopter crashed into mountainous terrain earlier this week, killing its crew. (Additional reporting by Joan Hsu; Writing by Lee Chyen Yee, editing by Ron Popeski)

南台灣畜漁業重創 豬魚半年才能正常生產

（中央社記者楊淑閔台北13日電）農委會主委陳武雄今天表示，全台蔬菜預計 3週後可恢復生產，米糧無疑慮；重創程度最深的畜產及漁產方面，禽類需5到6週恢復生產，豬及漁產則都要半年之後，才能正常產出。
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　　莫拉克颱風重創台灣重要農產縣市，整體農業恢復期需時多久？陳武雄說，種植蔬菜的農田水退後即可恢復生產，估計約 3週後可恢復生產，米糧部份也沒有大礙。

　　他表示，不過這次畜產及漁產損失慘重，漁產並持續創近19年風災損失新紀錄。行政院農業委員會統計，累計畜禽損失新台幣13億2519萬元，主要為豬死亡11萬8143頭、雞死亡571萬4000隻、鴨死亡106萬5000隻。

　　陳武雄說，禽類中白肉雞和有色雞死亡500萬隻，占總飼養量6000萬隻的7%到8%；其中白肉雞約需5週後可恢復生產，有色雞需10週；豬隻則需要半年時間。

莫拉克風災漁產損失已達39億3862萬元，養殖魚塭受損面積達8381公頃，淺海養殖魚塭受損面積為1231公頃。陳武雄說，漁產恢復生產也需要半年時間。

Kurt Nimmo on Alex Jones Tv:False Flag Could Come at The End of Summer!

infowars.com

MSM: Americans working much harder – for less pay

(MSNBC) – Feel like you’re working a lot harder these days, putting in longer hours for the same pay — or even less? The latest round of government data on worker productivity indicates that you probably are.

The Labor Department said Tuesday that the American work force produced, at an annual rate, 6.4 percent more of the goods they made and services they provided in the second quarter of this year compared to a year ago. At the same time, “unit labor costs” — the amount employers paid for all that extra work — fell by 5.8 percent. The jump in productivity was higher than expected; the cut in labor costs more than double expectations.

That is, despite the deep job cuts of the past year, workers who remain on the payroll are filling in and making up the work that had been done by their departed colleagues. In some cases, that extra work came with a smaller paycheck.

The higher worker output and lower labor costs have been good news for companies struggling through the worst recession since World War II. So far, some 70 percent of companies in the S&P 500 have turned in better-than-expected profits for the latest quarter.

But wage cuts and lost paychecks could seriously jeopardize the recovery of a U.S. economy that still relies on consumer spending for two-thirds of its power.

“You have a very severely harmed, injured consumer in terms of income slow down, job uncertainly, job loss, wealth loss, inadequate savings, high debt levels,” said Laura Tyson, an Obama advisor who headed the Council of Economic Advisors in the Clinton administration. “The consumer, I don’t see powering us out of this recession.”

Many economists believe the current recession is on the verge of ending. And if, as many expect, the economy begins expanding again in the second half of this year, companies may begin adding more shifts and re-hiring workers as demand for their products increases.

That improving trend — a slowdown in the pace of the downturn — was confirmed in this month’s Adversity Index from msnbc.com and Moody’s Economy.com, which measures the economic health of 381 metro areas and all 50 states. The index includes four components —employment, housing starts, housing prices and industrial production — and classifies each as being in recession, at risk, recovering or expanding.

So far, none of the areas is in the “recovery” stage. But according to the index, 85 metro areas are now in a “moderating recession” – up from 23 the month before.

“A lot of these places were contracting at a much faster pace in the first quarter than they are now,” said Andrew Gledhill, an economist at Moody’s Economy.com, which prepares the index.

With job cuts slowing, corporate profits improving and the housing market showing signs of a bottom, many analysts are forecasting that U.S. Gross Domestic Product will turn positive again this quarter after a sharp over the past year.

Not so fast, say other analysts.

“I think there’s a lot of risks ahead,” said Larry Lindsay, a private economist and Director of the National Economic Council under the Bush administration. “We still have a consumer balance sheet that needs repaired. We still have problems in the housing sector. We still have ultimately to get out of a massive amount of fiscal stimulus, a massive amount of monetary stimulus. And I agree with (Fed Chairman Ben Bernanke) those are technically possible to do. But they are not painless things to do. So I do think there a little bit of ebullience out there.”

Higher productivity cuts two ways.

If we all get better at our jobs and use technology to increase how much work we can do in the same number of hours, our employers can afford to pay more and everyone’s living standard goes up.

The sharp drop in labor costs last month also makes it less likely that inflation will be a problem for the Federal Reserve — which has pumped over a trillion dollars of cash into the banking system to head off financial collapse. With inflation in check, that makes it easier for the Fed to keep interest rates low without sparking another round of inflation.

“The combined efforts of workers and business to grind out solid productivity gains through the recession is unequivocally good news — an underlying reality of solid fundamentals that has been overlooked by the economic doomsayers and naysayers for many months,” said Brian Bethune, an economist at IHS Global Insight, in a research note Tuesday.

But this round of productivity gains has a darker side. The recent round of strong corporate profits, even as sales have fallen, came mostly from aggressive cost cutting that included huge rounds of layoffs and, for some employees still on the payroll, cuts in hours and wages. Some 7 million works have lost their jobs since the recession began in Dec. 2007. After healthy gains in the second half of last year, hourly compensation has dropped 2.2 percent so far this year — though it bumped up two-tenths of a percent in the second quarter.

Companies have also been slashing inventories to avoid getting stuck with unsold goods. If demand picks up again, rebuilding those inventories could provide a big boost to employment and wages, as companies begin to ramp up again to restock. But it remains to be seen when, and how strongly, that pickup in demand will happen.

As paychecks evaporated and work hours shrank during the recession, Americans have hunkered down and begun saving more. The personal savings rate slipped to 4.6 percent in June, after rising to 6.2 percent in May, but it was still well above the 1 percent rate in 2008.

Higher savings will help rebuild batter retirement accounts. But it also creates a headwind for a pickup in consumer spending. That’s troubling when you combine it with lower incomes, which are the engine of future spending. Personal income fell 1.3 percent in June, the steepest plunge in more than four years.

Businesses have also been cutting new investment to the bone until they see convincing signs that the recession is finally over and sustainable growth is picking up. Others are hoarding cash to help them weather the ongoing economic storm.

“Right now we have to worry about enough demand in the economy,” said Tyson. “So if the private sector, particularly consumers, are going to be increasing their savings rate, for every dollar they receive they’re going to be spending a little less and saving a little more.”

Lower wages and higher savings leaves less money to buy the goods and services that will create demand. In the past, consumers who saw their household budgets squeezed managed to pay the bills by borrowing against their home equity or by running up credit card balances. But those options are available for fewer and fewer consumers.

“What our contacts tell us is that we probably have another round of credit card and consumer credit restriction coming,” said Lindsay. “And those (restrictions) have still not caught up to the rise in the unemployment rate and to the decline in FICO (credit) scores. … So I think we’re probably in the fall going to see another round of credit tightening.”

And that means companies will continue to try to squeeze more out of fewer workers.

Source: MSNBC

The Federal Reserve is Immoral

During the first few days of each month comes a task that is increasingly approached with dread around here and, unfortunately, that condition is likely to persist for some time.

Shortly after banks make their month-end update to various short-term savings accounts that we hold, these balances are queried, only to find that, almost without exception, interest credited is less than it was in prior months and far less than it was eight or ten months ago.

Why?

Largely as a result of the Federal Reserve keeping short-term interest rates pegged to zero.

You see, aside from some Certificates of Deposit that were locked up late last year which, today, provide the strangest of feelings during a very strange period in history (i.e., feeling lucky to get about 2.5 percent interest for a one-year CD), it's nearly impossible to get more than a two percent return these days on any kind of an FDIC-insured account and, more likely than not, you'll get less than one percent.

Speaking as one who knows from experience, there's a big difference between one or two percent and five or six percent, what used to be the "minimum" rate of return for a super-safe savings account backed by the government.

More importantly, if this is causing us angst every month, I can only imagine what it's doing to the budgets of other savers whose finances are far less comfortable than ours.

Put simply, the freakishly low short-term interest rates that the Federal Reserve is jamming down everyone's throat are immoral and, maybe, just maybe, a lot more people are beginning to see this, along with other practices of our central bank that are just not right.

Maybe, just maybe, something will finally be done about reforming (or, as suggested by Rep. Ron Paul, abolishing) this banking cartel - hopefully before the Fed celebrates its 100-year anniversary in a few years.

Just to be clear on the terminology here, Merriam-Webster offers the following:

immoral
adjective
not moral; broadly : conflicting with generally or traditionally held moral principles

moral
adjective
1a: of or relating to principles of right and wrong in behavior

Setting aside questions about the dark veil of secrecy surrounding who and how much the central bank has been helping with their problem loans, problem assets, and problems staying solvent, there are at least three ways that the organization David Wessel calls "the fourth branch of government" is acting badly these days - by punishing savers, by enriching the banks, and by fleecing the poor.

Of course, none of this is really new - it all just seems a whole lot more relevant today than ever before given the current state of affairs in this country and around the world.

Punish the Savers

As noted above, it used to be that you could always count on getting five or six percent interest in a "no-risk" savings account backed by the FDIC. In fact, going all the way back to 1955 (when the interest rate data at the Fed's website stops), the average short-term lending rate is right between those two marks - 5.66 percent.

Ever since I was a teenager, I can remember thinking, "If I could somehow amass a million dollars, that would surely generate enough money to live on for the rest of my life".

Well, welcome to the 21st century, where the asset bubbles keep a-poppin' and the interest rates keep a-droppin'.

Over most of the last hundred years, aside from the dollar losing more than 90 percent of its purchasing power (versus a loss of zero during the prior ten decades), there hasn't been too much to complain about in the Fed's management of money and interest rates but, since asset bubbles and the attendant "mopping up" process have become a way of life, the rate of return on savings has been abysmal.

With the exception of the "baby-steps" rate raising campaign a few years ago, the Fed funds rate has been below two percent since 2002 - after the decade's first asset bubble met its pin.

Now, if there was a good reason for keeping rates so low, this might all make some sense to senior citizens who have looked disappointingly at their bank statements for years, but given the fact that the low-rates in 2002-2004 led to the housing and credit bubbles forming and then bursting a few years later, and here we are with even lower rates today, all of this should make anyone with half a brain realize that there is something seriously wrong with the system as it currently operates.

In a nation in dire need of internal savings, the fact that savers are being punished as never before is just plain wrong - immoral - and the idea that we live in an era of "low inflation" is just salt rubbed in the wounds of senior citizens who, year after year, watch prices for health care and energy rise by some multiple of the one or two percent they can earn on their savings.

Twenty years from now (perhaps sooner), they'll look back on today's monetary policy and say to themselves, "What were they thinking, punishing the savers like that when the U.S. desperately needed savings?"

Enrich the Banks

As if it weren't bad enough that savers are cheated every time the Federal Reserve lowers interest rates, the worst part is that banks are the beneficiaries.

You see, in addition to buying up many of the bad assets previously held on bank's books over the last year or so - the result of waves of imprudent bank lending - when the Fed lowers interest rates it helps to make the business of banking much more profitable and, conventional wisdom has it that our financed-based economy will then begin to recover.

And when the banks can borrow at these super-low rates, that means that savers can't earn much more in interest.

Banks come first and savers are far down on the list.

Why does the system work this way?

Well, most people haven't got a clue what the Federal Reserve is or what it does (though, understandably, there is growing interest in this topic, ever since the wheels fell off of the global economy last fall), but the crucial bit of information that the now-slightly-more-curious public should learn quickly is that the central bank was not set up to help the people or the government, but, rather, to help the big banks.

In fact, according to G. Edward Griffin, who happened to write a whole book on the subject, the very reason that the Federal Reserve was formed back in 1913 was so that big banks could wrest back control of the banking system from the many small, fledgling, independent banks all around the country that were taking away their business.

Look around you today. You might see lots of little banks failing, but only a few large ones ever go under and none of the country's biggest banks ever fail.

The Fed was created by the big banks, for the big banks, and its unwritten "mission statement" is to do whatever it takes to ensure the survival and profitability of those big banks, getting the government to step in with public money when necessary for "the greater good", effectively socializing the losses while keeping the gains in private hands.

That's why what we have today - a wholly unsustainable system of ever-expanding credit and debt dominated by a handful of "too big to fail" banks - keeps getting propped up.

The masses are led to believe that credit is the "lifeblood of the economy" when, in fact, credit is the lifeblood of a banking system that has, over time, sucked the life out of the economy.

It's hard to imagine anything that is more immoral than the Federal Reserve's role in this process, now almost a hundred years in the making.

Fleece the Poor

In arriving at the third and final way that the Federal Reserve is immoral, clearly, that last thought in the previous section was premature.

In fact, there is one very good example of something being done today by the central bank that is even more immoral than a nearly century long wealth transfer from the public sector to the private banking system - the ongoing assistance being provided by the Fed in helping the banking system reach out and find new customers so that every possible dollar can be extracted from them.

You see, the country's big banks (along with the central bank that serves their interests) would much prefer that poor people all across the country not go to a place like you see to the right and, for a small fee, convert their paycheck into cash and forever live within their means.

Bankers would much rather see the nation's poor open up checking accounts and then venture further into the world of modern day banking, quickly learning to spend well beyond their means.

Left unsaid in the Fed's many efforts to reach out to the "unbanked" is that checking accounts are a sort of "gateway drug" for many people - a road to debt serfdom where, in addition to paying interest on money borrowed to buy stuff that they don't need, these "newly banked" poor will also be fleeced by a bewildering array of fees and charges in a system that is set up to systematically suck as much money out of as many people as possible.

Over the years, the Federal Reserve has made great efforts to attract new customers for banks, in some cases providing cartoon characters to make the whole idea of debt serfdom seem like a friendly sort of condition, much in the same way that Joe Camel once attracted new smokers.

Under the guise of "education" and with "consumer protection" as its goal, the Federal Reserve might seem to be "looking out for the little guy", but they're not. They've had the power to do this for many years now but, for obvious reasons, have exercised their "power to protect" the consumer only sparingly, allowing millions of subprime borrowers to give the housing bubble one last giant hurrah before it finally burst.

Fortunately, it appears that the Obama administration would like to see the American consumers' interests watched over by some other group and for good reason. A report earlier in the week in the Financial Times detailed how big banks in the U.S. plan to extract almost $40 billion in overdraft fees from American consumers whose balance sheets haven't been bolstered by government bailouts.

It seems that, with the collapse of the mortgage finance bubble, big banks are now reverting to a profit model that is driven more by extracting fees from their customers wherever possible and overdraft fees from the cash-strapped are "the mother lode".

A full 90 percent of overdraft fees come from just 10 percent of all checking accounts and most of this 10 percent have low credit scores and/or are recent entrants to the world of mainstream banking.

Not surprisingly, the highest overdraft fees come from the biggest banks - Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, SunTrust, and Citizens Bank.

For banks, overdraft fees are a low risk, high profit part of their business, not something that is usually mentioned as part of the Fed's outreach programs. It is a sophisticated, large scale sort of "payday loan" system that many Americans fall prey to and, as long as customers have their payroll checks automatically deposited, the bank will always have first crack at the money and people will continue to spend more than they make because, when you get down to the very basics here, most people aren't very good at math.

But, banks are.

Maybe Ron Paul is right - the Fed should be abolished.

Then markets could set interest rates, banks would have to fend for themselves, and there would be one less group helping to extract what little money the poor have left.

by Tim Iacono