February orders increased 2.2 percent but economists expected a 3 percent rise.
January durable goods orders fell 3.6 percent.
Orders for non-defense capital goods excluding aircraft rose 1.2 percent. Analysts' expected of a 2.0 percent gain.
Non-defense capital goods' orders fell 5.2 percent in January.
Excluding transportation which had an unsustainable sharp increase in civilian plane orders, durable goods orders were only up 1.6%.
Boeing received 237 aircraft orders in February, up from 150 in January, accounting for the 3.9 percent jump in transportation orders.
Motor vehicles and parts orders rose 1.6%.
Inventories of manufactured durable goods rose for the twenty-six consecutive month and are now at the highest level since the series was first published on a NAICS basis in 1992
High inventories and falling demand for non-defense capital goods' orders does not portend well for future GDP growth.
If the government can force you to buy health insurance, what can't they force you to do or buy?
That was the question posed by a number of Supreme Court justices throughout today's oral argument on the constitutionality of ObamaCare. And that was the question President Obama's lawyers couldn't seem to answer.
That question didn't seem to bother the four liberal justices, who appeared ready to uphold the law. At one point, Justice Breyer suggested that the government could force you to buy things such as cellphones and burial insurance. The remaining justices, however, appeared highly skeptical of the government's argument. Justice Kennedy and Chief Justice Roberts, largely believed to be the "swing votes" in this case, pressed the administration's lawyer hard for any kind of limit to the President's theory.
Chief Justice Roberts harshly noted that the type of insurance ObamaCare forces people to buy was completely different from the type of health care these people actually use. Justice Kennedy countered the administration's argument by saying that the government will say that every market is "unique."
The fact that the Obama administration didn't have a good answer for these questions could spell doom for the President's signature legislation. That doesn't mean the law will ultimately be struck down. After all, the government needs to convince only one of the conservative justices. But today's hearing illustrated just how uncomfortable they are with a law that, as Justice Kennedy proclaimed, "changes the relationship of the federal government to the individual in a very fundamental way."
The Obama administration’s health insurance mandate faced severe skepticism Tuesday from conservatives on the Supreme Court during a pivotal morning of oral arguments on the landmark legislation.
Justice Anthony Kennedy, the court’s most consistent swing vote, repeatedly voiced doubts about the mandate’s constitutionality, suggesting he could side with the court’s four staunch conservatives to overturn President Obama’s healthcare law.
“That changes the relationship of the federal government to the individual in a very fundamental way,” Kennedy said.
Jeffrey Toobin, a lawyer and legal analyst who writes about legal topics for The New Yorker called Tuesday a “train wreck for the Obama administration.”
“This law looks like it’s going to be struck down. I’m telling you, all of the predictions, including mine, that the justices would not have a problem with this law were wrong,” Toobin said Tuesday on CNN. “I think this law is in grave, grave trouble.”
Supporters of the law had seen Chief Justice John Roberts and Justice Antonin Scalia as possible supporters of the mandate in addition to Kennedy, but the two offered aggressive questions during the two hours of arguments.The debate hinged largely on whether the mandate requires people to enter the market for health insurance or regulates the market for healthcare. Verrilli argued that everyone either uses healthcare or is at risk of unexpectedly ending up in the market for healthcare services. The mandate simply ensures that those services are paid for, he said.
Scalia wasn’t buying it.
“I don’t agree with you that the relevant market here is health care. You’re not regulating health care. You’re regulating insurance,” Scalia said. “It’s the insurance market that you’re addressing and you’re saying that some people who are not in it must be in it.”
Following an exchange between Verrilli and Scalia, Justice Sonia Sotomayor spent a full two minutes outlining the three main elements of the Justice Department’s position, then she asked Verrilli, “Which of these three is your argument? Are all of them your argument?”
Roberts pressed Verrilli to explain where Congress’s power to issue new mandates would stop. The lack of a “limiting principle” has dogged the Justice Department’s case throughout the process, prompting one lower-court judge to question whether Congress could also require citizens to buy broccoli, because a healthy diet would cut down on healthcare costs.
The Supreme Court justices revived the broccoli analogy and ran through several more, asking whether the government could mandate the purchase of cellphones, gym memberships, cars, prescription drugs or burial insurance.
Conservative judges in lower courts have upheld the mandate on the grounds that healthcare is unique, due to the risk of accidents and the nature of its cost-shifting. Although other goods also get more expensive when people don’t buy them, there are few parallels to the requirement to treat uninsured patients.
The mandate is also considered essential to effectively implementing other parts of the healthcare law. Provisions requiring insurance companies to cover sick people, and prohibiting them from charging those patients higher prices, could dramatically raise the price of insurance if not counterbalanced with the mandate.
“That seems to me a self-created problem” that could be solved by not imposing those regulations, Scalia said.
Senator Lee Says 5-4 Ruling Against Individual Mandate
Sen. Mike Lee (R-Utah) predicted Tuesday that the Supreme Court will rule against President Obama's signature healthcare legislation and declare the individual mandate unconstitutional.
"Based upon the questions from the bench, I am predicting that there's likely to be a 5-4 ruling in this case. I tend to think it's a 5-4 ruling holding that the individual mandate is unconstitutional," said Lee on Fox Business Tuesday.
Lee said that he sensed Kennedy, who is considered the traditional swing vote on the court, appeared "very skeptical" about the Justice Department's argument in defense of the mandate.
Lee, who clerked for Supreme Court Justice Samuel Alito on the U.S. Court of Appeals for the Third Circuit Court, also noted that today's hearing was uncharacteristically "lively."
The Illinois Policy Institute asks the correct question "If the government can force you to buy health insurance, what can't they force you to do or buy?"
Regardless of whether or not one thinks we need national healthcare, legislation ought to pass strict constitutional muster. Obamacare doesn't, and thus deserves to be flushed down the toilet. Congress can try again.
In the course of a quick 15 minute debate broken into a series of 30 second sound bites, it is sometimes difficult to get everything said that needed to be said. One point I did not get a chance to mention again, but I did bring up in my Blog rebuttal to Weisenthal, is that central bank planning of money supply and interest rates is in and of itself ridiculous. Repeat bubbles and bailouts prove it.
Soviet Style Planned Economies Do Not Work
It makes as much sense for a group of guys in a room to attempt to set a price and amount of money as it did for inept Soviet-style central planners to run an economy, setting the price and amount of steel production and other goods - precisely none.
Certainly the Greenspan Fed ignored (cheerleaded is a better word), the housing bubble every step of the way. Bernanke defended the housing bubble and failed to see its consequences.
Stability and Flexibility
The most amazing, and galling thing, is Bernanke has the nerve to preach about "price stability" in the wake of that collapse.
Jo wants the flexibility for the Fed to step in and cleanup messes. I don't want the flexibility of fractional reserve lending and fiat currencies because that is what created these messes in the first place.
Deputy U.S. Trade Representative Michael Punke and Treasury Deputy Assistant Secretary for International Monetary and Financial Policy Mark Sobel today began a two-day series of meetings at the World Trade Organization’s (WTO) seminar on the relationship between exchange rates and trade, where they will advocate for market-determined exchange rates as a foundation of an open global trading system.
U.S. participation in the WTO seminar is premised on the importance of trade liberalization and recognition that persistently misaligned exchange rates and competitive devaluations undercut an open trading system.
Ambassador Punke stated: "Real exchange rates that are aligned with fundamentals are a necessary foundation for the global trading system."
The discussion is useless. China will float the Yuan when it is ready and not before.
Australian Prime Minister Julia Gillard said on Monday she was surprised at the scale of her ruling Labor party's defeat in state elections, widely seen as a dire warning for her fragile government.
Labor, which has ruled for 20 of the past 22 years in northern Queensland, suffered an unprecedented rout at weekend elections, taking so few seats that its official party status in the state is under threat.
When Labor came to power nationally in 2007 it also controlled all the state parliaments, but since then the four major east and west coast states have fallen to the Liberals, complicating passage of its policies and reforms.
After the Queensland vote, Labor is expected to have just seven seats in the state to the conservative Liberal National Party's 78.
The Labor Party is aptly named but US readers need to be aware that the strangely named Liberal National Party has a conservative connotation.
Compounding the irony, the World Socialist Web bemoans the alleged "pro-business" program of the Labor Party. You cannot make this stuff up.
Small Firms Struggle With Bills
Australian businesses are going to crash and burn as a result of Labor initiatives and a property bubble headed for a "big flush".
MORE than a quarter of small to medium-sized firms face going under because they are unable to pay their tax bills and outgoings, the latest survey by Bibby Financial Services says.
The study found that 26 per cent of firms struggled to pay their bills to suppliers, while 24 per cent faced an uphill task meeting their tax payments.
Only 30 per cent of firms said they intended to invest in their business, down from 33 per cent the previous year.
About 40 per cent of firms said managing cashflow, staffing issues, dealing with red tape and tax administration were among the biggest headaches they faced.
The cashflow problems were heightened with almost half of the firms experiencing delays in payment and 27 per cent had to deal with bad debts in the past year.
"Not surprisingly, many remain pessimistic about their future payment terms. Over a third (36 per cent) expect the length of time they must wait to be paid will increase further in the coming quarter," BFS managing director Greg Charlwood said.
Bank of Queensland Halted, Hit By Surge in Real Estate Losses
THE Bank of Queensland (BoQ) has been hit by a surge in residential and commercial property loans striking trouble, prompting the board to order a $450 million capital raising to shore up the regional bank's balance sheet.
The stock was put in a trading halt today as BoQ’s chief executive Stuart Grimshaw revealed that the bank would record a $91 million after-tax loss for the first half of 2012. The statutory loss follows a $222m normalised underlying profit for the period.
The Party is Over
Turn out the lights, the party is over. Australia is headed for one hell of a hangover in the wake of residential and commercial real estate busts. Retailers will be especially hard hit as consumers throw in the towel on spending and store owners struggle to keep up with absurd labor costs and excessive lease payments or property taxes.
Retail prices in Australia are absurd. A 5% reduction in prices is hardly a bargain. As for the notion mining will carry the economy, forget about it. Commodity prices are going to plunge, and besides, commodities are not a big driver of jobs anyway.
There is no "floor" under retail. The bottom is going to fall out, and unemployment is going to soar. In turn, rising unemployment will clobber Australia's already deep-in-trouble housing sector.
As for small shops, they are completely doomed. Store owners with little leeway on wages will not get the income they need to pay taxes, interest, utilities, and rent.
Expect an across the board retail and housing bloodbath because one is coming.
Inquiring minds are asking How does Paul Ryan's budget plan stack up against president Obama's budget plan, item-by-item? With thanks to Ross Perez and Lori Williams at Tableau Software, let's take a look.
The idea for this post came from Lori Williams. I asked for the deficit and debt comparison tables at the bottom. Numbers are rounded to the nearest $100 billion.
In Path to Prosperity I found this interesting chart and commentary.
First, Figure 2 makes it very clear that, absent action, Social Security, Medicare and Medicaid will soon grow to consume every dollar of revenue that the government raises in taxes. At that point, policymakers would be left with no good options.
I happen to agree with that analysis, so what does Ryan propose to do about it? The answer is nothing.
Obama vs. Ryan Medicare Proposal
Note that Medicare expenses soar under both Obama's plan and Ryan's plan. Is this the best Ryan can do?
Obama vs. Ryan Deficit and Debt
Notice how both Ryan and president Obama make progress for three years, then nothing for the next seven. Ryan does a better job, but after 10 years of Ryan's proposal, public debt will rise from 11.5 Trillion to $16.1 trillion and that is if Ryan's revenue assumptions come in.
Here's a hint: They won't. Revenue assumptions for both Obama and Ryan will prove to be way too optimistic.
A point of note: Ryan and Obama use a different starting point for public debt, which coupled with arithmetic rounding, explains the slight discrepancy in the first column of numbers.
Path to Prosperity or Path to Ruin?
It's easy to make a comparison to Obama's budget and do better. Indeed it would be hard to do worse, but that does not make Ryan's budget any good.
Ryan does nothing about Medicare and makes the horrendously over-bloated defense budget even worse.
I happen to like some of Ryan's ideas, and hate others, but the overall budget proposal is not fiscally sound.
I would like to do similar analysis of Romney's plan. Unfortunately Romney does not have a plan, only vague promises of miracles, more far-fetched than what Ryan has proposed.
Addendum: References to "National Debt" above were corrected to read "Public Debt".
Steen Jakobsen, chief economist at Saxo Bank in Denmark discusses the illusion of cheap money, bond market yields, and the lack of European reform in his latest email.
In Spain, things are going from bad to worse. Last weekend's local election in Andalucia, where Spain’s centre right People’s Party failed to secure an outright majority, left Prime Minister Rajoy without a mandate to carry on with tough austerity.
It was a bad start to week where we on Thursday will see a major general strike aimed at… Yes, you guessed it: Austerity measures.
Spain 10-Year Bonds and 5-Year CDS
Illusion of Cheap Money
The European story remains one of major promises and no actual reforms. A low interest rate and an extreme sense of “security” created by the illusion of easy money and low interest rates won't last forever.
As I wrote in Interest rates: the market has it all wrong, we could be on route to an exit strategy from central banks which at a bare minimum will be a goodbye to “unconventional measures” and if so, the low in interest rate cycle is in place.
30 years of Japanisation?
The only way central banks can create a proper exit from unconventional is to hand over the torch to reforms from governments and politicians. Unlikely, yes, needed?
Absolutely, otherwise we are doomed to 30 years of Japanisation.
I concur with the above analysis. What cannot last forever by definition won't. That includes a market whose only focus at the moment is on the "illusion of cheap money".
