2012 Presidential Election

Last Friday saw two high-profile liberal pundits – one on Bloomberg News's Political Capital and the other on PBS's Inside Washington – repeating the story that Newt Gingrich divorced his first wife while she was being treated for cancer, without either of them noting that one of Gingrich's daughters – Jackie Gingrich Cushman -

Late Friday afternoon, Todd Shields at

Not that it took keen insight to catch it, but yours truly was one of a very few people who pointed out that General/Government Motors unduly dressed up its financial statements in advance of its late-2010 initial public offering by foisting an unreasonable level of vehicle inventory on dealers. The effect of this was to enable the company, which in accordance with general industry practice recognizes sales when it ships vehicles to dealers, to book an estimated $900 billion in sent-ahead pre-tax profit largely not supported by dealer sales. Contrary to the drawdown or at least level-off I expected after the IPO, GM, with of course virtually no establishment media coverage, has continued to push vehicles out to its dealers to what would appear to be potentially dangerous levels, as seen in the following graphic (HT to Zero Hedge for original): Dealer inventories are 30% higher than they were on September 30, 2010, the end of the last full quarter before the IPO (624,000 vs. 478,000), and 62% above where they were at the end of 2009 (624,000 vs. 385,000). That would make sense if GM's sales have increased by similar percentages, but they haven't. Sales through November of calendar 2011 are 14% ahead of the first eleven months of 2010. Even if you believe that pre-IPO inventories were justified, it would appear that at least half of the new layer isn't. On a look-back basis, GM's days' sales in inventory is just shy of 100 days. On a look-forward basis, assuming the next three months' dealer sales beat last year's comparable three months by 10%, it's 84 days. Assuming a 37%-63% product mix between cars and light trucks (which is the sales mix so far this year), $5,000 in gross profit per car, and $12,000 in gross profit per light truck (consistent with the calculations from a year ago), GM has sent ahead another $1.3 billion in pre-tax profit since September 2010. The next paragraph would seem to indicate that light trucks are an even higher percentage of on-hand inventory, which would mean that the sent-ahead profit number is even larger. To date only one story I'm aware of ( Bloomberg, July 5 ) has appeared in the establishment press about GM's extraordinary inventory buildup. Industry guidance on prudent inventory levels varies, but it generally suggests that they should be between 45 and 75 days, and definitely not well into the 90s. The Bloomberg item quotes an industry standard of 60 days, along with GM's justification that theirs is appropriately higher (100-110 days for trucks alone) because of the need “to meet demand for different combinations of weight classes, cab types, engines and trim levels.” I don't see how that gets you into the 90s, let alone triple digits, unless you have motives beyond having vehicles conveniently available to customers. The Bloomberg article notes that Ford manages to keep days' sales at dealers of its truck lines below 80. The danger in all of this is that if there is an economy- or gas price-driven sales slump, dealers will start resisting company pressure to keep ordering, and if successful, slow down GM's shipments and ultimately its production lines. That's a danger, thanks to establishment press non-coverage, about which the public is being kept almost completely in the dark. Cross-posted at BizzyBlog.com .

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GM Non-Story: Dealer Inventory Build-up Continues

At the Washington Post's “with Bloomberg” Business section, the self-described locale “Where Washington and Business Intersect,” a Wednesday item by Neil Irwin (“Fed downgrades growth forecasts, sees high unemployment for years ahead”) told us that “The Federal Reserve sharply downgraded its projections for the U.S. economy,” but never cited any projected growth numbers. Seriously. Having learned what they are for 2011 and 2012 in the seventh and eighth paragraphs at an Associated Press item (well, at least they got to it, though it probably won't make it into many broadcasts of AP's content because of its placement), it's understandable why staunch defenders of Team Obama would resist doing so. After the jump, I'll take out the mystery by getting to the AP's numbers first: Fed foresees far weaker growth than it had earlier … The Fed now predicts the economy will grow no more than 1.7 percent for 2011. For 2012, it foresees growth of about 2.7 percent. Both forecasts are roughly a full percentage point lower than its June forecast. The Fed sees unemployment averaging 8.6 percent by the end of next year. In June, it had predicted unemployment would drop next year to as low as 7.8 percent. The rate is now 9.1 percent. To be clear, Irwin did specify the unemployment numbers, but said absolutely nothing about future economic growth: The Federal Reserve sharply downgraded its projections for the U.S. economy Wednesday, warning that weak growth and high unemployment will be the norm for years. The Fed expects that the unemployment rate will be around 8.6 percent at the end of next year, down only slightly from 9.1 percent today, and will still be between 6.8 percent and 7.7 percent in late 2014. In their June forecast, Fed officials said joblessness would come down faster, to around 8 percent by the end of 2012, when the next presidential election will take place. Despite these projections, the Fed’s policymaking board declined during the two-day meeting that ended Wednesday to take any new action to boost growth, leaving ultra-low interest rates unchanged. Leaders of the central bank are coming around to a view they had resisted: that the economy, weighed down by consumer debt and a depressed housing market, will not soon return to its old path of growth. The pace of economic growth the officials expect in 2012 is not high enough to put Americans back to work in large numbers. … Economic growth picked up in the July-through-September months, to a 2.5 percent annual rate of growth. Gee Neil, don't you think at least some of your readers of a story about projected economic growth would want to know the specifics? Truly, a weak writeup. Cross-posted at BizzyBlog.com .

Originally posted here:
WaPo Item on Fed’s Economic Downgrade Leaves Out Tepid Projected Growth

Yesterday, Joe Weisenthal Business Insider reacted to the mixed economic news of the day by observing: “Lots of folks are scratching their head about today's dismal UMich/Reuters consumer sentiment number coming in so ugly, just as retail sales for September came in so strong.” It seems that the folks at the Associated Press were not among the head-scratchers. From all appearances, the self-described Essential Global News Network, whose acronym might as well stand for “The Administration's Press,” didn't cover the consumer sentiment story at all. What follows are several paragraphs from Alex Kowalski at Bloomberg News describing just how ugly it was, complete with the “U-word” we've all come to know and laugh at (bolds are mine throughout this post): U.S. Michigan Consumer Sentiment Index Unexpectedly Falls Confidence among U.S. consumers unexpectedly dropped in October as Americans' outlooks for the economy and their finances slumped to the lowest level since 1980. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 57.5 this month from 59.4 in September. The median estimate of economists surveyed by Bloomberg News called for a reading of 60.2. The gauge of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 47, the lowest since May 1980. Consumers may be questioning the recovery's durability as incomes stagnate, home prices fall and policy makers debate ways to strengthen the recovery. Faster job growth may hold the key to bigger gains in consumer spending that accounts for about 70 percent of the economy. … The difference between the median projection and the actual figure was the biggest in percentage terms since November 2010. Searches on ” Michigan consumer ” and ” Thomson consumer ” (not in quotes) at the AP's main site return nothing relevant and nothing at all, respectively. A Google News search for the last 24 hours on [consumer michigan "associated Press"] (input exactly as indicated between brackets, sorted by date) returns only five items, none of which give evidence that AP covered the consumer sentiment story.Same story, different search : A Google News search for the last 24 hours on [consumer thomson "associated Press"] (input exactly as indicated between brackets, sorted by date) returns only one item. Again, there is no evidence that AP covered the consumer sentiment story. In a brief cruise through the Google News archive, I was able to find that the wire service mentioned the Thomson/U of M survey in July , October 2010 , and September 2010 . About two hours after the consumer sentiment news was released, AP Business Writer David McHugh did find time to write up the relatively good news about retail sales: Stocks pushed higher Friday as better than expected U.S. retail sales data and positive corporate news overshadowed fears from Europe's debt crisis. U.S. retail sales for September rose 1.1 percent, ahead of 0.7 percent market expectations. That indicated to some that the world's largest economy might not be in as much trouble as feared earlier. The consumer sentiment news says otherwise. It's hard not to conclude that McHugh and his employer didn't want to pass on anything that might dilute the positive retail news. Cross-posted at BizzyBlog.com .

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MIA: AP Coverage of Dour Consumer Sentiment Report

Bloomberg News has taken an unorthodox step in the world of wire services, and created an opinion section that it says “will embrace a diversity and variety of opinion.” But early signs suggest a liberal tilt to”Bloomberg View”, as it's called. It will be edited by David Shipley, former deputy editor of the New York Times opinion page, and James Rubin, who was an Assistant Secretary of State under President Clinton. Furthermore, Bloomberg employees are quite open about the fact that the views of the company's president, New York City mayor Michael Bloomberg, will be reflected prominently in its content. read more

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Bloomberg News Hypes Balance in New Opinion Section, But Staff Suggests Leftward Tilt

There's little point in “following the money” if you only follow it in one direction. And too often, journalists only follow the money to the right, leaving shady financial dealings from the left unexposed. That's exactly what Bloomberg News reporter Ryan Donmoyer did in a recent article on the death tax provisions of President Obama's tax deal with congressional Republicans. As the Washington Examiner's Tim Carney noticed , Donmoyer dutifully noted the indirect financial stake in the death tax debate of a conservative group that opposes the tax, but ignored a similar conflict on the parts of some of the tax's proponents. read more

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Bloomberg News Follows the Money, But Only in Direction of Death Tax Opponents

AP – Meg Whitman, the Republican candidate for California governor, has surpassed New York Mayor Michael Bloomberg for the highest personal contribution in American campaign history. Read more: Meg Whitman breaks US campaign spending records (AP)

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Meg Whitman breaks US campaign spending records
(AP)

What if reporters hunting and pecking for happy economic news are playing up incomplete government reports? Take this AP story by Jeannine Aversa on hopes rising over jobless claims: The number of people signing up for unemployment benefits dropped to the lowest level in two months, an encouraging sign that companies aren’t resorting to deeper layoffs even as the economy has lost momentum. The Labor Department reported Thursday that new claims for unemployment aid plunged last week by a seasonally adjusted 27,000 to 451,000. Economists had predicted a much smaller decline of just 2,000. But wait, we have an asterisk alert: did the Labor Department really get data from all 50 states? Bloomberg News explained, ahem, that nine states did not report actual numbers: For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said. There’s nothing wrong with reporting the Labor Department estimates — but every story ought to include the missing-states paragraph in their stories, and reporters ought to restrain their “hopes rise” talk considering the incompleteness of the reporting. This Aversa story (or at least this version) doesn’t have that information. If this was a GOP Labor Department, isn’t it possible reporters would be more skeptical that the government estimates might have some administration spin in them?

Excerpt from:
Asterisk Alert: AP Story on Jobless Claims Doesn’t Note Labor Dept. Report Missing Data of Nine States

“This is the answer.” Via Newsbusters. I don’t want to spoil the surprise, but Mike Bloomberg and “communications pizazz” both figure prominently. Is Bob Gates, of all people, really one of the weak links in this administration? Bob Gates? Visit msnbc.com for breaking news, world news, and news about the economy View the video