Archive for October 16, 2008

CNN/AP: Venezuela to introduce six hour work day

October 16, 2008 Leave a comment

Forwarded by a keen eyed supporter of shorter working time:

CARACAS, Venezuela (AP) — The government of President Hugo Chavez is planning to establish a 6-hour workday under forthcoming legislation.

Labor Minister Roberto Hernandez announced Monday that he would present a proposed bill before the end of the year to reduce the workday from 8 to 6 hours, improve employee benefits and establish “more forceful” penalties for businesses that violate labor laws.

The president’s allies hold a majority within the National Assembly and most bills proposed by Chavez’s administration are approved without considerable delay.

Chavez presented the same proposal as part of a constitutional reform package that voters rejected last December.

Before the vote, some business owners warned that reducing the workday would force them to cut jobs or close down.

International trade crashing…

October 16, 2008 Leave a comment

The Baltic Dry Index is a commonly used indicator for international trade. This index has now fallen to its lowest level in 5 years. Some are attributing the problem to difficulty of international shippers to get letters of credit which guarantee payment for their shipments – a sign of deteriorating international economic conditions.

According to Mish Shedlock, this makes sense because, “demand is falling like a rock. Who in their right mind is not cutting back production in the face of the biggest consumer led recession in history?” Those banks who are lending, without concern for whether they will get their money back, “are the precisely the ones who will not get their money back.”

Thus, Washington’s erratically evolving plan to force banks to lend is worthless. Mish asserts:

The smart banks should be closed for new business. I am sure there are some exceptions in medical businesses, bankruptcy related businesses, or small niche markets in other places, but for the most part, Compelling Banks To Lend At Bazooka Point is exactly the wrong thing to do.

The US is in a recession, consumers are cutting back discretionary spending, there is rampant overcapacity in every sector but energy, and there is no reason to go on a lending spree. Furthermore, there is no reason for any qualified buyer to want to borrow. Why would any responsible party want to expand in this environment? The only people who want to borrow significant sums of money now are the very people banks should not want to lend to. Thus the best thing banks can do with that money is sit on it.

FRBNY: “conditions for New York manufacturers deteriorated significantly in October”

October 16, 2008 Leave a comment

According to the Federal Reserve Bank of New York manufacturing conditions are falling sharply:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in October. The general business conditions index dropped 17 points to a record-low -24.6. The new orders index also fell to a record low, and the indexes for shipments, unfilled orders, and inventories all declined sharply. The prices paid index eased significantly, to its lowest level of the year, while the prices received index also fell, although less sharply. Employment indexes were negative. Future indexes declined markedly with exceptionally large declines in the future new orders and shipments indexes.