It’s a Hard Life to be Rich.

We have spent the last few days holding back tears…

Michael Jackson! Robert MacNamara!

And now our heart goes out to Nantucket Island. Word came this morning that the rich are not living it up like they used to. The New York Times reports that it’s the slowest summer on Nantucket locals have ever seen. There are over 600 properties for sale – and none of them are selling. Even at discounts of up to a third off! Restaurants and bars are offering discounts too – anything to lure in the customers.

Here at the Daily Reckoning, we champion lost causes. We join the diehards. And we take up the banner of despised, persecuted minorities everywhere. So we are aggrieved by the plight of the rich. They’ve lost about $10 trillion in the downturn, according to our estimates. They’re being blamed for every sin

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by Edward Hugh: Barcelonabr /br /Global manufacturing took another step towards growth in June - but the process was, as ever, uneven. The JPMorgan Global Manufacturing PMI posted 46.9, its highest reading since last August. The current output component even expanded slightly following a year-long period of contraction. The PMI has now remained below the neutral 50.0 mark for thirteen successive months.br /br /The principal factors weighing down on the level of the PMI in June were declines in new orders, employment and inventories. However, rates of contraction in new work and employment eased to their weakest for thirteen and eight months respectively. Looking ahead, the new orders to inventories ratio – which tends to move in advance of the production cycle – rose for the sixth month running to its highest since April 2004. Only 4 PMIs - those for China, India, Turkey and Sweden posted growth readings in ...

On June 26, PMI Group Inc. (PMI), a California-based mortgage insurer, announced that Moody's Investors Service (MCO) confirmed its rating on PMI's senior unsecured debt to "B3" and junior subordinated debt to "Caa1". The outlook on the ratings was revised to developing.

While the past downgrades by rating agencies have had a negative effect on PMI's eligibility to insure mortgage loans from GSEs and other private mortgage lenders, the recent action by Moody's will definitely give some relief to PMI.

Moody's took this action as PMI successfully executed its Amended and Restated Credit Agreement. The Amended Agreement reduces the size of the facility to $125 million and eliminates certain financial covenants and events of default contained in the previous revolving credit facility. According to Moody's, amended terms of the credit facility would reduce PMI's near-term default risk. We think the Moody's action should offset the downside

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Global factory activity continued to improve in May amid growing optimism that the worst of the recession may be over. Output contracted at a much less ferociously than at the start of the year in one economy after another, and this month three countries actually registered output growth - India, China and Turkey. The JP Morgan global manufacturing index (PMI) rose to 45.3 in May from 41.8 in April, the highest level in nine months, although still a long way below the 50.0 mark dividing growth from contraction. The component indexes for output and new orders were both running at much higher levels than in April. However, the headline PMI is still at a very low level by historic standards, and well below one which ...

by Edward Hugh: Barcelonabr /br /Well the eurozone outlook is certainly deteriorating less rapidly at this point than it was, at least this is the impression given by the May flash Purchasing Managers Indexes (PMIs) - which show the pace of economic contraction slowing markedly from April. PMI readings for the 16-country euro area rose significantly this month, and hit their highest level for the last eight. It is, however, important to bear in mind that the index still registered contracting economic activity, even if the rate of decline fell for a third consecutive month. Chris Williamson, chief economist at Markit, who compile the indexes, said the latest readings were consistent with second quarter GDP falling about 0.5 per cent quarter on quarter (or by a 2% annual rate), well down from the 2.5% quarter on quarter GDP outcome (or 10% annual rate) in the first three months of the ...

by Edward Hugh: Barcelonabr /br /The global manufacturing recession continued in April, with rates of contraction for output, new orders and employment all showing what are effectively sharp contractions by historical standards. The rates of contraction however moderated almost universally, and this is now the fourth month where this moderation has been evident. Thus, while the contraction is far from over, it is reasonable to say the it has stabilised, and the big issue is at what rate it will hold in the months to come. The initial shock has now been absorbed, but that is a far cry from saying that we already have the worst behind us. The general deterioration in employment conditions raises the concern that as the impact of the government stimulus "shocks" in their turn wane, and as national banking systems come under the impact of the additional loan defaults the growing unemployment and falling ...

pa href="http://feedads.googleadservices.com/~a/9CJoBmKtGA6FcxZcH_xebnVcuTw/a"img src="http://feedads.googleadservices.com/~a/9CJoBmKtGA6FcxZcH_xebnVcuTw/i" border="0" ismap="true"/img/a/pThe a href="http://www.ism.ws/index.cfm"Institute for Supply Management/a (ISM) released its manufacturing report on business Monday and there are now bright spots for two months in a row. You'll remember that the report measures, indexes, and correlates manufacturing activities with other measurement readings from the government and elsewhere.br /br /Although the manufacturing sector report still indicated recessionary trends, the decline was slower than experienced in both December and January. The overall PMI index was up for the second month in a row, pointing to a much slower annualized GDP decline this quarter (Q1) than reported for Q4. The ISM measurements shows that the annualized declining rate to be at 1.7% (That’s 0.425% on a quarterly basis)br /br /The Production Index was up again, increasing by 4.2 percentage points from January's reading (which was up 5.8% from December's)br /br /The Backlog of Orders Index was ...

by Edward Hugh: Barcelonabr /br /a href=”http://2.bp.blogspot.com/_ngczZkrw340/SYbkemRvI3I/AAAAAAAAMhs/IGjYLmJSzj4/s1600-h/eu+confidence+index.png”img id=”BLOGGER_PHOTO_ID_5298173225970115442″ style=”DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 234px; TEXT-ALIGN: center” alt=”" src=”http://2.bp.blogspot.com/_ngczZkrw340/SYbkemRvI3I/AAAAAAAAMhs/IGjYLmJSzj4/s400/eu+confidence+index.png” border=”0″ //abr /br /Central Europe’s economies continued to contract in January – lead by their manufacturing industries – under the combined weight of a credit crunch and a slump in demand for their exports. My feeling as all three economies – Poland, the Czech Republic and Hungary – are now in recession. Hungary’s is clearly the worst case, and events are moving rapidly and negatively there, but the slowdown in the Czech Economy is also very pronounced, and Poland seems finally to be falling into line, following some internal financial chaos back in October. Based on back of the envelope type calculations derived from the PMIs I would say their economies were contracting at the following pace in January.br /br /strong …

Last week was a tough one for the optimists.

In addition to dreadful numbers for auto sales, last week the Institute for Supply Management reported that its manufacturing PMI index fell to 36.2 in November. A value below 50 indicates that more facilities are reporting deterioration rather than improvements in categories such as orders, production and employment. The index never fell below 39 in either of the previous 2 recessions.

Source: FRED.

ISM's related index of business activity constructed from a survey on nonmanufacturing establishments fell to 33.0 in November. We don't have a long enough track record of that index to know what it requires to get a reading that low.

Source: FRED.

But the real attention last week was on the loss of 533,000 jobs during the month of

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The pace of decline in eurozone service activity eased back slightly in August from July’s five-year record low. The final Markit Eurozone Services Business Activity Index came in slightly above the flash estimate of 48.2, registering 48.5 (from 48.3 in July). So eurozone services were declining more slowly, but this was, nevertheless, the third consecutive monthly fall in services activity.Germany was the only big-four euro nation to see an expansion in the services sector in August, although even in Germany the growth rate eased back for the third time in four months and registered a seven-month low. Spain continued to record the weakest performance of the big-four, but the pace of contraction eased for the second month running from June's series record. Both France and, in particular, Italy also saw moderations in the rate of decline of their services sectors after record contractions in July.The pace of ...