Economy: what sectors are left?

This little snippet of information just rose to the top of Yahoo! News:

The nation's service sector contracted in January for the first time in almost five years, a trade group of purchasing executives said Tuesday.

This little story is destined to disappear into the ether, I'm sure, snuffed out like a brief candle by primary news.

I'm not an economist, so I can't give this piece of information the full bonddad treatment, but it sounds kind of, well, ominous:

The consensus among survey respondents was that the services sector — which includes industries such as restaurants, banking, construction, retailing and travel — has "come to the end of a long-term period of growth,"

...especially given how often we hear about the contraction of the manufacturing and IT sectors (the good jobs) and that the growth of the service sector (low-paying jobs) is keeping the unemployment rate relatively steady.  The "end of a long-term period of growth" does not sound like a mere statistical bobble or a January anomaly.

ISM said only three service industries reported growth, while 14 showed contraction.

•  I dont think it will disappear

  due to the fact that the market is tanking rather alarmingly.

  Big news day.

  by ablington on Tue Feb 05, 2008 at 07:52:48 AM PDT

  •  There goes my retirement account again

    This ownership society is starting to kind of suck.

    by kismet on Tue Feb 05, 2008 at 07:54:45 AM PDT

    •  Naomi Klein has an article in The Nation

      in which she rips apart Bush's 'Ownership Society':

      Remember the "ownership society," fixture of major George W. Bush addresses for the first four years of his presidency? "We're creating...an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property," Bush said in October 2004. Washington think-tanker Grover Norquist predicted that the ownership society would be Bush's greatest legacy, remembered "long after people can no longer pronounce or spell Fallujah." Yet in Bush's final State of the Union address, the once-ubiquitous phrase was conspicuously absent. And little wonder: rather than its proud father, Bush has turned out to be the ownership society's undertaker.

      Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market--a home mortgage, a stock portfolio, a private pension--they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. That meant they could vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.

      It was always tempting to dismiss the ownership society as an empty slogan--"hokum" as former Labor Secretary Robert Reich put it. But the ownership society was quite real. It was the answer to a roadblock long faced by politicians favoring policies to benefit the wealthy. The problem boiled down to this: people tend to vote their economic interests. Even in the wealthy United States, most people earn less than the average income. That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down. [...]

      Today, the basic promises of the ownership society have been broken. First the dot-com bubble burst; then employees watched their stock-heavy pensions melt away with Enron and WorldCom. Now we have the subprime mortgage crisis, with more than 2 million homeowners facing foreclosure on their homes. Many are raiding their 401(k)s--their piece of the stock market--to pay their mortgage. Wall Street, meanwhile, has fallen out of love with Main Street. To avoid regulatory scrutiny, the new trend is away from publicly traded stocks and toward private equity. In November Nasdaq joined forces with several private banks, including Goldman Sachs, to form Portal Alliance, a private equity stock market open only to investors with assets upward of $100 million. In short order yesterday's ownership society has morphed into today's members-only society. (Link)

      by Guy Incognito on Tue Feb 05, 2008 at 08:02:11 AM PDT

      •  Diary ! Diary !

        You should post this as a diary. Good catch!

        by NBBooks on Tue Feb 05, 2008 at 08:12:49 AM PDT

        •  Eep...

          I don't have the time to diary this today, unfortunately. Feel free to diary it yourself, if you like? I'm well versed in some areas of economics, but this isn't one of them, and from what I've read of yours I have no doubt that you'd add more value than I could!

          Another article that's pertinent is Engdahl's article on Greenspan:

          While free market purists and dogmatic followers of Greenspan’s late friend, Ayn Rand, accuse the Fed Chairman of hands-on interventionism, in reality there is a common thread running through each major financial crisis of his 18 plus years as Fed chairman. He managed to use each successive financial crisis in his eighteen years as head of the world’s most powerful financial institution to advance and consolidate the influence of US-centered finance over the global economy, almost always to the severe detriment of the economy and broad general welfare of the population.

          In each case, be it the October 1987 stock crash, the 1997 Asia Crisis, the 1998 Russian state default and ensuing collapse of LTCM, to the refusal to make technical changes in Fed-controlled stock margin requirements to cool the dot.com stock bubble, to his encouragement of ARM variable rate mortgages (when he knew rates were at the bottom), Greenspan used the successive crises, most of which his widely-read commentaries and rate policies had spawned in the first place, to advance an agenda of globalization of risk and liberalization of market regulations to allow unhindered operation of the major financial institutions. [...]

          This is the true significance of the crisis today unfolding in US and global capital markets. Greenspan’s 18 year tenure can be described as rolling the financial markets from successive crises into ever larger ones, to accomplish the over-riding objectives of the Money Trust guiding the Greenspan agenda. Unanswered at this juncture is whether Greenspan’s securitization revolution was a "bridge too far," spelling the end of the dollar and of dollar financial institutions’ global dominance for decades or more to come.

          It's a very sobering read, and I felt sick as I read it. But it's important that we recognize how we came to be where we are, and who's responsible.

          by Guy Incognito on Tue Feb 05, 2008 at 08:30:19 AM PDT

          •  'The end of dollar financial institutions'

            That's where I am placing my bet.  My 401k has not lost money during this implosion.

            by RichM on Tue Feb 05, 2008 at 08:41:00 AM PDT

            •  Tumultuous times

              The Iranian Oil Bourse is slated to go online any day now, internet permitting(and assuming that THAT doesn't cause war).

              Keep an eye on currencies pegged to the dollar -- those economies are importing our monetary inflation and it's causing all sorts of social tensions. Inflation is a problem that will have to be dealt with either sooner or later. Those currencies will have to depeg and raise interest rates, and as soon as that happens all of those currencies will rise versus the dollar. As the dollar continues to drop, the bottom can drop out at any point, especially if the Oil Bourse offers oil settlements in less troubled currencies.

              Who knows what these lunatics might do if they're not able to save the dollar from a precipitous drop? For all of their talk of the virtues of free markets, we've seen  all sorts of shady inteventions and manipulations by the Fed/Plunge Protection Team. They're talking about using monetary policy to influence asset prices. In other words, they're NOWHERE.

              by Guy Incognito on Tue Feb 05, 2008 at 08:55:27 AM PDT

              •  I thought...

                The Iranian bourse was scrapped.  Basically, they will accept payment in Euros, based upon wherever the Euro is in relation to the dollar at the sale.  I think they scrapped the bourse because it would be too overt.  If the except dollar-denominated Euros, then they can stay under the radar.

                by RichM on Tue Feb 05, 2008 at 09:12:38 AM PDT

                •  It had been frozen

                  because of UN economic sanctions, but once those lapsed Iran was free to proceed with the project, IIRC.

                  There's a difference between accepting Euros for oil settlements and pricing oil in Euros. Currently Iran accepts payment in Euros, and actually prefers it for obvious reasons. But if Iran creates its own oil marker(analogous to 'Brent Crude', for example) based on the Euro, then this would make it far easier for other oil-producing countries to abandon the petrodollar. The Bourse is an international electronic market so, for example, Canada can choose to price its oil according to a Euro marker and sell it at the Oil Bourse, in theory. At least, that's the gist of it, as I understand it....

                  by Guy Incognito on Tue Feb 05, 2008 at 09:22:58 AM PDT

          •  Just cut and paste both your posts

            both your posts= diary!!!

            by Silent Lurker on Tue Feb 05, 2008 at 08:49:49 AM PDT

            •  Heh...

              I could do an insta-diary today, but I'd rather put some thought into it. Can have one up tomorrow!

              by Guy Incognito on Tue Feb 05, 2008 at 09:00:07 AM PDT

      •  Yeah...

        The "ownership society" always sounded to me like a cover for the complete abdication of any moral responsibility for one another, or for the well-being of the whole.

        by DBunn on Tue Feb 05, 2008 at 08:29:41 AM PDT

    •  I dont own much, but my regular

      ol' savings account has lost about 2 percentage points on the interest rate due to the fed rate cuts. For awhile there I was getting close to 5%.

      by ablington on Tue Feb 05, 2008 at 08:04:10 AM PDT

      •  Not to mention that the value of every dollar

        in that account has dropped in value by a substantial amount.  It's hard for me to believe that the folks in the know didn't have this planned from the beginning.

        by beemerr90s on Tue Feb 05, 2008 at 08:18:16 AM PDT

      •  don't own much - but own outright -

        I got my monthly statement for my single credit card yesterday - my APR was reduced by .24%!!!!
        Whee!!!! I'm sure to go out and splurge , keeping the waitress at Sonic making just enough to keep her from qualifying for Medicaid. THat's decimal two four percent -why bother?? I'm still not gonna use the damned thing but about once every two months.

        by Abra Crabcakeya on Tue Feb 05, 2008 at 08:19:23 AM PDT

        •  I'm gonna harass my creditors again

          and make them give me promo rates beneath what CD's are paying. Wheeee!

          by 2ajpuu on Tue Feb 05, 2008 at 08:24:56 AM PDT

        •  mmmmm...Sonic.

          by ablington on Tue Feb 05, 2008 at 08:53:35 AM PDT

          •  Sonic - footlong chile cheese healthfood n/t

            by Abra Crabcakeya on Tue Feb 05, 2008 at 08:55:29 AM PDT

      •  Mortgage rates dropped

        a whopping ~.1% in response.

        It is usually better to buy stock in the bank than to deposit money in it.

        by SingleVoter on Tue Feb 05, 2008 at 08:20:53 AM PDT

•  Also, we need to get on the ball with

  alt energy. This will be a growth industry for years to come.

  by ablington on Tue Feb 05, 2008 at 07:53:47 AM PDT

  •  THE growth industry

    I believe that for most of the next 10-15 years, the conversion from fossil fuels to alt energy will be the primary economic activity.

    BTW, I can't hype geothermal enough. It's the only safe, clean energy source that's available 24/7, even on cold, windless nights.

    by 2ajpuu on Tue Feb 05, 2008 at 08:22:45 AM PDT

    •  we'll get solar to work 24/7

      when we can beam it down. just you wait! (yes, that requires significant global cableage. let's build it!)

      by RisingTide on Tue Feb 05, 2008 at 08:37:41 AM PDT

      •  In the short- to medium-term, though

        If and when we move to alt energy, geothermal will be able to command premium prices without the significant outlay (monetary and energy) that moon-based power stations will require.

        by 2ajpuu on Tue Feb 05, 2008 at 09:22:15 AM PDT

        •  moon based is too far out.

          geostationary is where it's at.

          now we still got to build the mirrors, and convince the same folks who are still scared of nuclear energy that it really will be fine.

          I don't know so much about geothermal. should wiki it.

          by RisingTide on Tue Feb 05, 2008 at 09:32:49 AM PDT

    •  In that case...

      The EU is WAAAAYYYY ahead of us.  Their governments have been investing in alternative energy for a decade.  Meanwhile, we have been spending trillions of dollars on oil wars of choice.

      by RichM on Tue Feb 05, 2008 at 08:43:23 AM PDT

      •  But we have so much to show for them....

        After all, our star-spangled Commander-in-Chief said that they would make gas cheaper.

        by 2ajpuu on Tue Feb 05, 2008 at 09:24:25 AM PDT

  •  It is the only industry that can grow

    in this country, everything else is overseas. This from a story on msn front page right now:

    The service sector makes up about 90% of the U.S. economy.

    link
    90% of our economy is from the service sector, the burger-flipper at McDonalds makes up a larger portion of our economy than anyone working at GM or any of the big 3.

    by meatwad420 on Tue Feb 05, 2008 at 08:27:06 AM PDT

    •  If the dollar drops far enough

      other countries might find it profitable to build sweatshops here.

      by 2ajpuu on Tue Feb 05, 2008 at 08:28:41 AM PDT

      •  If a rethug is elected

        especially the huckster with his flat tax, then yes this will be a sweatshop country. The black market will make sure of that.

        The only thing keeping this country from sweatshop practices is welfare, that is it. Without welfare people will have to work or starve, and they will work for less and less in order to recieve the money needed for survival, or survival wages.

        For most people who recieve welfare, it is cheaper to recieve welfare than get a minium wage job, buy clothes, purchase day-care and all those things one needs to have in order to work at most buisness, mikkyd's included.

        by meatwad420 on Tue Feb 05, 2008 at 08:38:46 AM PDT

      •  They already do

        Someone I know who lost a job in the banking sector just got a job in a manufacturing concern that decided to move its core operations into South Carolina.  It's probably not a sweatshop, per se, but SC is a right to work state and not exactly a bastion of worker- and environment-friendly regulation.

        by kismet on Tue Feb 05, 2008 at 08:49:51 AM PDT

•  Disappear? It's currently #1 story on Bloomberg

  stock markets down about 2%.

  I think it was seem by a fair number of people.

  by science first on Tue Feb 05, 2008 at 07:57:16 AM PDT

  •  I was more thinking about

    right here on the big orange :)

    by kismet on Tue Feb 05, 2008 at 08:03:10 AM PDT

    •  Oh, disappear from DKos, then I agree

      In my opinion, the interest in, and sophistication of, discussion of economic and financial market matters is not that great on the DKos.

      by science first on Tue Feb 05, 2008 at 08:09:34 AM PDT

      •  Jerome and Bonddad

        address it fairly well.

        by beemerr90s on Tue Feb 05, 2008 at 08:19:42 AM PDT

  •  This year, we almost saw a global economic panic

    which would have been a hell of a lot worse than the great stock market crash in the 20's.

    thank King.

    by RisingTide on Tue Feb 05, 2008 at 08:38:40 AM PDT

    •  The year has just begun! nt

      by meatwad420 on Tue Feb 05, 2008 at 08:42:35 AM PDT

    •  It ain't over yet...

      The market is recovering because the Fed rate just dropped 1.25% in a couple of weeks.  Once everybody comes down from that temporary high, they are going to realize that free junk ain't the answer.

      by RichM on Tue Feb 05, 2008 at 08:46:43 AM PDT

      •  we lost six hedge funds that day.

        CELEBRATE!

        It can't all be bad news, can it?

        by RisingTide on Tue Feb 05, 2008 at 08:58:06 AM PDT

    •  written last year

      It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.
      :::

      Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current "liquidity environment"—i.e., cheap credit—ends, "the buying opportunity will be a once in a lifetime chance."

      The fact that the crash is now being announced by the Post shows that it is a done deal. ...
      Those left holding the bag will be the ordinary people whose assets are loaded with debt, such as tens of millions of mortgagees, millions of young people with student loans that can never be written off due to the "reformed" 2005 bankruptcy law, or vast numbers of workers with 401(k)s or other pension plans that are locked into the stock market.

      http://www.globalresearch.ca/...

      by Silent Lurker on Tue Feb 05, 2008 at 09:08:03 AM PDT

•  gov't!

  seriously, we're the only ones getting raises and keeping relatively good benefits these days.

  come work for the gov't!

  by terrypinder on Tue Feb 05, 2008 at 07:57:18 AM PDT

  •  Free markets good! Govt bad!

    That's Red Socialist talk!

    Rabble Rabble!

    :)

    by Guy Incognito on Tue Feb 05, 2008 at 08:05:49 AM PDT

  •  I want to be McCain's makeup artist.

    Is that a govt job?

    Needs more bronzer.

    by ablington on Tue Feb 05, 2008 at 08:05:55 AM PDT

    •  Ha! There's a full employment initiative!

      by science first on Tue Feb 05, 2008 at 08:11:23 AM PDT

  •  I am

    a state employee.  And if I am lucky I'll retire in this job.  

    by kismet on Tue Feb 05, 2008 at 08:17:30 AM PDT

    •  Although

      I'm a state employee with a 401K rather than a pension, so I don't know if I've got that much to crow about.

      by kismet on Tue Feb 05, 2008 at 08:20:21 AM PDT

•  There have only been...

  Two growth sectors in this 'economic expansion'.  (OK, health care also expanded and probably will continue to do so).  Those sectors were construction and all of the sectors surrounding real-estate (agents, brokers, office personnel, etc.) and the 'service' sector - restaurants, retail, etc.  This article seems to munge the two, but I believe they are separate in the actual employment reporting.  The economy has basically been churning because people have been able to take out equity from their homes and use it to by dinner out, vacations, big cars and big teevees.  When that stopped, everything else stopped.

  by RichM on Tue Feb 05, 2008 at 07:58:17 AM PDT

•  booze, ammunition, and fetish porn

  growth opportunities -- invest now

  by woolie on Tue Feb 05, 2008 at 08:09:34 AM PDT

  •  Thanks for the Hot Stok Tip

    would you like my social security number?

    by 2ajpuu on Tue Feb 05, 2008 at 08:17:31 AM PDT

  •  You can get porn...

    Free on the Intert00bz.  Where is the investment?

    by RichM on Tue Feb 05, 2008 at 08:45:11 AM PDT

    •  there's a huge market

      In a commodity market, it's all about specialization. Make a product no one else offers. Spin the wheel three times, put all three results together, and film! :)

      by woolie on Tue Feb 05, 2008 at 09:11:46 AM PDT

      •  Drunken gun porn?

        It's the new American Dream! Where do I sign up?

        by 2ajpuu on Tue Feb 05, 2008 at 09:26:03 AM PDT

•  being human livestock for the rich? n/t

  by Abra Crabcakeya on Tue Feb 05, 2008 at 08:13:33 AM PDT

  •  Soylent green

    is people!!!

    by kismet on Tue Feb 05, 2008 at 08:18:06 AM PDT

    •  Emerging market! n/t

      by beemerr90s on Tue Feb 05, 2008 at 08:22:00 AM PDT

      •  I want 500 shares of Soylent Green

        I'll make a killing!

        by kismet on Tue Feb 05, 2008 at 08:47:39 AM PDT

        •  You could leverage a bit for higher profits.

          Commodities futures.

          by beemerr90s on Tue Feb 05, 2008 at 09:04:49 AM PDT

•  The Military Industrial Complex is growing.

  Along with the Oil business.

  That's about it!

  Enjoy the collapse of your civilization!

  Have a nice day!

  by rick on Tue Feb 05, 2008 at 08:16:24 AM PDT

•  Agriculture

  The US (and world) agricultural sector is in the midst of its Golden Age right now. Commodity prices have never been better, and profitability for almost all farmers, but particularly grains -- rice, wheat, corn, soybeans -- and associated industries are setting all time records right now for profitability.  All farm sizes are enjoying the benefits, from the big corporate farms to the small, part-time operations. One result is that government countercyclical cash payments are almost completely eliminated this year.  Only cotton and peanut farmers are getting paid this year, and even then it will be much reduced from other years.

  Agricultural land values are also at all time highs, have tripled in price over the last few years. Farmers are also using this newfound wealth to pay down debt rather than expand their indebtedness.

  The reason for the boom in farming is the increase in demand for commodities of all kinds, mostly fueled by rapid economic growth of China, India, and other parts of the less-industrialized world. There is also an increase in demand for agricultural resources for bio-fuels, although this is less of a factor than the personal income growth in China and India.

  by eastsidedemocrat on Tue Feb 05, 2008 at 08:17:46 AM PDT

  •  just read in Nat Geo -

    That many small towns in North Dakota - part of "Nation's Breadbasket" - are drying up like tumbleweed because it is taking a minimum of roughly 3,000 acres for a farm to be profitable. That's over 4 square miles. "Agribusiness" is doing well , perhaps , like giantism is in communications , Rx, other sectors of economy .
    But - distinctly human activities such as farming or publishing a small town newspaper to simply earn a living - these ways of making it through the world are being crushed.

    by Abra Crabcakeya on Tue Feb 05, 2008 at 08:26:01 AM PDT

    •  Yeah, I read that too

      But that was written before farmers realized that the price increases are going to be relatively permanent (3-5 years, at least) due to sustained demand increases worldwide.  

      The definition of profitability has changed too.  A farmer today wants to pull down six figures, and to do that in a wheat area like North Dakota, he needs a lot of acreage and a lot of machinery to keep labor costs down.  With wheat prices as high as they are now, though, anyone can make money on almost any sized farm in North Dakota. It's been about five years since any significant amount of farmers have gone out of business in North Dakota.  It's booming there too.

      by eastsidedemocrat on Tue Feb 05, 2008 at 08:42:38 AM PDT

      •  I hope as people get back in to agriculture

        if they do (as opposed to corporations)

        we get more emphasis on localism and sustainability.  I just read "The Omnivore's Dilemma" and it's kind of sad what industrial farming for corn sugar is doing to the land and to us.

        by kismet on Tue Feb 05, 2008 at 08:47:08 AM PDT

        •  It's scarrier than what you've read

          but it's working for those in the industry.

          For example, Cargill, the private, family-owned, homegrown, Minneapolis-based, international grain monopoly, is the most influential player worldwide in virtually every agricultural sector and policy decision. (They recently acquired all of Nestle's cocoa processing facilities for example.) Employing hundreds of thousands of people with major facilities in almost every country, they have largely transformed US and world agriculture from a domestic-focused food system to an export-oriented commodity trading system, much of it subsidized, in large part, by US taxpayers.  It's really one of the biggest rackets ever, but, right now anyway, the machine that Cargill (and smaller competitors such as Tyson and ADM as well as the GMO wizards at Monsanto) has built really is generating one of the few economic bright spots in our currently bleak economic outlook.  Farmers are happy right now.

          by eastsidedemocrat on Tue Feb 05, 2008 at 09:03:32 AM PDT

          •  As I said below...

            It is a bubble.  They are creating artificial scarcity in the 'real economy' by creating a 'meta economy' on top of it.  They will oversell the production and then the bubble will burst.  Bank on it.

            by RichM on Tue Feb 05, 2008 at 09:59:48 AM PDT

  •  The next bubble to burst...

    Oh, and we became a net food importer a couple of years ago.

    by RichM on Tue Feb 05, 2008 at 08:48:34 AM PDT

    •  We're back to net exports,

      for the time being, but you're right on target about the bubble.  What happens to land values when the dollar goes back up, or China has a recession, and farm profitability declines?

      On the up side, however, US farm lenders have so far been wary about lending to farmers with high land valuations, losing some of that business instead to foreign-owned banks that have entered the market due to the low dollar value.  If those farms do go belly up if the land bubble bursts, it will be largely swallowed by the foreign banks rather than the US ones (who are still largely cooperatives backed by the Federal Farm Credit System).

      by eastsidedemocrat on Tue Feb 05, 2008 at 09:16:23 AM PDT

      •  There was a diary...

        About a month ago talking about the de-regulation of commodities - decoupling them from actual capacity.  That means if somebody has billions of dollars in a hedge fund and wants to take a bet against the dollar, they could buy a mass amount in agricultural futures.  These futures would exceed the expected output of that product - forcing farmers to try to produce more than actually possible.  This creates artificial scarcity.  Raising the price, a rush to produce, land which can grow the crop becomes for valuable, etc.  When the 'real economy' can't deliver, there is a panic - because they can't deliver.  It is very similar to what happened in the real-estate market.  Once the housing reached a certain price, nobody else could be brought in - even at zero interest.  When the market could not be supplied with new buyers, the whole thing collapsed.  The answer?  We need to regulate these out of control financial instruments that are based on nothing more than ramped speculation.

        by RichM on Tue Feb 05, 2008 at 09:55:47 AM PDT

        •  It's true, but it is very unlikely to happen

          Hedge funds do try act strategically to pinch commodity markets in order to create false scarcity. It is an almost annual event in the heating oil futures market, for example.  Undoubtedly, hedge funds are participating in pushing prices of agricultural commodities higher now than they otherwise would be, and they'll do the same thing in reverse on the way down.  However, for the funds, it's a two edged sword.  As rich as some of these guys are, not very many people, if any, are willing to bet enough of their own money that they lose billions of dollars.  That's why there is really no evidence ever created that price pinching schemes occurred.  Every time they do happen, at least a few billionaires also lose their shirts, just like they did in the mortgage securities markets.

          Unlike in financial markets, in commodities the real game does not happen in the commodities derivatives markets.  The people who fix the system -- giants like Cargill, et. al. -- do not participate in commodity exchanges in any significant way -- they hate commodity exchanges.  Instead, they make their money through private forward contracting.  By doing business only with the very largest producers and controlling costs through prices fixed years in advance of delivery and upon which producers' loans are based, Cargill and like monopolists do not have to speculate like hedge funds do.  Their profits are guaranteed.  Cargill, for example, is already betting that agricultural properties are becoming overvalued and has begun to sell grain terminals to hedge funds.  Check back in a few years because Cargill will be buying those same terminals back for a fraction of today's sales prices.  

          There's a big downside to this though -- it means only the biggest producers can survive when commodity prices are low.  That's why we have mega-farm production system that we do today.

          by eastsidedemocrat on Tue Feb 05, 2008 at 11:45:59 AM PDT

•  Manufacturing is still growing too,

  though only slightly right now.  It is benefiting from the low value of the dollar relative to European and Canadian manufacturers.

  by eastsidedemocrat on Tue Feb 05, 2008 at 08:44:34 AM PDT

  •  No it's not...

    At least at were it counts - employment.  We may be selling more widgets abroad, but it hasn't led to more jobs.

    by RichM on Tue Feb 05, 2008 at 08:47:34 AM PDT

    •  Not according to the same ISM surveys

      cited by the diarist. It went up in January, so there has been job growth there.

      by eastsidedemocrat on Tue Feb 05, 2008 at 08:51:33 AM PDT

      •  The employment numbers...

        Which came out on Friday showed a contraction in the manufacturing sector.

        by RichM on Tue Feb 05, 2008 at 08:53:24 AM PDT

        •  From the linked article ...

          Some recent unexpected growth. Last Friday the more closely watched ISM Manufacturing reading came in at a 50.7 reading for January, up from 48.4 in December, showing an unexpected return to growth in that sector. This marks only the sixth time in the report's history that the service sector has recorded lower growth than the manufacturing sector, and it's by far the largest margin by which the service sector has trailed manufacturing.

          Granted, the 50.7 is close enough that it might be contradicted by other surveys, though.

          by eastsidedemocrat on Tue Feb 05, 2008 at 09:06:55 AM PDT

      •  I'm sure

        as the dollar drops, it will become more cost-effective to make things in this country again.  Possibly an economic contraction will actually be good for us in the long run, if we learn how to work together and live smaller.

        May you live in interesting times!

        by kismet on Tue Feb 05, 2008 at 08:55:56 AM PDT

•  This basically seals in the 2nd Bush recession

  The report is found here: http://www.ism.ws/...

  It shows employment at 43.9, which means a sharp contraction. We probably lost a lot more than 17,000 jobs in January. It's a good thing we passed two tax cuts under this president to prevent this one, huh? Oh oops.

  by rovertheoctopus on Tue Feb 05, 2008 at 08:54:10 AM PDT