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It seems Pope Francis needs to brush up on his Tertullian!

It has been reported (in The ChristLast Media, I must note) that the current Pope does not like the phrase "lead us not into temptation...

"Let no freedom be allowed to novelty, because it is not fitting that any addition should be made to antiquity. Let not the clear faith and belief of our forefathers be fouled by any muddy admixture." -- Pope Sixtus III

Friday, August 19, 2011


From Bloomberg:

Philadelphia Manufacturing Index Sinks

The Federal Reserve Bank of Philadelphia sent a signal about renewed recession risks just one day after its president said the U.S. economy is growing and doesn’t need exceptional measures.

Philadelphia Fed President Charles Plosser said two days ago his policy-making colleagues at the central bank painted a picture that was “more negative than justified” last week. Yesterday, Plosser’s regional bank said its manufacturing index plunged to the lowest level in 2 1/2 years, helping to push stocks down as much as 5 percent.

“He did say business leaders he talked to were pessimistic on growth, although he thought the economy would continue to expand,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, referring to Plosser. “But he didn’t realize his index the next day would signal recession? That’s the irony here.”

The mixed messages from Philadelphia provide one more dose of uncertainty to markets already dealing with Europe’s debt crisis and the aftermath of Standard & Poor’s downgrade of the U.S. credit rating. Fed policy makers said Aug. 9 they expect a “somewhat slower pace of recovery” than they foresaw previously.

The Philadelphia Fed yesterday said its index of manufacturing in the region plummeted to minus 30.7 in August, the weakest reading since March 2009, when the economy was still mired in the deepest and longest recession since the 1930s.

Equity Selloff

The reading, exceeding the most pessimistic projection in a Bloomberg News survey, helped generate a selloff on Wall Street. The S&P 500 Index slumped 4.5 percent to close at 1,140.65 in New York trading.

“The report was the shot heard around the world and pushed stocks down even more. A reading like this is consistent with recession,” Rupkey said of the Philadelphia survey.

Marilyn Wimp, a spokeswoman for Plosser, said he wasn’t available to discuss the implications of yesterday’s manufacturing report.

Each time the Philadelphia Fed’s gauge has stood at minus 30 or lower, the economy has been in a recession or was about to tip into one, according to data compiled by Bloomberg News.

“This was a recessionary number. It tells me confidence has really been hurt -- not only on the consumer side, but also on the business side,” said Scott Anderson, a senior economist at Wells Fargo Securities LLC in Minneapolis.

Region’s Growth

The Philadelphia Fed’s region covers eastern Pennsylvania, southern New Jersey and Delaware.

Deutsche Bank economists, including chief U.S. economist Joseph LaVorgna, in a note to clients said that another key gauge, the index of leading indicators, rose in July more than economists forecast.

“The overall cast of data continues to present a mixed signal,” they wrote.

Plosser was one of three regional Fed presidents who dissented from the Fed’s Aug. 9 decision to bolster the sputtering recovery by pledging to hold a key interest rate at a record low near zero at least through mid-2013.

Explaining his opposition for the first time in an Aug. 17 interview with Bloomberg News reporters and editors, Plosser said he thought the Fed “painted a picture of the economy that was more negative than justified” and that he would have preferred waiting to see if the anticipated rebound in the second half of this year materialized.


“I thought the very recent data suggested that things were not deteriorating as fast as a lot of people would -- you know -- people were getting hysterical about,” Plosser said in the interview.

Economic news heading into the Fed’s Aug. 9 meeting was mostly downbeat. Gross domestic product expanded at a 1.3 percent annual rate in the second quarter after a 0.4 percent pace in the prior period, the worst six months since the recovery began in June 2009, Commerce Department figures showed July 29.

Manufacturing, a key pillar of strength during the recovery, grew at the slowest pace in two years, while service industries expanded at their weakest pace since February 2010, according to separate measures from the Institute for Supply Management.

Weak economic news, fears about Europe’s spreading debt crisis and the unprecedented downgrade to the U.S. credit rating stirred market turmoil the day before the Fed meeting. The S&P 500 Index of stocks dropped 18 percent from the end of April through Aug. 8.

Weaker Production

Anderson at Wells Fargo Securities, said the Philadelphia Fed report points to “much weaker factory production” in the third quarter. And that’s likely to force him to lower his current forecast for 2 percent growth in the second half of this year, he said.

The economy is weak and could be getting weaker, he said. Anderson dropped his second-quarter growth figure to below a 1 percent pace, from a 1.3 percent rate. The government releases an updated GDP figure on Aug. 26. “We’re getting closer to stall speed,” he said.

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