Thing One: Importing Recession: This economy would be great if it wasn't for the customers.
The U.S. economy may be a sputtering depression factory running on broken dreams and children's tears, but it is the Socratic ideal of an economy when compared with Europe and lots of other places in the world. Upset about 8 percent unemployment in the U.S.? Just be grateful it's not Europe's record-high 11.4 percent unemployment, or Spain's 25 percent.
Trouble is, though many Americans think of Europe as nothing more than a source of food, laughs and youthful indiscretions, it is also a key customer of U.S. exports. They buy our stuff. Now that everybody on the entire continent is broke, they don't need our stuff quite as much, the Wall Street Journal reports. And it is not just Europe with the flagging appetite: China, too, buys our stuff, believe it or not, and it is also suffering from Europe's malaise, with GDP growth possibly slowing to 7.5 percent this year, the worst since 1990, according to the WSJ. That affects us and everybody else in the world that sells stuff to China.
Global trade is expected to grow this year at the lowest rate since the recession, the WSJ writes, up just 2.5 percent, which is half the growth rate of 2011 and way down from 14 percent growth in 2010. The average rate of the past couple of decades is 6 percent. So this is going to feel like a global recession -- and trade volumes may actually have fallen in June and July, the WSJ writes.
Since the U.S. recession ended in 2009, the export sector has been one of the strongest mules pulling us out of the muck. If its strength is fading, we'd better find ourselves another mule in a hurry -- and the Federal Reserve is not that mule, no matter what the stock market may believe.
Thing Two: Continental Drift: Just how screwed is Europe? Well, this morning we learned that its unemployment rate is at a record 11.4 percent, as mentioned above. And we got new factory data that Reuters trumpets as showing Europe's economy is in a "new recession," meaning its first recession since 2009, which will shock precisely no one. Meanwhile, Greece's new budget projects a sixth year of recession for that seemingly hopeless economy. But have no fear! European policy makers are busily arguing about a plan to save the continent's banks, at the start of what Bloomberg calls "an October of unrest" for Europe, in a "month that may decide the success" of efforts to end the crisis. Oh, goody.
Thing Three: Helpful Thing To Go Away: As if we didn't have enough to worry about, the payroll tax holiday Americans have enjoyed for the past couple of years is likely going to disappear at the end of the year, The New York Times writes. Turns out politicians just don't have an appetite for extending it, what with the big scary budget deficit and all. Something must be sacrificed to solve this non-existent problem! But not to worry, losing this holiday will only shave about a full percentage point from already anemic GDP, no big whoop. And, yes, our nation is run by idiots.
Thing Four: Banks Just Can't Catch Break: Also having a hard time? Banks. In the U.K., they're just constantly getting hassled all the time by Parliament and regulators, just because of some minor Libor fraud. And now they're even getting the stinkeye from a major bishop of the Church of England, the Wall Street Journal writes. Back here in the Colonies, banks are about to lose a weird accounting wrinkle that boosted earnings when their bond prices fell, and vice-versa, the WSJ writes. And six big U.S. banks have suffered a wave of cyberattacks recently, The New York Times writes. The group that claims responsibility for the attacks says it's getting revenge for that offensive video mocking the Prophet Muhammad.
Thing Five: World's Most Boring Deal Nears Completion: Thrilling news, everybody, Xstrata's board has finally agreed to a $33 billion takeover bid by Glencore, promising an eventual end to a merger process that began around the time of the Crusades. Somehow these companies have managed to turn what would otherwise be the important creation of the world's biggest commodity mining-and-trading behemoth into news duller than the monthly crop report. Until, that is, the finally merged monstrosity destroys the global economy in 2018. You read it here first.
Thing Six: China Sues Obama, Using Bush Lawyers: Who says Mitt Romney is the only guy who can irritate China? A Chinese wind farm company is suing President Obama, the Financial Times writes, because he told them they couldn't put their wind farm within spying distance of a U.S. Navy test site in Oregon. Fun fact: Representing the Chinese company are a couple of top lawyers from the Bush administration.
Thing Seven: Living On SEC Time: We knew the Securities and Exchange Commission was mostly useless, but this is kind of ridiculous: Reuters reports that the Chicago Federal Reserve warned the SEC two years ago that it needed to do something about the dangers of high-speed trading, but the SEC is only just now getting around to giving that some thought. Hey, that porn is not going to watch itself, you know.
Thing Seven And One Half: October Classic: On this day in 1903, at the Huntington Avenue Baseball Grounds in Boston, the Pittsburgh Pirates beat the Boston Americans (later Red Sox) 7-3, in the first-ever World Series game. Boston's Cy Young was the losing pitcher, and Pittsburgh's Jimmy Sebring hit the first-ever World Series home run. Boston went on to win the series, 5 games to 3 (with Cy Young eventually picking up two wins), in what was one of just four World Series to use a best-of-nine-games format instead of a best-of-seven. Boston won four more World Series by 1918, before stupidly trading Babe Ruth to the Yankees.
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Calendar Du Jour:
10:00 a.m. ET: ISM Manufacturing Index for September
10:00 a.m. ET: Construction Spending for August
Heard On The Tweets:
@BobBrinker: I see people say - but QE2 worked. Well yes, but it was coordinated with MASSIVE fiscal stimulus and tax cuts. It was not left on its own.
@QuietAmerican55: Thank god the FCC is keeping naked breasts off our TV screen. More time to see some car chases end in bullets to the head.
@GZuckerman: Just passsed Don King in hallway, draped in an American flag, calling out to anyone passing. Scary sight
@KenJennings: Remember, ladies: despite everything you think you know about Billy Joel, he does NOT want clever conversation.
And you can follow me on Twitter, too: @markgongloff