The big thing that would surprise people in Europe this year is growth.

And there’s more evidence that there’s some kind of pulse beating.

Last week after some decent PMI number, Goldman raised its 2012 GDP outlook from -0.8% to -0.4%.

The latest: German factory orders jumped 1.7% sequentially, nicely ahead of the 1.0% consensus.

Here’s a great chart of German factory orders vs. industrial production, courtesy of Markit.

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We thought we had it all figured out before this week started.

We were wrong.

The top minds in the investment business offered some novel analysis, broke conventional wisdom, and even opened our eyes to some misperceptions.

This particular week we learned that the Obama recovery is stronger than Reagan’s, Reagan’s recovery is stronger than Obama’s, the real reason why Wall Street loves leverage, and that many respected investors are staying away from the Facebook IPO.

What follows are excerpts from such stories this week.  All of the important stuff you might have missed this week, right here.

SOLVED: The Real Connection Between Stocks And Treasuries

“The connection is not between stocks and yields, but between PE ratios and yields, and although the stock market has been gaining, that’s apparently not been due to significantly higher PEs. The good news for equity investors is that, at least as Kitano sees it, long-term rates are likely to rise thus pushing up PE ratios.”

Read more here >

Why The Obama Recovery Has Been Much More Impressive Than Reagan’s

“If you really want an apples-to-apples comparison, it’s hard to fathom why Reagan doesn’t have to answer for a recession happening so soon on his watch, and why he only gets measured on those two years. What’s more, as you can see in the chart above, the 1984-1988 period was pretty average, so we’re really just talking about two years of really impressive morning-in-America growth.”

Read more here >

Why The Reagan Recovery Was Much More Impressive Than Obama’s

“In the first ten quarters of the OR, GDP is up a total of 6 percent. During the first ten quarters of the RR, GDP rose 15 percent. Point for Reagan. In the first ten quarters of the OR, the economy created 790,00 jobs. During the first ten quarters of the RR, the economy created 7.5 million jobs  Point for Reagan.”

Read more here >

See the rest of the story at Business Insider

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Forget all the debates about debt monetazation, quantitative easing, and even inflation.

The REAL reason bankers should want Americans to stop getting rid of their debt and keep living off credit boils down to cold hard cash according to Morgan Stanley (via zerohedge).

Look what happens to banker pay when the Debt/GDP ratio rises — cha-ching! And you’ll note that both banker pay and Debt//GDP were really high around the 2008 and around the 1929 Stock Market crash.

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Mandatory spending on health care will grow significantly over the next decade, increasing to $13.375 trillion, according to a new report from the Congressional Budget Office.

In 2011, federal outlays of $856 billion for Medicare, Medicaid, and other health care programs made up more than 42 percent of mandatory spending. By 2022 expenditures for these programs will increase to $1.8 trillion, making up more than 51 percent of direct spending and claiming an even bigger percentage of GDP. 

A few weeks before the outlook report was released, CBO Assistant Director for Health and Human Resources Linda T. Bilheimer gave a presentation on the implications of rising health care costs.

See the rest of the story at Business Insider

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Earlier we angered some folks when we pointed out that you shouldn’t blame Bernanke for low interest rates on your savings deposits, but rather blame the lack of growth, and the incredible demand for risk-free, liquid instruments.

It turns out, we could have made that argument in chart form very easily.

First, here’s a look at 3-month CD rates.

As you can see, and as you should know, CDs yield zilch.

Now, check out this chart.

It shows CD rates again in blue vs GDP/savings deposits in red.

Basically, the yields on CDs undulate in perfect rhythm with the proclivity of people to put money in savings deposits. As more people want to put money in savings deposits (red line declining) yields fall, which is exactly what you’d expect. As fewer people are inclined to deposit money in banks (red line rising) yields rise.

Want to know why yields are lower than ever before? It’s because people are putting money in banks like never before.

See our original post on savings here.

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Most people are aware that the labor participation rate — the percent of the population that is both unemployed and unemployed (i.e. the total labor force) — has declined precipitously since the recession,  now standing at 64 percent.

Take out the unemployed, and that ratio declines even further.

This figure, called the unemployment-population ratio, stood at 58.5 percent in December — a 6.6 percent drop from 2007.

Credit Suisse’s Neal Soss and Henry Mo recently wrote a paper discussing what effect this decline will have on GDP.

A long stretch of low employment-population ratio suggests that the economy loses the productivity that would have come from those “idle” workers. This syndrome reduces potential GDP, the only ultimate wellspring of fiscal solvency and economic well-being.

Why is the emp-pop rate falling?

They first point out that population has been aging significantly. Due to these structural factors, the rate’s been declining since 1996.

But the Great Recession has put the decline on steroids.

The authors found that only one-third of the ratio’s recent acceleration can be chalked up to shifting demographics (ie aging population). The rest results were brought on by cyclical factors (ie plummeting demand from a weak economy).

Soss and Mo believe the only way to address this problem is with counter-cyclical policies, which leads to the author’s final prediction: QE3 remains likely.

The FOMC’s decision to push its forward guidance on exceptionally low rates from “at least through mid-2013” to “at least through late 2014” underscores members’ sense of urgency in taking more counter-cyclical policy. In our view, QE3 is still likely. We expect a program to commence in the next few months with a heavy emphasis on buying mortgage-related securities.

Now click here to see the only states that have regained most jobs lost during the recession >

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Monday opens up a busy few days, although few corporates will release at the start of the trading week. However, that rapidly changes as the days progress and nearly 20% of S&P 500 listed companies announce quarterly results.

But more than just earnings, Monday is filled with a series of important macro announcements, including reports out of Japan, Italy, Germany, and the U.S. 

Here’s what you need to know.

• The Philippines start the day off with fourth quarter GDP. Economists expect the nation to see an annualized rate of 3.80%, which would represent an acceleration from the third quarter.
• At 3:00 a.m. EST Taiwan will announce unemployment, which is seen roughly flat at 4.33%.
• Attention then shifts to Europe, where at the same time, Slovakia and Spain will announce consumer confidence and GDP, respectively. Slovakian confidence last stood at -40.8. A reading below zero represents negative expectations. In Spain, the economy is expected to contract 0.2% quarter-on-quarter.
• Italy takes center stage at 4:00 a.m. EST, when it announces business confidence. Expectations are for the headline indicator to decline 20 basis points to 92.3. 
• At 5:00 a.m. the European Central Bank will report its own confidence readings for a variety of sectors. Expectations are for consumer confidence in the region to remain flat at -20.6, while business conditions improve marginally to -0.25 from -0.31.
• Economic announcements move to Latin America for the next several hours, when Chile and Brazil release data. Brazilian inflation is expected to rise to 0.3%, from a negative reading in December. Chile will announce industrial production at 7:00 a.m. EST, with economists forecasting a rise, albeit at a lower pace. The headline figure is forecast at 1.2%.
• The United States releases personal income and spending at 8:30 a.m. EST. Economists polled by Bloomberg see incomes expanding by 0.4%, with spending increasing 0.1%. 
• Then, at 10:30 a.m. EST, the Dallas Federal Reserve will announce manufacturing activity in the region, which covers Texas, northern Louisiana and southern New Mexico. The reading is expected to rise to zero, from -3 in December.
• Closing out the day are relatively early announcements in Asia, which can still impact after-hours trading in the U.S. At 4:00 p.m. EST South Korea will report industrial production. Economists see production surging 1.1% in December, from a -0.4% reading a period earlier. Then, at 4:30 p.m. EST, Japan will announce its jobless rate, which is expected to remain flat at 4.5%, followed by industrial production 20 minutes later, which is seen reversing a decline last month and growing 2.9% in January.

U.S. corporates reporting quarterly results on Monday include Gannett and Wendy’s. Below, a roundup of tomorrow’s big announcers.

Wendy’s (WEN): $0.04
Gannett (GCI): $0.69
McKesson (MCK): $1.38
Diamond Foods (DMND): $0.73

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ORIGINAL POST, SEE UPDATE BELOW: Earlier we made the argument that the Obama recovery has been much more impressive than the Reagan recovery since A) The conditions Obama inherited were wildly worse and B) Federal government spending under Obama didn’t grow as fast as it did under Reagan.

But we were just looking at Federal Government spending.

Here’s a look at annual government spending growth at all levels: Federal, state, and local.

Here it’s even more lopsided. In Reagan’s first four years in office, government spending grew by at least 7.5%, and in the first two years, government spending grew by over 10% year over year. Obama hasn’t had one year of government spending growth over 7.5%, and the growth in government spending in 2011 appears to be the second smallest is actually the third smallest since WWII.

Although GDP has been mediocre under Obama, he’s achieved a rebound in growth with much less stimulus than Reagan did, and, it should be noted, that despite predictions from many economists, there’s been no double dip, unlike with Reagan.

Again: Obama 1, Gipper 0.

UPDATE: It’s been noted by some that it’s unfair to compare government spending growth under Obama and Reagan this way, since it doesn’t account for inflation, which was obviously much higher in the early 80s.

Using real dollars, adjusting for inflation, we get a slightly different picture, but only just slightly different.

The growth in real government spending during Obama’s first two years were ahead of Reagan’s first two years, but following that, Reagan really kicked it into overdrive, especially in the mid 80s. Government spending, while it got an initial jolt under Obama, is now shrinking at the fastest pace since the late 60s.

Furthermore, at no point has government spending growth under Obama been unusually high, as you can see in the second chart, which dates back to 1947.

And here’s that same chart going back to 1954, which further emphasizes how restrained spending has been under Obama.

Again, given all this, the  economic rebound under Obama looks extremely impressive.

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This post originally appeared at 24/7 Wall St. 

HTC, Motorola (NYSE: MMI), LG and Nokia (NYSE: NOK) might as well curtail their efforts in the smartphone arena. The industry has only two companies left with the ongoing opportunity for extremely large sales — Samsung and Apple (NASDAQ: AAPL).

A new study from Strategy Analytics shows that in the fourth quarter Apple shipped 37 million smartphones and overtook Samsung to become once again the world’s number one smartphone vendor by volume. Global sales of smartphones were up 54% to 155 million units. Between Apple and Samsung, sales were almost 74 million for the period — nearly half of the total.

Samsung announced its fourth-quarter earnings about the same time as Strategy Analytics released its figures. Its net income rose 17% over last year’s quarter to $3.6 billion. Over the course of 2011, the South Korean company shipped 300 million handsets. Apple’s recently announced earnings were even more impressive.

Read the rest of the story at 24/7 Wall St.

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In 2011, union membership increased 49,000 last year to 14.76 million.

However, the Union membership rate declined by just 10 basis points in 2011 to 11.8% according to BLS data.

In 1983, the first year for which comparable data is available, union membership stood at 20.1%.

Among the survey’s other findings:

• Public sector workers had a union membership rate five times higher than the private sector — 37 % versus 6.9 %.
• Teachers and librarians had the highest unionization rate at 36.8 %, while sales workers had the lowest at 3 %.
• Demographically, Black men showed the highest rate at 17%, while Asian men showed the lowest at 10.1 %.
• Among states, New York was first with 24%, while North Carolina was last with 2.9%.
• Utility workers saw the greatest drop in union membership, declining 4.6% from 2010. Motion picture and sound recording professionals saw the greatest gain, 3.5%.

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