President Barack Obama’s jobs plan is unlikely to have any meaningful impact on U.S. economic growth, according to Gluskin Sheff chief economist and strategist David Rosenberg.
In a recent note to clients, Rosenberg characterized the plan as “smoke and mirrors.”
“Much of it is merely rolling over existing tax relief passed in late 2010, such as payroll taxes for workers and extended jobless benefits,” he wrote. ”I’ll put it to you this way. Assuming (i) that the House Republicans do not accept the Obama spending measures, and (ii) half of the tax relief goes into savings and debt reduction, then we are talking about the grand total of $35 billion of net new stimulus from this ‘jobs plan’. That’s principally because so much of it is merely extending what is already in the system.”
Rosenberg – a long-time bull on gold and U.S. Treasuries, and one of the few economists to accurately predict much of the financial crisis in 2008 – went on to say that “At an annual rate, that is a 0.2% boost to baseline GDP growth. In other words: much ado about nothin’. It doesn’t even come close to offsetting the ongoing drag from the retrenchment at the state and local government levels.”
The Gluskin Sheff economist later discussed his bearish outlook on the broader financial markets:
“In the meantime, the market will likely go down another 15-20% — that is on the premise of a recessionary bear market taking hold. And it could be worse if Europe falls apart. We are on the precipice right now; the situation is very fragile as it pertains to a Greek default in the near-term. The reality is that Germany holds the key to so much and here we have all the North American focus on the Dow and S&P 500 and yet the German DAX index has not recovered from early August lows —making new lows — as are the banks, which are down 50% this year. German investors know Europe better than U.S. investors; the latter still think we are going to miraculously muddle through. Things will be fine in Europe and U.S. stocks are cheap — especially the banks!”
“But what is happening in the past two or three days is that the North American markets are succumbing to the events in the euro area — more so than by developments in the United States. The vagaries of globalization: 20-years ago, world equity markets had a 40% correlation with each other. Today that correlation is north of 80% (as we found out in 2008 when there was nowhere to hide and decoupling was confused for lags).”
Rosenberg’s full note is available below via Zero Hedge:
http://www.zerohedge.com/news/rosenberg-latest-helping-smoke-and-mirrors-obama
Spanish Mountain Gold Launches Pre-Feasibility Study
The PFS is expected to be completed over a period of approximately six months. The Company may elect to initiate a feasibility study (FS) during this six month period without prior completion of the PFS. The FS is expected to take approximately one year from the date on which the FS begins. Full Spanish Mountain Gold News Release.
- The Company is considering a smaller milling capacity of 25,000 tonnes per day to reduce capital expenditures and to exploit higher-grade, near surface resources for the first 3 years of production.
- Expansion to 40,000 tonnes per day is expected for the remaining mine life.
- Subsequent to the PEA, the Company has completed in excess of 18,000 metres of infill drilling in both the Main and North Zones.
- The results from this drilling will be incorporated in an updated resource model.
