services

A full fledged Deflationary Bust

This morning the NAPM reported a record low reading on their services index. This is the vast majority of the economy. Yesterday we learned that auto sales also declined by a record amount in November.
What both auto sales and services have in common is a continuing worsening of monthly measures compared with 2007. For example, in August car sales were down about 19% YoY. In September the loss was 21%. In October it was 23%. November's number, released yesterday,was more than 30% off from 2007.

Some time ago, I summarized Prof. Leamer's research on typical business cycle contractions: first housing, then durables (mainly cars and furniture), then non-durables, and finally services. When services go, you are in the full force of the recession. That's where we are now.

In the services report was another bomb: the prices index has also declined dramatically, also to a new all-time low -- from an all-time high only four months ago.

What is WTO GATS Mode 4?

GATS stands for General Agreement on Trade and Services. This is a treaty under the control and part of the WTO .

The GATS defines four modes of trade in services. Mode 4 refers to the temporary migration of workers, to provide services or fulfill a service contract. Because the current framework of Mode 4 allows for only temporary movement of workers across borders to provide services, and their visa as well as their right to stay and work are tied to their original terms of employment or contract and to their employer.

The WTO is basically negotiating a global guest worker program.