Waste Management (WM) remains well-positioned to profit from the long-term, secular recycling and no-waste trends, and that's the main reason I'm reiterating my buy rating for the company's shares, first recommended on March 25, 2009, at a price of $25.74.

The recession hurt WM's results in 2009, as the commercial impact of reduced industrial output rippled throughout the U.S. economy. But that's just a temporary, cycling downturn. The long-term trend looks very good for WM, and here's why: 20 million customers, 267 owned/operated landfills, 16 waste-to-energy plants, 105 recycling plants, and more than 100 beneficial-use landfill gas projects.

U.S. non-farm productivity surged to an annualized rate of 6.3% in Q3, the strongest productivity gain in four years, the U.S. Labor Department announced Wednesday.

The revised statistic is a substantial increase from the preliminary 4.9% Q3 productivity increase announced by the department a month ago.

"All in all, it's a great productivity number for the quarter, which leads to a good annualized rate," economist David H. Wang told BloggingStocks Wednesday. "This will relieve some inflationary pressure in the economy, and also give the Federal Reserve some leeway regarding interest rates. The Fed can now see that labor is not adding that much to inflationary pressures in the U.S. economy."

Over the past 12 months non-farm business productivity has increased 2.7%, the largest four-quarter gain since late 2004. During Q3, manufacturing productivity increased 5%, while non-financial productivity gained 4.2%.

Economic Analysis: The high Q3 productivity stat is good news for the economy, employers, and employees. With high productivity, the U.S. economy can grow rapidly without inflation, easing pressure to raise prices. This simultaneously means worker productivity per hour is rising, which usually leads to raises, higher real incomes, and higher living standards. After registering productivity giants that averaged 2.5% per year for 1996-2005, productivity had slowed to about 1% in 2006. With the revised Q3 2007 stat, there's now additional evidence that productivity has resumed advancing at an impressive rate.

For two years now, investors have been told that Japan provides the most value of the Asian markets. Due to its relative market under-performance, investors keep waiting for the world's second-biggest economy to awaken. On the one hand, today's news of a record high in industrial output, helped by auto and semiconductor output, certainly is a good sign signaling Japan's economic growth potential. On the other hand, many analysts are worried due to a huge slowdown in the housing construction industry that the economy is going to sink back into recession. We think the U.S. has a housing construction problem, it pales in comparison to what's happening in Japan.

Due to regulation (is it ever productive?), Japan's housing starts tanked 44 percent on the year in September, the worst drop ever. The brilliant revision to Japan's Building and Standards Law has forced construction companies to wait months for approvals. The big question is whether this real slowdown in the construction industry will dampen economic investment within the broader economy?

Coupled with a stronger yen, which is slowing exports into the U.S., and more government regulation, the constant drum-beating of analysts to invest in Japan looks like it will continue to be good money chasing bad.

On the other hand, if the yen were to weaken and we can get the government to stay out of economic affairs, then investors should turn their attention eastward.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer holds no position in any stock mentioned as of 11/21/07.

Highlighting the disparity between government statistics and the real world, orders for durable goods fell an estimated 2.8% in May, led by reductions in the orders for aircraft, metals and machinery. It is speculated that some of the decline is due to a productivity spike in April which has temporarily raised inventories in an economy which is entering a cooling phase. Adding to the statistical decline is a reduction in steel orders which had surged through the first quarter as manufacturing interests bolstered their inventories of raw materials both domestically and abroad.

Economists are still forecasting higher levels of corporate investment and from what I see, that's true. Companies are looking to renew and refine their interior operations and are aggressively seeking improvements to revenue flow. The investments to that end however are falling into the categories of infrastructure, R& D and sales rather than increased output capacity, leading to reductions in workforce, not increases in production machinery. Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts stated, "Capital spending is not moving forward with the strength we had hoped.''