Random Musings

Are Parents Keeping Their Own Kids Out of the Workforce?I have been exploring various methods of examining how our demographics are factoring into our economy. I think such an examination is all the more meaningful given the fact that boomers have seen such a dramatic decline in their net worth at a time they saw retirement on the horizon. The implications...

Read More

Today's Markets

A.) The market sold-off on strong volume at the beginning of the day. Note the long bards and the high volume.B.) After rising for most of the day, prices again broke lower on higher volume.C.) Prices found support at the 61.8% Fibonacci level and rose into the end of trading.A.) Prices are edging as close as possible to the upward sloping trend line....

Read More

Are Gas Prices Heading Lower?

Click for a larger imageA.) Prices have broken the upward sloping trend lineB.) There is strong resistance in the upper 35/lower 36 area.Let's look at the sell-off in more detailA.) Prices gap down. This is a bearish development as it indicates a big change in the supply and demand picture favoring the bears.B.). Prices print a strong downward bar,...

Read More

Fed Governor Plosser On the Economic Outlook

From a recent speech:Although many forecasters now expect growth to improve, they also expect the unemployment rate to rise to near 10 percent at the end of this year or the beginning of 2010. Actual numbers are trending in that direction. The unemployment rate climbed to 9.7 percent in August, even though nonfarm payroll jobs had the smallest decline...

Read More

Wednesday Commodities Round-Up

Interesting developments in the copper market.Click on all images for a larger imageA.) Prices are just below the long-term upward sloping trend line. Now, prices have not make a solid break through the trend line -- we don't have a strong downward moving candle. Instead we have prices consolidating just below the trend line. That could mean that...

Read More

Today's Markets

The primary point of this chart is to show that for the last two days prices have been trading in a narrow range (roughly 50 cents with the exception of this morning's price action).The purpose of this chart is to show that sometimes the analysis is far from clear. Note that on the top we have lives A and B. While line A is a longer duration and...

Read More

A Note on the Housing Market

Click for a larger image.The existing home sales market is by far the largest of the housing markets. Notice that over the last roughly 2 years the pace of sales has stabilized between (roughly) a 5.25 million and 5.75 million annual pace. That is what a bottom looks like.New home sales appear to have bottomed at the end of this year and are now...

Read More

Getting it wrong about the CS-CPI

- by New Deal democratOne of the most interesting alternate measures of the economy was first posted a couple of years ago by Tim Iacono of The Mess that Greenspan Made. The CS-CPI is the consumer price index, with the Case Schiller house price index substituted for owner's equivalent rent. In that manner it captures the impact of price changes in the biggest asset most consumers will ever buy, on the inflation rate. I have mentioned several times how research into the Roaring Twenties and Great Depression showed that it was when the year-over-year...

Read More

China Turns Inward For Growth

From the WSJ:Chinese businesspeople like Mr. Tseng are adapting to what they believe will be a lasting consequence of America's deep recession. Savings by suddenly frugal U.S. households soared to an annualized $566 billion in the second quarter, more than quadruple the rate at the start of 2008. While that is important to rebuilding U.S. financial health, it is also sucking demand out of the world economy. China's exports, after growing for years at a steady 20%-plus rate, recorded a year-over-year drop last November. They kept falling, and in...

Read More

Treasury Tuesdays

Notice there are two upward sloping trendlines that connect the lows on the long term chart. Also note that prices have held above that support even though prices have sold-off.A.) Prices have run into upside resistance before only to be rebuffed. B.) Prices crossed over the 200 day EMA, indicating a more from bear to bull market.So -- what gives...

Read More

Advice To The Co-operative Bank II

Despite forwarding the Co-operative Bank with a copy of my piece the other day about being bombarded with calls from their automated dialler, and despite pressing the correct buttons on my phone to remove my number from their database, they persist in calling me and asking for an unknown female.Are these people completely incompetent?I am very glad that I do not have an account with them, but wonder what it will take to get them to stop ringing ...

Read More

Today's Markets

Prices rebounded today on M&A news. Notice that prices moved to the 61.8% Fibonacci line and the sold off a bit.1.) Prices gapped a bit higher at the open.2.) Prices moved higher with strong bars on (3) higher volume.4.) Prices consolidated moves higher.5.) Prices found upside resistance at the 61.8% Fibonacci level.On the daily chart we have...

Read More

Why I'm Bullish: K.I.S.S. Edition

- by New Deal democratSince today is a dead economic news day, and since Bonddad and Invictus have weighed in on the linchpins for their current economic views (Bonddad noticed right track/wrong track numbers getting better, Invictus notes headwinds facing the average wage-earner/consumer), I thought I would add my own post simply stating why I am...

Read More

Rail Traffic Incrased In Third Quarter

The above chart is from Railfax and it shows that rail traffic increase in the third quarter. The reason this is important is simple: when an economy increases activity it has to ship more stuff from point A to point B. The increase in activity is a good overall sign, which explain why the above chart is so important.The year over year chart shows...

Read More

Time Capsule Post: Open in One Year

Fast forward one year from now, to late summer/early fall 2010. According to most accounts, at that point we should be about one year removed from the trough of economic activity, otherwise known as the end of the recession. So let's say, for the sake of argument, that the recession ended in June, at the end of the second quarter (also, not coincidentally,...

Read More

Shutting Stable Doors

Listen very carefully and you will hear the sound of a stable door being slammed shut by Darling and Mandelson.Ahead of Alistair Darling's Labour conference speech outlining new rules to curb bankers' bonuses, Lord Mandelson spoke on BBC's Radio 4 programme.He noted that Gordon Brown, as Chancellor, had introduced new legislation that "sorted out a ragbag of different regulatory processes" in financial services to make them "much leaner, meaner and more efficient". Aside from the obvious point that the Tripartite system was hardly "leaner, meaner...

Read More

Market Mondays

Let's take a look at last week's action. As always, you can click on all images for a larger image.1.) Prices were in a slight uptrend for the first almost three days.2.) Prices were in a tight range (from roughly 106.60 to 107.40) on Tuesday and Wednesday as the market awaited the Fed's decision.3.) Once the Fed announced its decision the market tried...

Read More

Headwinds

InvictusI’ve made no secret of the fact that I have serious reservations about the sustainability of any strength in our economy. I’ve tried to document and chronicle most of the reasons for my doubts as I’ve seen them. (See any of my previous posts here or my hundreds of posts over at Blah3.com.)I had a long talk with Bonddad this week about the nature...

Read More

File Under: Where Have I Heard That Before?

Hmmm...the NY Times sounds vaguely familiar.The Bonddad Blog, July 6, 2009:Perhaps the most interesting piece of work Rosie produced recently was an analysis of how many unemployed individuals we currently have for each job opening. Rosie looked at the Job Openings and Labor Turnover Survey (JOLTS) data from the BLS and the number of unemployed (also...

Read More

Weekend Vacation Photos

These are some random photos from our Alaska trip. They're in no particular order. Hope you like them -- and I'll be back on Mond...

Read More

The Week in Review: A mixed bag

- by New Deal democratHere we are at Friday afternoon again, and before Bonddad posts his much awaited photos and calls it a weekend, let's quickly recap the week.Unlike last week, which was a full-throated battle cry of bullish data, this week was more of a mixed bag:- Leading economic indictors for August went up 0.6% and July was revised higher 0.3%, but the underlying data is mainly already known.- Initial Jobless Claims fell to 530,000, suggesting that the economy is getting closer to the point where it actually starts to create more jobs...

Read More

A Look At Getting Better/Getting Worse Numbers

The above chart is from Pollster.com. It is a combination of all the big polls regarding how people feel about the economy. This is one of the first polls that caught my eye back in the late spring. I hadn't looked at it since the election. When I saw the then big swing between March and May I was very surprised. This occurred at the same time we were seeing a dip in the 4-week moving average of initial unemployment claims. These two factors were what first convinced me the economy was bottoming out.The above chart shows two trends. The...

Read More

When will the Economy Start to add Jobs? (VI.) A Conclusion and a Prediction

- by New Deal democratThis is the Sixth of Seven articles in which I am examining when economic growth (GDP) will translate into job growth (the 7th will deal with the unemployment rate). In the first 4 articles I examined 5 potential leading indicators of job growth. In the 5th article, I showed how the leading indicators fit together temporally....

Read More

Forex Fridays

1.) Prices formed a double top with the first top at the end of last year and the second top at the beginning of this year. This is a reversal formation.2 and 3.) These are support levels which prices have moved through.4.) The MACD is deceasing and has been for the entire year.5.) The RSI is decreasing and has been for the entire year.6.) The EMA...

Read More

HSBC Moves CEO

HSBC is relocating Michael Geoghegan, its chief executive, from London to Hong Kong as from February next year.HSBC state that there are no plans to move the company's domicile from the UK.However, as the G20 ponder what they intend to do to punish bankers for their hand in the economic mess and as the UK 50% tax rate kicks in, doubtless the fact that Hong Kong has a 16% tax rate may well have a bearing on future plans for the location of HS...

Read More

Today's Markets

I've included the above picture simply to show where technical support lies on the chart. Simply put, at current levels there are a lot of levels where prices could stop. In addition, prices have fallen about 2.75% from their peak of 108.Also note the two primary uptrends are still intact.Notice on the daily chart that we're coming off a double top...

Read More

Will the Real Growth Please Stand-Up?

I've seen a fair amount of commentary around the web that the latest retail sales number is less than legitimate because cash for clunkers obviously played a role in influencing the number. In response to that claim consider the following chart:Click for a larger imageThis is a chart of government consumption expenditures as a percentage of GDP. ...

Read More