Seasonal Adjustment Cherry Picking

I just wanted to make a very short post in regards to the issue New Deal Democrat brought up earlier today about seasonal adjustments and how many in the blogoshpere (and in print) are trying to use the unadjusted data to back up their claims that the economy is getting worse. You can't have it both ways, either you adjust or you don't. And if you decide not to then you must accept that last month the unadjusted household survey showed an unemployment rate of 9.5% (instead of the adjusted 10.2%) and the establishment survey showed an unadjusted...

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Today's Market

Click for a larger imageA.) Notice the incredible range that trading took today. Prices touched all the major EMAs. Going down to the 50 day EMA is a big deal -- it indicates there is a lot of bearish sentiment out there right now. However, also note the prices formed a narrow cand...

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About Seasonal Adjustment of Initial Jobless Claims

- by New Deal democratThe canard that we should ignore Seasonally Adjusted Initial Jobless Claims in favor of the non-seasonally adjusted claims is back. This canard was least seen masquerading as a "black swan" back in July, when as now seasonally adjusted claims were falling because the non--seasonal number of claims was not rising as much as would...

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Hysteria and Economic Blogs: Why They're Best Friends

Reading blogs that in any way write about economics has generally become an exercise in utter futility. According to most good news is either propagated by corporate whores who are blind to the realities around them or presented without considering "all" the facts. All government statistics and all economists are wrong -- unless they support or present a bearish viewpoint. Then the facts are treated as irrefutable truths presented by intellectual gods. And Goldman Sachs or the Federal Reserve manipulated everything to further some plot. In other...

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Market Monday's

A.) The SPYs are forming a broadening top.B.) The EMA picture is still bullish: the shorter EMAs are above the longer EMAs, and teh longer EMAs (20 and 50) are still moving higher. The 10 day EMA is moving lower, but this EMA is always more volatile.C.) Momentum is decreasing.D.) Notice that on the most recent top the A/D failed to make a new high....

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Dubai's Dead Cat Bounce

It seems that the fear and panic, that the media would have us believe was going to envelop the world this week (when the Dubai markets opened again) hasn't happened yet.Markets across Europe and Asia have in fact rebounded today.The intervention by the Central Bank of the United Arab Emirates, to provide an emergency liquidity facility for local lenders, seems to have calmed everyone's jittery nerves for the time being.As to whether this is will prove to be only a dead cat bounce, remains to be seen.Seemingly the authorities in Dubai have been...

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Weekly Indicators: "National Beached Whale Day" special edition!

- by New Deal democratYesterday the turkeys were stuffed. Today, it's 300 million stuffed Americans who are imitating beached whales, so keep your belt unbuckled and check out how the high-frequency economic indicators fared last week.Monthly indicators were mixed. The BEA revised 3rd Quarter GDP down to 2.8%, as expected, due primarily to an increase in imports. On the brighter side, Personal Consumption Expenditures - a measure which generally leads the business cycle - improved, as did personal income and real disposable income. The Case-Schiller...

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Recession Worse Than Thought

Chancellor Alistair Darling will admit in the pre-Budget report that the economy performed worse in 2009 than he first predicted.Quell surprise!The prediction for economic shrinkage was 3.5%, the reality was in fact 4.75%.Given this failure in forecasting, why should anyone believe the Treasury when it says that growth in 2010 will be between 1-1....

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Heads Banks Win, Tails You Lose

The banks have had a rather good week, from their perspective, in addition to winning their case at the Supreme Court over bank charges they have also managed to come out of the Walker Review unscathed.Banks will only have to disclose the existence of all £1M pay packages. However, the recipients can remain anonymous. Additionally, this new requirement only comes into force for the 2010 calendar year. The 2009 bonuses will have long since been spent on cars and houses by then.Champagne all rou...

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Happy Thanksgiving

To everyone,We're signing off for the rest of the week. Have a good Thanksgiving.We'll be back on Mond...

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A Personal Note to the Doom and Gloomers from Bonddad

This is Bonddad. I mention that because there are four writers here: me, New Deal Democrat, Invictus and Silver Oz.I (as in Bonddad) still believe the economy will grow in the 1%-2% range for the next few quarters. I have been saying that for the previous 6 months. Until I see otherwise, I will continue to hold to that prediction. In case you are wondering, there are several reasons for this.1.) We are use to major quarter to quarter percent changes in PCEs. However, these do not need to grow at a fast pace to add to growth. If we see 1%...

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Three steps forward, two steps back

- by New Deal democratIn addition to the very good (relatively speaking of course) Initial Jobless Claims report this morning (see below), there were 4 other economic releases pushed up to today due to the Thanksgiving holiday. Two were good, two not so good.Personal income and spending were both up: Personal income increased $30.1 billion, or 0.2 percent, and disposable personal income (DPI)increased $45.7 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis.Personal consumption expenditures (PCE) increased $68.3 billion,...

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Gold Hits New High

Click for a larger imageA.) In September and October, prices rose in a gentler manner. They'd hit a high and the round out the action. This allowed the market to absorb the gains.B.) So far this month, gold is simply screaming higher. C.) The RSI is telling us prices are a bit overbought, butD.) The MACD is saying there is plenty of momentum andE.)...

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Banks Win

One way or the other the banks were going to win the case for charging "excess" fees for overdrafts.In the event that they had lost their appeal at the Supreme Court, they most certainly would have started charging for all bank accounts (irrespective of whether they were in credit or not).As it is, millions of bank customers hoping to be refunded overdraft charges have been dealt a major blow by a Supreme Court judgement.The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges...

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Initial Jobless Claims: 466,000 !

- by New Deal democratThe BLS reported that for the week ending Nov. 21, seasonally adjusted initial jobless claims were 466,000. Last week's number was revised to 501,000. This is the best showing since "Black September" 2008 when the economy nearly ground to a panicked halt.The 4-week moving average was 496,500, a decrease of 16,500 from the previous week's revised average of 513,000. The 4 week seasonally adjusted moving average is now about 24% lower than the peak of 658,750 on April 3 of this year. Unadjusted, there were 543,926 new claims,...

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Did Brown Create a False Market?

When Gordon Brown persuaded Lloyds to take on the wreck of HBOS, he put his "reputation" on the line.This "reputation" was placed even more on the edge of the precipice, when it became apparent that HBOS was on the verge of collapse.How surprising then, that at that very moment, the Bank of England bailed HBOS out with a secret (secret to the public and shareholders) loan.The question is, did Brown create a false market in the shares in order to save his "reputatio...

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Treasury Tuesdays

Sorry for being late with this. This week has been very crazy with with are traveling.A.) Prices broke a two month uptrendB.) Prices are now in a new uptrend that is confirmed byC.) A Rising MACDD.) A very strong A/D line that indicates there is a strong demand for Treasuries andE.) A rising RSII want to return to the strong A/D line as it indicates...

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Wednesday Commodities Round-Up

Click for a larger imageThe main issue with the agricultural prices chart is there is no clear direction either way. There are three different consolidation patterns with no strong up or down move between them. The MACD and RSI confirm there is no momentum in either direction. The EMAs are all moving higher, but they are in a very tight pattern....

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FOMC Minutes in a Minute

The FOMC released the minutes from its Nov. 3-4 meetings. Lately these minutes have really had something for everyone. As for me, I picked up on the following:"While these developments were positive, participants noted that it was not clear how much of the recent firming in final demand reflected the effects of temporary fiscal programs to support the auto and housing sectors, and some participants expressed concerns about the ability of the economy to generate a self-sustaining recovery without government support."This, to me, encapsulates exactly...

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GDP Up 2.8%: Case Shiller Improves

I'm still traveling. Posting will be sporadic today and tomorrow. I think all of us will be taking Thursday and Friday off.From the BEA: Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.8 percent in the third quarter of 2009, (that is, from...

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CFNAI -- Yellow Flag?

The Chicago Fed’s National Activity Index (CFNAI) printed yesterday, and the 3-month moving average – which is what the folks in Chicago tell us to look at – declined for the first time in 2009 (click through for larger image): Though not necessarily cause for concern, the decline is certainly worth keeping an eye on. As one data point does not a...

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The Secret Loans

Two of Britain's once respected banks stood on the precipice of collapse last year. Had they collapsed the UK's banking system would have ground to a halt (even cash dispensers would have ceased dispensing cash).As such the Bank of England stepped in with an emergency loan of £62BN, to Royal Bank of Scotland (RBS) and HBOS during October and November 2008.Mervyn King, Governor of The Bank of England, revealed the secret loan during a parliamentary hearing today. The money was repaid in full by January 2009.I wonder if, had the responsibility for...

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Lloyds Takes More Taxpayer Money

Lloyds Banking Group, the once proud bank that was wrecked by Gordon Brown when he persuaded its board to take over the toxic HBOS, is draining the taxpayer of even more money today.Lloyds is raising £13.5BN via a rights issue. As such the government will be pumping another £5.7BN of our money into the bank, in order to maintain our current holding of 43%.Lloyds wants the money so that it can avoid participating in the government insurance scheme for its bad debt. The scheme would have protected Lloyds against worse than expected losses on its...

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Today's Market

This is Bonddad -- I'm traveling early tomorrow AM and am hopelessly behind on packing right now. I'll post some market stuff when I get to Cincinnati where my wife and I are spending Thanksgivi...

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Geitner Leaving?

From The Street.comGeithner's tenure has been rocky with lawmakers and the public, and recently he has appeared to have fallen out of favor again. Geithner has come under criticism for the Obama administration's regulatory overhaul, which he had a key role in developing, as well as the bailout of American International Group (AIG Quote) and its trading partners, like Goldman Sachs(GS Quote), during his position as New York Federal Reserve chief in the previous administration.Last week, he got into a heated exchange with members of the Joint Economic...

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Unemployment and Establishment Jobs Growth at the State Level

From the BLS:Regional and state unemployment rates were generally little changed or higher in October. Twenty-nine states and the District of Columbia recorded over-the-month unemployment rate increases, 13 states registered rate decreases, and 8 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate rose to 10.2 percent in October, up 0.4 percentage point from September and 3.6 points from October 2008.In...

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OECD Countries Emerge From Recession

From the WSJ:The world's developed economies emerged from recession in the third quarter, as their combined gross domestic product grew for the first time since the first three months of 2008.Figures released Monday by the Organization for Economic Cooperation and Development showed economic output in its 30 members during the three months to September was 0.8% higher than in the second quarter, although it was 3.3% lower in annual terms.The OECD said the combined GDP of the Group of Seven largest developed economies rose 0.7% from the second quarter,...

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Market Monday's

Click for a larger imageThe P&F chart really shows how large cap stocks have done. Above is a P&F chart of the OEF -- the ETF that tracks the S&P 100, or the biggest stocks in the S&P. Notice that there is a ton of volume on the up moves. Also note there is only one small down move of any significance over the last 7-8 months. This...

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Brave New World

Richard Lambert, the Director-General of the CBI, has seen the future and it looks "different".That will be the thrust of the message that he will deliver today at the CBI's annual conference. The central theme of his address will be that the recession has forced businesses to undertake a fundamental rethink of how they operate, raise finance and to cut the shackles of their past reliance on banks for providing finance.Lambert will also say that businesses will work to create a more flexible workforce.The lecture forms the backdrop to the publication...

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Weekend Weimar and Beagle

It's that time of the week. Here are the latest pictures of our kids ...

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Weekly Indicators

- by New Deal democratBoth the monthly data and the high frequency weekly data were mixed, but with a generally bullish bias.The monthly data included a bad housing report, mediocre increases in industrial production and capacity utilization, a decent but not outstanding LEI, an mixed Empire State index, and a strongly positive Philly manufacturing index.Meanwhile, as to the weekly data:The BLS reported new jobless claims remained the same as last week on an SA basis at 505,000. On a 4 week average basis, this series continues to decline.Edmunds...

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When will the economy add jobs? November update

In September I took a long look at Leading Indicators for job growth, and concluded that they have historically turned in the following order:(1) Real retail sales bottom and turn.(2) Initial Jobless claims turn.(3) The ISM manufacturing index turns above 50, i.e., signals actual growth.(4) Industrial Production turns.(5) ISM manufacturing index is...

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Regarding "Facts"

Invictus has a piece just below where he highlights a fairly typical event: a public figure making up facts as they go along. Unfortunately, this is more and more of a regular event.At first I found this existed on the right side of the political aisle. The reality is extremely conservative economic doctrine -- the whole "let the market work it out" argument -- just doesn't work as planned. The basic problem is any system needs rules to survive and prosper along with referees. Imagine a sporting event without a ref. No one would go because...

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Forex Fridays

We're still seeing an incredibly bearish overall trend in place. Note that we are still seeing a trend of lower highs (A) and lower lows (B). Also note the bearish orientation of the EMAs (D) -- all are moving lower and the shorter are below the longer.However, there is still the possibility of a double bottom emerging (C). Note the momentum increased...

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Life Is Taxing

The Times reports that small businesses spent longer doing their taxes in 2008 than in 2007, despite Labour's promise to reduce red tape.Small and medium-sized businesses in Britain spent on average an extra five hours working on their taxes, mainly because of the temporary cut in VAT in December last year. The total number of hours spent filling in tax returns rose to a record average of 110, up from 105 in September, according to a report by the World Bank and PricewaterhouseCoopers.Britain slipped from 24th to 25th in the rankings of 183 countries...

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Business As Usual: Make Stuff Up

During Tim Geithner's somewhat contentious appearance before Congress today, some Republicans took every opportunity to get their shots in. Congressman Michael Burgess (Asshat-TX), was no exception. He got his sound bite in -- "I don't think you should be fired, I think you never should have been hired," or something to that effect. Whatever, he's...

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Today's Market

I've spent a fair amount of time explaining why I don't like the current market. This is another post along those lines.Click for a larger imageA.) On November 9 prices gapped higher, printing a strong bar. That's the kind of event bulls like.B.) The prices clustered in a very narrow range, printing three very weak candles. This is a terrible way...

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Housing Starts Drop

From the Census:Privately-owned housing starts in October were at a seasonally adjusted annual rate of 529,000. This is 10.6 percent (±8.7%) below the revised September estimate of 592,000 and is 30.7 percent (±8.3%) below the October 2008 rate of 763,000.However, let's put that number in visual perspective:Click for a larger imageThe total annual...

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October Leading Indicators

As I predicted a couple of weeks ago, October Leading Economic Indicators (and revisions to September) came in at +0.3, the seventh positive reading in a row. This suggests that economic growth will continue through this quarter and the first quarter of 2010 as well.To repeat what I said then: typically, even in the last two "jobless recoveries", jobs began to be added to the economy when the YoY LEI was up +5% or better. This month will replace the awful -1% of October 2008, meaning that for the last 7 months, the LEI is up 5.9%, and up 4.2% YoY....

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Sage Wisdom For Investing -- In Anything

I oft mention David Rosenberg, and he oft mentions one of the wisest men on Wall St., Bob Farrell. Farrell is a legendary, Hall of Fame market maven and technician who plied his trade for decades at Merrill Lynch. When he left (he still writes a subscription-only newsletter), he penned his Market Rules to Remember, which I'd posted a long while ago over at Blah3 and will share with the Bonddad crowd now. These rules are truly timeless, and applicable to investing in just about anything. Without further ado: 1) Markets tend to return to the mean...

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Intial Jobless Claims: 505,000

The BLS reported that for the week ending Nov. 14, seasonally adjusted initial jobless claims were 505,000. Last week's number was revised slightly higher to 505,000 as well."The 4-week moving average was 514,000, a decrease of 6,500 from the previous week's revised average of 520,500."Unadjusted, there were 479,295 new claims, a decrease of 53,132 from the week before, and well below the 513,000 initial claims in the same week last year.In unadjusted terms, this was the best new claims number, relative to normal seasonal adjustment, in over a...

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Thursday Oil Market Round-Up

A.) Prices are still contained by a trend lineB.) The EMA picture is still bullish -- the shorter EMAs are above the longer EMAs. But also notice the 10 day EMA is more or less horizontal, indicating a flat line short term trend. The longer terms trends (20 and 50 day EMAs) are still positive. Finally, note that on several times over the last few...

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A Mountain of Debt

Brown's Bankrupt Britain has a nasty habit these days of breaking records, not the good ones but the bad ones relating to the size of debt.Sure enough, as is becoming the norm, another record has been broken. In October the UK Government had to borrow £11.4BN. This is the worst monthly figure since records began in 1946. Tax receipts fell by £4.1BN, compared with October 2008, and spending increased by £4.5BN.The total public sector net debt now stands at a staggering £829.7BN (59% of GDP).Certainly the figures are not good, most certainly if the...

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Today's Market

Yes, the SPYs are rallying. BUTA.) Notice that prices have not been able to get above 111.50. Also note the candles are getting smaller. AndB.) There is low volume. If people are so excited about this market then they should be stampeding into the market, thereby increasing volume.And if the market is so strong, why aren't the Transports confirming...

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Congress and White House Look At Jobs Bill

From the NY Times:With Congressional Democrats in near-panic amid forecasts that unemployment will remain high through next November’s midterm elections, a party leader said on Thursday that the House will pass a new “jobs bill” before Dec. 18. Senate Democrats likewise are weighing options. And the signals from Congress follow by a day the White House’s announcement that President Obama will follow his “Forum on Jobs and Economic Growth” on Dec. 3 with a “Main Street Tour” starting the next day in Allentown, Pa., and continuing to other hard-hit...

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