In Which I Repair Prof. DeLong's Broken Okun

- by New Deal democratIn a post yesterday in response to the Q4 2009 GDP report, Berkeley Prof. Brad DeLong asks, "Where Oh Where Is My Okun's Law?" and includes the following graph:The circled area to the upper left is the most recent GDP and unemployment rate data which the Professor suggests have broken Okun's law.In my opinion, the Professor already...

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Weekly Indicators: Caution Flag edition

- by New Deal democratThis week, for the first time, the weekly indicators flashed a warning about the sustainability of consumer spending.Let me get right to the most important news, which is shown in the graph below. Here's demand for gasoline for the last two years from the E.I.A.:While gasoline stocks are considerably higher than normal (separate...

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Weekend Weimar and Beagle

It's that time of the week -- it's time to stop thinking about the markets and the economy. So -- don't think about them. See you on Monday Oh yeah -- a special shout-out to Miss P in D.C. The puppies are back!!!...

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Weekly Indicators Protest! We can haz doggies???

- by New Deal democratI'm swamped. I'll post the indicators over the weekend.Maybe in the meantime there are a few photos of doggies someone has laying arou...

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GDP -- A Look At Imports and Exports

Finally, let's take a look at exports and imports. Click on all images for a larger images.Imports are increasing on a quarter to quarter basis.As are exports.The good news is in both areas. The increase in imports means consumption is increasing and the increase in exports indicates that other countries are growing. However, the overall trend...

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GDP -- A Look At Investment

Let's continue out look at the GDP report by looking at the percentage change from the preceding quarter in real (inflation-adjusted) investment. Click on all images for a larger imageTotal private investment increased smartly in the fourth quarter, although some of that increase is the result of a bungee like snapping back from a very low level.Non-residential...

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GDP -- A Look At PCEs

Personal consumption expenditures -- PCEs -- account for about 70% of GDP growth. In addition, PCEs have three sub-parts -- service expenditures (about 66% of PCEs), non-durables (about 22% of PCEs) and durable expenditures (about 12% of expenditures). Here are the charts that show the percentage increase from the preceding quarter in real PCEs and...

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GDP and Jobs 2

Yesterday I wrote about the extremely close fit between % changes in GDP and % changes in jobs on a year-over-year basis. Generally speaking, take the YoY %age change in GDP, subtract 2, and you are probably within a percent or two of the YoY % change in jobs, with a lag of a few months.But the YoY change doesn't tell us about when we begin to add...

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GDP +5.7

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 5.7 percent in the fourth quarter of 2009, (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.2 percent.Let's break the data down into small parts.Real personal consumption expenditures increased 2.0 percent in the fourth quarter, compared with an...

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Forex Fridays

Overall, the dollar is in the middle of a rally that so far has three legs - up (A), sell-off/correction (B) and a resuming of the trend (C). Let's break this down.In the first leg up, we had some major gaps higher (1) indicating there was a fundamental shifting in supply and demand. Prices rallied to previous highs before forming a pennant pattern...

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Don't Feel Sorry For Yourselves

I cannot but help chuckle at Alistair Darling's comments directed to the bankers (ex "Masters of The Universe"), where he told them "don't feel sorry for yourselves".Before he went into a meeting at Davos, with eight UK and foreign-owned banks, he held a press conference at which he said:"My message to the banks is that it is in their interests to get off the front pages.The banks should do what they are supposed to do, provide credit to the economy. They must know that changes are necessary. They can all see that the regulatory regime needs to...

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Today's Market

A.) Prices have moved through key technical support levels on high volume. Also note that volume has been higher on all tghe sell-off days.A.) Prices have moved through key technical levels on high volume.A.) Prices are right at key technical levels.So far, the SPYs have dropped about 5.6%, the QQQQs have dropped about 6.1% and the IWMs have dropped...

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What Barry Said

From the Big Picture:The question usually comes up in response to something I wrote. I’ve been contacted by Republicans, who want me to join or advise their committees. I usually tell them that I find much of their ideology intellectually indefensible, and their marriage to the religious right offensive. When I get the same question from Democrats, my response is they seem to not understand how the economy works, are too spineless to get anything done, and are way too politically correct for my tastes.I agree. Completely....

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New Home Sales Drop

From the WSJ:Demand for new homes in December fell, as cold weather and continuing joblessness put a chill on hopes for a housing-market recovery.Single-family home sales fell 7.6% from November to a seasonally adjusted annual rate of 342,000, the Commerce Department said Wednesday, though it noted the drop was within the margin of error. December's...

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GDP and Jobs

- by New Deal democratTomorrow the advanced estimate of 4th Quarter 2009 GDP will be released, and the likelihood is that all of the popular blogs will be trumpeting that the number is but a "blip," taking their cue from Professor Krugman.It is well to remember that, regardless of the source of GDP growth, whenever that growth has been in excess of...

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Initial Jobless Claims Drop

From the Department of Labor:In the week ending Jan. 23, the advance figure for seasonally adjusted initial claims was 470,000, a decrease of 8,000 from the previous week's revised figure of 478,000. The 4-week moving average was 456,250, an increase of 9,500 from the previous week's revised average of 446,750.Here is the data:Remember last...

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Thursday Oil Market Round-Up

A.) Oil prices are consolidating in a triangle formation.A.) Momentum is decreasing andB.) People are leaving the security.However, when prices are consolidating, it's important to look at oscillators. To that endBoth the fast stochastic (A) and slow stochastic (B) are showing an oversold condition in the mark...

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"Secret" Meeting

Hush whisper it softly, The Times reports that Alistair Darling will meet the heads of top British and American banks (including HSBC, Barclays, Standard Chartered, JP Morgan and Morgan Stanley) at a secret meeting in Davos tomorrow.How can this meeting be described as "secret", if it is publicised a day in advance in a national newspaper?The purpose of the "secret" meeting is for the bankers to express their feelings to Darling about the possibility of new sanctions against the banking sector. The banks, quite rightly, are concerned that attempts...

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Today's Market

There are two important questions with the SPYs right now.1.) Are they forming a bottom?2.) Is the bottom strong enough to launch a rally?Right now the evidence is the SPYs are stabilizing. However, notice that so far the 110.00 - 110.50 area has proved to be difficult to more through....

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A Closer Look At Copper

Copper is a key component in many products. Therefore, it is considered to be a leading indicator. Because the markets are currently experiencing some turmoil, now is a good time to look at the chart to see what it says about possible future market direction.Prices have dropped through several key resistance areas. However, the markets are still...

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Case Shiller Index Mixed

From the WSJ:The indexes showed prices in 10 major metropolitan areas fell 4.5% in November from a year earlier, while the index for 20 major metropolitan areas dropped 5.3% on the year.Both indexes declined 0.2% compared with October. Adjusted for season factors, the 10-city index was flat on the month, while the 20-city composite fell 0.1%.Let's...

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Wednesday Commodities Round-Up

A.) Prices have broken two key trend lines, indicating a change in trend is occurring.A.) The 10 and 20 day EMA are moving lower and the 10 day EMA has crossed below the 20 day EMA. Finally, prices are below all the EMAs.A.) Momentum has clearly dropped buB.) We're not seeing a huge exodus from the shar...

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Unite Tries To Hold Back The Tide

Unite, the union that represents Cadbury employees, is rightly worried that the proposed leveraged takeover of Cadbury by Kraft may lead to job losses in the UK.Aside from organising a rather futile employee protest in Bournville, the home of Cadbury, today the union says that Kraft must give assurances that the interests of the workforce will not be swept aside in the deal, and that the quality of the products will be safeguarded. Or what?What exactly will Unite do, or be able to do, if Kraft doesn't give these assurances?It is powerless to stop...

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Today's Market

Click on all images for a larger imagePrices are just below important technical levels.Prices are below the EMAs and the shorter EMAs are moving lower. Additionally, the 10 day EMA has moved below the 20 day EMA.Prices are at technical support. Additionally, the 10, 20 and 50 day EMAs are moving lower and the 10 day EMA has crossed below the 20 day...

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Tranports Are At Important Support Levels

The transports have moved through several key areas of support and are at important technical leve...

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