This weekend, Mr$s. Bonddad and I are at the Rally to Restore Sanity. We would encourage all those nearby to attend. We'll be back on Mond...
Friday, October 29, 2010
Weekly Indicators: the tricks vs. the treats edition
- by New Deal democratThis week's most important statistic was surely 3rd quarter GDP, which came in at 2%,lukewarm and as expected: growth, but not enough to knock down unemployment. The Chicago PMI showed that in the Midwest at least manufacturing is still going strong. Consumers meanwhile are as gloomy as ever both about the present and the future. New and existing home sales bounced along the bottom.Let's turn now to the high frequency weekly data.Last Friday I said that "Purchase mortgage applications will be important to watch next week."...
The Import Problem in More Detal
Here is a chart of the contributions to the GDP percentage change:Notice that imports subtracted a fair amount from grow...
Lagging Nonfarm Payrolls: Is the main culprit offshoring?
- by New Deal democratTwo days ago in the first installment of this little series I pointed out that the typically reported jobs metric, Nonfarm Payrolls, was not keeping up with almost every other measure of job growth, including private sector jobs, the Household Survey, aggregate hours worked, temporary hires, and the results generated by examining...
3Q GDP Up 2%; Imports Growing Problem
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 2.0 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis....
Yesterday's Market
Yesterday, we had two markets. In the AM we had a gap higher (a), followed by a down, up down market (b). In the afternoon, prices moved higher, but did so very slowly, inching up the EMAs (c).On the daily chart, the EMAs are still in the most bullish orientation possible (a). In addition, the A/D line and the CMF both indicate new money is flowing...
The Curate's Egg
The leaders of the EU have managed to create for themselves, and the people of Europe (whom they claim to represent), something of a curate's egg wrt the agreement to revise (in limited fashion) the EU rulebook.There will be a "limited treaty change" (so as to avoid countries having to ask their voters to endorse it), that will ensure a legally watertight underpinning of the Euro110BN bailout for Greece and the Euro750BN bailout for others. However, those countries that do not stay within EU deficit budget limits will not lose their vote (as Chancellor...
Thursday, October 28, 2010
Durable Goods/Case Shiller and Initial Unemployment Claims
The year over year rate of change is still positive. However, the pace of the increase is slowing, indicating that the rate of improvement is decreasing.The month to month rate of increase shows the decrease in the pace of improvement.Durable goods:First, let's take a look at the headline chart -- that is, the chart that shows the total number.The...
More Evidence of Increased Pressure on Food Prices
From the WSJ:Over the next decade, China's annual grain demand is likely to reach 573 million tons, which is above its current production levels. With marginal increases in crop yield shrinking and arable land harder to find, the bet is on that Beijing may swiftly become more reliant than ever on global markets for an essential class of commodities it is desperate to keep mostly home-grown......Inside China, this has already gone from just bourse play to a matter of public interest. In October, the price of staples like cooking oil and sugar...
A closer look at Withholding tax receipts
- by New Deal democratAbout a year ago I started keeping track of withholding tax receipts. which are reported daily by the Treasury Department. Doomers were sure that these receipts, which were still running negative YoY, spelled, well, Doom, but I was confident that the trend was bottoming and would reverse until it became positive - which is exactly...
EU Loses Touch With Reality
David Cameron has thrown in the towel in his fight to resist an EU imposed increase of £435M in Britain's contribution to the EU (based on an EU budget increase overall of 2.9% to £110BN).Ironically, if this 2.9% rise is approved, it will in fact be a modest "victory" for Cameron who has been fighting a rearguard action (calling all EU heads of state) to prevent the implementation of a budget increase of 5.9% which is being demanded by MEPs. These MEPs are clearly a bunch of individuals who have not set foot on "real world planet Europe" for many...
Wednesday, October 27, 2010
Yesterday's Markets
Treasury prices have been dropping all week. Notice that prices have gapped lower at the beginning of trading (a and b) and closed near their daily lows (c, d, e)Yesterday, I noted that prices had moved below the 50 day SMA. Here we see that prices have moved through the 50 day EMA (a). Also note the last two days have printed some strong downward...
The Dips In Congress Want To Legislate a Double Dip Recession
From Bloomberg:U.S. House Republicans plan to try to slash $100 billion from the federal budget as early as January if they wrest power from Democrats in this year’s midterm elections, setting up possible early showdowns with President Barack Obama on taxes and spending.Yesterday I described the US economy as a "second gear" economy. The economy is growing, but very slowly. However, there are several points that indicate a spark could lead to growth if given the right impetus. This also means the economy is far more susceptible to shocks such...
Is it a (relatively) "Jobless Recovery" OR are Nonfarm Payrolls underestimating job growth?
- by New Deal democratYesterday Bonddad wrote a particularly good summary of the economic situation, I think. As the impetus from manufacturing fades, consumer spending has taken up slack. The economy feels like it is grinding along in slow gear, even though there are some metrics (savings, debt reduction) that like coiled springs could power a much...
The Dog That Didn't Bark
The House of Lords is conducting an enquiry into the audit profession, and has been told that accounting rules were a significant contributing factor to the banking crisis.Tim Bush, a member of the Accounting Standards Board's (ASB) Urgent Issues Task Force, told the Lords that international accounting standards forced auditors to abandon the principle of prudence in their audits.Lord Lawson accused the profession as being "one of the dogs that didn't bark."He quite rightly uses the phrase "one of". As noted many times before on this site, the...
Yesterday's Markets
The IEFs are in a very interesting place right now. First, consider (a), when prices first broke through major support. The 10 day EMA moved below the 20 day EMA and prices eventually found support at the 50 day EMA. Now we have the 10 day EMA below the 20 day EMA (b), but prices closed below the 50 day EMA, printing a strong bar. This might now...
Tuesday, October 26, 2010
The Second Gear Economy
Over the last month and a half, I've looked at a macro picture of the US economy twice. The first conclusions are here. The second set of "looks" is contained in the following four posts: link, link, link, link. All of these show an economy that is growing very slowly. Let's review the basics:Consumer spending is advancing at about a 1.5%-2% rate every quarter. Consumers are buying necessities, some non-durable luxury goods and durable goods, but not in massive amounts. A high savings rate indicates people are being frugal.Manufacturing --...
Beige Book, Part IV: Prices
From the Beige Book:Input costs, most notably for agricultural commodities and industrial metals, rose further. Shipping rates increased, and retailers in some Districts noted rising wholesale prices. However, prices of final goods and services were mostly stable as higher input costs were not passed on to consumers. Wage pressures were minimal.Let's...
Yesterday's Markets
First, notice the two lines established from previous highs over the last 10 days.Prices gapped higher at the open (a), peaked quickly (c) but couldn't maintain momentum so they fell back to a previous support level (c), established a few days ago. Prices dipped over lunch, rallied into resistance (d), moved a bit higher (e), but then fell into the...
