Weekly Indicators: 2011 ends with a bang edition

- by New Deal democratMonthly data ended 2011 on a mixed note. The Case Shiller home index for October showed further declines in home sale prices, while consumer confidence has now regained virtually all the ground it lost during the debt ceiling debacle in July. Meanwhile, some of the high frequency weekly indicators continue to be affected by seasonality, but almost all ended 2011 with good showings.Turning first to jobs, all three weekly indicators were good:The BLS reported that Initial jobless claims rose by 17,000 to 381,000. The four week...

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Bonddad Linkfest

Cities cutting street light service to save moneyCommodities decline for first year since 2008Treasuries have best year since 2008Corn traders extend bullish betsInitial claims rise 15,000Chicago PMI decreases slightlyChina's PMI falls for second monthUS economy enters new year on good footingGold hits six-month lowThe importance of liquidity for haven currenc...

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1951: Investment

This post is part of the Bonddad economic history project.The above chart shows the contributions investment made to GDP in 1951.  The big story above is the massive inventory draw down that occurred throughout the year.  Remember, that in 1950 we saw a massive inventory build as businesses stockpiled items in anticipation of the Korean war...

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2011 Year in Review: Employment

The employment situation has done OK, this year, but there are still some incredibly negative developments.  First, the bad news:The unemployment rate is still very high at 8.6%.  However, it has dropped over a percentage point over the year.The 4-week average of initial unemployment claims spent most of the year above the important 400,000...

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Morning Market -- The Break-Out Is Still Wanting

The above four charts show the IWMs, IYTs, QQQs and SPYs.  All are still waiting for a breakout.  Notice that none of the charts have printed a strong, bullish candle over the last week, and only one or two over the last two.  The bottom line is we're just not seeing a strong move from these levels yet. The IEF daily charts shows...

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1951 PCEs, Income and Savings

The above chart shows PCEs contribution of overall economic growth during 1951 and the contributions of each sub-part of PCEs to overall PCE growth.  The first quarter saw a tremendous surge as consumers anticipated shortages caused by the Korean war effort.  In essence, these purchases pulled purchases ahead to the first quarter, which explains...

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An examination of the model for ECRI's black box

- by New Deal democratTwo weeks ago, an article I wrote, A Peek inside ECRI's black box gained considerable traction. There I examined a number of data series which likely generated ECRI's recession warning in September, using as my starting point the work of ECRI's founder, Prof. Geoffrey Moore, who in a 1961 manuscript set forth a number of leading indicators that predicted recessions and recoveries both before and after World War 2. A commenter at Seeking Alpha, dlamba, suggested reading Prof. Moore's later work, "Leading Indicators for the...

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Anecdotal Thoughts On the Houston Economy

I live in Houston, Texas in a neighborhood called the Heights.  Over the last 4-6 weeks, I've seen the following, which you should consider as nothing more than anecdotal information in a limited geographic area:1.) An old apartment building (as in at least 40 years old) that sat on five residential lots just down the street has been torn down.2.) An entire row of other row houses has been cleared and there is a rumor in the neighborhood that the area has been set for some kind of retail development.3.) There are at least 4 other houses going...

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Morning Market -- Break-Out Denied (so far) Edition

The above charts show that none of the equity average broke out yesterday -- in fact, we see a general retreat for recent gains.  The SPYs are now below their previous resistance lines and the QQQs and IWMs are retreating from their respective upper trend lines.  In short, the confirmation of the breakout has yet to happen -- which is one...

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Bonddad Linkfest

Italian interest rates dropObama to ask for debt ceiling increaseConference Board's Consumer Confidence releaseUS declines to name China a currency manipulatorTreasuries will sell-off next year as economy strengthensJapan industrial output fallsDeposits at ECB hit highTwo new Fed nomineesGold (and GLD) losing its appealCalculated Risk on House Pri...

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Ricardian Equivalence is a Crap Theory

From WikipediaIn its simplest terms: governments can raise money either through taxes or by issuing bonds. Since bonds are loans, they must eventually be repaid—presumably by raising taxes in the future. The choice is therefore "tax now or tax later."Suppose that the government finances some extra spending through deficits; i.e. it chooses to tax...

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1951: GDP

Moving forward from 1950 and into 1951, we'll see the government spending -- in the form of war spending for the Korean War -- can indeed create economic growth.  In fact, it can be the primary driver for overall economic growth.The above chart is of total GDP growth, along with the contributions of each sector of the economy to growth. ...

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Morning Market

After bouncing off the Fibonacci fans, prices have now moved through resistance, priting a fairly strong bar to do so.  Also note the technicals are giving a buy signal (MACD has given a buy signal, CMF has turned positive and the A/D line is advancing).  The EMA picutre is a bit blurred, however.Moving on, remember we're looking for a confirmation...

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Bonddad Linkfest

Rental properties helping to boost housingMonetary policy week in reviewVolcker rule comment period extended Census' durable goods reportRussia cuts refi rateGap between lawmakers and citizens increasesLawmakers increase incomes in last 6 yearsCrude oil and energy stocksUS is now a net exporter of petroleum productsThe bond market isn't concerned with US borrow...

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2011 Year In Review: The Consumer

Let's continue looking at the year in review by looking at the consumer's health:Real PCEs rose in the second quarter, but then leveled off for the next 5-7 months.  However, over the last three months we've seen a nice increase.Service expenditures -- which account for about 65% of PCEs, have for the most part risen all year.  But the rate...

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