Bonddad Linkfest

Political polarization is at a its highest level now (WaPo)Insider trading and Buffet rule legislation advances (NYT)Turkey is hawkish on inflation (WSJ)German retail sales drop (WSJ)Eurozone joblessness at high (FT)Treasury seeks to borrow $444 billion in 1Q12 (Yahoo)EU banks will tap ECP lending facility again (FT)Senior loan officer survey (FRB)\Incomes rise, spending stagnant (FT)Spain's economy shrinks (W...

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Feds Release the Senior Loan Survey

From the FRB:Overall, in the January survey, domestic banks reported that their lending standards had changed little and that they had experienced somewhat stronger loan demand, on net, over the past three months. Foreign respondents, which mainly lend to businesses, reported a net tightening of their lending standards while loan demand was about unchanged.2Regarding business loans, domestic banks reported, on balance, little change in standards on commercial and industrial (C&I) loans but a continued easing of pricing terms on...

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1953 PCEs

1953 is a year with two sub-parts.  The first two quarters we see decent growth.  In the first quarter, the growth is pretty even, spread among durable, non-durable and service purchases.  In the second quarter, we see a slight drop in durable good purchases.  In the third quarter, non-durable goods purchases subtracted sharply...

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Greece Off Track

Canadian Business reports that the troika have delayed a meeting with the Greek government to discuss ways of reducing employment costs.The troika have called off a meeting planned for Tuesday and will hold it later in the week.Jean-Claude Juncker, the Luxembourg prime minister is quoted:"Everyone knows that Greece's consolidation program is off track.Greece must live up to its commitment...

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Eurozone Unemployment Hits Record

As the EU political "elite" attempt to hold onto their jobs, by desperately propping up the Euro and attending a never ending round of well catered summits, they should spare a thought for the unemployed of Europe.Figures released today by Eurostat show that unemployment in the Eurozone hit a record high at the end of last year.The unemployment rate in the eurozone was 10.4% in December, some 16.5 million people were unemployed in December (a rise of 751,000 from the year before). A record 5.6 million of the unemployed are under 25.Spain...

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The Fluid Greek "Deadline"

The Greek Prime Minister, Lucas Papademos, has said: "Significant progress made in talks about PSI...We are seeking to conclude negotiations with the troika by the end of the week".This of course is the same fluid "deadline" that moves ever further forward into the distan...

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Morning Market

The IWMs (Russell 2000) fell below a longer-term technical uptrend, but found support at a high established early on the 23rd right below the 79 handle.  The QQQs found support at a price from the 25th.  Also note the strong level of support from the 19th.  Both of these levels are centered around the 59 handle. The SPYs opened the day...

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Morning Market

Remember: what we're looking/waiting for in the equity markets is a move through support.  So far, all, we've gotten in terms of price action is sideways movement, indicating the selling pressure isn't there -- at least, not yet.The following price levels still hold:IWM: 79QQQ: 59.50 - 60.25 areaSPY: 131 Copper is still rallying.  Prices...

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1952: Compilation

The following posts are all part of the Bonddad Economic History Project's 1952 series.GDP PCEsInvestmentExports and importsEmployment and incomeGovernment receiptsInflation and Fed Pol...

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Bonddad Linkfest

Architectural billings increase (BB)5-year treasuries hit record low yield (BB)  Hedge funds increase bullish commodity bets (BB)Portugal sees bond yields spike (FT)How the EU crisis is bullish for commodities in the medium term (FT)Gold hits 7-week high (FT)The austerity debacle (NYT)BEA's personal income and spending report (BEA)South Korea's current account falls (WSJ)Cattle herd the lowest in 60 years (W...

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We're All Keynesians Now

The New Yorker Magazine has a great piece on economic policy in the early years of the administration.  It is written by Ryan Lizza and is one terrific piece of journalism.  It is very detailed and nuanced -- which of course means that very few will actually read it.Part of the article is based on a memo from Larry Summers to the President regarding the fiscal stimulus.  Here is a link (PDF) to the entire article -- which I also recommend you read as it's a fascinating analysis of a very difficult time.  At this point, it's...

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No Deal Today - Don't Believe The Hype

Despite last week's hype from various "sources" within the EU, and the delusional IIF, (akin to the self congratulatory bullshit spouted by third world dictatorships) that a deal on the Greek haircut is imminent, reality has, once again, hit the fan.The Euro Council meeting is under way, yet the much hyped "deal" is nowhere to be seen.No surprises there then! On top of this Angela Merkel has said that the second bailout tranche will not be finalised today, because the troika has not yet finished its assessment of the Greek economy.Bloomberg quote...

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A Closer Look At Manufacturing.

As we close out January, let's take a look at the overall state of US manufacturing. New York appears to be rebounding somewhat:The Empire State Manufacturing Survey indicates that manufacturing activity expanded in New York State in January. The general business conditions index climbed five points to 13.5. The new orders index rose eight points...

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Morning Market: Is The Rally Over?

The 60 minute chart shows that prices moved sideways last week, using 131 as support.  However, the overall uptrend is still intactThe 30 minute chart shows last week's price action in more detail.  Monday and Tuesday were technically meaningless.  On Wednesday, we see the rally inspired by the Fed's minutes, but that was completely...

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Europe Rearranges Its Deckchairs

As the EU holds yet another summit today to discuss the ongoing Eurozone crisis, still smarting from German attempts to takeover the country Lucas Papademos the Greek Prime Minister said that unless Greece's international backers agreed to a new bail-out, Greece would be unable to pay off its loans and be forced out of the Eurozone.He warned that Greece faces “the spectre of bankruptcy and all the dire consequences that entails.Nothing new there then!What is actually required is for Greece and its bondholders to agree the haircut, and...

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Hester Waives Bonus

Stephen Hester, CEO of RBS, has bowed to political pressure and has waived his £1M bonus.This is of course a Pyrrhic victory for those who were baying for Hester to waive it.Had he taken the bonus, a large chunk would have gone to the taxman; as it is, the decision to waive the bonus has knocked a chunk off the value of RBS shares (which are owned by the taxpayer). Be careful what you wish f...

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Weekly Indicators: continuing positive trends edition

- by New Deal democratFirst, as to the monthly reports, home sales continued poor, but consumer confidence jumped back further, completely regaining its pre-debt debacle levels. In the rear view mirror department, 4Q 2011 GDP was +2.8% although some internal components were weaker. Those few sources who thought a new recession might begin by the end of 2011 were almost certainly wrong. Turning now to the high frequency weekly indicators:Weekly employment-related data was mixed.The BLS reported that Initial jobless claims rose by 25,000 to...

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EU To Impose Dictatorship On Greece

Bloomberg reports that European policy makers are discussing plans to directly intervene in Greek budget decisions as the country struggles to cut its deficit.Under the proposals, European institutions would have powers to implement austerity measures agreed under the terms of Greece’s bailout agreements.This will not go down well with the Greek people.In fact the Greek government have told the German government to fuck off wrt this proposal. This rejection means that Greece will not get its second bailout and will defau...

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Greece Will Default - Merkel Sees The Light

Angela Merkel has finally realised what the rest of the world (excluding Rehn) has known all along:@afneil Andrew Neil Foreign Office sources say Merkel now thinks Greece will defau...

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Really -- Austerity is a Really Stupid Idea, Completely Divorced From Data and Reality

Today, the BEA released the initial estimate of 4Q GDP.  Above is a chart of the percentage change in 4Q11 GDP and the elements that contributed or subtracted from GDP growth.  Guess what?  Austerity subtracted from growth.  This occurred because of contractions at the federal (which subtracted .62 from the calculation) and state...

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A Special Note From Bonddad on the Absolute Stupidity Behind the Expansionary Austerity Movement

We've written quite a bit here about how mind-numbingly stupid the idea of austerity is.  My reasoning is simple: government spending is a component of the GDP equation (which is C+I+(X-M)+G).  This equation has been around a long time, and is a basic component of macro-econoimcs.  Under the basic concepts of math, if you lower a value in an equation that involves addition, you wind up with a lower total number on the other side of the equals sign.In addition, we have a ton of data from the existing attempts to use this idea that...

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ECB Stands Back From Debt Talks

European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo has said that the ECB is not involved in the Greek debt talks.This is hardly good news, if Paramo is speaking the truth, for those who are hyping the rumour that a deal is close at ha...

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The End of The Euro

@faisalislam Faisal Islam I hear one European bank has already started to account for euros by nation, ie German euros, Greek euros, with internal exchange rat...

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The Troika's Wishlist

Reuters reports that the EU, IMF and ECB (aka troika) have drawn up a report which includes a list of measures they want to see enacted by Athens, before the Euro130BN bailout fund is released (always assuming of course the bondholders agree to their haircut).This is all very nice. However, given that the bondholders have yet to agree terms of their haircut and the Greeks are in denial about the wishlist actually being binding or relevant (government spokesman Pantelis Kapsis said the government would try to negotiate some of the points),...

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Iran To Stop European Oil Shipments

The FARS news agency reports that the Iranian parliament will debate an emergency bill this Sun that would halt oil exports to Europe from next week.That will hit the EU's plans for a gradual imposition of sanctions....

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Bonddad Linkfest

Greek talks continue (BB)Emerging market stocks hit 5 month high (BB)Fed statement (FRB)Fed's economic projections (FRB)Brazil central bank signals lower rates area ahead (BB)Wheat rallying; Russia may have to curb exports (BB)Italian yields declining (BB)Bernanke transforms the Fed (...

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1953: GDP and Contributions to Growth

According to the NBER, the early 1950s expansion lasted from October 1949 to July 1953.  We can clearly see the contraction in the last two quarters in this chart:We see the economy growing strongly in the first quarter, hitting a 7.7% growth rate.  Consumers are adding a fair amount to the overall growth, but the real contributor is government...

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Beta testing the Shadow Weekly Leading Index (week 3)

- by New Deal democratAs readers know, I am trying to reverse engineer the ECRI Weekly Leading Index.Research has revealed that the WLI (per Lakshman Achuthan) has 7 components. We know that two are initial jobless claims and the JoC-ECRI commodity index. Six of the seven are public record.Since the possible early monthly reports were reported two weeks ago, they wouldn't count in any event. This week we can begin to find out if the components are weighted (almost certainly they are) and their relative weights, since several components had significant...

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A Closer Look At the Four Largest SPY Sectors

On Monday, I noted that the underlying technicals of the market had changed; more aggressive, "growth areas" of the market were rising.  Below are daily charts of (in order technology, financials, energy and health care ETFs).  Combined, these four sectors comprise 57% of the S and P 500.Technology (which accounts for 19.39% of the SPYs)...

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