Bonddad Linkfest

Congressional leaders near budget deal (WaPo)Some at Fed are urging preemptive strike (NYT)India hit by second major power outage in two days (NYT)Jobless generation puts brakes on US (FT)Taiwan's economy shrinks (FT)Columbia cuts interest rates (FT)EU unemployment holds at 11.2% (Eurostat)India holds rates steady but lowers GDP projection (Marketwatch)US economy stuck in a rut (Marketwatch)EU inflation estimated at 2.4% (Eurost...

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Real retail sales and the onset of recession

  - by New Deal democratYesterday I referred to the business cycle analysis of Prof. Edward Leamer of UCLA, who wrote in 2007 that:The timing [pre-recession] is: homes, durables, nondurables, and services. Housing is the biggest problem in the year before a recession... durables is the biggest problem during the recession He found that housing...

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This Is What A Global Slowdown Looks Like

Below I've assembled the annualized GDP growth rates for various regions of the world. Note one common trait: they're all slowing or already in recessi...

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The Never Ending Story

Whilst the world sits "agog" watching the Olympics (apart from in India where their power system has crashed), Greece is just about to run out of money aga...

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Morning Market Analysis

Despite all of the reports coming from the markets about the East and the EU, the overall position of the equity markets is one of contained action; the IWMs and QQQ are trading in a range while the SPYs have just barely broken out. We're starting to possibly see a few cracks in the Treasury rally.  Notice the SHYs broke a short term uptrend...

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Bonddad Linkfest

Signs of coordinated action boost markets (FT)Global warming now incorporated into crop price projections (Agrimoney)South Korean business confidence at 4-year low (Beyond Brics)Japanese industrial production deceases (METI)India faces inflation threat, making the RBIs job harder (...

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Vehicle sales and the onset of recession

- by New Deal democratA lot of the recent economic data has been weak, but weakness does not necessarily equate with actual contraction.It's well to keep in mind the sequence of events that typically leads both recessions and recoveries, as identified by the research of Prof. Edward Leamer. First housing turns, then durable goods like cars, then nondurable...

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Please Learn the Definition of the Word "Socialism" Before You Use It

One of the most common words used to describe President Obama is "socialist."  If that were true, then this chart wouldn't exist:Above is a chart of the percentage change is GDP and the contributions to that change from both federal and state and local spending.  In the last 8 quarters (two years) we see negative contributions from federal...

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Dammit, now I'm gonna have to change the design of my backpack nuclear bomb

- by New Deal democrat The Wall Street Journal reports on a Fox News interview with Justice Antonin Scalia: Fox’s Chris Wallace asked about weapons that can fire off a hundred shots in a minute, in reference to the recent mass murder in a movie theater in Aurora. “We’ll see,” said Justice Scalia, referring to the need to wait on a court case that gets at the question. He then volunteered that the second amendment refers to the right to “keep and bear” arms, so that it “does not apply to arms that cannot be hand-carried…It doesn’t apply...

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Secret Bankers' Meeting

Apparently, last Tuesday, there was a secret meeting of the CEO's and Chairmen of some the UK's leading banks.The purpose of the meeting was to address the reputational damage from the industry's ongoing spate of scandals.Mark Kleinman of Sky News reports that the meeting at HSBC's head office discussed Liborgate, as well as the payment protection insurance and interest rate swaps mis-selling.It is regrettable that it has taken the banks so long to start to try to address issues that have been in the public domain, and the source of much public...

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Morning Market Analysis; Asia To the Rescue?

The Chinese market led the world lower, but now may be in a position to help the world markets break out of their weakness.  First, prices have been trading between 32 and 34.5 for the last month and a half.  Second, note the rising CMF -- a sign that money is moving into the market.  Third, prices gapped higher on Friday on strong volume. ...

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Weekly Indicators: pervasive coincident weakness, some leading strength edition

  - by New Deal democratIn the rear view mirror, the big number reported this past week was 2nd quarter GDP. The initial throw of the dart came in at +1.5%.  This is poor but still positive and not as poor as many had feared.  Stay tuned for the revisions over the next several months.  Monthly data reported included new home sales, falling from an upwardly revised May number.  Durable goods taken as a whole rose, but core capital goods fell.  Both measures of capital goods spending have been stalled since February....

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Weekend Weimar, Beagle and Pit Bull

It's that time of the week. NDD will be here over the weekend. I'll be back on Monday. Until then........

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Initial jobless claims and the onset of recession: updated

  - by New Deal democratLast week I wrote that, compared with the onset of previous recessions, in which a rise of initial claims of 10% or more off the bottom was almost always required, the current situation only appeared to support slow growth but not actual contraction.This week's number makes for an even more dramatic comparison.  As...

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So -- Where We We Economically?

Over the last week, I've taken a look at the various sectors of the US economy, using the Beige Book and Ben's Congressional statements as the basis of my analysis.  Here's are my thoughts:Employment: why this isn't a daily issue on everybody's tongues is absolutely beyond me.  We've been over 8% for a long time, and yet, no one is doing anything.  Here's the bigger problem.  There are three sectors of employment: government, manufacturing and service.  While manufacturing jobs have increased, they've done so at a slow...

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Bundesbank Shoots Draghi's Fox

Yesterday Mario Draghi, head of the ECB, was making all sorts of rash promises about the ECB doing whatever was needed to prop up the Euro etc.I noted:"Draghi then reverted to type, and promised that the ECB will "do whatever it takes to preserve the euro".This of course is patently untrue."Today the Bundesbank has verified my conclusion, by stating that it remains opposed to further bond buying by the ECB.Whatever Draghi might like to do, the Bundesbank won't allow him to do it; ie they have shot his f...

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Morning Market Analysis

The entire US treasury curve is still rallying; there is no sign of any sell-off.  All the prices are still above the EMAs (all of which are rising) and momentum is still bullish.  We're not going to see any major move from the equity markets until money flows out of the safe haven markets.The entire US corporate curve is in the same situation. ...

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Don't Expect Any Relief in Grain Prices

Notice that most of the bread basket is under some type of drought warning right now.  Here's the report from the NOAA:The Great Plains to Midwest:   Unrelenting heat and lack of rain continued the downward spiral of drought conditions.  D0 to D2 expanded across parts of the Plains from Texas to North Dakota, from Missouri...

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Where We Are: Employment

From the Beige Book:Employment levels grew at a tepid pace for most Districts since the last report. The Boston, Cleveland, Atlanta, Chicago, and Dallas Districts said employment levels were flat to up slightly, with most contacts citing U.S. fiscal policy uncertainty or weak demand for their conservative approach to hiring. Kansas City said employers...

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