"A generous man will prosper; he who refreshes others will himself be refreshed"
by GSIMMERLE on Wed Jul 28, 2010 2:57 pm
...As the prospects for a double dip recession in the US seem to increase by the day, just about every bearish market commentator has his or her reasons why we should the triumphant return of the Great Recession. Even though I am not usually one to follow the crowd, in this care I figured I might as well join the party and discuss my 5 favorite reasons a double dip may be upon us....
http://tinyurl.com/25zlzku
by sowhat on Fri Jul 30, 2010 8:44 am
by dlry on Sat Jul 31, 2010 10:54 am
Given the July bounce in the stock market, the ever-optimistic me expected some sort of anemic bounce in the WLI as well, but that bounce never came. Of course, it would be helpful to know the makeup of WLI (components and percentages), but unfortunately that information is proprietary.
Nonetheless, we can say there has never been a WLI plunge in history of this depth and duration, nor any dip at all below -10 that has not been associated with a recession.
Whatever the ECRI sees preventing them from issuing a recession alert remains a mystery.
So they wait until it is blatantly obvious we are in one before issuing a warning.
You may add <active topics> to your favourite links by defio70 on Mon Aug 02, 2010 10:20 am
As for today, ISM Manufacturing weakened fom June's levels but since it beat expectations all is good in the world.
An industry trade group says growth in the manufacturing sector weakened in July to the slowest pace this year. The Institute for Supply Management says its manufacturing index slipped to 55.5 in July from 56.2 in June. Economists polled by Thomson Reuters had forecast a lower reading of 54.1. Construction spending also gained based on (wait for it) government spending.
Construction spending in the U.S. unexpectedly increased in June, boosted by gain in government programs that made up for declines in private residential and commercial projects. Economists forecast construction spending would decline 0.5 percent.
The 0.1 percent increase in outlays followed a revised 1 percent drop in May that was larger than previously estimated (shocker, a revision downward)
Private construction spending dropped 0.6 percent following a 1.4 percent decrease in May. Homebuilding outlays fell 0.8 percent. Private non-residential projects decreased 0.5 percent, reflecting declines in construction of factories, commercial dwellings and communications stations. (enough with the private sector... give me more government)
Spending on public construction increased 1.5 percent from the prior month. (ahhhh...yes)
Federal building climbed 4.6 percent to $31.7 billion, the most on record.
TraderMark
by dlry on Mon Aug 02, 2010 5:46 pm
1. Construction spending came in up .1% but in fact there were downward revisions of .8%. It was not a good report.
2. The manufacturing ISM came in down less than a point. Expectations were for a 2 point decline. However the all-important new orders index plunged 5 points and the inventory index rose 4.6 points. Many regard the change in the difference between the new orders index and the inventory index as the lead indicator provided by the manufacturing ISM. This lead indicator collapsed.
3. The stock market keeps acting well in the face of relentless disappointing economic news.
4. The significance of many positive economic surprises in Europe is slowly sinking in. It was the European stock markets that led the way last night and brought the S&P back to the 200-day moving average this morning.
5. The other force that has been keeping the stock market aloft amidst relentless disappointing U. S. economic news has been expectations by market participants of future Treasury and Fed props to the economy and stock market.
6. Last week Morgan Stanley and UBS coincidentally floated “an idea” that the Administration could, with a wave of its magic wand, refinance many of the government held and guaranteed mortgages (Fannie, Freddie, Ginnie Mae) at a much lower interest rate.
7. Chicago Fed president James Bullard recommended that the Fed should move towards massive quantitative easing if there is a negative shock to the economy.
8. I have taken a cynical view that the unwind of excessive Euro pessimism and hopes and expectations for a second round of QE will probably take the stock market higher.
9. I want to stress how thin the ice is that I am skating on. When the economic data deteriorates in a surprising and relentless fashion, as it now has, the historical record shows that the real deterioration exceeds what is reflected in our economic data.
10. Why this cynical assessment given my belief that the U. S. stock market is a dangerous knife edge and the U. S. economy will continue to disappoint? Basically, because I believe the Fed and the Treasury will move heaven and earth to keep asset prices aloft. Professional market participants existentially hope for the next round of emergency measures.
11. Somehow the actions of the financial authorities, held hostage to high asset prices, and professional market participants, existentially inclined to go along with the authorities, will probably keep equity prices aloft until economic events turn negative enough to make the moral hazard game no longer a plausible one.
-END-
You may add <active topics> to your favourite links by sowhat on Tue Aug 03, 2010 8:56 am
...One wonders just where the Chairman gets the temerity to say that US consumers will spend more with time, despite the just confirmed (for the nth time) contraction in actual incomes, not to mention that the second drop in Payrolls in as many months will once again confirm the double dip...
http://tinyurl.com/33c7we3
by defio70 on Tue Aug 03, 2010 10:15 am
by Entendance on Thu Aug 05, 2010 11:53 am
Entendance wrote:on Fri Jul 16, 2010 3:41 am...Offshoring transforms American workers’ wages into performance bonuses for executives, capital gains for shareholders, and honoraria and research grants for economists who shill for the practice.
The problem that the US economy faces is far more serious than the financial crisis resulting from financial deregulation. The reason that traditional monetary and fiscal policies cannot produce an economic recovery is that so much of the US economy has been moved offshore. As the jobs have departed, there is no work to which low interest rates and massive government spending can recall workers. This is the real freefall.
viewtopic.php?f=6&t=751&p=11260#p11490
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Wait a Minute…That Stinks! http://tinyurl.com/2vzqbuk
by dlry on Thu Aug 05, 2010 5:46 pm
Executive Summary
1. June German factory orders: another positive surprise. The DAX trades into new high ground.
2. U.S. unemployment claims rise to a several month high. There is no special reason. This is very disturbing.
3. Though payrolls may meet or beat expectations tomorrow, they are always revised down when employment deteriorates.
4. The ECRI leading indicator is negative.
5. As Albert Edwards argues, with the Fed funds rate near zero, the yield curve cannot become inverted.
6. If one excludes the yield curve from the Conference Board leading indicator it tells the same story as the ECRI leading indicator.
-END-
You may add <active topics> to your favourite links by dlry on Mon Aug 09, 2010 7:15 pm
Jennifer Schonberger: What's your take on the state of the economy now?
Peter Schiff: We're in the early stages of a depression now. It's going to be a horrific experience for average Americans who are going to watch their standard of living plunge. The cost of living is going to escalate dramatically. We are going to see soaring prices for the basic necessities of life, like energy, clothing, and other things. Education and health-care costs are going to continue to spiral out of control. Millions of more Americans are going to lose their jobs, and all of us are going to lose our freedoms and our rights. As the government gets bigger, it tries to end the crisis; but its policies are creating, perpetuating, and making it worse.
The sad fact is these policies are going to wipe out the middle class. They're going to wipe out the poor; they're going to wipe out retirees. Accumulated savings is going to be blown.
There is no economic recovery. All we did is spend more borrowed money. We dug ourselves into a deeper hole, and now we're in even more trouble than before Obama ascended to the presidency.
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