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We are nearing the first anniversary of when the economy went into a free fall. Most economists argued a year ago we were not in a recession, and if we were it was not going to be bad.
The year-over-year (YoY) calculations soon will improve significantly beginning with August 2009 data. The media will start reporting economic turning points which do not really exist. Expect the economic clowns to spread a false message of recovery. The clowns will ignore the month-over-month (MoM) calculations which help define the economic trend.
This week’s economic wrap focuses on the following topics:
- The Commercial Real Estate Time Bomb
- Employment Shows Economy Still in Crisis
- Volume Increase in Home Sales
- Manufacturing Close to Bottom
- Consumers Are
UnwillingUnableScared to Drive Recovery
I purposely mixed the data between sources this week to demonstrate how many of our economic indicators are inconsistent. There is no perfect economic indicator. There are data-gathering errors, sampling errors, methodology errors, and analyst errors. There is no economic indicator which does not have error. All suffer from analysts and punters misusing or misrepresenting the message whispered in the data.
This does not make any of them a bad indicator. My favorite “whipping boy”, the Institute of Supply Management (ISM) surveys, is still very useful – as long as you understand their shortcomings, and use it in conjunction with other data you are seeing, and then trend the results.
Even the jobs data this past week from the BLS had a certain aroma. It is possible to pick the corn out of the crap develop useful data.
~ ~ ~
There is little doubt we are close to the end of this recession’s decline. Yet, the painful process of watching the data get less bad month after month continues. The end of recession needs to have a data low point (trough) in at least jobs and manufacturing.
This did not happen in July 2009.
~ ~ ~
The Commercial Real Estate Time Bomb
San Francisco Fed President Yellen said commercial real estate could once again increase the downside risks to the economy. Bank of Tokyo – Mitsubishi UFJ summarized the economic effect of Commercial real estate to date:
Residential construction has been a drag on real GDP since Q1 06, while commercial real estate just started to subtract from growth in Q4 08, 0.3 percentage points of the 5.4% real GDP decline, moving on to Q1 09, 2.3 percentage points of the -6.4% real GDP decline, and 0.3 percentage point of the -1.0% Q2 real GDP decline. This drag is a worry, but nominal GDP commercial construction has now declined 18.1% this cycle, similar in magnitude to past corrections in the 80s and 90s.
Commercial real estate decline will not end in 2Q 2009, and most likely there will be another 3 to 5 quarters of decline.
The banks are full of non-performing paper. We have never suffered a nationwide housing price decline, and this has bled the banking system of its reserves despite their recapitalization efforts. And this crisis is still not over. Combine this with the normal non-performing credit card debit defaults which accompany a severe recession.
Now add Commercial loan defaults. The banking industry’s bacon has been saved in the past by “V” recoveries. This takes the pressure off of the banks because the borrower’s business picks up and increases revenue, the commercial property values increase.
There will be no “V” recovery in the “new normal”.
Employment Shows Economy Still in Crisis
The headline: The government announces Unemployment rate falls 0.1% in July 2009 to 9.4% - Recovery Begins.
The reality is that non-farm civilian private jobs are still evaporating at the rate of over 4% per year, but this number is trending down from 8% earlier this year. Employment is less bad.
It is impossible for a expanding population to have unemployment rate fall while the number of jobs also falls. But it appears nothing is impossible in America. There is a methodology error which I have questioned in the past as this unemployment data is extrapolated from a detailed telephone survey. If it were my data I would have published it and disclaimed it as it did not make sense.
Trending the BLS employment data (“chart 2” graph above) and the ADP employment data (graph below), job losses and job gains should equalize in 2 to 4 months if current trends hold. This is an end of recession marker when this event occurs.
Our changing methodology in deriving the unemployment rate makes backward comparisons between past WWII recessions difficult – our current methods paint a rosier picture. When you encounter a statistic where today’s situation is worse, you take notice. Hat tip to Mish and Calculated Risk for the graph showing workers who have exhausted their regular unemployment benefits (and maybe even the extended benefits)
The 4 week moving average of advance initial unemployment claims decreased slightly to 555,250. The use of unemployment insurance data to project total unemployed as some analysts are trying to do will yield erroneous results. The use of this data is to trend initial claims only – it is a gauge of the rate people are becoming unemployed. This rate continues to trend downward, and this is simply sending an economic signal that the highest rate of decline of employment for the Great Recession has past.
The best explanation of unemployment initial claims recent volatility was given by Bank of Tokyo – Mitsubishi UFJ:
A plunge in initial jobless claims occurred over the first half of July because the bankruptcy announcements of Chrysler and GM and the associated plant closings meant that the usual plant closings in July for retooling instead happened much earlier than is typical (pushing up claims to record highs in May and June). Historically, the BLS has always had difficulty seasonally adjusting the numbers surrounding the auto retooling each summer, and the early plant closings made the adjustment even more difficult this year. The weeks ending July 4th and 11th received a huge downward seasonal adjustment, while the weeks ending the 18th and 25th were bumped upward. Today’s data is the first that reflects the true underlying level of claims.
For continuing unemployment claims, the huge drop in July that was also affected by seasonal adjustment issues suggests the unemployment rate will move down (temporarily) in July as well – even when you take into account the fact that much of the drop in continuing claims was due to benefit exhaustion (the current exhaustion rate lies around 50%) and not due to a pick-up in hiring.
Volume Increase in Home Sales?
Home sales volumes are in all probability increasing but precise data is not available.
The National Association of Realtors NAR says contracts signed for home sales in June 2009 are up 3.6% MoM, and up 6.7% YoY (seasonally adjusted). This data is for contracts for sale, and not actual sales which potentially would occur one or two months later. Normally, this type of data is ignored, but the markets are searching for green shoots.
In comparing the NAR pending home sales data to NAR’s home sales numbers last week, the data does not correlate. Even if the existing home data is time shifted two months, the percentage changes over the preceding period and YoY do not match. Users of this NAR data should not draw any conclusions except for confirmation of general trends. The NAR needs to publish its range of error as its data gathering methodology appears ragged.
This pending home sales data also does not correlate to the June data of the Mortgage Bankers Association which show basically flat new mortgage application rate. This difference could be explained by more cash buyers, either:
- Investors with cash looking for fixed income and not needing a mortgage; or,
- Buyers’ down-sizing and not needing a mortgage.
The new mortgage application rate remain relatively unchanged. The four week moving average of mortgage loan application volume (which includes refinancing) increased 1.2% WoW, and increased 4.1% compared with the same week one year earlier. The refinance share of mortgage activity increased slightly to 54.2% of applications. The average interest rate for 30-year fixed-rate mortgage decreased 19 basis points to 5.17%.
Manufacturing Close to Bottom
The Institute of Supply Management (ISM) manufacturing index, considered a key economic indicator, was contracting less bad in July 2008 at 48.9 (50 being manufacturing is neither contracting nor expanding).
Industrial production levels are at the lowest levels this decade – and industrial capacity utilization is at the lowest since WWII. The good news is that manufacturing is close to the bottom, and the reality is we are in a very deep hole. Both new orders and production now are growing according to this subjective index.
This index is an un-weighted average across all manufacturing sectors – it should be viewed as “bar room talk”. Manufacturing now accounts for only 5% of our economy based on revenue and employment. Because of the multiplier effect into the service industries we continue to view manufacturing as a cornerstone of our economy. The American tragedy is that this may be no longer true.
But this ISM survey does confirm other manufacturing indicators which also paint a “less bad” and “close to a bottom” picture. There is no indication that ISM manufacturers believe the economy is going to start growing soon.
A segment of manufacturing, auto sales had a nice bump up in July 2009. This is the fourth month of increasing sales which is confirmation of a bottom. Light truck sales after having a bad month last month is up MoM – but not far above the Great Recession lows. Surprisingly, both Toyota (TM) and Chrysler increased market share at the expense of GM, Ford (F) and Honda (HMC).
Yet Ford had its first YoY sales growth.
Preliminary June 2009 Census data on manufacturing released this week confirms manufacturing was still falling in June. The data remain confused as happens when manufacturing bottoms. New orders up slightly, shipments up (but due entirely to the increase in value of petroleum products), unfilled orders decreased slightly, and inventories down slightly. The good news in this data was that HVAC and electric generating equipment were the reason for the increase in unfilled orders – this is a definite end of recession activity. The biggest drag was the transport sector which normally signals the end of a recession by beginning to expand. Conflicting signals.
Consumers Are Unwilling Unable Scared to Drive Recovery
Economists believe that consumers who have confidence in economic conditions will spend more. As consumer spending accounts for 70% of the economy, consumers are continuously fed unrealistic economic hope to trigger spending. The latest ABC consumer confidence numbers show the brainwashing is not working:
Ninety-two percent say the economy is in bad shape, at or above the fearsome 90 percent mark since early October; 76 percent think it’s not a good time to buy things; and 56 percent rate their personal finances negatively.
I see no reason consumers should have confidence. There is no apparent economic driver, and they have been misinformed about “green shoots”. There is no data which indicates in any shape or form we will return to the economic good ‘ole days of the past. Government spending is out of hand, and the consumers believe this is trapping them into a future of higher taxes and reduced economic growth.
Many of the economic indicators have the ability to recover relatively quickly, but personal income is not one. With our consumer driven economy, the more income consumers receive, the more money they can potentially spend. Personal income fell 1.8% MoM in June 2008. This decline raises more questions than answers as it backs out the gains of the previous month and puts personal income in 2009 into negative territory. One more reason not to react to individual month data, and to monitor trends.
Last weeks GDP release showcased government’s failure to overcome consumer belief that the economy will remain bad indefinitely. David A. Rosenberg opined in John Mauldin's “Outside the Box”:
Consumer spending came in at -1.2% annualized, twice the decline expected by the consensus. This occurred in the face of gargantuan fiscal stimulus and leaves wondering how this critical 70% chunk of the economy is going to perform as the cash-flow boost from Uncle Sam's generosity recedes in the second half of the year. Imagine, government transfers to the household sector exploded at a 33% annual rate, while tax payments imploded at a 33% annual rate and the best we can do is a -1.2% annualized decline in consumer spending in real terms and flat in nominal terms? What do we do for an encore? In the absence of the fiscal largesse, it is quite conceivable that consumer spending would have shrunk at a 10% annual rate last quarter! Nonresidential construction action sagged at an 8.9% annual rate and this was on top of a 44.0% detonation in the first quarter. Ditto for equipment & software 'capex' spending, also down at a 9.0% annual rate and this too followed a 36.0% collapse in the first quarter. Residential construction slumped sharply yet again, this time at a 29.0% annual rate. These are the guts of private sector spending and collectively, they contracted at a 3.3% annual rate -- the sixth decline in a row.
Consumer credit decreased at an annual rate of 5.25% in 2Q 2009. Revolving credit decreased at an annual rate of 8.25%, and nonrevolving credit decreased at an annual rate of 3.5%. This is a continuation of the trend which began 4Q 2008 when consumer credit began contracting. It was expanding at nearly 5% per year before 4Q 2008, and now is contracting at approximately 5% per year.
Chain store sales for July 2009 remained depressed. Data is normally expressed as YoY declines, and the recession was beginning to be felt in retail sales in August 2008. So expect a big improvement next month which is simply more smoke and mirrors.
As a reminder, these same store sales figures do not include Walmart which is 40% of the chain store sales. Walmart has decided not to report monthly.
Additional Economic Data This Week
Shipping counts are a good validation of economic trends as goods must be shipped between users. The West Coast sea container counts are not rising, but are flat or slightly declining. There is no indication of recovery. Although rail counts are currently slightly improving, they remain below recessionary highs of earlier this year.
Construction spending had a slight bump up in June 2009. The dirty little secret was that it was caused by government spending – and not the private sector. Still, the decrease in private sector construction spending was a mere 0.1% MoM, and was the smallest decrease this year. One month does not make a trend.
Filing for Bankruptcy: eNucleus (ENUI), NanoDynamics (NNDY), Cooper-Standard Holdings, Security Bank (SBKC), Cygnus Business Media, Finlay Enterprises (FNLY). Bank failures this week:
Economic Forecasts Published this Past Week
The Economic Cycle Research Institute (ECRI) released their Weekly Leading Index which continues its gain on this index’s fresh 5 year high. Lakshman Achuthan, managing director at ECRI, provided the following statement:
With WLI growth soaring into the double-digit range, prospects for U.S. economic growth have brightened significantly.
Hat tip to Steve at MEMETICS & MARKETING for editing support.
Disclosures: long MMFs, AAPL, AMZN, ORCL, GOOG, EWZ, EWY, EWA, EWC, PIN, Physical Gold
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On Aug 09 07:28 AM Steven Hansen wrote:
> markfl
> i always read John Lounsbury and you will find my comment already
> there.
>
> you are correct about trucking being a coincident indicator. the
> problem is that there is no quantitative pulse point (data set).
> if you look at my history, logistics is one of the areas i consult.
>
>
> however, sea and rail transport do provide timely real time data
> to analyze. and both of these remain with the recessionary levels.
>
>
> one final point, i am seeing no economic indicator -except leading
> ones such as new orders - which shows this great recession is ending.
> and this data is subjective, not objective.
>
> when i see quantitative data rising, i MIGHT think things are getting
> better. the problem with quantitative data in the next few months
> is that it is stimulus driven. i am not a fan of stimulus, and all
> it does is make big W's economically.
How will the media handle the doubling of the 30-Year T-Bond from the 2008 close of 2.50%
How will pundits dance around the fact that California's massive budget cuts (less spending and fewer jobs) represents 15% of the US economy?
The lack of earnings growth, rising interest rates, and higher inflation numbers should provide for a lively discussion around the Thanksgiving table.
Keep the Grey Goose next to the Black Swan just in case...
On Aug 09 07:28 AM Steven Hansen wrote:
><snip>
> you are correct about trucking being a coincident indicator. the
> problem is that there is no quantitative pulse point (data set).
> if you look at my history, logistics is one of the areas i consult.
Steve, what about a proxy for trucking? We know the ports and rails are covered, so we just need to get trucking.
I've been thinking that if I could find a source for diesel fuel sales (or shipments to retail outlets?) that might serve to give a pretty accurate picture (weather adjusted, of course). I've not started investigating this yet. Feasible?
>
>
> however, sea and rail transport do provide timely real time data
> to analyze. and both of these remain with the recessionary levels.
>
>
> one final point, i am seeing no economic indicator -except leading
> ones such as new orders - which shows this great recession is ending.
> and this data is subjective, not objective.
Do we have a "head fake" coming do to the need for inventory re-stocking? I hear that this is the case and I believe that will give signals that the touts will immediately apply the "I told you so". My feeling is that this will (is?) a cause for improved ISM, hours worked, GDP, mfg revenue improvements (if input costs don't suddenly spike), etc. Then I expect that all that will wind down and the following quarter we'll hear "Shocking! Just absoultely shocking!" when the trend dictated by the continuing recessionary forces are un-masked. Thoughts?
>
> when i see quantitative data rising, i MIGHT think things are getting
> better. the problem with quantitative data in the next few months
> is that it is stimulus driven. i am not a fan of stimulus, and all
> it does is make big W's economically.
Well, it does do one more useful thing: provide a platform for "The Big Lie" to the uninformed by the PTP, MSM and other with vested interests in espousing false optimism. Of course that is really not how most of *us* would define "useful", but we are, after all, a diverse society and economy. These folks need employment too (well, other than a real lob - like really informing truthfully)! ;-))
HardToLove
I come here to get a look at someone trying to disect the baloney the rulers serve us. You've managed to peal away the layers and I still see rot underneath. Thanks!
What government was that you said was actually truthful to its public? Singapore?
I like your "change of pace" pitch this week. However, it took me more time than usual to read because there was so much new content.
Here are some of the thoguhts that came up in reading:
1. Could the blue line in the Total Rail Traffic graph represent the new normal, or is it just a long bottom?
2. Could some of the gap between pending home sales and existing home sales result from failure to get mortgage approvals? In my small subdivision, there have been four sales this year. Two were closed on the first contract; one was closed on the second contract when the first buyer could not arrange financing; and one was closed on the third contract. So this little anecdotal evidence has 7 pending sales and 4 closed sales.
3. The graph from Bank of Tokyo-Mitsubishi is one that I had not seen before and it got me doing my "reversion analysis" thing. Here are some observations extracted from the graph:
a. From 1983-95 the rate of increase was ~$4 billion/year (~2.3%)
b. From 1995-2003, ~$9 billion/year (~3.7%)
c. From 2003-09 (mid-year), ~$34 billion/year (~8.9%)
If we were to return to the 1983-95 trend line, the decline over the next 2-4 years would be about 50% from here (~60% from the 2008 peak).
If we were to return to the 1995-2003 trend line, the decline over the next 2-4 years would be about 27% from here (~40% from the 2008 peak).
Both of these are much more negative projections than I presented recently in my article on "The State of the Construction Sector" seekingalpha.com/artic...
If I listen to Larry Kudlow, I can stop worrying about these things. But maybe I am so stupid that what he says goes in one ear and out the other or completely over my head. I'll keep on trying to make money with short-term long positions, but unhedged buy-and-hold is not for me. There is still too much to play out.
> " If it were my data I would have published it and disclaimed it
> as it did not make sense."
>
> It doesn't make because you are not supposed to analyse it, Stupid.
> The US Government rely on their lap dog media to regurgitate this
> drivel to the general population. It is just a few trouble makers
> like yourself that sit down and try to figure out whether it is intellectually
> coherent and consistent. This is a particularly stupidl thing to
> do, because it was never suppose to be in the first place.
Dave - If your Comment is Sarcasm Then Brilliant !!! => How Stupid To Question "The Great Oz". (bummer on those who did not grasp the humor.)
Based upon what I have read of your comments when "Fishing For Status" here on Seeking Alpha I Would Surmise As Such.
It is blithely obvious that "Prop-Up-Ganda" Is What The Media Mandate Is These Days.
As I Mentioned On "The Hand's" Instablog:
Thank You Steven.
You are wise to point out that YoY stats are about to get "Rosey" since it was a year ago that "The bottom began to fall out".
I applaud your ability to discern "Plausible Reality" from "Tea Leaf" Data.
"Do we have a "head fake" coming do to the need for inventory re-stocking? I hear that this is the case and I believe that will give signals that the touts will immediately apply the "I told you so". My feeling is that this will (is?) a cause for improved ISM, hours worked, GDP, mfg revenue improvements (if input costs don't suddenly spike), etc. Then I expect that all that will wind down and the following quarter we'll hear "Shocking! Just absoultely shocking!" when the trend dictated by the continuing recessionary forces are un-masked. Thoughts?"
obviously there will be a bump up at the bottom when inventory is no longer declining - and we must make what we sell instead of pulling it out of inventory.
but i expect this to be a fairly weak bounce this time. this is the New Normal. more and more production is going overseas. many of the production jobs lost this recession will not be returning. i cannot imagine what the incentive is for a manufacturer to produce in America (lower taxes, minimal regulation, lower wages??).
stay tuned as this is the topic for my next article.
My thoughts on your points:
"1. Could the blue line in the Total Rail Traffic graph represent the new normal, or is it just a long bottom?"
this is the trillion dollar question. obviously it is the bottom unless we get a visit from another swan, but it also could be close to the New Normal. the less and less we make in America, the movement of raw materials and intermediate manufactured goods will occur in the country of production. only the finished goods transport will still occur within the USA.
"2. Could some of the gap between pending home sales and existing home sales result from failure to get mortgage approvals? In my small subdivision, there have been four sales this year. Two were closed on the first contract; one was closed on the second contract when the first buyer could not arrange financing; and one was closed on the third contract. So this little anecdotal evidence has 7 pending sales and 4 closed sales."
in my opinion - no. the financing issue did not drop from heaven last month. it has been an ongoing issue since last year (maybe since 2006). it should have not changed the relationship between purchase contracts (pending home sales) and existing home sales. also if you look at the mortgage bankers association curve in june (which is mortgage applications), and compare it to NAR's purchase contracts - the curves do not match.
having said that, they are not much different either. i am a big picture type of analyst so i am trying to point out that you cannot believe the exact data - but i do believe home sales have improved.
"3. The graph from Bank of Tokyo-Mitsubishi is one that I had not seen before and it got me doing my "reversion analysis" thing. Here are some observations extracted from the graph:
a. From 1983-95 the rate of increase was ~$4 billion/year (~2.3%)
b. From 1995-2003, ~$9 billion/year (~3.7%)
c. From 2003-09 (mid-year), ~$34 billion/year (~8.9%)"
"If we were to return to the 1983-95 trend line, the decline over the next 2-4 years would be about 50% from here (~60% from the 2008 peak)."
"If we were to return to the 1995-2003 trend line, the decline over the next 2-4 years would be about 27% from here (~40% from the 2008 peak)."
"Both of these are much more negative projections than I presented recently in my article on "The State of the Construction Sector" seekingalpha.com/artic...
John, this is a very good analysis which i agree fully. If i remember correctly James Quinn wrote a scathing analysis of c&i real estate which i thought was a pretty accurate predition.
> Hard to Love
> "Do we have a "head fake" coming do to the need for inventory re-stocking?
><snip>
From Steve:
> obviously there will be a bump up at the bottom when inventory is
> no longer declining - and we must make what we sell instead of pulling
> it out of inventory.
>
> but i expect this to be a fairly weak bounce this time. this is
> the New Normal. more and more production is going overseas. many
> of the production jobs lost this recession will not be returning.
> i cannot imagine what the incentive is for a manufacturer to produce
> in America (lower taxes, minimal regulation, lower wages??).
>
> stay tuned as this is the topic for my next article.
Thanks. My feeling is also a weak bounce. But that'll be enough to start another round of blathering from the "green shoots" crowd. I don't know if I can survice another 3 quarters of that.
HardToLove
Somehow we will muddle through. Always have, always will.
Steven,
Is it really impossible?
There is a large, aging sector (80 million US Baby Boomers) of the population, who are starting to withdraw (retire) from the labor force.
Let's assume that the jobs vacated by retiring Boomers are largely not replaced, this would simply reduce the number of jobs (falling job numbers) and show up in falling "Participation rates".
If the number of retiring Boomers is sufficient, then it may be possible to see jobs lost, while "unemployment" falls, even whilst the total population numbers continue to expand, in the short to medium term?
Therefore, a lower "participation rate" could result in a "effectively lower Unemployment Rate" than may otherwise be the case, as the jobs vacated by the retiring Boomers are Lost to the economy, but not added to the "unemployment rate".
Other annomallies, such as lower consumption averages in some areas of the economy may well also be similarly affected, such as turnover, purchase rates for housing.
one of the common misconceptions is that the retirement of the baby boomers results in a lower number of potential workers. this is not true.
it is true percentages change with more under 16 and over 65 citizens. in other words, the existing workforce will be supporting a higher number and percentage of over and under age people.
but the potential workforce in terms of real numbers will continue to grow in size throughout the baby boomer's retirement.
so the fine hair we are discussing is whether the U-3 headline unemployment rate correctly portrays the real unemployment situation in America.
"Therefore, a lower "participation rate" could result in a "effectively lower Unemployment Rate" than may otherwise be the case, as the jobs vacated by the retiring Boomers are Lost to the economy, but not added to the "unemployment rate""
the only way the above statement is correct is to admit that the unemployment rate we all talk about incompletely accounts for the people who are really unemployed and looking for a job.
"Steve, what about a proxy for trucking? We know the ports and rails are covered, so we just need to get trucking."
"I've been thinking that if I could find a source for diesel fuel sales (or shipments to retail outlets?) that might serve to give a pretty accurate picture (weather adjusted, of course). I've not started investigating this yet. Feasible?"
great minds think alike. yes, i tried using diesel as a pulse point because in the USA it is mostly used for transport. but the gods are against us - diesel is combined with fuel oil in the reporting. interestingly, gas is separate.
and if you really want to get aroused, start investigating how much diesel is produced in the United States vs imported.
I'm with you but I don't get what you mean here,
"one final point, i am seeing no economic indicator -except leading ones such as new orders - which shows this great recession is ending. and this data is subjective, not objective."
This doesn't seem to jibe with your regular posting of ECRI leading indexes? I also have been led to understand that their indexes are "objective."
OB
On Aug 09 07:28 AM Steven Hansen wrote:
> markfl
> i always read John Lounsbury and you will find my comment already
> there.
>
> you are correct about trucking being a coincident indicator. the
> problem is that there is no quantitative pulse point (data set).
> if you look at my history, logistics is one of the areas i consult.
>
>
> however, sea and rail transport do provide timely real time data
> to analyze. and both of these remain with the recessionary levels.
>
>
> one final point, i am seeing no economic indicator -except leading
> ones such as new orders - which shows this great recession is ending.
> and this data is subjective, not objective.
>
> when i see quantitative data rising, i MIGHT think things are getting
> better. the problem with quantitative data in the next few months
> is that it is stimulus driven. i am not a fan of stimulus, and all
> it does is make big W's economically.
ECRI's index is leading one and it is rising. what is in their index is proprietary although we have some clues (such as market indicators and money supply). therefore, i cannot say whether their index is objective or subjective overall.
i am seeing no quantitative coincident index rising...... yet.
per www.census.gov/popest/...
usa population
2008 304,059,000
2007 301,290,000
2006 298,362,000
population is going at a nice clip at almost 3 million per year.
i looked in the singapore straits today, and a lot of bulkers were anchored empty. i think it is the time of year on the Baltic Dry. i read somewhere that china tries to buy its bulk commodities for spring shipments. with the oversupply of bulk carriers, imo the Baltic Dry index will give you a false economic reading.
The market must be held aloft until they ram health care through, and then it can be allowed to pop. And, of course, they will be short by then, and devil take the hindmost.
www.reuters.com/articl...