Steven Hansen

The Coming of Real, Weak, Imperceptible Economic Growth

bbro,
i agree with John that your comment is a valid consideration.

depending on the analyst, there is a belief that 400,000 to 450,000 jobs are created each week. so when the initial unemployment rate exceeds that number, the percentage unemployment should rise (and it averaged over 460,000 per week for January).

so the only conclusion you can draw is that the percentage unemployed should have risen in January.

but alas....

the unemployment rate is determined by survey. they start with a clean slate every month. so it bounces all over the place. this approach, of course, makes you wonder if it can be manipulated.

i am not saying there is manipulation, but i am saying that we are wasted a lot of money discovering the unemployment rate - and the answer is suspect because it is full of noise. we are lying to ourselves about the definition of unemployment., and who is unemployed.

The Coming of Real, Weak, Imperceptible Economic Growth

thanks John.

the bls data has so much "noise" because they work the data too much. give me the raw data and i will figure out what it means.

this noise is why the detailed monthly analysis we do is worthless. the data must be viewed over long time spans to draw any correct analysis BECAUSE of their methodology. on the other hand, i can draw specific conclusions using the more general buy less detailed ADP data.

the bls needs to use KISS (keep it simple stupid).

The Coming of Real, Weak, Imperceptible Economic Growth

i promise. i report on this every week. i am not anit-government - i am anti-distorted data.

Markets: The January Effect

this is the new normal. all bets are off. John, when the January effect was down, what was the average improvement when the year ended higher (versus average up years or up years when January was up)?

The Coming of Real Weak Imperceptible Economic Growth

hopefully someone from ECRI will comment on this article when it is published. but here is my interpretation.

the WLI to me is a pressure gauge of the fundamentals or elements which are present to make the economy expand or contract from its current relative position.

what ecri is seeing is a loss of pressure - but there still is pressure.

they are saying there is enough pressure remaining to prevent a double dip. ECRI believes they can see ahead probably to the beginning of 4Q.

i use different methodology, and i do not see a double dip in the short term (a few months ahead).

the economy is large and does not turn quickly.

The Coming of Real Weak Imperceptible Economic Growth

"Certainly without government and Federal Reserve action to artificially boost things we wouldn't even technically be out of a recession right now. And when I say technically, I mean technically."

The reaction of the Fed to this crisis deserves praise. But i think their actions and lack of foresight on the housing bubble, lack of real employment growth, and the economic freeze that was incubating is a basic cause of this crisis. to me it is like an awards ceremony where you give a pyromaniac an award for saving a baby trapped in a fire he created.

as far as the government is concerned - they are the number one villain. their laws dropped us into this recession. throwing literally a trillion dollars of pork into the fire (instead of targeting a foundation for real growth) only slowed the decline - and for sure will slow the recovery.

Yes, we would be in a different place right now without the fed and government actions. i am convinced the fed actions saved us from the abyss. i am equally as sure the governments untargeted actions were a waste that will cost my grandchildren dearly.

The Coming of Real Weak Imperceptible Economic Growth

Moon - your comments are on target and appreciated. i do believe that over the next two months we will see a real end to the decline. but for sure it has not happened yet.

U.S. Economy: Increasing Layoffs Could Spell Trouble

who says we are not in a recession right now? i suggest with a better targeted and smaller stimulus, we would have already clearly bottomed - and a mild recovery could have been underway.

Don't Trust Pending Home Sales Data

John,
this weekend my article will have a graph projecting the pending data to forecast sales using unadjusted data. this seems to correlate quite well but my period i use is only one year. there may be built in cumulative errors when you view it over long periods.

From my recent experience, there is a lot of question whether a short sale can actually close. i was advised not to identify a short sale for a 1031 exchange.

Bad Karma for Homebuilders: Starts Up, Sales Down

Unfortunately i cannot remember the source, but the homebuilders are saying the foreclosure market is severely impacting foot traffic of potential buyers to even look at their new homes.

this is a reinforcing death spiral. as the new home market must decrease prices, it is reducing their margins to the point it is not worth the risk to develop. a larger and larger portion of new starts are now spec homes.

it really would be good if this market segment stays weak until the problems (spelled foreclosures) in the existing home market are resolved. the last thing we need if you already own a home is more supply of homes.

Still Waiting for Real Economic Growth

Berated....
Singapore uses ARIMA forecasts generated by X12-ARIMA software (developed by US Census Bureau).

Sorry, I picked Singapore purposefully as a player on a level field.

Numbers lie, and liars figure. GDP is not a good indicator of economic health.

Still Waiting for Real Economic Growth

washington does not know what to do. most of these big name economists have been saying all along things will get a lot better. they have reacted in their traditional manner of throwing money at the wall to see how much sticks.

this has been the historical game plan - stimulate, recover.

now the current administration has been caught in a squeeze play where all their advice has been wrong. this emphasis now on trying to simulate green jobs is simply horseshit.

stimulate jobs period - not with money but a complete review of our laws, regulations, taxes which are making America one of the most expensive place to have a business.

Still Waiting For Real Economic Growth

ain't
when i wrote the article, your interpretation of the rationale of the price increase for existing home sales is what i had in my mind. John Lounsbury added a technical reason which i had not considered.

Still Waiting For Real Economic Growth

Nice analysis Wildebeest. There is so much more to say on the CFNAI. It is talking up a storm.

Still Waiting For Real Economic Growth

that is as good of a reason as any. thanks John.