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The Good News Economist

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  • Cramer Is Right and Stewart Is Full of It [View article]

    I think you may have missed Jon's main points. (And Jim actually agreed). Many on Wall Street did know that the large elite banks were leveraging themselves 35:1 to produce great returns... to now bail the banks and then further point the finger at joe the homeowner saying, "Bad Joe, you leveraged yourself into your home beyond your means" is a disservice to everyone.

    I am old school. I believe that old money takes time. Usually if someone sells me "Fast Money," something eventually smells. And the current elite financial institution bailout (while blaming the hardworking mortgage payer) just wreaks.

    I enjoy watching both Jon and Jim. They both are good entertainers. But one of them actually bills himself as a jokester... the other a financial advisor...
    Mar 18, 2009. 03:37 AM | 12 Likes Like |Link to Comment
  • This is Not a Bull Market: Stocks Are Not Up, and They’re Headed Even Lower [View article]

    Here is another simple measure. I bought $10,000 worth of shares in a growth stock fund in early March. When I now look at my statement it claims that those shares are now worth $13,563. It looks like those stocks are UP to me. Even if I adjust for inflation (#3) or annualize (#1), they still seem to be up quite a bit... ;-)

    May 26, 2009. 12:59 AM | 6 Likes Like |Link to Comment
  • Banking Is Tanking Worse Than Ever [View article]
    @the hand

    No it is not worse than 1929. Ask your grandparent or any other person that lived through the depression and/or the dust bowl.

    In comparison to back then, we have not a clue. Go read the book, "The Worst Hard Times" to get some perspective. If you think gloom and doom now, imagine 25-30% unemployment combined with black storm clouds that kicked up in the West and made it all the way to NY and DC and rained mud.
    And few to no people living on entitlements.

    Today bank failures are slowing significantly. No one has run on any bank. The elite top ten banks have all our eyes now on their stupid junk paper, but new mortgage notes are surging (and they are not sub-prime).

    Many strong regional banks are refusing TARP funds. Their portfolio and asset structures are just fine including their commercial holdings.

    When you start saving and using your recycling instead of putting it out to the curb, then we'll start some straight talk about really hard times.

    But until such a time, bank stock indexes have no where to go but up from here.

    PS. I own no bank stocks and never have.
    mmm... perhaps I should now...
    Jan 24, 2009. 03:24 AM | 6 Likes Like |Link to Comment
  • Factory Orders Rise, Layoffs Fall [View article]
    Cautious and ED,

    I understand that initial claims are up. I am not trying to be disingenuous here. I've stated multiple times that my goal is to report the silver lining, not the negative news that is already in the mainstream, well known, and reported via many many outlets.

    The corporate layoff metric is reported far less albeit no doubt precedes initial claims as a leading indicator of what is happening with employment. The ISM manufacturing data on employment also matches the Challenger, Gray and Christmas metrics.

    Thanks for reading and commenting.

    Apr 3, 2009. 10:17 AM | 5 Likes Like |Link to Comment
  • It's Time to Stop the Economic Gloom and Doom [View article]
    Gotta agree with Sam on:

    The most alarming feature at present is the fatalistic public mood.

    And with Keynesians that it can still be the case that we are better off having the government intervene than we would be if we did nothing at all.

    This was the huge mistake of the Hoover days, when they did absolutely nothing... and the country had to wait until March for FDR.

    Thankfully we have Keynesian policy happening as we write and we have Barack and company engaged and ready to sprint out of the gate later this month....

    (no gloom and doom here)
    Jan 2, 2009. 04:24 AM | 5 Likes Like |Link to Comment
  • Who Thinks This Recession Is Over? [View article]


    Certainly you've heard the famous Bill Clinton quote: "Well now, that just depends upon what the meaning of the word 'is' IS."

    Are your set of definitions mind numbing or those that the Econ 101 teachers teach? What is your definition of "Real-World people"?
    (Some of us entrepreneurs have taken Econ 101 *and* worked blue and white collar jobs for past 30 years)

    If we can't agree on the definitions, then anyone can make the data say anything they want it to say. That's why we have CPAs, GAAPs, supreme court justices, umpires, certified auto inspection mechanics, and the NBER.

    Everyone knows that following a recession there is negative fall-out. After a great recession there is significant debris and pain. That doesn't change the fact (and collective judgement) that the recession just past is indeed over.

    Oct 24, 2009. 01:43 PM | 4 Likes Like |Link to Comment
  • The 'Bull or Bear' Debate Will Be Resolved Soon [View article]

    It is not surprising that the author and many, many other individuals and managers have so much cash on the sidelines. Indeed the rally has only just begun and as investor and consumer sentiment continues to turn, the influx of that sideline liquidity will continue to leave many in the dust as this rally continues...

    Good luck,
    May 10, 2009. 09:49 AM | 4 Likes Like |Link to Comment
  • Bernanke Speaks Out on the Great Recession [View article]

    Very nice excerpts from the speech.

    Thanks for distilling them down for us.

    I enjoyed the YouTube idea. Perhaps if Ben doesn't take you up on your suggestion, you could take pieces like this one, and broadcast yourself interjecting your awesome commentary...

    I would watch.

    Jan 15, 2009. 12:14 PM | 4 Likes Like |Link to Comment
  • Second Half Growth: Coming on Strong [View article]


    1. The point is that most economists had forecast a downward revision. Again they were wrong. Q2 numbers were better than expected. As recovery began, many touted a lackluster Q3 and Q4. But a much stronger Q3 and Q4 now appears highly likely.

    2. The good news at Dell are not only better margins from cost cutting, but a forecast for a strong second half sales. That is likely a barometer for increased corporate spending. Hundreds of new jobs are now available at Dell and posted on their corporate jobs board.

    3. 10% is in the rear-view mirror with respect to unemployment. Much more corporate hiring is now occurring vs. layoffs.

    4. There is much more going on in the housing market than first time home buyers. Investors are also swarming in with cash... returns on rental business is at an all time high. Like all housing rebounds we are now seeing price increases moving up market.

    5. Have a look at our historical watch of the ISM manufacturing index since the beginning of the year. Also watch it closely on Tuesday to see a manufacturing sector that is now growing again. It has been since June with or without Clunkermania.

    Nice repartee, but I'm not moved by your rebuttal.
    Aug 30, 2009. 06:31 PM | 3 Likes Like |Link to Comment
  • Citigroup Questions [View article]
    It was not just the Citigroup profit outlook alone that sparked this rally, but really a confluence of factors that have been building, combined with three statements, from Citi, from Bernake, and from Barney Frank. It appears as though we may have reached a tipping point...

    @The Hand - be careful right now with AMEX particularly if you are traveling. I am sure that you have a backup, but there is significantly growing evidence that they are squeezing many customers leaving them potentially hanging on a trip... [cutting credit lines, or even shutting it off if they don't like the current balance] (just happened to me and a quick check on the web reveals I am not alone... just be careful my friend)
    Mar 11, 2009. 09:22 AM | 3 Likes Like |Link to Comment
  • The Economy: How to Tell When It's Improving [View article]

    I enjoyed the article but have to disagree with your analysis of what is actually happening right now...

    >Most economists agree that it will take that long, at least,
    >before the biggest
    >problems – mounting layoffs,
    >the housing bust, the banking crisis, and plunging
    >confidence – start to turn around.

    Have you been watching the indicators in the last two weeks!?

    How about just yesterday?
    Foreclosures down 25%
    California Foreclosures their lowest in over a year.
    Retail UP 1% in January --> that's 12% annualized
    Manufacturing and Non-Manu declines have both decelerated in Jan with some industries reporting growth.

    And from yesterdays bls employment numbers
    >The advance seasonally adjusted insured
    >unemployment rate was 3.6 percent for the
    >week ending Jan. 31, *unchanged* from the
    >prior week's unrevised rate of 3.6 percent.

    Initial claims down -8,000%

    Where would you like to see the VIX index?

    I am not sure what else you need to see, from the Jan retail numbers impatient consumers are *not* holding back...

    Thanks for the article!

    Feb 13, 2009. 12:48 PM | 3 Likes Like |Link to Comment
  • U.S. Unemployment - Is It Really So Bad? [View article]

    A great article. I too remember the days of 1974. The herd mentality to the negative was alive and well. The end was near!

    I didn't own a jacket in 74, but I do remember the long gas lines and getting to the front of the line only to find that pump was done.

    I'll keep my shoes tied loose, enjoy a good cigar, and a round of midnight golf. It doesn't get much better than that.

    Feb 10, 2009. 09:13 AM | 3 Likes Like |Link to Comment
  • Are Things As Bad as They Seem? [View article]

    I really enjoyed the storm analogy.

    Way back I used to work for the National Weather Service. It continues to be an interesting exercise to see forecasters vary so widely on their predictions... particularly when the forecast moves beyond a few days...

    Hurricanes especially have a "mind of their own". Statisticians pore over the vast amounts of data produced by one storm in the hopes of predicting the path of the next one more accurately... and still the predicted path is wide.

    Many times it come down to which forecast model to you put your trust in and what data was used to load its run.

    I appreciated also the compilation of indicators. What is your read on ISM report on manufacturing? It appears that while many of the indexes there still point to contraction, many of them for January point to contraction at a significantly reduced rate...

    Feb 10, 2009. 01:44 AM | 3 Likes Like |Link to Comment
  • Evidence That Big Inflation Is Coming [View article]
    Great article Adam,

    Many have already heard me rant on about the lack of deflation in any of the numbers (save energy and transportation driven by energy/oil decline). Your comments on the money supply are right on the mark and are backup up by the data charts published on the st louis fed data site.

    But I don't agree that inflation is coming any time soon. Core prices are likely to remain flat for some time to come... should they rise I'm sure there will be swift corrective action. But there is no evidence in any numbers that it will be needed. The first action of course is to stop adding it in to the system... and then perhaps bleeding it out...

    Mish types a long yarn about avalanches, etc... but it's just a story not based on data or historical perspective... just a bunch of what ifs.

    Thanks again Adam for a great thoughtful post.

    Jan 25, 2009. 09:19 PM | 3 Likes Like |Link to Comment
  • Bank Failures, 2009 Edition: Three and Counting [View article]
    Excellent point klarsolo...

    In fact let's look at the *rate* of bank failures. It has actually slowed since the big chill back in October and November when it peaked at about 5 banks per month.

    Then 3 Banks in December

    and now only 3 Banks in January

    I'd say this is a quite calm rate of failure.

    With respect to most regionals they are doing just fine... In fact have a close look at the regionals and you will see that they are a quite strong and well capitalized, bunch.

    Take a look at these 5 that have just flat out refused TARP funding...

    I'd like to transplant their management teams to our top 5 banks.
    Jan 24, 2009. 03:54 PM | 3 Likes Like |Link to Comment