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Dec. Durable Goods: -5.2% vs. -4.0% expected, +3.7% prior (revised). Ex-transport +1.9% vs....

Dec. Durable Goods: -5.2% vs. -4.0% expected, +3.7% prior (revised). Ex-transport +1.9% vs. +0.2% expected, +1.3% prior .
Comments (11)
  • june1234
    , contributor
    Comments (2330) | Send Message
     
    Orders sink 5.2% but that's good , priors months numbers revised downward also good. Markets up Cant beat this business model
    27 Feb 2013, 10:02 AM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
     
    What they are getting at is that the overall trend shows a slight uptick. So they think this is the beginning of a trend. Of course you have to examine this in light of the macro environment and ask yourself, "Are there things on the horizon that could put more pressure on unemployment?"

     

    If you answer yes, then faith that the slight uptick is going to translate into a continuing trend is probably an unreasonable faith. Malaise is still the order of the day. Its not Armaggedon, but it sure isn't enough of an improvement to keep markets moving up. Probably what we have is enough good news to keep us above 1500, but getting to 1600 or higher is becoming much more unlikely.
    27 Feb 2013, 10:27 AM Reply Like
  • june1234
    , contributor
    Comments (2330) | Send Message
     
    They think -5.2% and prior months numbers revised downward is an uptick? Good thing for me they don't do my finances
    27 Feb 2013, 10:33 AM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
     
    The red line is what they are focusing on. I know its like saying, "We just cut off your foot, but hey your other limbs are showing improvement."

     

    http://bit.ly/ZAAUGn
    27 Feb 2013, 10:47 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    Orders for durable goods (ex transportation equipment) jumped the most in a year. Transport orders are notoriously volatile.

     

    It's amazing (well, maybe not, here in SA), given the comments, that many wish to persist in self flagellation, telling themselves that everything is terrible and all is going to collapse. One can only imagine what a profitable investment approach that outlook has yielded.

     

    P.S. Existing-home sales beat estimates, too.
    27 Feb 2013, 10:58 AM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
     
    It depends on your definition of good. Yours is probably a lot lower than mine for decision making. You also probably have a retail portfolio to worry about, so again your metrics are different.

     

    So if you someone gets in an accident, and is paralyzed, and a few weeks later they start wiggling their foot, we can certainly say that is a recovery, but if all they do is wiggle their foot for the rest of their lives, you really don't have the recovery you want. You could also have a recovery that takes 50 years for the person to get back on their feet. Either way, that's not the recovery you want.

     

    What we have in the numbers is support for current levels, but that's not good enough. The way this number should have read is, "transportation is going up and up because there is such growth that demand for transportation items is strong because people are traveling for pleasure and business."

     

    I still see lots of appraisals that keep forcing real estate prices down, I still see lots of losses, so the idea that the numbers we have are good enough to fix all that is just plain wrong. If your goal is to say there is enough in the data for me to stay in equities, then yes, you have that. To assume that everyone should have that metric is also a mistake. To also assume that these numbers speak to the success of gov intervention is also a mistake.

     

    It all depends on your perspective.
    27 Feb 2013, 11:07 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    Hoop:

     

    As an investor, there is no subjectivity or "perspective." You either make the right decisions or the wrong ones. Those that have persisted, here in SA, for years, now, lamenting the pace of the recovery and/or saying this or that should have happened or been done by the Fed, Government, etc., if they've used any of these excuses as reasons to avoid being invested, then, they've just sabotaged themselves.
    27 Feb 2013, 11:22 AM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
     
    "they've just sabotaged themselves. "

     

    OK. I think that's a really good point. I think there is a lot of value for them to learn how to better protect themselves. So as there is a lot of hype about the moon turning to blood because of sequestration so too there is a lot of hype about the skies being set on fire about the ability of the gov to kill capitalism and thus productivity.

     

    I use SA as a way of thinking out loud that generates responses that bring up things I didn't think about. This has helped me immensely in dealing with the portfolios that I have a hand in managing. So for me, these numbers mean little help for what I need to do, and it also helps revise my penchant for putting cash to work with where I think interest rates are heading. Obamacare and Dodd Frank are going to really cost people. That means less producitivity for people. So even though we have data now that is not so bad, even though it could much better, the data is not strong enough to offset the costs that the new regulation is going to cost people. Add this to the increasing possibility of more Euroscares on the horizon causing capital flight to the US, and there are still some serious headwinds that I have to consider for what I do.

     

    All this adds up to a very anemic future, and possibly a recession in 2014. For me that means low interest rates for a long time. I am now starting to think that even my prediction of 1600 for the S&P and 2.30 for the 10 yr will not come true in 2013.
    27 Feb 2013, 11:37 AM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    Hoop:

     

    More fodder for your thinking:

     

    First, don't allow "Euroscares" or such to influence your investing. These kinds of issues are non-quantifiable, anomalous fears. They are just the sort of intangible fears that always paralyze some investors and prevent them from ever attaining success. And, a new one can always be imagined around every corner. They are simply an excuse for inaction.

     

    Second, it's really hard, at least for me, to imagine a scenario where we just migrate, absent some major unforeseen triggering effect, into a recession. There's simply too much undeployed capital, and we're consistently expanding the economy at a measured pace. In fact, the very lack of exuberance is the best facet of it all. That's much more sustainable than rapid growth and excited flows in equities. Frankly, I see the present conditions as one of the best markets in many years for value-based investors.
    27 Feb 2013, 12:09 PM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
     
    "absent some major unforeseen triggering effect"

     

    It may not be some major event, like BB raising rates rapidly over a 12 mo period, Obamacare and Dodd Frank will be scaled in, thus they could be scaled in such a way so that their extra costs offset any productivity gains in the economy. There are a bunch of unknowns here, but the big strategic picture is that we are going to be adding a bunch of costs to our economy that we don't need to. That means its going to be harder for people to buy things that will drive earnings.

     

    As people spend more on healthcare and have less healthcare to consume, they will also be faced with less credit from banks. From a macro picture, this means malaise, or even a slow grinding down of growth. Thus, what we could see is not a big trigger, but a slow grind.

     

    Are you thinking about borrowing to invest based on your view this is the best time in many years for a value-based investor?
    27 Feb 2013, 12:24 PM Reply Like
  • Tack
    , contributor
    Comments (12436) | Send Message
     
    Hoop:

     

    I never borrow to do anything, at least not at age 63. I am a firm believer in Polonius' admonition: "neither a borrower or lender be." I am 100% free of debt nor do I provide any, except indirectly through my holdings of debt issues.

     

    That being said, for someone younger and with substantial other income to cover obligations, I could see that fixed-rate borrowing at today's historic low rates, in order to make long-term investments, might be especially attractive, presently.
    27 Feb 2013, 12:43 PM Reply Like
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