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  • Gallup finds unemployment rising and under-employment nearing 20% in December, refuting more optimistic views of ADP and possibly tomorrow's U.S. government report. Gallup says its results "more accurately reflect what is actually taking place" in the job market because its measures are not seasonally adjusted.  [View news story]
    "And Gallup is an expert on employment statistics, How?"

    No, Gallup is not an expert on employment statistics.

    Gallup is, however, expert in polling/surveys--with no fancy 'seasonal adjustments' and no questionable 'birth/death' models. As an added bonus, Gallup doesn't have the pressure of having to justify a bloated, outdated, overpaid bureaucracy subsidized by taxpayer monies.
    Jan 6, 2011. 08:12 PM | 6 Likes Like |Link to Comment
  • CMI's Growth Index Continues to Slide [View article]
    Me three. I made an (in hindsight) ill-advised short bet in Sept, thinking the GDP would tank based on the CMI's history. Oh well, live and learn.

    Perhaps the deviation from the historical trend is less the fault of the CMI and more the fault of the GDP? I know very little about how the GDP is calculated, but could the GDP be artificially elevated based on the staggering amount of govt stimulus being provided? Thoughts welcome....
    Jan 6, 2011. 04:47 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Any thoughts as to why the Monster Employment index has been on a 4-month downward trend--especially going into the holiday season? I know little about their model but I'm curious about the trend (especially in light of ADP's blowout number).
    Jan 6, 2011. 07:12 AM | Likes Like |Link to Comment
  • QE2 and Stock Market Breadth Still Question 'Smart Money' [View article]
    Thx Chris.

    "QE2 is primarily about asset prices and balance sheets, not interest rates." Every time I think about the Fed's *real* reason for QE2, it angers me. I can understand why they wanted to do it, but I think we'll pay a heavy price for their hubris down the road.

    Additionally, looking at $NYSI, two idle thoughts occur to me:
    1. while the pattern you mention is clearly evident, the pattern could breakdown as we approach richer P/E valuations on on the S&P, and
    2. you could also make the argument that we've seen lower highs on the $NYSI since Sept 09. If this pattern dominates, the recent upturn could be short-lived.
    Jan 5, 2011. 01:07 PM | Likes Like |Link to Comment
  • Manufacturers' New Orders Under the Lens [View article]
    Gentlemen: excellent presentation of how perceptions can be skewed by the form in which the data is presented. Much appreciated.
    Jan 5, 2011. 12:10 PM | 1 Like Like |Link to Comment
  • Automobile Sales Record Strong Gains [View article]
    "...without the help of government subsidies"

    Surely, I'm not the only one that got a grim chuckle out of that? This whole fragile recovery has been largely the product of govt subsidy in one form or another (eg, TARP, ZIRP, QEn, Cash-for-Clunkers, etc.).
    Jan 5, 2011. 08:40 AM | 3 Likes Like |Link to Comment
  • Dec. ADP Jobs Report: +297K vs. +100K expected and +92K prior (revised from +93K). The pace of job growth was "well above what is usually associated with a declining unemployment rate... After a mid-year pause, employment seems to have accelerated."  [View news story]
    I suspect your comment is directed at perma-bears, but it will be interesting to see if the bulk of this increase is temporary/seasonal retail hiring or something more permanent.
    Jan 5, 2011. 08:30 AM | 4 Likes Like |Link to Comment
  • 2011 Outlook: FAQs on Gold, Stocks, Rates and Emerging Markets [View article]
    Thx for the follow-up. I found two tidbits on corp debt from a recent Brett Arends piece (online.wsj.com/article...). I don't know anything about Mr Arends' economic views, and I'm still trying to put everything in context, but I've excerpted two of his points that I thought were relevant to our discussion:

    "5. Corporate debts are far larger than people realize. Wall Street is selling a story that corporate balance sheets are in great shape and U.S. companies are simply awash with spare money. It's misleading. Some companies, naturally, are fine. But overall, corporate debts have been rising, not falling. Federal Reserve data show non-financial corporations owed $7.4 trillion at the end of the third quarter - an increase of $250 billion in a year, and a new record. As recently as 2005 the figure was just $5.5 trillion. The Fed says nonfinancial corporations now have debts equal to 58% of their net worth - compared to just 41% five years ago. And when you add these debts to the value of equities, the so-called "enterprise value" of public companies is now about 2.2 times annual sales, according to FactSet. That's an extreme level - far higher than in 2006 or 2007, and exceeded only by the madness of 1999-2000.

    6. Systemic leverage is through the roof as well. After three years of alleged "deleveraging," U.S. households have managed to slash their enormous mortgage and other debt burdens by all of… 3.5%. Meanwhile government and corporations have borrowed much more. Net result? Total debts have risen 15% since the fall of 2007 to $36 trillion. Maybe this is okay, maybe it isn't. There are brilliant economists on both sides. But more leverage means more risk. That's economics 101. Yet here we are, the market is booming, and everyone seems to think everything is just hunky-dory. "
    Dec 30, 2010. 11:27 AM | Likes Like |Link to Comment
  • A spending splurge from upper-income Americans led the way to strong self-reported consumer spending during Christmas week 2010, Gallup says - $183/day on average during the week ending Dec. 26, up from $126 Y/Y. This could explain the dichotomy between data showing stronger consumer spending despite weakening confidence.  [View news story]
    350, 351--whatever it takes....

    :-)
    Dec 29, 2010. 10:15 AM | Likes Like |Link to Comment
  • Housing Is My #1 Theme as Home Prices Resume Their Decline [View article]
    You could make the argument that every metric has flaws: it looks at the wrong things, or it leaves something out, etc. Regardless of the flaws inherent in Case Shiller, it has a track record in its current form. Whether these are the 'right' 20 metro areas to gauge--I don't know. But these were the same 20 metro areas that were measured on the upside of the housing bubble so it makes sense to measure them on the downside, thus allowing for meaningful historical comparisons.

    To change the make-up of the metric now would be like...like...well, kinda like the govt changing the way it calculates inflation or unemployment!! They just don't do those kinds of things!

    :-)
    Dec 29, 2010. 08:51 AM | 10 Likes Like |Link to Comment
  • 2011 Outlook: FAQs on Gold, Stocks, Rates and Emerging Markets [View article]
    Thx, good read. A few thoughts:

    1) re Gold: I'd add another reason for increased demand: the possible (perhaps inevitable?) failure of fiat currencies. I've no idea on the probability or timing of this event, but it seems plausible to me. Many appear to be buying PMs to hedge against loss of confidence in the USD, the Euro, etc.

    2) you mention that corporations have "well over $1.3T cash on their balance sheets". A minor quibble perhaps, but isn't much of that "cash" really borrowed money (ie, debt) and thus needs to be repaid at some point? Corporations took advantage of historically low interest rates and loaded up on cheap debt, but it's debt nonetheless. What are the implications of this?

    3) what happens when QE2 expires in 2011?

    Thx.
    Dec 29, 2010. 08:39 AM | 3 Likes Like |Link to Comment
  • Case-Shiller Shows House Prices Are Double-Dipping [View article]
    And core CPI doesn't include food and energy, so what's your point?
    Dec 28, 2010. 11:04 AM | 4 Likes Like |Link to Comment
  • Three Reasons to Be Prudent Now [View article]
    Thanks for the thoughtful response, Diva.
    Dec 25, 2010. 01:21 PM | Likes Like |Link to Comment
  • Three Reasons to Be Prudent Now [View article]
    Steve, are there any studies showing the amount of correlation between forward earnings estimates and actual earnings? In other words, how accurate are forward earnings estimates?
    Dec 23, 2010. 07:24 AM | 1 Like Like |Link to Comment
  • Third Quarter GDP Grows 2.6%: Looks Like a Recovery [View article]
    Don't forget govt expenditures....
    Dec 22, 2010. 10:07 AM | 1 Like Like |Link to Comment
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