catching up
Jun. 25th, 2010 12:18 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdGood morning, Cascadia. This is very much a semi-organised tab dump, and a lot of business with very little econ. That's the problem with being busy on other things; you have to spend a lot of time playing catch-up on the minutia and can't get back to the bigger picture. This is catch up.
Garth at Greater Fool delivers what amounts to a "the only thing we have to fear is fear itself" speech; apparently he's been onset by end-of-the-world doomers. His previous post mentions the fall in Canadian retail sales; it was big, a 2.0% drop, wiping out almost all the previous month's gain, and US home sales in May dropping to a record low - down 33%, to 300,000 units/year annualised, the lowest number on record. And that's vs. April's revised lower sales (down to 446,000 from 504,000); apples to apples, you're looking at a 40% drop. I think we can safely consider the "demand pull-ahead" theory of the housing tax credit stimulus validated now. (Data courtesy CitizensBank Foreign Exchange Newsletter, archived here, but the housing numbers are here.) This was, frankly, a much bigger drop than even the bears were expecting.
At Marketwatch, Mike Holland says that US financial reform is basically worthless, but still insists it will make credit more expensive and much harder to get, and pushes "trial lawyer" buttons. Karl Denninger is holding off a full opinion until the bill is law, but thinks that it demonstrates regulatory capture is still in full effect but that so far he thinks the bill is a mild net positive, despite FreddieMac/Fannie Mae being left out of the bill.
Deutschebank says US financial conditions are collapsing again - not bad to the post-Lehman bankruptcy lows, but into crisis territory, near the 1982/2001 lows. Significant numbers of banks are missing TARP payments, some -about 10% - are missing multiple payments.
The GOP teamed with Ben Nelson to block the Democrats' job bill in the Senate, which included the renewal of extended unemployment benefits. Senator Collins of Maine said earlier she's willing to support an extension of those considered separately, which would allow the Democrats to break filibuster and pass that, but if that doesn't happen, it will be interesting to see headline (U3) unemployment start to drop rapidly even as employment rates remain unchanged. Unemployment claim four-week average is remaining steady at 460,000.
Zero Hedge sees the "BP is Too Big to Fail" propaganda ramping up.
The Economic Cycle Research Institute (ECRI) Leading Economic Index has fallen sharply to -6.9%, indicating significant contraction in economic activity. This may be a repeat: the Philly Fed Business Index slowed significantly from 21.4 to 8.0 in June, still indicating growth but a sharp dropoff in the rate. Despite all this, UMichigan Consumer Confidence rises to 76.
First-quarter GDP figures have been revised downwards to 2.7% annualised, from 3.2% annualised. Durable goods orders in May sound awful - down 1.1% - but take out transportation and it's up 0.9%, which actually makes it not so bad. One of Karl's personal leading indicators is warning, tho':
There are rumours that the US Federal Reserve is about to go on a printing/buying spree of US$2.6trillion with a T. Karl Denninger rolls to disbelieve and wants sources named.
And something nobody's watching lately: Baltic Dry Index numbers have fallen through trendline and support. Dry bulk shipping is falling down.
Sorry this isn't more coherent; US markets are up on agreeable financial reform. Ca$ is up against US$. Have a good weekend!
Garth at Greater Fool delivers what amounts to a "the only thing we have to fear is fear itself" speech; apparently he's been onset by end-of-the-world doomers. His previous post mentions the fall in Canadian retail sales; it was big, a 2.0% drop, wiping out almost all the previous month's gain, and US home sales in May dropping to a record low - down 33%, to 300,000 units/year annualised, the lowest number on record. And that's vs. April's revised lower sales (down to 446,000 from 504,000); apples to apples, you're looking at a 40% drop. I think we can safely consider the "demand pull-ahead" theory of the housing tax credit stimulus validated now. (Data courtesy CitizensBank Foreign Exchange Newsletter, archived here, but the housing numbers are here.) This was, frankly, a much bigger drop than even the bears were expecting.
At Marketwatch, Mike Holland says that US financial reform is basically worthless, but still insists it will make credit more expensive and much harder to get, and pushes "trial lawyer" buttons. Karl Denninger is holding off a full opinion until the bill is law, but thinks that it demonstrates regulatory capture is still in full effect but that so far he thinks the bill is a mild net positive, despite FreddieMac/Fannie Mae being left out of the bill.
Deutschebank says US financial conditions are collapsing again - not bad to the post-Lehman bankruptcy lows, but into crisis territory, near the 1982/2001 lows. Significant numbers of banks are missing TARP payments, some -about 10% - are missing multiple payments.
The GOP teamed with Ben Nelson to block the Democrats' job bill in the Senate, which included the renewal of extended unemployment benefits. Senator Collins of Maine said earlier she's willing to support an extension of those considered separately, which would allow the Democrats to break filibuster and pass that, but if that doesn't happen, it will be interesting to see headline (U3) unemployment start to drop rapidly even as employment rates remain unchanged. Unemployment claim four-week average is remaining steady at 460,000.
Zero Hedge sees the "BP is Too Big to Fail" propaganda ramping up.
The Economic Cycle Research Institute (ECRI) Leading Economic Index has fallen sharply to -6.9%, indicating significant contraction in economic activity. This may be a repeat: the Philly Fed Business Index slowed significantly from 21.4 to 8.0 in June, still indicating growth but a sharp dropoff in the rate. Despite all this, UMichigan Consumer Confidence rises to 76.
First-quarter GDP figures have been revised downwards to 2.7% annualised, from 3.2% annualised. Durable goods orders in May sound awful - down 1.1% - but take out transportation and it's up 0.9%, which actually makes it not so bad. One of Karl's personal leading indicators is warning, tho':
Communications orders were down a fair bit on shipments but have effectively collapsed on new orders, down 9.4% m/o/m... communications new orders are below the May 2009 levels. That's an early warning - and one that I track very closely. Communications orders are, as I have repeatedly noted, an excellent indication of forward intentions to hire.Mish has an interesting note about muni bonds, long seen as safe havens, and notes that investors are not being compensated to the degree of risk they're taking, which is well above zero. Illinois is considered more likely to default now than is Portugal or California. Zero Hedge looks at state and local budget problems in depth here.
There are rumours that the US Federal Reserve is about to go on a printing/buying spree of US$2.6trillion with a T. Karl Denninger rolls to disbelieve and wants sources named.
And something nobody's watching lately: Baltic Dry Index numbers have fallen through trendline and support. Dry bulk shipping is falling down.
Sorry this isn't more coherent; US markets are up on agreeable financial reform. Ca$ is up against US$. Have a good weekend!
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no subject
Date: 2010-06-25 09:00 pm (UTC)It always ticks me off when the media reporting of worrying inflation or durable goods/GDP numbers is hedged by saying "But if you remove X and Y, the numbers are good." Especially when tracking inflation, where they usually leave off things like groceries and fuel to make the picture more rosy. They can say that overall inflation hasn't been a problem, or maybe even a little deflationary, but for this layman who looks at my food bill... my cost of living in that area has gone up 50 percent or more. My paycheck has not.
I realize that talking heads separate out categories to examine what may be driving the numbers up or down for the overall economic picture, but do you ever get the sense that sometimes it's used as smoke and mirrors on the general public?
And any sense from anyone that we'll see an increase in the national cost of SNAP benefits since a dollar doesn't go as far in the family food budget as it did even last year?
I really appreciate your posts, they are concise overviews with very good sources. Thank you for taking the time to pass this information along.
no subject
Date: 2010-06-25 11:51 pm (UTC)At least, that's why, back when. Now most people are looking to the next quarter, or maybe the next year, and I think that's fucked things pretty good, but still.
I have called shenanigans on various elements of published figures several times - I do it with every major jobs report (the "birth/death model," for example) and the now-useless formerly-interesting nonborrowed bank reserves data (made useless by reclassifying most borrowed reserves as not-actually-borrowed).
I have no idea about what's going to happen with any individual government programme. However, I would assume there would be no expansion or renewal of temporary benefits packages through at least the election. Extended/emergency unemployment may be an exception. Emphasis on "may."
Thanks and I'm glad you appreciate even these lame tabdump ones. ^_^
no subject
Date: 2010-06-25 11:00 pm (UTC)On the econ? He's right about some things but still looking at this whole mess as a financial game played by people with plenty of disposable income. Which may be his readership but still, it ain't just a game and the world as a whole is rather going straight to hell with no sign anyone with the power to do so wants to redirect the steering wheel or apply any breaks. And my patience with that whole sort of economic discussion (unless he purely means this for investment purposes only, which maybe I'm missing) (and even then, my patience for the espousal of what seem to be several underlying theories in it) is down to nil.
In particular, his comments on the Gulf tend to cause the same sort of towering "I want to kill people" rage that any comments by people trying to downplay that disaster cause in me. Let's just say I think he's grossly missing the point that the Gulf spill *is* a disaster of Biblical proportions (outside of the mythical Great Flood, clearly much WORSE than anything that happened in the Bible, unless I've forgotten something, and you could argue about which is worse, there), and that he's missing out on the whole "our environment as a whole is heading towards a disaster of friggin Book of Revelations proportions even without the Gulf spill making everything five jillion times worse a jillion times faster" bit.
I know, that's not the point of his post, but, ::screams long and loudly and screams long and loudly some more until voice disappears but the echoes blast with seeming permanence in my head::
Errrr, feel free to delete this if it's not appropriate to the thread, or too whatever.
I haven't clicked on the rest. Sorry. It's just, okay, the planet is going to keep spinning round the sun for a while yet and all, but even the most clearly crazy "doomers" seem to have a better handle on the seriouslness of a great many things than people like him. And even while they are clearly batshit crazy in all sorts of ways, and ignorant/delusional/misled in others, I actually have more sympathy with their ranting than with parts of his. End of my own rant.
no subject
Date: 2010-06-25 11:40 pm (UTC)And I didn't mean to imply that you shared what seem to be his priorities, if it came off that way. From some other things in your post it seems clear you don't (or else you read him differentty than I did, and possibly I'm innaccurate, since I usually don't read him at all).
no subject
Date: 2010-06-26 12:07 am (UTC)Well, he's a Tory. Of course he's looking at a lot of it that way. In US terms that makes him, hum... he doesn't really exist. Not in quantity, anyway. Something like a New England Republican of the old school. Like a lot of people who haven't gotten in deep with it, he's far too quick to take the word of the US government, and I think he's similarly too quick to take data from BP as accurate as well.
In general, he thinks things are pretty fucking bad, mind you. He's talking about a generation of pain even in that post. But he's reacting to people who really do market doom/end-of-times for a living, and while most of that stays south of the border (41% of Americans think Jesus will return by 2050), I think this post overstates the counter-case, and that he's over-reacting to the over-reactors. I think things are worse than he thinks they are, separately.
But really - and I didn't include this in my post, oops - I wanted to include it because this is more Depression mindset. I think the US is now in what I refer to as a depression mindset. Canada's not there yet, but It's creeping up in all sorts of places (Italy, Spain) and I think he's playing a counter-action game against that, because one of the things you need to avoid if you want to prevent a Depression is the emergence of that mindset. I... strongly suspect that effort has failed and one of my big questions is whether China's system of socially (and, really, governmentally) mandated optimism, combined with what's legitimately a different point in the economic cycle, can buffer against it there.
That would be nice. I have no idea.
Ah.
Date: 2010-06-26 05:18 am (UTC)From purely a manipulative, "things will go better if people expect them to" mindset, well, hell, who knows what will work, so can't blame him there. I had more the idea he was comfortable with things settling into a universal third-world economy sort of thing, as long as he and his buddies made out. My bad.
I know what I think would be *most likely* to work, but I also think the powers that be would actively fight to keep that from working, which would cause who knows what problems, which might keep it from working even if I'm otherwise right, and so forth.
Odds of "what I think is most likely to work" actually happening? Probably less than 1%, and probably no single part of it tops 50% likelihood (the US getting rid of the Bush tax cuts and pulling back from Iraq and Afghanistan and investing heavily, I mean *really* heavily, in solar/wind production, and some sort of jobs program combining those industries w/gulf clean-up crews and maybe a few other things, is probably *more* likely than legit financial regulation and making sure offshore corporations pay taxes and so on, and, well, yeah, so gonna happen.)
Re: Ah.
Date: 2010-06-29 06:03 am (UTC)As I mentioned earlier, I'm avoiding US politics as much as possible right now. Of course, this article refers to Canadian politics, which are reasonable.