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solarbirdGood morning.
The DJIA is down 200 points as I write, and the S&P 500 is worse by percentage, erasing all of yesterday's gains and then some. Part of that, I think, is traders taking a better look at yesterday's GDP numbers, which were billed as better than expected but matched the consensus I saw, but whatever. Sure, a lot of it was fakeonomics, as expected out of the stimulus package, but Karl at Market Ticker notes, "Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.2%... an enormous swing in purchasing power and not in the right direction!" He also doesn't trust some of the numbers in it, particularly:
And, perhaps predictably, today we learned that personal income and personal spending - which will be needed to drive the US out of this recession if the previous consumer-based economy is to continue - were headlined as slightly down last month. Most people are reporting it as "flat," as the down is very slight, so still; down, when expectations were for a rise. But again, read further into the press release; what the BEA calls "private wage and salary disbursements" - wages, salaries, what you typically see as "earned income" - fell in every sector. What kind of income was up? Rental income - to no surprise, as all those evicted former homeowners have to live somewhere - and "personal current transfer receipts." What're "personal current transfer receipts"? As defined by the same agency: "Personal current transfer receipts are benefits received by persons for which no current services are performed. They are payments by governments and businesses to individuals and nonprofit institutions serving individuals," which is to say government benefits and private charity, with about 95% of it being government (same link). Take government out, and personal income fell significantly. Not disastrously; but significantly.
In short, economic activity still hasn't been keeping personal income flat, and if you factor in official inflation, spending actually fell 0.6%, as well.
First-time jobless claims fell 1,000, which is statistically no movement. A meaningful fall had been expected. The four-week average of first-time claims declined 6,000 to 526,250, as we seem to be settling in around the 525,000 number. Continuing claims (four-week average) fell by 78,750 to 5.96 million; I don't have the number directly in front of me right now but I think about a quarter of that is benefits expiration.
Consumer sentiment numbers are down from September, but less bad than it looked like they'd be at the middle of the month. Importantly:
Oh, and even though you should never, ever read comment pages on news sites, I scrolled down past the end of that consumer confidence article on Marketwatch and spotted this little bit of office humour:
DIJA now down 250, S&P closing on -3%. Good luck, everyone.
The DJIA is down 200 points as I write, and the S&P 500 is worse by percentage, erasing all of yesterday's gains and then some. Part of that, I think, is traders taking a better look at yesterday's GDP numbers, which were billed as better than expected but matched the consensus I saw, but whatever. Sure, a lot of it was fakeonomics, as expected out of the stimulus package, but Karl at Market Ticker notes, "Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.2%... an enormous swing in purchasing power and not in the right direction!" He also doesn't trust some of the numbers in it, particularly:
Looking inside the data, the "big change" in private domestic investment is all residential fixed - up 23.4%. I don't believe it. I've been scouring the homebuilder earnings releases and data, and I don't see the numbers that support this. An improvement over the ditch-diving of the last many quarters, yes - but a 23.4% increase, a swing of fifty percent from Q2-Q3? Oh hell no. Where is it? It's not in Home Depot's or Lowe's quarterly results, it's not in the homebuilders, and I can't find it in the suppliers (lumber companies, etc) either. This sort of move would result in monstrous top-line revenue increases reported by firms in this sector and that simply has not happened.But you can read all of that here, if you like.
And, perhaps predictably, today we learned that personal income and personal spending - which will be needed to drive the US out of this recession if the previous consumer-based economy is to continue - were headlined as slightly down last month. Most people are reporting it as "flat," as the down is very slight, so still; down, when expectations were for a rise. But again, read further into the press release; what the BEA calls "private wage and salary disbursements" - wages, salaries, what you typically see as "earned income" - fell in every sector. What kind of income was up? Rental income - to no surprise, as all those evicted former homeowners have to live somewhere - and "personal current transfer receipts." What're "personal current transfer receipts"? As defined by the same agency: "Personal current transfer receipts are benefits received by persons for which no current services are performed. They are payments by governments and businesses to individuals and nonprofit institutions serving individuals," which is to say government benefits and private charity, with about 95% of it being government (same link). Take government out, and personal income fell significantly. Not disastrously; but significantly.
In short, economic activity still hasn't been keeping personal income flat, and if you factor in official inflation, spending actually fell 0.6%, as well.
First-time jobless claims fell 1,000, which is statistically no movement. A meaningful fall had been expected. The four-week average of first-time claims declined 6,000 to 526,250, as we seem to be settling in around the 525,000 number. Continuing claims (four-week average) fell by 78,750 to 5.96 million; I don't have the number directly in front of me right now but I think about a quarter of that is benefits expiration.
Consumer sentiment numbers are down from September, but less bad than it looked like they'd be at the middle of the month. Importantly:
The majority of consumers reported that their finances had worsened for the thirteenth straight month in October. This is the longest decline in the history of the survey.None of this looks good for the holiday shopping season. None of it.
A record-low percentage of consumers cited income gains in the month and for the first time in sixty years, the majority of families expected their incomes to remain unchanged or decline during the year ahead.
As a result, consumers now put debt reduction and increased savings at the top of their agendas rather than the quick resumption of spending plans, said Richard Curtin, the director of the Reuters/UMich survey.
Oh, and even though you should never, ever read comment pages on news sites, I scrolled down past the end of that consumer confidence article on Marketwatch and spotted this little bit of office humour:
The economy, How Bad Is It?And so on. Apparently, both "grin and bear it" and Vaudevillian humour are making comebacks. We're doomed. -_^
The economy is so bad... I got a pre-declined credit card in the mail.
The economy is so bad... If the bank returns your check marked "Insufficient Funds," you call them and ask if they meant you or them.
The economy is so bad... I ordered a burger at McDonalds and the kid behind the counter asked, "Can you afford fries with that?"
The economy is so bad... Motel Six won't leave the light on anymore.
The economy is so bad... The Mafia is laying off judges, and Exxon-Mobil laid off 25 Congressmen.
The economy is so bad... Dick Cheney took his stockbroker hunting.
DIJA now down 250, S&P closing on -3%. Good luck, everyone.
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Date: 2009-10-30 05:44 pm (UTC)no subject
Date: 2009-10-30 06:14 pm (UTC)no subject
Date: 2009-10-30 06:30 pm (UTC)no subject
Date: 2009-10-30 06:35 pm (UTC)no subject
Date: 2009-10-30 09:02 pm (UTC)Remember, he's watching you. He knows if you've been bad or good, so be good or Santa will f*cking kill you.
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Date: 2009-10-31 06:02 am (UTC)no subject
Date: 2009-10-31 06:41 am (UTC)no subject
Date: 2009-10-31 06:51 am (UTC)Fitting, really - the W-shaped part - but not fun.
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Date: 2009-10-31 06:53 am (UTC)