2012 November

Personal Income, GDP Revisions & Bad Benchmarks

My theme for 2012 has been that something is different this year than the past two years of even substandard recovery. Recession looms and recent data has done nothing to make me think that trend is anything but hardening. While there was some celebration over the first revision to Q3 GDP, as headline growth was .. read more

Something Is Different About 2012, Durable Goods

The month-over-month change in seasonally adjusted durable goods orders appeared to, once again, beat expectations. Absent cyclical and seasonal adjustments, however, the numbers tell a different story. For an explanation of seasonal factors and the vain pursuit of precision, see our post here. Year-over-year, the trend change in 2012 for durable goods mirrors other data .. read more

On November 27th, 2012, posted in: Markets by Tags: , , , ,

Repo Rates, Swap Spreads, And A More Distant Fed Exit

Joe Calhoun recently noticed a bit of a structural shift taking place in the repo market, and he was right to point out the Fed’s role in the process. QE 3 has caused some of the usual “unforeseen” and unintended consequences that ripple through wholesale money markets. I have been highlighting a related drop in .. read more

On November 26th, 2012, posted in: Markets by Tags: , , , , , , ,

A Closer Look: Market Cap

The S&P 500 Cap-Weighted Index ((IVV)) has had an exceptional bounce-back week, albeit on very low volume due to the holiday weekend. The index blew through its 200-day moving average, and seems likely to retest resistance at the 50-day MA at the 1426 level. The index is up 13.98% year-to-date. The S&P 500 Equal-Weighted index .. read more

On November 25th, 2012, posted in: Weekly Update by

Uh, Oh. Bernanke Agrees With Me

There’s important potential for the economy to strengthen significantly if there’s a greater level of security and confidence about where we’re going. A plan for resolving the nation’s longer-term budgetary issues without harming the recovery could help make the new year a very good one for the American economy. Ben Bernanke in a speech last .. read more

A Closer Look: Commodities

The GSCI Commodity Index ((GSG)) consists primarily of Energy (71%), but also contains Agriculture (14%), Industrial Metals (7%), Livestock (4%), and Precious Metals (4%). The index currently sits atop support, but the situation is precarious at best. GSG is down 1.64% for all of 2012. The Dow Jones-AIG Energy Total Return Index ((JJE)) consists of .. read more

On November 18th, 2012, posted in: Weekly Update by 1 Comment

Looking For Silver Linings

John Templeton, one of the greatest investors of all time, said that investors should buy at the point of maximum pessimism. Nothing illustrates the adage of something being easy to say and hard to do more than that statement. It is of course at the point of maximum pessimism that our natural psychological barrier to .. read more

Houses, FHA Losses And Eternal Faith in Persuasion

“More than 17 percent of all FHA loans were delinquent in September, according to data on the agency’s website.” I believe that number was 9% last quarter. Of course not all delinquencies turn into bad loans, or full-on NPL’s, but both the trend and absolute level should be alarming. The major problem, however, seems to .. read more