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Monthly Archives: November 2012

Personal Income, GDP Revisions & Bad Benchmarks

By |2012-11-30T16:01:36-05:00November 30th, 2012|Markets|

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 revised up to 2.7% from [...]

Something Is Different About 2012, Durable Goods

By |2012-11-27T16:46:54-05:00November 27th, 2012|Markets|

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 we have seen in other [...]

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

By |2012-11-26T16:38:36-05:00November 26th, 2012|Markets|

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 swap spreads, particularly the 10 [...]

A Closer Look: Market Cap

By |2012-11-25T22:13:40-05:00November 25th, 2012|Markets|

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 ((RSP)) is set up so [...]

Uh, Oh. Bernanke Agrees With Me

By |2012-11-25T17:19:51-05:00November 25th, 2012|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Taxes/Fiscal Policy|

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 week to the Economic Club [...]

A Closer Look: Commodities

By |2012-11-18T19:26:18-05:00November 18th, 2012|Markets|

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 Natural Gas, Crude Oil, Heating [...]

Looking For Silver Linings

By |2012-11-18T19:12:46-05:00November 18th, 2012|Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

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 executing that strategy is greatest. [...]

Houses, FHA Losses And Eternal Faith in Persuasion

By |2012-11-16T15:08:19-05:00November 16th, 2012|Markets|

"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 be the mortgage guarantee business [...]

Now They Tell Us

By |2012-11-15T12:24:48-05:00November 15th, 2012|Markets|

I suppose there is some benefit to having an "official" recession period - standardizing comparison periods and all. But this is not truly a newsworthy announcement by any means. Some economists expect Germany to remain on the plus side of GDP growth throughout, but recent data does not really offer much hope for that hope. "Word that both France and [...]

Japan

By |2012-11-15T10:39:18-05:00November 15th, 2012|Currencies, Federal Reserve/Monetary Policy|

The Yen is finally weakening as the likely incoming Prime Minister, Shinzo Abe, called for unlimited monetary easing: The yen slumped to the lowest in more than six months against the dollar on prospects Japanese elections next month will hand power to an opposition party that advocates more aggressive monetary easing. The dollar gained against the majority of its 16 most- [...]

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