201508.04
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Further Correcting The ‘Cycle’

When looking at cyclical inflections, GDP is the last to know about it. That has been the case at cyclical turns in each of the last three peaks, most especially how GDP treated the first half of the Great Recession. More recently, given the abomination of cyclical behavior, GDP finally after three years caught up…

201508.04
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The Inventory Imbalance Might Be The Worst Economic Factor For H2

With factory orders continuing to be much worse than they appear, it makes sense to try to measure the effect of over-optimism accounted by inventory. Recessions themselves were once almost exclusively set up by this one factor, as the difference between production and sales, caught up within the supply chain, eventually works out toward alignment….

201508.04
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Seeing Context In Factory Orders

For the most part, the descriptions of factory orders released this morning tend toward the seasonally-adjusted monthly variation. That is unsurprising given how much continued focus there is in just the narrowest of timeframes, leaving that as the basis for enlarging extrapolations. For June, factory orders were up 1.84% after dropping a revised 1.09% in…

201508.03
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Continued State of Denial

The San Francisco Fed just published a study in its Economic Letter that purports both that the housing bubble was exogenous and that the Fed would have had to crash the economy to a much greater extent than even the Great Recession to gain control of it somewhat pre-emptively. As you can easily surmise, there…

201508.03
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China Is Much More Than the PMI

The problem with sentiment surveys is, as I am becoming a broken record, that they don’t often mean what they are taken to mean. At best, they are relative measures of changes and potentially, if captured and refigured just right, inflections. With innumerable problems encapsulated into not just their construction but the idea of a…

201508.03
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‘Dollar’ Continues; Future Growth Implications

Repo rates absolutely surged at month-end, LIBOR jumped a few more basis points and the eurodollar curve is bid almost everywhere in large chunks. Commodities continue to get smashed, especially crude oil, and currencies are devaluing in almost equally large portions. Even the treasury market is somewhat sporting the tell-tale collateral calls. In short, the…

201508.03
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The Fuss About Wages Is The Fuss

The latest FOMC policy statement was dominated by a single, added word; “some.” As far as actual policy maneuvers I doubt it will make much of a difference, but it certainly adds more flavor to the growing evidence the US economy isn’t anywhere near close to what it should have been by now. In other…

201508.02
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A Closer Look: World Markets

Since the beginning of the year, the S&P 500 Index (IVV) has been trading within a range of 150 or so points; just bouncing from one end of the range to the other, sometimes in dramatic fashion. Last week it did more of the same, bouncing off the 200-day MA before hitting resistance at the 2115 level. The S&P 500…

201508.02
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The New Normal Gets A Downgrade

It was back in 2009 that Bill Gross coined the term New Normal to describe the post-crisis US economy. That economy is marked by a reduced willingness to take risk in the private sector for a variety of reasons. No interest rate is low enough to induce corporate spending in an environment where aggregate demand…

201508.02
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Bi-Weekly Economic Review

Economic reports scorecard 7/20/15 – 7/31/15 The economic data releases since my last update were a bit better than expected but as the GDP report showed, the US economy continues to plod along at a disappointing pace. In fact, the GDP report was, in my opinion, not as good as the headline with investment a…

201508.02
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The Weekly Snapshot

Top News Headlines Chinese stocks plunge, then stabilize Linn Energy shows shale bust isn’t over Whole Foods stock hammered on earnings Twitter beats estimates, stock makes 52 week low Gold stops going down Economic News Durable goods orders rebound, still down almost 3% year over year Dallas Fed improves but still negative Case-Shiller shows surprising…