Volatility Can Be The Expiration of Reflation
While our focus is usually trained on markets, volatility as a concept can apply to much more than asset inflation extremities. The Japanese bond and stock markets are conforming to the QE script, as US markets begin to correlate (across the JPY-USD). What’s really interesting, however, is that despite now four years into a “recovery” .. read more
Where’s the Butterfly?
A healthy caterpillar will always turn into a butterfly, a beautiful, stunning representation of a natural system in good balance with sustainable proportions. Likewise, a healthy Caterpillar is a sign of a stable and healthy economic system, whether defined by region or the entire globe. If we look at Caterpillar’s dealer sales figures, it gives .. read more
Exploring the Limits of Monetary Intervention
The mini-cycle in inventory has re-appeared in the latest two regional manufacturing surveys. Both the Empire Fed and Philly Fed indices have again fallen below zero, indicating a contraction in activity. However, it is the frequency of negative readings that is most relevant. Since the middle of 2012, both surveys (along with their three other .. read more
The Proper Perspective on Jobs and Income
The headline employment growth for May 1974 totaled 165,000 jobs. That followed a weaker report from April where only 89,000 new jobs were created. Only a few months before, the headline beancount of job quantity was 304,000. For the seven months between November 1973 and May 1974, the headline averaged +135,000. That was notable because .. read more
Retail Sales Slowing In Every Segment
This morning’s retail sales figure from the Census Bureau shows a Y/Y increase (unadjusted) of only 1.79%. That is the second worst month since the recovery took hold in later 2009. The worst month was actually last month, which means the current condition in retail trade is, by far, the worst two months since the .. read more
Where Has All The Okun Gone?
Headline employment figures had been displaying a far better indication of the labor market than most of the internal, non-adjusted numbers for January and February. Unfortunately, in March the headline finally converged with disappointing internals rather than the other way around. In the Establishment Survey, the headline increase of 88k was far below expectations, and .. read more
Is Two Months the End of the Cycle?
The ISM Manufacturing reports for January and February 2013 looked to be showing a noticeable rebound in manufacturing activity after some rather dicey months in the second half of 2012. I posited that this rebound was largely inconsistent with broader data (notably durable goods and factory orders) and explained them in the context of a .. read more
Economic Optimism Missing From US Data As Well
Final revisions to Q4 2012 GDP were out today, with little surprise nor any major changes. Personal consumption expenditures were slightly lower, from adding 1.52% to GDP in the advance estimate, to 1.47% in the first revision and finally down to 1.28%. To underscore just how weak these figures are, real gross domestic purchases (the .. read more
