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Consumers Simply Never Showed Up

By |2014-11-14T15:22:36-05:00November 14th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The largest calendar segments of the retail universe are back-to-school followed closely by Christmas. The peak month for back-to-school is August which is usually the third or fourth biggest month of the year in terms of raw retail sales; with October right behind as Christmas retailing ramps up. September, which falls in between back-to-school and Christmas (at least historically), was [...]

Durable Goods Cycles

By |2014-10-28T12:36:54-04:00October 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The unfortunately established narrative for all economic accounts in 2014 relates (still) to depressing winter earlier in the year and “better” from there. At first glance, the latest figures on durable goods seem to be following that idea, though a “rough patch” has perhaps developed over the past two months. A wider context, however, is really needed as the pattern [...]

Maybe IBM Should’ve Bought The Whole ‘Cloud’ Rather Than Itself

By |2014-10-20T14:58:00-04:00October 20th, 2014|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

IBM blames the cloud for its dismal results, but the fact is that IBM should own the cloud outright (figuratively, of course). If the business has changed so much in the past few years due to customer shifting, then why wasn’t IBM leading that process? Why are they now actually admitting what amounts to a dereliction of managerial duties? Since [...]

No Wages, No Spending Despite ‘Pump Priming’ Autos

By |2014-10-15T13:06:31-04:00October 15th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The orthodox notion of monetary policy, following its Keynesian root, is that spending for the sake of spending will lead to a healthy economy. It does not matter, to this philosophy, how or why that spending takes place; only that it does. If, for example, the Federal Reserve can “stimulate” the interest rate sensitive sectors of the economy, like automobiles, [...]

Home Construction Still Moving Down

By |2014-09-18T12:20:47-04:00September 18th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Another month, another instance where supposed “tight” supply and high home prices fail to register any significant change in home construction. Construction figures for August bear little resemblance to the idea that anything other than monetary interference is responsible for the mini-bubble in activity. Further, August represents another month’s worth of confirmation, despite any and all volatility in the data [...]

Low-Amplitude ‘Cycles’

By |2014-09-05T16:33:57-04:00September 5th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

If you limited yourself to only the official unemployment rate the picture you get of the economy is seemingly one that fits very much inside historical expectations. The rate rose and fell just like it “should” in a recession/recovery cycle. That raises the question about why this period has been so divergent with past expectations. When even the Federal Reserve [...]

Spending, Stagnation and the Revised Position of Instability

By |2014-09-03T15:25:27-04:00September 3rd, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Personal intuition usually serves well in both economics and finance, which is why, despite all the billions of dollars and amazing efforts otherwise, this business is still an art and not a “science” (even pseudo-). I should have remembered as such the last time I actually reported on a sentiment survey, as the Chicago PMI a few months back tumbled [...]

GDP Pieces

By |2014-08-28T12:33:27-04:00August 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Following up on my earlier observations about a reduced trajectory, getting away from the thick trees of quarterly statistic movements and revision for the forest of patterns and paths, viewing the subcomponents of GDP as standalone accounts rather than contributors highlights exactly that problem. Whether you view the economy through real final sales (both of domestic product and to domestic [...]

GDP Revisions Actually Show A Much Smaller Economy Further From Health

By |2014-08-28T11:55:32-04:00August 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Statistics are notorious for being worse than liars, according to cliché, but under many circumstances there is more than an element of truth to that. The latest revisions to the July revisions are not quite the liars’ paradox (everything I say is a lie; that first statement is true) but there is something amiss that is missed in the narrow [...]

Appropriately Using the D-Word

By |2014-08-06T12:04:40-04:00August 6th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

There is a lot that is deficient about the idea of the plucking model, but that speaks more about its mainstream use as a “law” of economic behavior than the elegant and intuitive simplicity behind it. Its primary observation is that a recession is the temporary interruption of the larger trend of economic advancement. What is missing lately in the [...]

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