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recession

IBM Still Provokes More Than Morbid Curiosity

By |2016-07-19T18:16:59-04:00July 19th, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

At this point, maybe it’s more like a train or car wreck whose shocking carnage compels you to keep staring at it. I still think there is, however, relevant information in IBM’s ongoing crash though I can’t deny the degree of fascination with it as almost theater. The company yesterday reported its 17th consecutive quarter of shriveling. Like a car [...]

Nearly Two Years of Manufacturing Contraction, And No Progress In Inventory

By |2016-07-19T16:41:26-04:00July 19th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Manufacturing sales were reported Friday to have declined 2.3% year-over-year in May, following a 4.7% contraction in April. Since sales in May 2015 were almost 6% less than May 2014, the manufacturing sector counts almost 8% less in revenue across two years of contraction. The worst part is, again, the time. In seasonally-adjusted terms, estimated sales of $456 billion in [...]

The Problem Is Not So Much Retail Weakness But Prolonged Retail Weakness

By |2016-07-15T17:47:43-04:00July 15th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Retail sales in June 2016 were up 3.14% from June 2015. That rate is slightly better than the average from the middle of last year, but not significantly so. The 6-month average continues to straddle the 3% range that traditionally marks recessionary circumstances, about 2% less than the average just before the “rising dollar” economy hit in late 2014. Under [...]

US IP Down For 10th Straight Month Indicating Growth Is Now The Outlier Scenario

By |2016-07-15T16:08:13-04:00July 15th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Industrial production in the United States remains caught up in the latest downward shift of the 2012 slowdown. The Federal Reserve estimates that overall industrial production contracted for the 10th straight month, falling 0.7% in June 2016. The degree of decline is relatively small, but as with so many other accounts the lingering of the condition for an only increasing [...]

Now We Know Why China Authorities Panicked; An Actual Negative Number In The One Place They Can’t Afford One

By |2016-07-15T12:07:58-04:00July 15th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In August 2014, Chinese industrial production was estimated to have slowed sharply from +9.0% that July to just 6.9%. Consensus at the time expected only a minor variation, an insignificant change to +8.8%. Chinese industrial statistics had suggested some minor (relatively speaking) weakness at the start of the year before rebounding throughout the spring in what is now, in the [...]

Corroboration Under the ‘Rising Dollar’ Economy

By |2016-07-14T18:50:37-04:00July 14th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Last week, the American Bankruptcy Institute (ABI) released its updated statistics for commercial bankruptcies through June 2016. For yet another month, bankruptcies jumped by 30% over the same month in 2015. Total commercial filings were 3,294 in June, compared to 2,442 in June 2015; Chapter 11 filings were up 36% year-over-year. The turn in apparent liquidity and business struggles occurred [...]

The ‘Costs’ Of Beyond The Cycle

By |2016-07-13T18:01:57-04:00July 13th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

We have to acknowledge that economic statistics are imperfect even under the best conditions. But that doesn’t mean we shouldn’t try to measure comparative circumstances where conditions are less than ideal or conventional. In terms of a business cycle, we think of recession as negative GDP; to the point that conventional “wisdom” actually believes two consecutive quarters defines one. Not [...]

The Hope Trade Returns Though Severely Stunted As It Should Be

By |2016-07-12T18:50:49-04:00July 12th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to be forward-looking discounting mechanisms. However, [...]

Wholesale Zombie

By |2016-07-12T16:55:45-04:00July 12th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Wholesale inventories have ground to a halt, but since wholesale sales have also the inventory imbalance only continues midway already through its second year. Excluding petroleum, the wholesale inventory to sales ratio surged upward starting in November 2014. By the middle of last year, inventory growth had slowed but that only locked the current imbalance into seeming perpetuity. For the [...]

Two Times Was Convincing; Five, Maybe Six Times Cannot Be Coincidence

By |2016-07-12T13:18:13-04:00July 12th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

People are often mistaken for thinking the eurodollar is somehow related to the euro, but that is in many ways quite understandable. In reality, the eurodollar system is shorthand for a global, offshore monetary regime that is dominated by “dollars” but includes every major currency. Thus, the participants in these currency markets are usually the same banks, meaning that if [...]

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