Markets

Revisions To Industrial Production Show, Unsurprisingly, Much Less Recovery And Even More Recession

By Jeffrey P. Snider|2016-04-15T16:26:40-04:00April 15th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

US industrial production fell yet again in March to (benchmark revised) -2% year-over-year. With updated revisions, the contraction in IP now extends seven months rather than what would have been just five under the prior assumptions. As anticipated yesterday, auto production was a leading factor in the retreat. Manufacturing output decreased 0.3 percent in March. The production of durables moved [...]

Off By A Factor of Two, Maybe Even Three

By Jeffrey P. Snider|2016-04-15T11:59:08-04:00April 15th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

You can always tell what kind of monthly variation any economic account provides from the commentary by which it is described. And there are, apparently, only two options: upward variations mean stimulus is working; downward variation just means that there will be more stimulus. Even by this crude cipher, you can still discern the state of the economic world since [...]

Will Autos Be The Cyclical Trigger?

By Jeffrey P. Snider|2016-04-14T18:37:37-04:00April 14th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

What is most amazing about the current “manufacturing recession” is that it has occurred while automobile production has remained rather stout. That would suggest the state of production beyond motor vehicles is much worse than the headline contraction rates. However, that might all be changing as we know “something” is amiss in the auto segment. Inventories of all kinds of [...]

Almost Two Years Already, Inventory Indicates Still More Manufacturing Recession To Come In Terms of Time And Depth

By Jeffrey P. Snider|2016-04-13T18:32:03-04:00April 13th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Given the revisions to wholesale sales (downward) and inventories (upward), we knew that the overall inventory imbalance for the whole supply chain would be pushed up somewhat. Total Business Inventory to Sales was 1.41 in February, the second consecutive month at that extreme. And it really is an extreme since the last time we saw such imbalance was November 2008 [...]

Exports Rebound In China, But Not Even Close to Enough To Be Significant

By Jeffrey P. Snider|2016-04-13T17:44:15-04:00April 13th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

The world cheered this morning’s trade estimates from China, as both exports and imports rebounded from a dismal start to the year. Exports rose 11.5% in March after falling 25% in February; imports fell “only” 7.6% after declining 13.8% the month before. Despite the difficulties with data calculations around the Lunar New Year, economists were quick with their usual glowing [...]

Still Stuck In the Slowdown; Retail Sales Continue

By Jeffrey P. Snider|2016-04-13T16:55:58-04:00April 13th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Calendar effects, base effects, and holidays continued to plague retail sales estimates. Where February 2016 included a 29th day of extra selling/buying, March finds an early Easter holiday relative to last year (it was in April). The result is difficult comparisons where the unadjusted series is not measuring underlying consumer growth but these other factors. That should change, however, in [...]

Not Snow or Seasons, Just Slow

By Jeffrey P. Snider|2016-04-12T17:25:35-04:00April 12th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Last year, economists were fed up with winter. They had had enough of Q1’s always lagging, threatening to upend the idea that there is a solid and improving recovery. To drop a negative GDP quarter into that mix was the final straw, since negative quarters are exceedingly rare – they actually don’t occur outside of recession. In the four decades [...]

Consequences of Conflating Wall Street With Capitalism

By Jeffrey P. Snider|2016-04-12T15:56:12-04:00April 12th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

https://twitter.com/SenSanders/status/719255892710068224 We tried this model of "banking" already once. Even the NBER found it to be "bubbly." We use exogenous variation in banks’ incentives to conform to the standards of the Community Reinvestment Act around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares the lending behavior of banks undergoing CRA exams [...]

Secular Stagnation Would Be The Best Case, But It’s Not Even Realistic

By Jeffrey P. Snider|2016-04-12T13:42:02-04:00April 12th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The IMF released the first 2016 edition of its World Economic Outlook (WEO). Titled Too Slow For Too Long, it seems as if the institution has finally caught on to the fact that the global recovery never really was a recovery. Throughout the report you get the sense that they are starting to figure out what is going wrong but [...]

The Global Economy Didn’t Change Last Year, Views of QE Did

By Jeffrey P. Snider|2016-04-12T08:27:34-04:00April 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The stock market is still viewed as if it were a discounting mechanism, a system where information is processed and priced to deliver insight about the fundamental state of liquidity, markets, and the economy. That view has always been debatable, but never more so than the whole of this century so far. What were share prices suggesting, fundamentally, in March [...]

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