Despite everything that happened in July and August throughout the financial world, there remained a tendency to simply dismiss it as anomalous. That was curious in and of itself, but that the global liquidations then were not isolated but rather the latest in a continuing string of “odd” events strains such determined dimness. We have arrived at a point in [...]
The only piece of the GDP revision to note is that the BEA is still having great difficulty estimating inventory. That isn’t surprising since businesses in this area are behaving far different than any expectation, even factoring the difficulty of the “recovery” environment. That leaves instead only Janet Yellen’s continuous pleading about the surge in consumer spending that never seems [...]
Japan fell back into recession again in Q3, expected this time, which is actually being charitable to Abenomics and especially QQE. To even believe that this monetary insanity has produced even marginal benefits, it has to be given “credit” of at least mini-recoveries in between these “technical recessions.” It is a problem far worse than that, as even a technical [...]
Crude oil prices are being slammed again today, as the “dollar” continues to reek about the places where economy and finance come together. Crude oil is perhaps the most visible extension of that process, where finance helps figure out direction of prices that will eventually be necessary to physically clear (even and especially to storage) actual product. Given the position [...]
Economic Reports Scorecard – 10/24/15 to 11/6/15 The economic data of the last two weeks stands in fairly sharp contrast to the markets' movements. Markets, particularly bonds and gold, are going all in, betting that this time Yellen & Co. have it right, that growth is really about to accelerate this time. From the end of the last FOMC meeting [...]
In addition to indications for a gathering slowdown in export power Germany, the UK has followed a similar line of late. That would make sense since both Britain and Germany are essentially the same kind of economy separated slightly in geography and currency. They both make much of their growth from the same marginal space; financial services, exports to the [...]
What should be written about GDP has nothing to do with whether 1.5% is meaningfully different than 3.9%. Everything gets focused upon the quarterly variations and, often intentionally, loses all that is important about the economic context. That 1.5% is weak and ineffectual, but that it continues the string of irregular and unstable approximations is all that truly matters; especially [...]
Economic Reports Scorecard – 10/12/15 to 10/24/15 The bifurcated nature of the economy is on display for all to see in the economic data from the last two weeks. Manufacturing continues to struggle as shown by the Fed surveys, the CFNAI, IP and inventories. Meanwhile, housing continues to improve in both the existing home and new home side of the [...]
The problem with using GDP as the primary means of economic accounting is its very nature. By attempting both comprehensiveness and precision, the resulting calculation is an agglomeration of various methods and sources, many of which are quite dynamic apart from static regressions. By that construction alone, GDP is susceptible to high degrees of kurtosis where assumptions find little. In [...]
Durable goods continue to contract, with August down year-over-year in both shipments and orders now. New orders have been contracting since February (with January barely positive) at an almost steady rate near -3% the last few months, while shipments did not see a negative rate until May (and were slightly positive again in June). In capital goods, the pattern is [...]
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