By Michael Ashton
“this is an unfounded, irrational, and borderline psychotic optimism”
If posting on December 22nd was a bad idea, imagine how stupid it is to post on December 23rd?
But I noticed something unusual and thought to point it out. Yesterday, I observed that the data has generally been weakening, and while some commentators are optimistic on the outlook for 2016 I am not one of them. Actually, it appears that perhaps commentators as a whole are not only too optimistic now, but have been too optimistic all year.
Continue reading Surprising Surprises
By Michael Ashton
November Existing Home Sales was reported at 4.76mm units
It is not usually a very productive endeavor to write an article on December 22nd. In the past, I have made it more or less a rule not to post anything after about the middle of the month, unless it was a greatest-hits repost series or something. However, today’s Existing Home Sales number was striking enough that it is worth at least a brief comment.
November Existing Home Sales was reported at 4.76mm units (seasonally-adjusted annualized rate), which was considerably below expectations for a nearly-unchanged 5.35mm. The chart (Source: Bloomberg) below makes graphically clear the magnitude of this disappointment.
Continue reading Home for the Holidays
By Jeffrey Snider at Alhambra
…for one day there was the familiar euphoria predicated upon the wish that central bankers might know something about anything
The FOMC at least still knows how to throw a party. It may not be what it once was, but for one day there was the familiar euphoria predicated upon the wish that central bankers might know something about anything. All-too-quickly, however, it vanished as it becomes increasingly clear, despite all attempts to rewrite this history, that there are no answers. After but a day, reality rudely intruded on the recovery, perhaps suggesting that it was the simultaneous recession announcement people are now more attuned to.
U.S. stocks dropped Thursday on persistent concern over faltering global economic growth, led by declines in energy and materials shares, a day after shares had rallied on the Federal Reserve’s decision to raise interest rates.
The selloff continues so far this morning as global, for once, means global which includes the US much to the dismay of the mainstream that still clings to the idea that the US economy is in primary condition for overheating. The dichotomy remains simply how it defined QE’s influence; “stimulus” is assumed to be stimulative, so at the end of it the intended target must have been stimulated even when it doesn’t show it. Therefore, according to orthodox mythology, if that isn’t truly apparent it only means it is about to be.
Continue reading The Experiment Runs Out
I really can’t think of much to say (write) that has not already been written in NFTRH or its updates. The market is acting as anticipated so far, in anticipation of coming confirmations (bearish favored over bullish), pending some bouncing around, with a relatively brief and lame Santa rally potential. So, ladies and gentlemen, for now we’ll let others say it with a trip around the interweb pipes and some market news and analysis…
- Waiting on Santa –Market Anthropology [biiwii comment: agreed MA, but Santa could be fleeting and nimble this year]
By Jeffrey Snider at Alhambra
Global Trade Confirmations; Economy As Finance
China’s trade estimates continue the trend of the global economy pushing closer to recession, assuming that it is not already there. We know that the lower part of the global supply chain below Chinese manufacturing and assembly, the resources and materials flow, has already been pushed beyond simple recession in some places, like Brazil, into defining a new disastrous economic state. What is left arguable is the end markets that precede all of this where economists and economic forecasts simply dismiss increasingly dark financial indications, especially commodities but not limited to them, as if the global supply chain were in high working order at the top but mysteriously chaotic just underneath.
That view is, of course, absurd. There are feedbacks and amplifications (and counterbalances) to consider, but the obvious track in these kinds of economic reflections are all working in the same direction; the one far and away from recovery in any part. That is why oil traded today below $37, copper threatens to trade below $2 and swap spreads continue to find new ways to overtake, perhaps, yield curve inversion.
Continue reading Global Trade Confirmations
By Michael Ashton
“The reason I haven’t written a column since the CPI report is similar. Sometimes I sits and writes, and sometimes I just sits.”
An uneducated fellow was laid up in bed with a broken leg. The vicar’s wife, visiting him, asked what he did to pass the time, since he was unable to read and couldn’t leave the bed. His answer was “sometimes I sits and thinks, and sometimes I just sits.”
The reason I haven’t written a column since the CPI report is similar. Sometimes I sits and writes, and sometimes I just sits.
That isn’t to say that I haven’t been busy; far from it. It is merely that since the CPI report there really aren’t many acts left in the drama that we call 2015. We know that inflation is at 6-year highs; we know that commodities are at 16-year lows (trivia question: exactly one commodity of the 27 in the Goldman Sachs Commodity Index is higher, on the basis of the rolling front contract, from last year. Which one?)
Continue reading Sometimes I Just Sits
By Jeffrey Snider @ Ahlambra
Alhambra looks into “grim” Black Friday estimates…
The initial estimates for Black Friday spending are pretty grim; you can make that interpretation based only on the press releases themselves as neither of the words “strong” or “robust” appear in them. According to ShopperTrak, actual sales (mall sales) on Black Friday itself were up almost 15% from last year but only because there was a clear revulsion against shopping on Thanksgiving Day. By their estimates, shopping the day of the holiday totaled almost $3.2 billion in 2014, which was up sharply from just $880 million on Thanksgiving Day 2012, but plunged to just $1.8 billion this year.
By quick count of that math, overall spending combined for the two “Black” shopping days was down about seven tenths of a percent – but it will likely be a larger decline than that as ShopperTrak has changed its estimation methodology turning direct comparisons against prior released data to somewhat of a discontinuity.
Continue reading Black Friday Experimentation
By Tom McClellan
Housing Starts – Lumber’s Message
November 19, 2015
There are a lot of leading economic indicators in use these days, but the one I like the best is lumber futures prices. Perhaps this is because almost no one else seems to pay attention to them as an economic gauge. Lumber prices tell us pretty reliably and ahead of time about what is going to happen to real estate prices and activity, plus interest rates. They can even tell us about what unemployment is going to do.
Continue reading Housing Starts – Lumber’s Message