Archive for January 2011
CONSUMPTION DRIVEN GDP
While 3.2% GDP growth in Q4 is excellent it was driven entirely by consumption which makes up 70% of GDP. The other 30% of the economy fared poorly in Q4 essentially stagnating (a puny 0.2% annualized growth rate). So while the consumer enjoyed its fastest growth rate since Q1 ‘06, the rest of the economy…
Read MoreGOOD NEWS
New home sales spiked 17.5% MoM in Dec, eclipsing the 3.5% median expectation. But, there’s always a but, the gain was led by a 70% jump in new home sales in the West. Every other region was flat. So all it took was a pop from 4,000 sales to (hold your breath) 7,000 sales in…
Read MoreDRY BULK
The Baltic Dry Index measures the cost for shipping dry bulk. This price can fluctuate wildly because supply of large cargo vessels is tight & inelastic. It takes 2 years to build a new ship & excess ships can’t be mothballed like planes. Since dry bulk consists of materials that function as raw materials for…
Read MoreLOSING LONDON
On the Data Front: December consumer spending surprised to the high side at 0.6% (consensus was 0.3%) and oil is down from its lofty heights on talk of increased supply coming out of Riyadh. Gold is also down based on the illusion that Germany will bail out the whole Club Med area. However, the big…
Read MoreCONSUMER CONFIDENCE?
26 I think consumers felt better as ‘11 got underway. According to the latest Conference Board survey the index came in better than expected in Jan. rising to 60.6 from 54 in Dec. But, the Univ. of MI Consumer Confidence survey showed a near-two point dip in Jan. To put the CB’s Jan reading of…
Read MoreBond Market Message
Bond markets are sending a strong message! That short term interest rates are higher in Canada than here is testament to the relative strength of their economy. The fact that their long rates are lower than ours suggests their long term fiscal and inflation outlook is also better than ours; they have no yawning budget…
Read MoreGOOD NEWS jobless
Initial jobless claims for the week of 1/15 unexpectedly improved dipping to 404k from the downwardly revised 441k the week prior. This should translate into a better payrolls report when the data are released on 2/4. Also, the architectural billings index jumped 3.2 points in December to a 3-year high of 54.2. This index leads…
Read MoreSurged MoM
Yes, building permits surged a pleasant 17% MoM in December. But consider that a 1-month wonder due to a builder rush to get applications in ahead of building code changes that were going into effect on 1/1/11 in NY, PA and CA. This is why permits soared 81% in the Northeast (courtesy of NY and…
Read MoreTaxes and Rates
Ever wonder how much federal tax you pay? The answer (with some assumptions) depends on 4 tax rates. 1st you pay the combined income and payroll tax on earnings. 2nd you pay the corporate tax while you invest your money. 3rd you pay dividend and capital gains tax as you receive the income. 4th you…
Read MoreFed unleashes…
The Fed sees the economy through the lens of a wealth effect stimulating consumer spending. And gains in the stock market have helped achieve that but only 20% of Americans own equity directly. But we all eat and most of us drive and what the Fed has also unleashed via QE2 is a weak dollar…
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