Posts Tagged ‘Graphsandlaughs.net’
Greek Tragedy
The Greek 10-yr gov’t bond yield is 14.7%, 11.5% above comparable German bonds. The 2-yr Greek note is trading at 22.2%, 20.45 % above the German 2-yr note. The cost of insuring Greek sovereign bonds jumped to 1,422 basis points based on the Bloomberg London 5-yr credit default swap. These swap prices signal more than…
Read MoreExcellent Employment!
Hallelujah! The economy gained 244K jobs in April! Payroll data for Feb and March were also revised up by a combined 46K! Hiring in the private sector posted the largest increase in 5 years and was broad based! Ignore the rise in the unemployment rate to 9%. The bad news; gov’t employment fell 24K, avg…
Read MoreArt Brushes Up
Like the Dow Jones, the art market is also hitting new postcrash highs. Sales peaked in ’07 when Christie’s and Sotheby’s sold $11.3 billion of art. That total fell to $4.8 in ’09 but jumped to $9.8 in ’10. And last May a Picasso sold for $106.5 million the most ever paid at auction for…
Read MoreUPS Earnings: Up but Down
UPS released its earnings last week. Volume fell here but grew overseas. Pricing power in the US was good and revenue surged despite weak volume because big investments in technology resulted in worker hours falling 2%. UPS mgt also had concerns about oil. In short: great $$$$, mediocre US outlook, a better situation in Asia,…
Read MoreAffordable Foreclosures
A key reason why new home activity has fallen off sharply is because new homes are now about 30% more expensive than existing ones; double the typical margin. Foreclosures and short sales accounted for 40% of all sales in February ’11 compared to just 25% in ’10. Moreover, some builders in hard hit spots continue…
Read MoreChina to Surpass USA in ’16
27 The IMF has determined that China’s economy will surpass ours in 2016 – in 5 years! Many have said it will happen in the mid 2020s; they are wrong. 1) The Chinese currency is massively undervalued. 2) Using Purchasing Power Parity (PPP) which measures what people spend and earn in their own currencies China…
Read MoreTrade Deficit Dynamics
The March trade deficit fell by 2.6% but, hold the applause. Imports fell 1.7% due to a fall in demand for crude oil. Exports fell 1.4% as US auto, industrial machinery & food products fell. As if the decline in exports was not bad enough, for the first few months of ’11 the deficit is…
Read MoreCountercyclical Measures
Including the stimulus, tax cuts, bailouts, home and car subsidies and automatic stabilizers (i.e. unemployment insurance and food stamps) the Great Recession will add about $4.2 trillion to the federal debt by the time it ends. The largest contributor; automatic stabilizers. They kick in when the economy slows. These stabilizers will add about $1.9 trillion…
Read MoreHome Builders Hurt Hard
NVR, Inc., a large home builder reported lower than expected earnings as sales dropped and margins narrowed. Looking through their financials there is not much to be happy about. If, arguably, the strongest public builder in the strongest markets (DC and northeast) can muster -18% on Y-o-Y orders and -75 basis points on Q-o-Q gross…
Read MoreGood Vs. Bad Inflation
The Fed via QE2 tried to generate inflation but got the wrong kind. Instead of wage inflation or real estate inflation (including house price increases) which causes people to ratchet up their spending because they feel richer, what we have are soaring prices for items that are hard to substitute away from such as energy…
Read More