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HomeMay 8, 2010: Market Week in Review
Posted by Larry Doyle on May 8th, 2010 9:33 AM |
The bill comes due.
This week’s bill is in Greece. The bills right behind it are in other EU nations. The larger bills are in the UK and the US. How will they be paid?
A combination of fiscal austerity measures, debt restructuring, monetization through currency devaluations, and potentially defaults. The civil unrest playing out in Greece is likely a precursor to similar unrest in other nations. Unless and until real fiscal discipline is implemented and executed, this civil unrest will spread.
Fiscal discipline may stunt short term government stimulated economic growth, but that is the only remedy for a path to long term economic prosperity. Washington has shown no appetite nor inclination to write this prescription. Our future is and will continue to be very challenging until they write the prescription. As I wrote the other day, “Athens Today, London Tomorrow? Washington Next Week?”
Welcome to the Sense on Cents Week in Review where I provide a streamlined recap of month-to-date market returns. (more…)
Consumer Metrics Institute: ‘Double Dip’ Very Real
Posted by Larry Doyle on April 22nd, 2010 2:44 PM |
I have become a huge fan of Rick Davis of the Consumer Metrics Institute, the Colorado-based effort that tracks real-time consumer purchases to project future economic growth. Recall that during my March 28th conversation with Rick on No Quarter Radio’s Sense on Cents with Larry Doyle, Rick projected that 2nd quarter 2010 GDP would register a -1.5% (yes, that is a negative GDP for 2nd quarter 2010). You can read a recap of my interview with Rick here.
What does Rick see lately? Let’s navigate. Rick wrote yesterday:
Speaking of what we do, our Contraction Watch (see top chart below) continues to show a contraction event that has not yet formed a clear bottom. The contraction has, however, extended long enough that the likelihood of the dreaded ‘double dip’ has become very real. (more…)
Unemployment Report: April 2, 2010
Posted by Larry Doyle on April 2nd, 2010 8:56 AM |
The widely anticipated April Unemployment Report covering the month of March was just released. Let’s dive right in and take a look at the numbers . . .
I. UNEMPLOYMENT RATE
December: 10%
January: 10%
February: 10.1%
March: 9.7%
- April Consensus Expectation: 9.7 %
- April Actual: 9.7%
>> LD’s comments: as expected. More people who had given up looking for work have now reentered the labor force. This trend will keep pressure on the rate. The U-6, that is the underemployment rate inched higher to 16.9% from last month’s 16.8%. What about the long term unemployed? (more…)
U.S. Economy = “Walking Pneumonia”
Posted by Larry Doyle on March 30th, 2010 12:36 PM |
The other night in my conversation with Richard Davis on No Quarter Radio’s Sense on Cents with Larry Doyle, I defined my outlook for the U.S. economy in 2010 as the equivalent of ’walking pneumonia.’ What do I mean? Let’s look at today’s economic releases, Consumer Confidence and Home Prices.
Although pundits may want to promote the rebound in these statistics as a harbinger of economic health, I personally do not think we will see these measures running away from us anytime soon. Have you ever had ‘walking pneumonia?’ I have. You don’t move all that quickly. At times, you wonder what the hell is wrong with you. Welcome to the Uncle Sam economy 2010. (more…)
March 28, 2010: Economic/Market Week in Review
Posted by Larry Doyle on March 28th, 2010 10:55 AM |
The hits just keep on coming. The news on Wall Street, Washington, and literally all around the world is an absolute onslaught. This avalanche of news (healthcare reform, Greece and the EU, China and currency manipulation, South Korean naval ship sinks with speculation of possible North Korea involvement, Israeli tensions with Palestine and Washington, Treasury debt supply pressuring interest rates, and on and on) can overwhelm us if we allow it. Global political and economic risks abound. These risks demand that we keep a balanced perspective as we navigate the economic landscape.
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns. (more…)
March 6, 2010: Economic/Market Week in Review
Posted by Larry Doyle on March 6th, 2010 6:08 AM |
Markets continued to rebound this week. Why? Dramatic improvements in Greece? No. Solid economic news here at home? I don’t think so. A slew of positive earnings reports? Hardly. What are we to make of it?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
ECONOMIC DATA
Recovery? I would not classify the data this week as defining a recovery. I will be gracious and define the data as mildly negative. Don’t take my word for it, let’s review the data together and you tell me what you see and what I may be missing. Let’s dive right in. Unless a hard number is indicated, the data represents the percentage change for the prior month along with the consensus expectation for the current month and then the actual change for the current month. (more…)
February 13, 2010: Market Week in Review
Posted by Larry Doyle on February 13th, 2010 8:12 AM |
Markets remain volatile and skittish. Why? Our global economy along with our domestic economy remain under the pressure of massive debts and deficits across the sovereign, corporate, and consumer spectrum.
Global governments can not prop economies and markets forever, try as they might. Can 2010 successfully transition from these total government supported and propped markets to a hoped for return to private enterprise with private capital? This week brought us more ups and downs in the markets as the economy overall searches for its footing. We remain a long way from being out of the woods. Pack lightly and lets navigate.
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic news and month-to-date market returns. (more…)
When Will Our Economy Return to Normal?
Posted by Larry Doyle on February 8th, 2010 8:18 AM |
The question most asked in economic circles is, “How and when will our economy return to normal?” My response is always, “What is normal?”
I find it most impactful to explain to people looking to gain a greater understanding of our economy and our markets that the normal economy of the late ’90s through 2007 was driven by the shadow banking system. This shadow banking system provided upwards of 40-45% of the total credit employed by our economy.
The shadow banking system incorporated the credit origination, securitization, and distribution businesses of Wall Street investment banks as opposed to the traditional lines of credit provided by commercial banking activities.
The crisis on Wall Street 2008 brought this shadow banking system to a virtual standstill. While it has begun to resuscitate itself, it remains a mere shadow (no pun intended) of its former self. What is the result? (more…)
January 23, 2010: Week in Review
Posted by Larry Doyle on January 23rd, 2010 7:15 AM |
From Massachusetts to Washington and from Wall Street to China, fireworks were flying this week across our global economic landscape. While the political focus in America is grabbing center stage, make no mistake, the issues driving the politics are largely economic.
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic news and the month-to-date market moves. Pack lightly as we have much ground to cover. That said, let’s enjoy the journey as the twists and turns along our landscape are truly fascinating and historic in nature. Let’s navigate.
ECONOMIC DATA:
1. Housing Starts: a disappointing report as starts fell 4% after an upward revision to a 10.7% increase in the prior month. I still take all the housing numbers with a pound of salt knowing that delinquencies and defaults continue to move higher. (more…)
Are We Having a Blowoff?
Posted by Larry Doyle on November 16th, 2009 11:24 AM |
“If you can keep your head when all about you are losing theirs…”
Retail sales rebounded strongly this month posing a 1.4% gain. Good news, right? In an attempt to provide a degree of sanity to what has become an extremely volatile report, let’s break this report down a little bit further.
Recall that our automotive sales have bounced around tremendously over the course of the last three months due to the Cash for Clunkers program. Auto sales soared in August given Uncle Sam’s handout. Once Uncle Sam shut that spigot off, auto sales dropped like a stone in September. In October, auto sales had a respectable bounce. All this said, there is no respected economist who doubts that the Cash for Clunkers program pulled demand forward. In the process, it has skewed the overall retail sales readings. What is the American consumer doing away from the auto sector? Let’s navigate. (more…)
