Posted by Larry Doyle on August 3rd, 2012 9:50 AM |
The monthly jobs report came out and is viewed as slightly better than expected but provides both sides of the political debate sufficient fodder to spin it to their advantage.
While equity markets want to put a happy face on the report (an increase in non-farm payroll of 163,000 jobs along with an uptick in the unemployment rate to 8.3%), I have little real confidence in the report signaling meaningful improvement in our economy.
Why am I concerned that our economy is poised to slow and potentially contract? Forget the employment report, let’s look elsewhere to get a better read on economic growth going into year end. (more…)
Posted by Larry Doyle on August 4th, 2011 5:08 PM |
“Everybody out of the pool” and “Adult Swim Only” are phrases that ring in my ear from my trading days at Bear Stearns. A long lost friend (God bless you, buddy!!) would bellow those statements when markets plunged like today.
What has recently drained the liquidity and lowered the water level in our equity market ‘pool’?
A number of critically important factors have been building and continue to haunt us.These include:
1. Meltdown in European sovereign debt. This is not and should not be a surprise. The meltdown was merely a matter of time. The outstanding question remains the depth and breadth of the meltdown. Stay tuned as risks remain very high.
2. The dysfunction in Washington truly displayed how screwed up our political dynamic is while shedding light on the enormity of our national debt and deficit. This reality is not changing anytime soon. Stay tuned as risks remain very high.
Posted by Larry Doyle on August 3rd, 2011 8:19 AM |
A wide array of supposedly smart people are now informing us that the economy is slowing and may slip back into recession. The new phrase being used to describe our economic condition is ‘stall speed’.
Well how about that? Stall speed, they say. Is the economy truly slowing? Is it really?
Or perhaps did the real economy, that is the one in which we live and operate—not the one fabricated by Wall Street pundits and Washington politicians—never truly rebound?
I ask because I firmly believe that our domestic economy never truly rebounded in a meaningful fashion over the last few years.
I cautioned people to avoid the regular smoke and mirrors emanating from our financial and political hotbeds in spring 2010, and have continued to caution since, when I first equated our economic malady as akin to “walking pneumonia“.>>>>>>>> (more…)
Posted by Larry Doyle on September 27th, 2010 7:21 AM |
The study of human behavior may be considered a science but to me it is the greatest and most challenging of arts. Why is that? For the very simple reason that while we are limited in the ability to study human behavior by reviewing the past, we are challenged by the fact that future behaviors are forever changing. The lessons of the past often do repeat themselves in the future; however, the environment of the PRESENT has NEVER truly been experienced so our current and future behaviors are so hard to forecast. Thus, is economics more art or science? Perhaps we can cover both bases and call it as much an art as a science especially in the Uncle Sam Economy circa 2010.
I raise this topic based upon a recent commentary put forth by a Sense on Cents favorite site, Consumer Metrics Institute. Rick Davis continues to paint an exquisite work as he recently penned, The Diverging GDP,
Prior to each revision to the GDP we are asked for insights into the likely course of those corrections from the Bureau of Economic Analysis (“BEA”) of the U.S. Department of Commerce. Most of the questions we have received recently center on the increasing divergence of our Daily Growth Index from the BEA’s GDP over the past couple of quarters: (more…)
Posted by Larry Doyle on August 23rd, 2010 7:56 AM |
Do you increasingly feel that you are not receiving the full story in terms of our overall economy? Do you feel as if the ‘political class’ in Washington is speaking a different language than the ‘working class’ in the rest of the country? Do you scratch your head as to why economic releases are often immediately panned and quickly thereafter revised? (Case in point, the initial release of 2nd quarter GDP on July 30th was quickly thereafter projected to be halved.) For all of the above reasons, more and more Americans are relying on independent economic research and analysis. Two of my favorites in this camp (aside from Sense on Cents, of course!!) are John Williams of Shadow Government Statistics and Rick Davis of Consumer Metrics Institute.
I recently highlighted Williams’ work in writing, What Is the Real Rate of Unemployment in the United States? In that commentary, I referenced Williams as he had stated:
That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present.
For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in the New York Times and Investors Business Daily, considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies. Despite minor changes to the system, government reporting has deteriorated sharply in the last decade or so. (LD’s emphasis) (more…)
Posted by Larry Doyle on July 30th, 2010 11:18 AM |
The equity markets are flat so the 2nd quarter GDP report must have been properly priced into current valuations. Perhaps, but I would neither go that far nor would I be so brazen as to say that the markets are wrong in how they trade. Markets are never wrong. The market is the market. All this said, let’s navigate with Rick Davis inside the 2nd quarter report and the prior revisions.
July 30, 2010 – Inside the New GDP Numbers:
On July 30th the Bureau of Economic Analysis (‘BEA’) released its “advance” estimate of the annualized growth rate of the U.S. Gross Domestic Product (‘GDP’) during the 2nd quarter of 2010. Per their report, the GDP grew during the quarter at an annualized rate of 2.4%, down from 3.7% in the 1st quarter of 2010. Several points from the report merit comment: (more…)
Posted by Larry Doyle on June 30th, 2010 9:41 AM |
How would you like to have the answers to a quarterly report before other participants have even thought that the activity is occurring, data is being compiled, analysis is being rendered, and the results are released? That would truly be awesome, wouldn’t it?
Can you imagine college students knowing the answers to their final exam before other students have even registered for the class? A doctor successfully making the diagnosis, while other doctors are waiting for the patient to arrive at the hospital? How about a weatherman pinpointing forecasts literally months in advance? Well, in my opinion, the work produced by Rick Davis of Consumer Metrics Institute is the economic equivalent of these seemingly miraculous calls. (more…)