GDP Q3 2012 Report: Mixed Signals

In their first (“Advance”) estimate of the US GDP for the third quarter of 2012 the Bureau of Economic Analysis (BEA) found that the economy was growing at a 2.02% annualized rate, some 0.76% higher than for the prior quarter and at very nearly the same level as reported for the first quarter of 2012.

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Ham and Yams and QE

Ben and I are stranded on an island, Robinson Crusoe-like and I, on my east side of the island, have been planting yams, collecting coconuts, and doing a little fishing. Ben decides to hunt on his west side and offers to trade a boar hindquarter for some yams. We negotiate and make a deal: 20 yams [...]

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The Unemployment Charade Or, Ignore The Headlines

While employment rose by 160,000 jobs in July, the overall unemployment rate remained at 8.3%.1 “Hurrah” is not the correct response to these data. (“Hurrah” is the response seen the most in the MSM.) First, the trends:

The payrolls chart (right) reveals a largely flat trend for the past year, which says that job [...]

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Global Economic Decline Is Here, Now

Today’s U.S. manufacturing report is at the top of a mountain of bad economic news coming out. Whether these data will lead to a “new” recession (as defined by the NBER) remains to be seen, but at the very least the U.S. economy is stagnating, and it is likely to remain that way for some [...]

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‘Special Interests’ (Washington) Benefit From Fed Twist

I will not include in this post any trite, cute “twisty” sayings about Operation Twist 2.0. announced by the Fed today; it’s bad enough out there without me adding to the din. The bottom line is that the Fed will extend its program to buy longer term maturity Treasurys to the end of 2012. This [...]

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The Economy Is Floating On Air

Much of what we see in recent economic growth is caused by one thing: cheap money and credit. This is obvious as we look at two important economic drivers: autos and homes. Both are significant in that they represent the two biggest purchases that most Americans will make in their lifetimes, so their dollar volume [...]

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The Current Malaise: The Failure Of Stimulus

Alhambra Investment Partners’ Dr. John Chapman discusses the current malaise:

Recent data on the U.S. economy are not encouraging, and calls for a recession have risen in recent months. But there is after all a big difference between an economy growing at 1-2%, and one not growing, or shrinking, as in Europe at [...]

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The Dreaded “D” Word

Prices are falling. The Fed will interpret this as “deflation” whereas it is more related to lack of demand. They will interpret falling prices as “deflation” and view this as dangerous to the economy. Here is a summary of the PPI and Ex-Im prices indices. Tomorrow (Thursday) the CPI will come [...]

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American Workers Are Less Productive

At this stage in the cycle we would expect to see productivity rising. Instead it has been declining these eight quarters. Even though auto and airplane manufacturers are doing well at the moment, it is not likely to last. One need only look at the overall trend in manufacturing to see this is [...]

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Trees And Forests: Consumer Sentiment, Production, and Jobs

It is easy to become distracted by the data that comes in daily. Like the Sorcerer’s Apprentice (starring Mickey Mouse), it can overwhelm you. It can take your eyes off the “Big Picture”. This is what curses most analysts. Today’s data is so perverse that it (almost) doesn’t make sense … [...]

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The Economy Is Stalling

Today’s economic reports continue to point to weakness rather than growth. This is something we have been forecasting for some time. We had forecast  at best stagnation for the second half of 2012, and, at worse, a “double-dip.” It reinforces my belief that it will put the Fed into a corner and cause them to unleash [...]

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