Analysis Topic: Economic Trends AnalysisThe analysis published under this topic are as follows.
Thursday, January 14, 2016
Federal Reserve Bank of Dallas President Robert Kaplan told Bloomberg's Michael McKee that the stock market swings may not reflect the underlying economy, and officials shouldn't overreact.
On Bloomberg TV's "Bloomberg <GO>" this morning, Kaplan said: "This has been a very tough start to the year. It says a lot though about the turmoil in the markets in China....You've got to watch these market moves, but you've got to realize that they may or may not reflect what's going on with the underlying economy in the United States. I'd say you've got to watch it, and understand it. But not over read or over react."Read full article... Read full article...
Wednesday, January 13, 2016
Relying on demographics, I told him and the audience that America’s economy would rebound as consumers spent more, but would then suffer a terrible blow between 2008 and 2010.
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Tuesday, January 12, 2016
Shipping Said to Have Ceased… Is the Worldwide Economy Grinding to a Halt? / Economics / Global Economy
Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world. He told me they had no ships at sea right now, because operating them meant running at a loss.
This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.Read full article... Read full article...
Monday, January 11, 2016
The most important question investors should be asking at this point isn’t whether the secular bull market which began in 2009 is over, but whether continued equity market weakness in 2016 will lead to the unthinkable, namely an economic recession. A recession in 2016 has been deemed virtually impossible by most mainstream economists, so much so that all discussion of this possibility has evaporated. And while most U.S. economic data categories are still admittedly strong, the persistent weakness under the surface of the equity market over the last several months demands that the topic be reexamined.Read full article... Read full article...
Monday, January 11, 2016
Regular contributor Michael Pollaro offers three more charts which tell a story that's both disturbing and apparently misunderstood by a lot of mainstream analysts.
The US trade deficit (exports minus imports) has been getting smaller. Since a trade deficit subtracts from GDP growth, a shrinking deficit will, other things being equal, produce a bigger, faster-growing economy (that's the mainstream take).Read full article... Read full article...
Saturday, January 09, 2016
It is important to distinguish the ‘back end’ from the ‘front end’ of the economy or else all you end up with hype emanating from the financial sphere every time an economic data release comes out. For example, I was critical of Martin Armstrong’s post, Is the recession Starting? in a rebuttal post, Armstrong 3+ Decades Late on Manufacturing because Marty’s post not only brought back some jaw droppingly old fashioned concepts about US manufacturing (JiT and automation replacing labor) but it focused only on the ‘front end’ of the economy, affirming the “ECM” in a short info-blurb.Read full article... Read full article...
Thursday, January 07, 2016
Investors, equities traders and global analysts were shocked when the Shenzhen Composite Index and the Shanghai Composite Index opened to a 7% decline on Monday, 4 January 2015. That alarm bells sounded and markets were shut down is testament to the precarious predicament of Chinese equities. As the world's second largest economy, China weakness has a devastating effect on the fortunes of developing countries and developed countries alike. Such was the negative sentiment around the sharp declines in Chinese equities, mutual funds and foreign funds (with an emphasis on Asian stocks), that global bourses also moved south. The situation is being compounded by sharp declines in oil prices, with oil futures for February setting fresh new lows.Read full article... Read full article...
Wednesday, January 06, 2016
ISM a Leading Indicator of Jobs?
I expect monthly jobs reports in 2016 will shock to the downside. Before I list all the reasons, here's an interesting chart that suggests manufacturing ISM is a leading indicator of jobs.Read full article... Read full article...
Tuesday, January 05, 2016
On Wednesday December 16, 2015, Federal Reserve Bank policymakers raised the federal funds rate target by 0.25 percent to 0.5 percent for the first time since December 2008. There is the possibility that the target could be lifted gradually to 1.25 percent by December next year.Read full article... Read full article...
Monday, January 04, 2016
Corn Market 2015
I have been watching corn prices lately as they are getting low enough to at least pique my interest into looking at a market that usually just gets bypassed with the rest of my agricultural futures prices tab on my trading platform, more out of habit than having anything in particular against the agricultural markets. The March 2016 Futures contract was down about 16% in 2015 along with most of the commodity space on fund outflows, a weak China, and a strong dollar.Read full article... Read full article...
Friday, January 01, 2016
- There is a slowing of production and dwindling of reserves at many of the world's largest mines.
- All the oz's or pounds are never recovered from a mine - they simply becomes too expensive to recover.
- The pace of new elephant-sized discoveries has decreased in the mining industry.
- Discoveries are smaller and in less accessible regions.
- Mineralogy & metallurgy is more complicated making extraction of metals from the mined ore increasingly more complex and expensive.
- Mining is cyclical which makes mining companies reluctant to spend on exploration and development.
- A looming skills shortage
- There is no substitute for many metals except other metals - plastic piping is one exception.
- Metal markets are small so speculation is a larger factor.
- There hasn't been a new technology shift in mining for decades - heap leach and open pit mining come to mind but they are both decades old innovation.
- Country risk - resource extraction companies, because the number of discoveries was falling and existing deposits were being quickly depleted, have had to diversify away from the traditional geo-politically safe producing countries. The move out of these "safe haven" countries has exposed investors to a lot of additional risk.
- Lack of recognition for population growth, growing middle class w/disposable incomes and urbanization as on-going demand growth factors.
- Climate change.
Thursday, December 31, 2015
Why Austrian Investing Is Important In The Era Of State Imposed Fiat Money / Economics / Fiat Currency
We are living in extreme times. When it comes to investing, the economy and markets, the extreme monetary policies of central banks all over the world should be top of mind of every investor.
To make our point, we refer to the 3 following charts that readers know by now … But it always helps to put things in perpsective. Our focus here is on the time period as of 1971 which will likely go in history books as the era of the “Great Monetary Experiment” (or something alike).Read full article... Read full article...
Sunday, December 27, 2015
Dylan Waller writes: Vietnam and Pakistan’s automotive industries are both poised for substantial growth, and consequently present a flurry of investment opportunities. Both countries have been positive outliers in Asia, due to superior stock market performance, higher economic growth, and also due to the relatively lower FX risks. As both countries begin their transition to emerging markets, the automotive industry in particular represents a strategic outlet for investors to profit from the superior investment landscape that is present in both countries.Read full article... Read full article...
Wednesday, December 23, 2015
Before we delve into the secular stagnation debate – a debate that has become a hot topic – a few words about current economic developments in the U.S. are in order. What was recently noticed was the Federal Reserve’s increase, for the first time in nearly a decade, of the fed funds interest rate by 0.25 percent. What went unnoticed, but was perhaps more important, was that the money supply, broadly measured by the Center for Financial Stability’s Divisia M4, jumped to a 4.6 percent year-over-year growth rate. This was the largest increase since May 2013.
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Tuesday, December 22, 2015
In their third (and "final") estimate of the US GDP for the third quarter of 2015, the Bureau of Economic Analysis (BEA) reported that the economy was growing at a +1.99% annualized rate, down -0.08% from their previous estimate -- and down nearly 2% (-1.93%) from the second quarter.
Almost all of the revisions in this report were minor, with the largest changes again involving the especially noisy inventory data. Most of the other line items were essentially unchanged. Inventories were reported to have been contracting at a -0.71% annualized rate, a -0.12% deterioration from from the -0.59% contraction rate reported in the previous estimate. As we have mentioned a number of times before, the BEA's treatment of inventories can introduce noise and seriously distort the headline number over short terms -- which the BEA admits by also publishing a secondary headline that excludes the impact of inventories. This BEA "bottom line" (their "Real Final Sales of Domestic Product") was actually revised upward +0.04% to a +2.70% growth rate for the third quarter, from the +2.66% previously reported.Read full article... Read full article...
Monday, December 21, 2015
Good friend Michael Pollaro just sent a couple of charts that show the US economy heading for a brick wall. The first illustrates what happens when business sales (the green line) turn negative. In the previous two boom/bust cycles, when sales started falling the economy either tipped into recession shortly thereafter or (it was discovered in retrospect) was already well into a contraction.Read full article... Read full article...
Friday, December 18, 2015
I was reading something yesterday by my highly esteemed fellow writer Charles Hugh Smith that had me first puzzled and then thinking ‘I don’t think so’, in the same vein as Mark Twain’s recently over-quoted quote:
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
I was thinking that was the case with Charles’ article. I was sure it just ain’t so. As for Twain, I’m more partial to another quote of his these days (though it has absolutely nothing to do with the topic:Read full article... Read full article...
Wednesday, December 16, 2015
We have noted anecdotally that there is a creeping inflation in the system. It does not show up in commodities, which are in a post-bubble (ah, the good old ‘China story’ that was so vigorously promoted to a degree that would make a gold bug promoter blush) melt down. Crashing costs like that are providing the Goldilocks-like balance to rising costs within the economy.
This morning, the highly recommended Daily Shot had among its macro graphs a look at the “sticky” consumer price index. That got me to go over to the St. Louis Fed website and pull a couple different views of it. First, here is SLF’s description of the sticky index…Read full article... Read full article...
Wednesday, December 16, 2015
Today's release of the UK jobs figures confirms the suspicions of the doves at the Bank of England, with earnings (pay) growth continuing to decline, joblessness pushing higher for the fourth straight month even as the unemployment rate hit a fresh 7-year low of 5.2%.Read full article... Read full article...
Tuesday, December 15, 2015
Dylan Waller writes: While the gloom faced in commodity prices has created slowed economic growth throughout frontier and emerging markets, there is one global market in Asia in particular that has not been deterred: Vietnam. Low commodity prices have been gruesome for some companies, and on a much larger scale has led to a global economic slowdown for commodity based economies. While the current environment has created a flurry of buy opportunities in commodity based economies, investment in Vietnam provides a similar opportunity with substantially lower risk. Vietnam’s economy, driven by its strategic advantage of low cost manufacturing, is continuing to maintain its position as one of the fastest growing economies in Asia, and is poised for stronger economic growth throughout 2025.Read full article... Read full article...