On Monday, I wrote how I was looking for strong job growth above where the market and the Fed were expecting. By midweek, this looked accurate as the 93k ADP numbers and jobless claims pointed towards this improving picture and bond yields rose as did equities. Today’s data killed this. Overall, this presses the reset button back to before the November elections and where the markets were thinking what would happen.
Today’s data appears to be out of kilter compared to the improvement in jobless claims, the strong ADP numbers, ISM data and the Challenger, Gray and Christmas survey that … …READ MORE
Tag Archives: congress
My Spin, My Bad
Fed Spikes Punch Bowl
Fed Spikes Punch Bowl?
Last night, I tweeted: “How much fun will tom b if we get +150k NFP? Bernanke will hav lots o’ fun appearing b4 House Banking Ron Paul 2 explain QE2.” Well, we got 159k+ and here’s what U.S. Rep. Ron Paul said yesterday:
U.S. REP. RON PAUL, IN LINE TO HEAD HOUSE SUBCOMMITTEE ON MONETARY POLICY, SAYS WILL PUSH TO EXAMINE FEDERAL RESERVE MONETARY POLICY DECISIONS
FEDERAL RESERVE IS ‘WAY TOO INDEPENDENT’, ‘TOTALLY OUT OF CONTROL’ – PAUL
PAUL SAYS SUBCOMMITEE WILL PUSH TO AUDIT U.S. GOLD RESERVES
PAUL SAYS DOES NOT BELIEVE DOLLAR CAN BE … …READ MORE
Posted in Front Page Also tagged Ben Bernanke, QE2, Ron Paul, US unemployment, White House Leave a comment
Fed Decides Then Justifies
Yesterday, the Federal Open Market Committee announced a new program of easing that entails buying US Treasury debt. The FOMC stated that, “…the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.”
The New York Federal Reserve detailed the purchases as … …READ MORE
Posted in Front Page Also tagged Ben Bernanke, currency war, Federal Reserve, Washington Post Leave a comment
AC/DC Week Ahead
The week begins with QE2 narrative and will end with the strength of the US consumer. Today, the FOMC releases the minutes from its last meeting and the market is looking for commentary on starting a new quantitative easing program. As I wrote last week, the markets are likely to be disappointed by the program. This shifting may be occurring already with Janet Yellen’s comments yesterday that, “It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system.” KC Fed’s Hoenig is to speak today and you can bet … …READ MORE
Yuan is the Word
http://www.cnbc.com/id/39150215
The Chinese currency has had a big move since the beginning of September. The renminbi or yuan has appreciated over 550 points moving from 6.8175 down to 6.7618. This is a larger move than what happened in June when the Chinese pledged to allow the currency to reflect economic fundamentals. Why is this occurring?
Some of the move can be explained by the recent spate of positive Chinese economic data. In August, the global equity markets were unsettled by the unexpected drop in Chinese imports and the concern was that Chinese growth was slowing. In September, these fears have … …READ MORE
Posted in Front Page Also tagged Chinese yuan, corporate taxes, Obama Administration Leave a comment
Positives Taking Back the Markets
The markets are now in the process of unwinding the double-dip scenario that had reached a zenith in August when jobless claims were 500k. Yesterday, SF Fed Director of Research stated, “Our forecast at the San Francisco Fed is for real GDP growth of about 2½ percent this year. We expect growth to pick up steam next year to between 3½ and 4 percent.” This is the first time I’ve seen this strong of a positive outlook for next year and it’s encouraging.
At the beginning of August, I put out a list of 15 positives that were needed to … …READ MORE
An End to the Housing Crisis
Last week, we had disastrous reports on the housing market that were precipitated by the $8,000 first time home buyers credit. US existing home sales fell 27.2% and US new home sales fell 12.4% as buyers had moved forward their purchases. RealtyTrac reported that home foreclosures rose 4% in July to 325,229. Housing prices appear to have stabilized as the S&P CaseShiller index rose for June, but that was still under the influence of the tax credit. July/August could be ugly. We are not sure to what level housing sales will eventually gravitate towards, but the adjustment process is stomach … …READ MORE
Posted in Front Page Also tagged Banks, existing home sales, housing crisis solution, new home sales 8 Comments
US Deficit Worse Than Reported
Yesterday, the Congressional Budget Office released their estimates for the federal deficit for 2010 and it’s deceivingly ugly.
“The Congressional Budget Office (CBO) estimates that the federal budget deficit for 2010 will exceed $1.3 trillion-$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010, when it issued its previous estimate. Relative to the size of the economy, this year’s deficit is expected to be the second largest shortfall in the past 65 years: At 9.1 percent of gross domestic product (GDP), it is exceeded only by last year’s deficit of 9.9 … …READ MORE
Potential Shift in Newsflow
As I wrote yesterday, the market is pricing in a slower US GDP for Q3. 50-75K private payroll growth is not enough to drop the unemployment rate, but it’s enough to avoid a double dip recession. It will just feel like a DD as it will dominate the newsflow due the upcoming US election. Yet…..in our 24/7 news cycle, I definitely feel that focus is myopic and trends toward the negative for impact. Therefore, we are going to need a sustained, positive theme to be established before a shift can occur.
The better-than-expected German & Eurozone GDP is a good … …READ MORE
Tax The Wealthy or Reduce Jobs?
With Congress set to debate extending the Bush tax cuts, there are risks to small business from raising taxes on the “wealthy”.
US Treasury Secretary Tim Geithner gave a speech yesterday in Washington on the Obama administrations economic case for raising taxes on high earners.
He states, “….But given the size of the deficits and debt that we inherited, we must provide that tax relief in a fiscally responsible way. We believe the best way to do that is by allowing the tax rate for the top 2 percent to go back to levels seen at the end of the … …READ MORE
