Succinct summation of week’s events:

Positives:

1) Thru all the political noise, yields with maturities ranging from 2′s to 30′s are all lower
2) June Pending Home Sales unexpectedly rise 2.4%
3) Initial Jobless Claims fall a touch below 400k for 1st time in 16 weeks
4) Conference Board consumer confidence up a touch but period ended 2 weeks ago before political noise got really loud
5) India steps up fight against inflation with 50 bps rate hike

Negatives:

1) DC politicians get us into this mess and have little courage to get us out
2) Overnight LIBOR, repo and t-bill yields all spike
3) Q2 GDP disappoints with only 1.3% growth off a lower than expected base from Q1, revised to just .4% gain
4) Chicago PMI falls a touch, follows weak NY, Philly, Dallas and Richmond mfr’g surveys
5) Final UoM confirms preliminary report that has confidence at lowest since March ’09
6) MBA said purchase apps fall to lowest since Feb
7) S&P/Case-Shiller home price index remains near multi yr low
8) Durable goods orders disappoint with non defense cap goods ex aircraft falling .4%
9) India hikes rates more than expected, are they killing growth?

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Succinct Summation of Week’s Events (7.29.11)”

  1. mark says:

    “Thru all the political noise, yields with maturities ranging from 2′s to 30′s are all lower”

    I guess that’s a positive but isn’t that really telling us just how badly the economy is hitting the skids (-15 bps today on long treasuries!)? Or is it saying that no matter how screwed up things are here, things are even more screwed up just about any place else you might want to park your money?

  2. partimer1 says:

    If the GDP is only 1.3%, after revision, it could well be negative. Does that qualify as a new recession ? Did we have a GDP of 2.4 or 1.8% in Q1? This is in the mid of QE2. It certainly looks very negative, and it also appears declining. How can this still be growth?

  3. ilsm says:

    If the tea party, insane amendment, debt extortion nuts don’t tank the economy everything will be okay until next bubble.

    US T Bill rates…………………………………..

    The world financial “order” is so whacked that with the nutcases, extortionists militarists and criminals in DC, the US treasury is still on top!!

  4. Bill Wilson says:

    Tonight’s nightly news might have been a contrary indicator. The story line went something like the politics in Washington are causing the stock market to crash and the economy to bite the dust. They even figured out how much total wealth was lost by 401k’s this week. They neglected to mention that the S&P 500 has been range bound since the start of the year.

  5. MayorQuimby says:

    Ilsm if we don’t cut more thatn we increase then the only thing you will have to worry about is survival when the crap hits the fan in a few years. And I mean SURVIVAL.

  6. ilsm says:

    MayorQuimby,

    SURVIVAL!!!! Some of my best friends have been dead 40 years. We all die.

    Deficits don’t matter in a liquidity trap and deep recession. The point Cheney missed and Greenspan neglected.

    Reducing the deficit, when the economy is growing is not just cutting.

    If you want to cut the debt in a recession then…………………

    Cut the war machine by about 70% about $400B a year now to less than 1% US GDP. Then raise a few taxes, and run a bit of protection on the slave labor imports from “developing countries”.

    SURVIVAL.

  7. MayorQuimby says:

    1. Deficits ALWAYS matter because deficits are ALWAYS harmful. There are no hard and fast rules. Deficits ESPECIALLY matter then your debt to GDP ratio is over 100 and 400 including unfunded liabilities.

    2. Liquid trap???. Ha!!! You mean solvency trap right?

    3. Cheney said deficits don’t matter and greensham was the most dovish fed president of all time.

    4. We cut or our debts become unpayable if they aren’t unpayable right now which they very well may be.

    5. There are no free lunches. You can’t run trillion dollar deficits for YEARS and then when you find yourself in too big a hole just BORROW your self out of the hole! Thats like proposing that people can dig themselves out of a hole by digging!!!

  8. Today’s Real GDP revisions reveal the economy is still in Recovery mode. It had been believed the previous 2007 high had been exceeded in November 2010 starting the Expansion cycle – but that’s not the case.

    Adding in this week’s data releases, the TRENDLines Recession Indicator projects this weak GDP growth will not trough ’til Sept/2012 … en route to a mere 1.1% GDP by its 2013Q2 horizon. No contractions envisioned.

    TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm

  9. Dow says:

    Funny. I look at the data and see a deflationary spiral picking up speed.

  10. peachin says:

    Barry… I have been following you and your transitions on the Web. Indeed, we need a very big healthy change in this country – it needs to start somewhere… you have a large audience – Consider

    A Constitutional Amendment
    1. Term limits for all elected officials (incl Congress)
    2. Political contributions by Citizens only (Corporations and Foreigners are not citizens) and limited to let’s say $10,000 maximum per citizen registered by social security #
    3. Lobbying at any level in any financial form – illegal with mandatory prison sentence

    A Level Playing Field …”for all”

    Where do we start?

    Yes, there are good reasons for Lobbying – but not enough for the crime being cast upon us.

    you have the attention of many more than most – if you believe in this you might consider lighting the fire. I believe you will get support by the likes of Warren Buffett and others.

  11. mathman says:

    man “buys” $330,000 house in Texas for $16:

    http://www.wimp.com/manbuys/

  12. deepakshenoy says:

    India’s got to kill some of the growth – our nominal GDP grew 20% last year, with a real growth of 8%. The dollar-rupee exchange rate is nearly the same, so in dollar terms, our economy grew 20%. It’s going to be incredibly difficult to sustain this level of growth, so they have to cut it. They’ll end up killing some part of it, for sure, though how much will happen through just a rate hike is hugely debatable.

    There’s been a lot of corruption found by huge private sector players bribing the government and the resulting cases will eventually contract our growth as well. (That’s a good thing – crony capitalism isn’t really growth anyhow, like you’re seeing with the US banking system)

    The rate hike is one part of the drama. Watch the next phase as our dysfunctional government (as opposed to other countries’) goes hugely populist with state handouts, farmer loan writeoffs and subsidies – there are big state elections next year. Coming soon to a theater, but probably not near you.

  13. VennData says:

    China Imposes Blackout on Train Wreck

    “…BEIJING — After days of growing public fury over last month’s high-speed train crash and the government’s reaction, Chinese authorities have enacted a virtual news blackout on the disaster except for positive stories …”

    Our trains are best! It seems that a lazy American-made part was the culprit, as the fascist corporate rapists suck the life out of the common worker who broke down, unable to maintain the quality of production known throughout the People’s Factory #23 who lost the bid for the part due to corruption and decadence of the vile Western salesman who lied to the humble Chinese buyer, whose Splitist boss tricked him into awarding the subcontract. The Splitist will be executed soon after his upcoming trial.

    http://www.nytimes.com/2011/08/01/world/asia/01crackdown.html