Succinct Summation of Week’s Events (9.30.11)
Positives:
1) Only a few more countries left to approve EFSF, moment of truth soon arriving for Greek bondholders past the debt exchange currently being done
2) Greece takes another step in getting next tranche with property tax hike
3) Chicago PMI surprises to upside likely led by auto sector
4) Final Sept UoM confidence rises almost 3 pts from depressed Aug level, one yr inflation expectations fall to lowest since Dec as gasoline prices drop to cheapest since Mar
5) Aug Durable Goods better than feared, core cap ex component up 1.1%
6) Initial Claims fall below 400k BUT seasonal adjustment issues make it faulty
7) Aug Pending Home Sales fall 1.2% but a touch less than estimated
8) Refi apps rise 11.2% to most since Nov
9) China HSBC final mfr’g index at 49.9, a bit better than preliminary reading of 49.4 and flat with Aug
Negatives:
1) Germans will fight tooth and nail a further leveraging of the EFSF
2) Greece hikes property taxes, step closer to economic ruin and bankruptcy
3) Euro zone Economic Confidence falls to lowest since Dec ’09
4) German IFO at lowest since Jan but slightly better than expected, Aug Retail Sales down 2.9% m/o/m
5) Shanghai index falls to lowest since July ’10
6) US New Home Sales fall to lowest since Feb
7) Within confidence data, those that said jobs were Hard to Get rose to most since 1983
8) REAL Income growth down .3% and REAL Spending flat in Aug
9) IR earnings guidance a canary in the old earnings mine?
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September 30th, 2011 at 5:23 pm
This is the first time in 2011 ECRI & my TRENDLines Recession Indicator are in divergence. After
adding in this week’s economic releases, the TRI gauges Q3 & Q4 GDP both @ 2.0%, followed by a dip to
o.8% in April 2012 … en route to a business cycle high of 3.9% in 2014Q4.
Both metrics have incredible records. On Oct 27th BEA announces Q3 and we’ll find out who blew this call…
TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm
September 30th, 2011 at 6:01 pm
ECRI goes public with recession call:
Bloomberg with Tom Keene-the longest and by far, the best. If you watch just one, make it this one.
http://pro.businesscycle.com/news_events/event_details/1472
CNBC-the liveliest bec they just don’t want to believe it.
http://pro.businesscycle.com/news_events/event_details/1474
Yahoo-rather dull
http://pro.businesscycle.com/news_events/event_details/1475
ECRI website today:
U.S. Economy Tipping into Recession
http://pro.businesscycle.com/reports_indexes/reportsummarydetails/1091
October 1st, 2011 at 8:11 am
CNBC rebuts ECRI recession call by quoting Jack Welch? Jeezus I call that an ironclad confirmation. Welch is such a bad joke!
In Europe the only good thing was that Greece didn’t default this week, it’s still “next week”. How many peripheral Euro countries will fall on the sword for the sake of the big cental euro banks? Only Iceland showed the moxie to tell the big banksters (Brit and Dutch) to get stuffed.
There must be an economic models of the effects of a Euro zone breakup but I haven’t been able to find any. I guess the closest parallel would be the bust up of Austro-Hungary. I assume The Eurozone would try to hold the center Italy and probably Spain and portray Greece as the exception but once one goes…Coming at the onset on another recession certainly jacks up the odds of a depression esp if the rumors about sick big Euro banks is true
http://blogs.wsj.com/economics/2011/09/07/costs-of-euro-zone-breakup-underestimated/
October 1st, 2011 at 7:34 pm
Why is #1 under negative a negative?
October 1st, 2011 at 7:38 pm
Proof it takes a while to un-program people: Folks at CNBC still feeling the need to quote Welch despite him not being the boss anymore…
October 1st, 2011 at 7:50 pm
Barry, I’m curious why you said this:
” Greece hikes property taxes, steps closer to economic ruin and bankruptcy.”
What’s with the seip closer to economic ruin, etc.? You’re implying that if Greece actually does some degree of austerity, it will cause economic ruin??? I mean, these guys are totally proflagate, so taxing them a little more is going to upset the apple cart???
Doesn’t seem consistent with your other stuff.
October 1st, 2011 at 7:57 pm
Around here, (Kalamazoo, no really) we saw our first big increase in exsisting home sales versus last year, AND, increase in existing sales price (not big, versus last August.) I bought a second home in northern Michigan last month, a very nice 10-15 year old development with a total of maybe 20 homes, there were four homes for sale when we bought. The other three sold since then.
I’m just crossing my fingers………