Posts filed under “Research”

A Quick (and Belated) Look at Flow of Funds

Though the data are always a bit dated, the Fed’s Flow of Funds report is always of interest to me, as it paints fairly comprehensive pictures.  My favorite part of the release is Table B.100: Balance Sheet of Households and Nonprofit Organizations, in which much can be gleaned about the health of households in the United States.  Because the data are slightly stale, I usually don’t get around to reviewing this release until a few days after it prints.

In the most recent release, dated March 8 and running through 2011Q4, we learn that the peak-to-trough decline in residential real estate valuation is now about $6.75 trillion.  We peaked in 2006Q4 at $22.711190 trillion and just hit another trough – of $15.963550T – in 2011Q4.

After a cliff-dive, owners’ equity in real estate as a percentage of household real estate has continued its descent, albeit at a bit of a slower pace, and now stands at 38.4 percent.  It’s almost unfathomable that several decades ago this metric stood over 80 percent — people, not banks, owned their homes:

(Click through all for ginormous)

Again after a quick (and painful) cliff-dive, household net worth recovered a bit and has now stalled out a bit.  We’re currently at $58.455138T, after having peaked in 2007Q2 at $66.838725.5T, so there’s a lot of work to be done here.

After a vertical ascent during the recession/crisis, it appears American households are now shedding some of their Treasury securities (peak ownership was 2010Q3).  It will be interesting to see if this move pans out over the intermediate term, or whether it backfires if global growth slows dramatically and/or economic catastrophe befalls the Eurozone.

From another Fed report, on Consumer Credit, the parabolic rise of Student Loans should be noted.  This rise, which I’ve been Tweeting about each and every month, has been giving the monthly releases a healthier feel, but beneath the surface it’s all been about Student Loans.

Stripping Student Loans from Total Consumer Credit gives us a bit of a different picture than has generally been portrayed.  While there are signs of stabilization, that’s about all that can be said.  Without Student Loans, there’s little growth to speak of:

Catch up with me on Twitter: @TBPInvictus.

Category: Credit, Current Affairs, Data Analysis, Economy, Research

A Correlation Worth Noting?

> The folks at the St. Louis Fed – about whom I can’t say enough good things — produce a proprietary Financial Stress Index, a full explanation of which can be found here [PDF]. A full deconstruction of the Index is, frankly, a bit above my pay grade.  What’s not, though, is exploring the correlation…Read More

Category: Data Analysis, Economy, Investing, Markets, Research

Setting the Record Straight

A chart made the rounds last week that purported to prove Nouriel Roubini and David Rosenberg are excellent contrary indicators as relates to the stock market.  The chart was simply the S&P500 annotated with alleged market commentary by the pair — bearish at the lows, bullish at the highs.  It eventually made its way over to the estimable Doug Kass, who posted it.  (Mr. Kass had no part in the chart’s creation, and this is not a quibble with his decision to post it. Further, I’m a big fan of his contrarian style.)

The truth — at least as it relates to Rosie — tells a bit of a different story.  In March of 2009 — on the 4th, to be precise — Dave was “looking for reasons to turn bullish” and “believe[d] the stage [was] being set for sentiment to become completely washed out, which is what it takes for contrarians to become constructive.”

Below is a page from his report that day (highlights were made by me three years ago and not for this post):

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Category: Really, really bad calls, Research

Nobel Laureates and Economic Prosperity

> The graphic above, via Jon Bruner of Forbes, reflects the enormous American contribution to Arts & Sciences over the past century. What is intriguing is not just that the US has won so many prizes, but that the a third of American Nobels have gone to immigrants to the US: “The United States has…Read More

Category: Philosophy, Research, Science, Technology

Weekend Smorgasbord from Invictus

Herewith a potpourri of unrelated items I’ve found on my never-ending voyage through the internet. Grab a cup of coffee and pull up a chair. Seen This Movie Before First up, an excerpt from a speech given by Teddy Roosevelt in December 1906. I was taken by the opening line and the third paragraph. Indeed,…Read More

Category: Current Affairs, Data Analysis, Economy, Politics, Research, Taxes and Policy

The Census Bureau released its annual report on Income, Poverty, and Health Insurance Coverage: 2010 (full PDF)  this morning.  Barry has posted the slide presentation that staff went through during the conference call over in the Think Tank (please have a look).  The (very ugly) bullet points from the release can be found here, and the…Read More

Category: Current Affairs, Data Analysis, Economy, Employment, Research, Wages & Income

Save the Statistical Abstract

Via Paul Krugman, I’m led to this WaPo piece about the imminent demise of the Statistical Abstract of the United States, which is an invaluable resource for all manner of at-a-glance data.  Regardless of one’s ideology or political leanings, I think we can all agree that more information is better, less information not as good,…Read More

Category: Data Analysis, Economy, Research

The Punditry Chronicles

Forecasting is a rough gig that often confounds even those who do it for a living and generally do it well. Situational awareness (see e.g., this and this), on the other hand, is all about knowing “what you need to know not to be surprised,” and having “the ability to maintain a constant, clear mental…Read More

Category: Analysts, Contrary Indicators, Really, really bad calls, Research

FRED Gets Even Better: Excel Add-in

The St. Louis Fed’s huge data repository, FRED, now has an incredible new feature:  an Excel Add-in, which is available here.  I’ve been test-driving the add-in for a month or so, and am very impressed with its capabilities.  If you’re a user of the FRED database, you may want to check it out for yourself….Read More

Category: Data Analysis, Research

Bob Farrell’s Rule #9 in Action

I think it’s likely that I introduced Bob Farrell’s Market Rules to Remember to the blogosphere (albeit to a smaller audience), as they’d been an integral part of my upbringing in the business and I was eager to share them when I started blogging.  (BR posted them here in August 2008.) That said, let’s have…Read More

Category: Analysts, Data Analysis, Economy, Really, really bad calls, Research