Posts filed under “Think Tank”

How much does free money work?

The first quantification of the impact that the stimulus of free money has on a particular sector comes out at 8:30 when July Retail Sales are reported and we see how much auto sales rose. Sales are expected to rise .8% but ex auto’s they are expected to rise just .1%. Jobless Claims, also of huge importance, are expected to total 545k, down 5k from last week and would continue the downward trend and would be clean of the July seasonal distortions. Continuing Claims are also expected to fall modestly. Import prices and Business Inventories are also out today and the Treasury auctions off $15b of 30 yr bonds. An unexpected gain in Q2 GDP in Germany and France led to a drop of just .1% in Q2 GDP q/o/q in the Euro Zone. Combining this with the celebration of the continued extremely easy money policy of the Fed is leading to another strong rally in equities, fall off in bonds and the US$. China rallied less than 1% after yesterday’s sharp selloff.

Category: MacroNotes

An Update on the “Mini-TARP Employee Bonus Pool” Idea

Good Evening: Since Monday’s commentary, U.S. stocks have swooned and jumped without much to show for it. Sure, they went down by more than 1% on Tuesday and up by a similar amount today, but the major averages are just about back to the closing levels posted on Monday. Yesterday’s retreat was in part blamed…Read More

Category: Markets, Think Tank

Was China tipped off to what the FOMC will say ahead of the 10 year

Ahead of both the 10 year auction from the Treasury and the FOMC statement from the Fed, I wonder if the Fed tipped off the Chinese on what they will say in terms of either extending or just fulfilling the existing program of buying US Treasuries. China of course being the biggest foreign holder has…Read More

Category: MacroNotes

Lotta stuff going on

The FOMC tells us what they are thinking at 2:15pm and all eyes are on whether they extend their purchases of US Treasuries past the expiration of the plan in Sept. On March 18th they introduced this new form of QE and since then, 10 yr bond yields have risen from 3% to 3.67%, the…Read More

Category: MacroNotes


The FOMC statement said that economic activity is “leveling out,” an improvement from the “pace of economic contraction is slowing” that was said at the June meeting. The rest of the paragraph on the economy was very similar to the June meeting. The commentary on inflation is about identical to the previous one as they…Read More

Category: MacroNotes

10 year note auction

The 10 year note auction was on the light side as the yield at 3.734% was about 2-3 bps above where the when issued was trading and the bid to cover of 2.49 is slightly below the average seen this year of 2.54. The level of indirect bidders however totaled 45.7% which is above the…Read More

Category: MacroNotes

King Report: Productivity Gains Not What They Appear

> U.S. productivity rises at fastest pace in six years So what. Over the past decade productivity gains have NOT been accompanied by higher real wages and living standards – a first in US history. Long-time readers know our crusade to debunk the ‘Great US Productivity’ miracle, which rests on faulty, if not fraudulent US…Read More

Category: Data Analysis, Economy, Think Tank

3 year note auction

The 3 year note auction, the easiest of the big three this week because of its short maturity, was very good. The yield was about in line with expectations but the bid to cover of 2.89 is well above the average this year of 2.52 and the highest since Nov ’08. Indirect bidders totaled 62.5%…Read More

Category: MacroNotes

Wholesale Inventories

June Wholesale Inventories, which make up about 25% of Business Inventories, fell a greater than expected 1.7% vs a forecasted drop of .9% and May was revised down by .4% to show a decline of 1.2%. The greater than expected fall IF followed by a similar drop in Business Inventories, will lead to a revision…Read More

Category: MacroNotes

Baltic Dry Index falls for 9th straight day

Coincident with the July slowdown seen in the new bank loan data in China and also with a short term topping out in their stock market, the Baltic Dry Index today fell for a 9th straight day to the lowest level since May 18th. It’s down 25% over the 9 day stretch.

Category: MacroNotes