Posts filed under “Think Tank”


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 believe due to a still substantial output gap, “inflation will remain subdued for some time,” notwithstanding the rise in energy and other commodity prices. With respect to policy, the fed funds will remain at “exceptionally low levels… for an extended period.” The buying of MBS and agency paper will continue. The only change in the plan to buy Treasuries is that they will gradually slow the buying process and spread it out until the end of October. The total amount will still be $300b but it clarifies the time frame as they gave ‘Autumn’ as a deadline in June.

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

Productivity, NFIB and China

Over time, GDP growth is equal to population growth + productivity. With population growth in the US at about 1% and the 60 year average of productivity being 2.3%, GDP growth should be between 3-3.5% in order to maximize the country’s asset base. Anything below that means the US is not producing to its potential…Read More

Category: MacroNotes

Where to Next for Commodities?

Good Evening: U.S. stocks took a bit of a breather today after seeing little to dislike in Friday’s nonfarm payrolls report. The slight trimming to Friday’s gains came on light volume, and then only after another series of afternoon upticks. The weakest performers on Monday (and, actually, for much of the past week) were the…Read More

Category: Markets, Think Tank

Rate hike odds

After fully pricing in a 25 bps rate hike by the January FOMC meeting midday Friday after the better than expected jobs data, the February fed funds contract is backing off and now pricing in a 76% chance of a hike. There are a few levers the Fed will undertake before they start raising the…Read More

Category: MacroNotes

King Report: NSA 1.33 Million Lost Jobs

> The US economy lost 1.33 million jobs NSA in July. Hallelujah! WooHoo! The recession is over!! Last July the US economy lost 1.401 million jobs NSA. The 68k gain is about the 66,848 per month margin of error for the BLS’s NFP prelim estimate. (Table 2F) The Net Business Birth/Death jobs for July are…Read More

Category: Think Tank