Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs…
Consumer confidence is the third miss by economists in a single day. Please consider the Bloomberg Consensus Estimate for Consumer Confidence. Consumer confidence has fallen back noticeably this month, down more than 6 points to a much lower-than-expected 95.2. This compares very poorly with the Econoday consensus for 103.0 and is even far below the Econoday…
As expected, Greece was able to make the 750M EUR payment to the International Monetary Fund last Tuesday but in order to get its hands on the cash, the country had to force all of its public service departments to fork over the remaining cash they had left. Source As we were warning in a previous…
I confess to being baffled by the strength of Denny’s over the past year or two. That bafflement, combined with the chart, compelled me to short it a few days ago at $10.72.
The Effective Demand limit upon the economy is not a very visible concept in the econo-blogosphere. Yet, it represents a limit upon the utilization of labor and capital toward the end of a business cycle. When real GDP reaches its effective demand limit, normally we would see capacity utilization peak and start to fall. Capacity…
As the Congress debates currency manipulation [1], it occurs to me useful to reprise my earlier primer on currency misalignment (first published in March 2010), where misalignment is one component of some definitions of currency manipulation. Currency misalignment can be determined on the basis of the following criteria or models: Relative purchasing power parity (PPP) Absolute purchasing power…
Consolidation in the semiconductor sector has increased over the last few years, but that hasn’t really caught our attention because the size of deals was small — so small, in fact, that the acquirers were not even required to furnish too many details. There are several advantages to small deals: they have cheaper valuations, don’t…
“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. “ Benjamin Graham The year was 2008, I was 25 years old at a Thanksgiving dinner with some family and friends. If you remember 2008 was the year the “Great Recession”…
The Empire State Manufacturing survey came in today weaker than the Bloomberg Consensus Estimate, but at least the economists got the leading +- sign correct. The first indication on May conditions in the manufacturing sector is soft, as indications have been all year. The Empire State index came in at 3.09, below what were already weak…
“The stock market is a voting machine rather than a weighing machine. It responds to factual data not directly, but only as they affect the decisions of buyers and sellers.”- Graham and Dodd, Security Analysis Earnings drive stock prices, so says investing lore. As earnings rise, stock prices move higher. As earnings fall, stock prices move…
