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Most of the top financial sites are organized that way. It's impossible with Blogger.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMy entire blog has moved over intact, from the beginning, except for comments.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EI failed to point out that existing subscribers to my feed were not carried over. There is no way to move a blogger feed into WordPress.\u003C\/i\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"color: #660000;\"\u003EIf you were an existing subscriber, you need to sign up again! \n\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nYou can do so in the Upper Left of \u003Ca href=\"http:\/\/mishtalk.com\/\"\u003EMishTalk.Com\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThanks.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/217591681882121331\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/217591681882121331?isPopup=true","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/217591681882121331"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/217591681882121331"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/03\/mish-moved-off-blogger-to-mishtalkcom.html","title":"Mish Moved Off Blogger to MishTalk.Com - For Email Alerts Please Sign Up Again on MishTalk!"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-1962597198716133940"},"published":{"$t":"2016-02-02T13:08:00.001-06:00"},"updated":{"$t":"2016-02-02T13:08:17.650-06:00"},"title":{"type":"text","$t":"Goodbye Blogger, Hello WordPress: Mish's GlobalEconomicAnalysis has Moved to MishTalk.Com"},"content":{"type":"html","$t":"It's been a long run, but I am leaving Google Blogger for a new home on WordPress.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPlease bookmark my new site: \u003Ca href=\"http:\/\/mishtalk.com\/\" target=\"_blank\"\u003Ehttp:\/\/mishtalk.com\/\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhy Leave? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMy needs outgrew blogger.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe top reason is that I wanted a multi-page layout, with a different home page than the detail pages. Most of the top financial sites are organized that way. It's impossible with Blogger.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn addition, WordPress offers additional features that Blogger doesn't.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cul\u003E\n\u003Cli\u003EAbility to write a post and release it at a scheduled time\u003C\/li\u003E\n\u003Cli\u003EBetter development tools\u003C\/li\u003E\n\u003Cli\u003EEmail notifications\u003C\/li\u003E\n\u003Cli\u003EA point of contact\u003C\/li\u003E\n\u003C\/ul\u003E\n\u003Cbr \/\u003E\nMy entire blog has moved over intact, from the beginning, except for comments. There are just a few more posts to pull over. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDaniel Robert and Michelle Langston at WordPress did a fantastic job with the move, converting all internal self-references to \u003Ci\u003EMishTalk\u003C\/i\u003E from blogger.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSay goodbye to GlobaleconomicAnalysis.Blogspot.Com\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSay hello to \u003Ca href=\"http:\/\/mishtalk.com\/\"\u003EMishTalk\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/1962597198716133940\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/1962597198716133940?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1962597198716133940"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1962597198716133940"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/02\/goodbye-blogger-hello-wordpress-mishs.html","title":"Goodbye Blogger, Hello WordPress: Mish's GlobalEconomicAnalysis has Moved to MishTalk.Com"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-2608962346696823594"},"published":{"$t":"2016-02-01T23:06:00.003-06:00"},"updated":{"$t":"2016-02-01T23:10:00.853-06:00"},"title":{"type":"text","$t":"Iowa Caucuses: Cruz Edges Trump and Rubio; Clinton and Sanders in Dead Heat"},"content":{"type":"html","$t":"Ted Cruz was the surprise winner in the Iowa Republican caucuses tonight edging out Donald Trump who in turn edged out Marco Rubio in a very strong voter turnout.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn the Democratic side, Hillary Clinton is just a handful of votes ahead of socialist Bernie Sanders in a vote still too close to call. Given that Clinton was ahead of Sanders by 40 percentage points a few weeks ago, this result may raise more eyebrows than Cruz did by winning the Republican side.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nVia \u003Ca href=\"http:\/\/www.realclearpolitics.com\/?state=nwa\" target=\"_blank\"\u003EReal Clear Politics\u003C\/a\u003E, the delegate totals look like this.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjq4amY9jGxqEDF5AkxLaIZ2J73hU3NTWXSN0E8kCteKx-9zNq7n1RL8CIKmei-w9iPpZWRcO6F0YPJ_B6WrGlG7Y9d2AALqO1RS3-u85mu4yi8z5RPkJ_PdOa4iYh9wcTBNxqGcQ\/s1600\/Iowa+Caucus.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjq4amY9jGxqEDF5AkxLaIZ2J73hU3NTWXSN0E8kCteKx-9zNq7n1RL8CIKmei-w9iPpZWRcO6F0YPJ_B6WrGlG7Y9d2AALqO1RS3-u85mu4yi8z5RPkJ_PdOa4iYh9wcTBNxqGcQ\/s400\/Iowa+Caucus.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike Huckabee dropped out tonight. In speeches following the caucuses, both Trump and Rubio reached out to Huckabee.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ENew Hampshire\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEihjS_W-QQncGo4e6j7MUEOD1F-bMDwZ_IkhqtCNuGrDC0qjQoKvuXxXYx-FwOZSM2NSOKItY027D9aCVgDnrzr5vpvjx5e9CZ01kkkqnZoLqItGEdUYgHiVCQjXwXY0Mn5i_zQYA\/s1600\/election+2016.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEihjS_W-QQncGo4e6j7MUEOD1F-bMDwZ_IkhqtCNuGrDC0qjQoKvuXxXYx-FwOZSM2NSOKItY027D9aCVgDnrzr5vpvjx5e9CZ01kkkqnZoLqItGEdUYgHiVCQjXwXY0Mn5i_zQYA\/s400\/election+2016.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTrump and Sanders are both supposed to easily win new Hampshire.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nUnless Trump puts in a poor New Hampshire showing, Iowa will soon be a meaningless result. Hillary's test comes after New Hampshire.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/2608962346696823594\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/2608962346696823594?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2608962346696823594"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2608962346696823594"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/02\/iowa-caucus-cruz-edges-trump-and-rubio.html","title":"Iowa Caucuses: Cruz Edges Trump and Rubio; Clinton and Sanders in Dead Heat"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjq4amY9jGxqEDF5AkxLaIZ2J73hU3NTWXSN0E8kCteKx-9zNq7n1RL8CIKmei-w9iPpZWRcO6F0YPJ_B6WrGlG7Y9d2AALqO1RS3-u85mu4yi8z5RPkJ_PdOa4iYh9wcTBNxqGcQ\/s72-c\/Iowa+Caucus.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-7623452929203962272"},"published":{"$t":"2016-02-01T12:30:00.002-06:00"},"updated":{"$t":"2016-02-01T15:12:19.622-06:00"},"title":{"type":"text","$t":"\"Blue Chip\" Optimism vs. GDPNow 1.2% 2016 Initial Q1 Forecast; Strengths and Weaknesses of GDPNow"},"content":{"type":"html","$t":"\u003Cb\u003E\"Blue Chip\" Optimism\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Atlanta Fed initial \u003Ca href=\"https:\/\/www.frbatlanta.org\/cqer\/research\/gdpnow.aspx?panel=1\" target=\"_Blank\"\u003EGDPNow Forecast\u003C\/a\u003E for first quarter 2016 starts off with an anemic 1.2% whimper.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"The initial GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 1.2 percent on February 1. \"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFirst Quarter 2016 GDPNow Forecast \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR61e3ugAx_vBpDkOrDR-xbw8mLFpMa3sBc0gkhMgppkrzkd91OMe1BrmjW1SD9SLiMk7uBUfJcrt4W448UHLli9FLEgWcsQlbBI6azLviglnnlDwVK3tLnSRmjSWD9GR-vEg8WA\/s1600\/GDPNow+2016-02-01.png\" imageanchor=\"1\" target=\"_Blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR61e3ugAx_vBpDkOrDR-xbw8mLFpMa3sBc0gkhMgppkrzkd91OMe1BrmjW1SD9SLiMk7uBUfJcrt4W448UHLli9FLEgWcsQlbBI6azLviglnnlDwVK3tLnSRmjSWD9GR-vEg8WA\/s400\/GDPNow+2016-02-01.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Atlanta Fed \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/bea-4th-quarter-gdp-1st-estimate-07-q.html\" target=\"_Blank\"\u003E\"Final\" GDPNow Estimate\u003C\/a\u003E for the 4th Quarter was posted on January 28.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe 4th quarter \"Blue Chip\" consensus at that time was about 1.9%. The actual BEA release was 0.7%.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EStrengths and Weaknesses of GDPNow \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe strength of the Atlanta Fed GDPNow model is that it mimics BEA calculations, thus providing an advance look as to what the BEA will report.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe inherent and unavoidable weakness in the GDPNow model is BEA revisions. GDPNow mimics a model in which data is revised, revised, and revised again.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLate last year the BEA announced it made a major \"\u003Ci\u003Eprocessing error\u003C\/i\u003E\" in regards to construction spending. The error affects GDP all the way back to 2005. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWe will not know the total effect until July 2016. We do know the biggest errors pertain to 2014 GDP which will rise, and 2015 which will fall. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI discussed the forthcoming construction revisions in depth in \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/bea-4th-quarter-gdp-1st-estimate-07-q.html\" target=\"_Blank\"\u003EWhen are Construction Revisions Coming?\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMoreover, GDP is notoriously wrong around economic turns, like now. It's highly likely the GDPNow model has mimicked bad data from the BEA that will be revised substantially lower in the future.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf so, the US is in recession now, with the vast majority of economists in \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/economists-in-fantasyland-economists.html\" target=\"_Blank\"\u003EEconomic Fantasyland\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/7623452929203962272\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/7623452929203962272?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7623452929203962272"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7623452929203962272"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/02\/blue-chip-optimism-vs-gdpnow-2016-q1.html","title":"\"Blue Chip\" Optimism vs. GDPNow 1.2% 2016 Initial Q1 Forecast; Strengths and Weaknesses of GDPNow"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR61e3ugAx_vBpDkOrDR-xbw8mLFpMa3sBc0gkhMgppkrzkd91OMe1BrmjW1SD9SLiMk7uBUfJcrt4W448UHLli9FLEgWcsQlbBI6azLviglnnlDwVK3tLnSRmjSWD9GR-vEg8WA\/s72-c\/GDPNow+2016-02-01.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-5133980792647995588"},"published":{"$t":"2016-02-01T11:20:00.004-06:00"},"updated":{"$t":"2016-02-01T11:20:46.830-06:00"},"title":{"type":"text","$t":"Construction Spending Anemic Despite Warm Weather; Where to From Here?"},"content":{"type":"html","$t":"Economists expecting a huge surge in construction spending thanks to unusually warm December weather were no doubt shocked by today's anemic report. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe \u003Ca target=\"_blank\" href=\"http:\/\/bloomberg.econoday.com\/byshoweventfull.asp?fid=472351\u0026amp;cust=bloomberg-us\u0026amp;year=2016\u0026amp;lid=0\u0026amp;prev=\/byweek.asp#top\"\u003EEconoday Consensus Estimate\u003C\/a\u003E was for +0.6% in a range of 0.3% to 1.3%, but not a single economist came close.\n\u003Cblockquote \u003E\nHeld down by weakness in the nonresidential component, construction spending didn't get a lift at all from the mild weather late last year, rising only 0.1 percent in December following a downwardly revised 0.6 percent decline in November and a 0.1 percent contraction in October. Year-on-year, spending was up 8.2 percent, a respectable rate but still the slowest since March last year.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut there is very good news in the report and that's a very strong 0.9 percent rise in residential construction where the year-on-year rate came in at plus 8.1 percent. Spending on multi-family units continues to lead the residential component, up 2.7 percent in the month for a 12.0 percent year-on-year gain. Single-family homes rose 1.0 percent in the month for an 8.7 percent year-on-year gain.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNow the bad news. Non-residential spending fell 2.1 percent following a 0.2 percent decline in November. Steep declines hit manufacturing for a second month with the office and transportation components also showing weakness. Still year-on-year, non-residential construction rose 11.8 percent.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRates of growth in the public readings are led by highway \u0026amp; streets, at a 9.4 percent surge for December and a year-on-year rate of plus 12.0 percent. Educational growth ended 2015 at 9.4 percent with state \u0026amp; local at plus 4.4 percent. The Federal subcomponent brings up the rear at minus 1.4.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLack of business confidence and cutbacks for business spending are evident in this report but not troubles on the consumer side, where residential spending remains very solid and a reminder that the housing sector is poised to be a leading driver for the 2016 economy. Still, the weak December and revised November headlines are likely to pull down, at least slightly, estimates for revised fourth-quarter GDP which came in at plus 0.7 percent in last week's advance report.\u003C\/blockquote\u003E\n\u003Cb\u003ETotal Construction Spending\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca target=\"_blank\"  href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiiXrgAw4Pn82kwKl57ibuiMlh94SBCNqT2SOUf2das4BpvCh2FbA6vMi4r6lue_pCFD2bSwtsowppW9r8on4WxhaQzzFFs6QH9kVaYZpsjRgxNKf78TeAoQofJtLLS-Cra6tzUxg\/s1600\/Total+Construction+Spending+2016-02A.png\" imageanchor=\"1\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiiXrgAw4Pn82kwKl57ibuiMlh94SBCNqT2SOUf2das4BpvCh2FbA6vMi4r6lue_pCFD2bSwtsowppW9r8on4WxhaQzzFFs6QH9kVaYZpsjRgxNKf78TeAoQofJtLLS-Cra6tzUxg\/s400\/Total+Construction+Spending+2016-02A.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ETotal Construction Spending Detail\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca target=\"_blank\"  href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiWRHvLkOQ8uyLlQikGtZARg5YpHta0HvEnePHRiqiYqQYEOQtXdGm6MZxfMr3hqo_qluH46Z-TVAfLdmuUOPwIzr_PAcy2o2NcSuV4svzjyAeqRILoPzn_HqBiFAwJssJyEvzFVA\/s1600\/Total+Construction+Spending+2016-02B.png\" imageanchor=\"1\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiWRHvLkOQ8uyLlQikGtZARg5YpHta0HvEnePHRiqiYqQYEOQtXdGm6MZxfMr3hqo_qluH46Z-TVAfLdmuUOPwIzr_PAcy2o2NcSuV4svzjyAeqRILoPzn_HqBiFAwJssJyEvzFVA\/s400\/Total+Construction+Spending+2016-02B.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EWhere to From Here?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTotal construction spending has stalled since June 2015. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBloomberg noted the \"good news\" in residential. Residential construction, especially single family homes, is more likely to be more opportunistic based on weather. New Wal-Mart superstores etc., are planned events. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt remains to be seen if \"\u003Ci\u003Ethe housing sector is poised to be a leading driver for the 2016 economy\u003C\/i\u003E\".\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI strongly suspect \"not\".\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/5133980792647995588\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/5133980792647995588?isPopup=true","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5133980792647995588"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5133980792647995588"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/02\/construction-spending-anemic-despite.html","title":"Construction Spending Anemic Despite Warm Weather; Where to From Here?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiiXrgAw4Pn82kwKl57ibuiMlh94SBCNqT2SOUf2das4BpvCh2FbA6vMi4r6lue_pCFD2bSwtsowppW9r8on4WxhaQzzFFs6QH9kVaYZpsjRgxNKf78TeAoQofJtLLS-Cra6tzUxg\/s72-c\/Total+Construction+Spending+2016-02A.png","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-6846187326948584111"},"published":{"$t":"2016-02-01T10:41:00.002-06:00"},"updated":{"$t":"2016-02-01T10:43:35.279-06:00"},"title":{"type":"text","$t":"ISM Negative 4th Month, Employment Shows Significant Declines "},"content":{"type":"html","$t":"Manufacturing in January continues its dismal track record with the latest ISM reading. \u003Ca href=\"http:\/\/bloomberg.econoday.com\/byshoweventfull.asp?fid=472327\u0026amp;cust=bloomberg-us\u0026amp;year=2016\u0026amp;lid=0\u0026amp;prev=\/byweek.asp#top\" target=\"_blank\"\u003EEconoday reports\u003C\/a\u003E ... \n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nEmployment sank the ISM index in January which could muster no better than a 48.2 for what, following annual revisions to 2015, is the fourth sub-50 reading in a row. This is by far the worst run for this closely watched indicator since the Great Recession days of 2009.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEmployment fell a very steep 2.1 points to 45.9 to signal significant contraction for manufacturing payrolls in Friday's employment report, which however would not be much of a surprise given the sector's prior payroll contraction. This is the third sub-50 reading for employment of the last four months and the lowest reading since, once again, 2009.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere is good news in the report and that's a snapback for new orders, to 51.5 for only the second plus 50 reading of the last five months and which points to overall improvement in the coming reports. But backlog orders, at only 43.0, remain in deep contraction, and what strength there is in orders isn't coming from exports which are in contraction for the seventh of the last eight months. Manufacturers have been working down backlogs to keep production up, which came in at 50.2 to signal fractional monthly growth. Inventories remain steady and low but the sample still say they are too high, sentiment that points to lack of confidence in the business outlook.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nConfirming the weakness is breadth among industries with 10 reporting composite contraction against eight reporting monthly growth. If it wasn't for strength in new orders, January's data would be almost entirely negative. This report is a downbeat opening to 2016 which follows a definitively downbeat year for the factory sector in 2015.\u003C\/blockquote\u003E\n\u003Cb\u003EISM Manufacturing Index\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj3jLu-eYWICABgdxTlYhRRgBRjJIJgcSeXAp5I2rVjqcB6gxZPNGZhzegEJMv4KWs_DdxGnWh2Dp7319G3blC4nmiNvQNtNfvvLTEENme4NWTQT2gxK70FHQVYdDLAmgfmGl3mlg\/s1600\/ISM+2016-02-01.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj3jLu-eYWICABgdxTlYhRRgBRjJIJgcSeXAp5I2rVjqcB6gxZPNGZhzegEJMv4KWs_DdxGnWh2Dp7319G3blC4nmiNvQNtNfvvLTEENme4NWTQT2gxK70FHQVYdDLAmgfmGl3mlg\/s400\/ISM+2016-02-01.png\" \/\u003E\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLet's further dive into the numbers straight from the \u003Ca href=\"https:\/\/www.instituteforsupplymanagement.org\/ismreport\/mfgrob.cfm\" target=\"_blank\"\u003EISM Report\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable class=\"blue\"\u003E\n\u003Ctbody\u003E\n\u003Ctr\u003E\u003Cth\u003EIndex\u003C\/th\u003E\u003Cth\u003EJan\u003C\/th\u003E\u003Cth\u003EDec\u003C\/th\u003E\u003Cth\u003EPP Change\u003C\/th\u003E\u003Cth\u003EDirection\u003C\/th\u003E\u003Cth\u003ERate of Change\u003C\/th\u003E\u003Cth\u003ETrend in Months\u003C\/th\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EPMI®\u003C\/td\u003E\u003Ctd\u003E48.2\u003C\/td\u003E\u003Ctd\u003E48.0\u003C\/td\u003E\u003Ctd\u003E0.2\u003C\/td\u003E\u003Ctd\u003EContracting\u003C\/td\u003E\u003Ctd\u003ESlower\u003C\/td\u003E\u003Ctd\u003E4\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ENew Orders\u003C\/td\u003E\u003Ctd\u003E51.5\u003C\/td\u003E\u003Ctd\u003E48.8\u003C\/td\u003E\u003Ctd\u003E2.7\u003C\/td\u003E\u003Ctd\u003EGrowing\u003C\/td\u003E\u003Ctd\u003EFrom Contracting\u003C\/td\u003E\u003Ctd\u003E1\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EProduction\u003C\/td\u003E\u003Ctd\u003E50.2\u003C\/td\u003E\u003Ctd\u003E49.9\u003C\/td\u003E\u003Ctd\u003E0.3\u003C\/td\u003E\u003Ctd\u003Egrowing\u003C\/td\u003E\u003Ctd\u003EFrom Contracting\u003C\/td\u003E\u003Ctd\u003E1\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EEmployment\u003C\/td\u003E\u003Ctd\u003E45.9\u003C\/td\u003E\u003Ctd\u003E48.0\u003C\/td\u003E\u003Ctd\u003E-2.1\u003C\/td\u003E\u003Ctd\u003EContracting\u003C\/td\u003E\u003Ctd\u003EFaster\u003C\/td\u003E\u003Ctd\u003E2\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ESupplier Deliveries\u003C\/td\u003E\u003Ctd\u003E50.0\u003C\/td\u003E\u003Ctd\u003E49.8\u003C\/td\u003E\u003Ctd\u003E0.2\u003C\/td\u003E\u003Ctd\u003EUnchanged\u003C\/td\u003E\u003Ctd\u003EFrom Faster\u003C\/td\u003E\u003Ctd\u003E1\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EInventories\u003C\/td\u003E\u003Ctd\u003E43.5\u003C\/td\u003E\u003Ctd\u003E43.5\u003C\/td\u003E\u003Ctd\u003E0.0\u003C\/td\u003E\u003Ctd\u003EContracting\u003C\/td\u003E\u003Ctd\u003ESame\u003C\/td\u003E\u003Ctd\u003E7\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ECustomers' Inventories\u003C\/td\u003E\u003Ctd\u003E51.5\u003C\/td\u003E\u003Ctd\u003E51.5\u003C\/td\u003E\u003Ctd\u003E0.0\u003C\/td\u003E\u003Ctd\u003EToo High\u003C\/td\u003E\u003Ctd\u003ESame\u003C\/td\u003E\u003Ctd\u003E6\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EPrices\u003C\/td\u003E\u003Ctd\u003E33.5\u003C\/td\u003E\u003Ctd\u003E33.5\u003C\/td\u003E\u003Ctd\u003E0.0\u003C\/td\u003E\u003Ctd\u003EDecreasing\u003C\/td\u003E\u003Ctd\u003ESame\u003C\/td\u003E\u003Ctd\u003E15\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EBacklog of Orders\u003C\/td\u003E\u003Ctd\u003E43.0\u003C\/td\u003E\u003Ctd\u003E41.0\u003C\/td\u003E\u003Ctd\u003E2.0\u003C\/td\u003E\u003Ctd\u003EContracting\u003C\/td\u003E\u003Ctd\u003ESlower\u003C\/td\u003E\u003Ctd\u003E8\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EExports\u003C\/td\u003E\u003Ctd\u003E47.0\u003C\/td\u003E\u003Ctd\u003E51.0\u003C\/td\u003E\u003Ctd\u003E-4.0\u003C\/td\u003E\u003Ctd\u003EContracting\u003C\/td\u003E\u003Ctd\u003EFrom Growing\u003C\/td\u003E\u003Ctd\u003E1\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EImports\u003C\/td\u003E\u003Ctd\u003E51.0\u003C\/td\u003E\u003Ctd\u003E45.5\u003C\/td\u003E\u003Ctd\u003E5.5\u003C\/td\u003E\u003Ctd\u003EGrowing\u003C\/td\u003E\u003Ctd\u003EFrom Contracting\u003C\/td\u003E\u003Ctd\u003E1\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EKey Points\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cul\u003E\n\u003Cli\u003EBacklog of orders in contraction 8 months\u003C\/li\u003E\n\u003Cli\u003EExports back in contraction \u003C\/li\u003E\n\u003Cli\u003EPrices in contraction 15 months\u003C\/li\u003E\n\u003C\/ul\u003E\n\u003Cbr \/\u003E\nIn December I stated \"\u003Ci\u003EThere's nothing in the ISM report to make the Fed want to hike, but the Fed will do what they want.\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Fed did indeed hike. And economists still believe no recession is coming.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor my take, please see \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/economists-in-fantasyland-economists.html\"\u003EEconomists in Fantasyland: Economists See 20% Chance of Recession That's at Least 20% Likely Already Here\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\n\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/6846187326948584111\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/6846187326948584111?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/6846187326948584111"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/6846187326948584111"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/02\/ism-negative-4th-month-employment-shows.html","title":"ISM Negative 4th Month, Employment Shows Significant Declines "}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj3jLu-eYWICABgdxTlYhRRgBRjJIJgcSeXAp5I2rVjqcB6gxZPNGZhzegEJMv4KWs_DdxGnWh2Dp7319G3blC4nmiNvQNtNfvvLTEENme4NWTQT2gxK70FHQVYdDLAmgfmGl3mlg\/s72-c\/ISM+2016-02-01.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-7095985299721135289"},"published":{"$t":"2016-01-31T23:22:00.003-06:00"},"updated":{"$t":"2016-01-31T23:23:43.492-06:00"},"title":{"type":"text","$t":"China Manufacturing Prices Decline 18th Month; China Hoping to Avoid Hard Landing"},"content":{"type":"html","$t":"China's manufacturing extended its long slump according to the\u003Ca href=\"https:\/\/www.markiteconomics.com\/Survey\/PressRelease.mvc\/09185002723a4f5c9f91d7f80462b11e\" target=\"_blank\"\u003E Caixin China General Manufacturing PMI\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nChinese manufacturers signaled a modest deterioration in operating conditions at the start of 2016,\u0026nbsp; with\u0026nbsp; both\u0026nbsp; output\u0026nbsp; and\u0026nbsp; employment\u0026nbsp; declining\u0026nbsp; at\u0026nbsp; slightly\u0026nbsp; faster\u0026nbsp; rates than in December. Total new business meanwhile fell at the weakest rate in seven months, and despite a faster decline\u0026nbsp; in\u0026nbsp; new\u0026nbsp; export\u0026nbsp; work.\u0026nbsp; Nonetheless,\u0026nbsp; lower\u0026nbsp; production\u0026nbsp; requirements\u0026nbsp; led\u0026nbsp; companies\u0026nbsp; to cut back on their purchasing activity and inventories of inputs. On the prices front, both input costs and output charges fell again in January, though at the weakest rates in seven months. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWeaker client demand led manufacturers to discount their prices charged again in January, thereby extending the current sequence of deflation to 18 months (although the rate of reduction was the slowest seen since June 2015). Lower selling prices were supported by a further fall in average input costs at the start of the year. In line with the trend for charges, the rate of decline eased to the weakest in seven months. Lower cost burdens were generally linked to reduced raw material prices.\u003C\/blockquote\u003E\n\u003Cb\u003EChina PMI\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjjolJGLzVFMv-Ku3T7gnM1_B6UdDgWI9KL2gZsr9UpC9yt_d17W0afhGGvfFLcUgeBR9UKmuh_eS9xSe2eo0r7apsFRI8Fgc_OF4PK7DoB-8RktiXZadlsop15N87Yg316gewSnw\/s1600\/China+Pmi+2015-02-01.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjjolJGLzVFMv-Ku3T7gnM1_B6UdDgWI9KL2gZsr9UpC9yt_d17W0afhGGvfFLcUgeBR9UKmuh_eS9xSe2eo0r7apsFRI8Fgc_OF4PK7DoB-8RktiXZadlsop15N87Yg316gewSnw\/s400\/China+Pmi+2015-02-01.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EChina Hoping to Avoid Hard Landing\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCommenting on the China General Manufacturing PMI™ data, Dr. He Fan, Chief Economist at Caixin Insight Group said:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"The Caixin China General Manufacturing PMI for January is 48.4, up 0.2 points from December. Sub-indexes show a softer fall in new orders, which contributed the most to the improvement in the overall figure. \u003Ci\u003ERecent macroeconomic indicators show the economy is still in the process of bottoming out and efforts to trim excess capacity are just starting to show results. The pressure on economic growth remains intense in light of continued global volatility. The government needs to watch economic trends closely and proactively make fine adjustments to prevent a hard landing\u003C\/i\u003E. It also needs to push ahead with existing reform measures to strengthen market confidence and to signal its intentions clearly.”\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHard Landing Definition \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf China is beginning to \"show results\", those results aren't pretty.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDepending on how one defines \"hard landing\", China is doomed. A couple years ago a \"hard landing\" was believed to be 6% growth. By that definition, a hard landing is baked in the cake.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n3% or 2% growth, or even lower is highly likely.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPerhaps a couple years from now, 3% won't seem any harder than 6% did two years ago.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/7095985299721135289\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/7095985299721135289?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7095985299721135289"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7095985299721135289"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/china-manufacturing-prices-decline-18th.html","title":"China Manufacturing Prices Decline 18th Month; China Hoping to Avoid Hard Landing"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjjolJGLzVFMv-Ku3T7gnM1_B6UdDgWI9KL2gZsr9UpC9yt_d17W0afhGGvfFLcUgeBR9UKmuh_eS9xSe2eo0r7apsFRI8Fgc_OF4PK7DoB-8RktiXZadlsop15N87Yg316gewSnw\/s72-c\/China+Pmi+2015-02-01.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-6139746863601516107"},"published":{"$t":"2016-01-31T17:49:00.000-06:00"},"updated":{"$t":"2016-02-01T13:13:16.807-06:00"},"title":{"type":"text","$t":"Nate Silver's Continual Underestimation of Donald Trump's Chances"},"content":{"type":"html","$t":"On January 18, I sent the article below (starting with the title \u003Ci\u003ENate Silver Off the Mark on Donald Trump Nomination Odds\u003C\/i\u003E)\u0026nbsp; to the New York Times as an Op-Ed.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThey did not publish it.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt's hard enough\u0026nbsp; getting something timely to major news organizations, and when you do, you have to sit and wait days for no response. The New York times has the best turnaround of the bunch, three days so I could have used this earlier.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis would have been more timely on the 18th and even more timely when I first started writing, but here it is now. What I have to say is still relevant.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ENate Silver Off the Mark on Donald Trump Nomination Odds\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI am a big fan of Nate Silver. His calling of the last two elections was nothing short of brilliant. However, I just cannot accept Silver's current assessment of Trump's chances of winning the Republican nomination.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn footnotes to his January 8 article \u003Ca href=\"http:\/\/fivethirtyeight.com\/features\/three-theories-of-donald-trumps-rise\/\" target=\"_blank\"\u003EThree Theories Of Donald Trump’s Rise\u003C\/a\u003E Silver expressed belief that \"\u003Ci\u003ETrump’s chances are about half of what betting markets say they are. I think they’re about half that - 12 or 13 percent\u003C\/i\u003E.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ETrump Odds According to Nate Silver\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh2KWBFW84YDcnc2K3Zy1L8yOEsCXqZljxn79OrjQ5vR2xMQUuUfsJ2APYC540CqzVWIfZu0ZnfMJRuCBBsYtgGfAEDW_7AsUASt3PV611zvjEpZT2u3N1Uk2khndF3t4p12N6S0A\/s1600\/Trump+Odds1.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh2KWBFW84YDcnc2K3Zy1L8yOEsCXqZljxn79OrjQ5vR2xMQUuUfsJ2APYC540CqzVWIfZu0ZnfMJRuCBBsYtgGfAEDW_7AsUASt3PV611zvjEpZT2u3N1Uk2khndF3t4p12N6S0A\/s400\/Trump+Odds1.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHistorical Precedents\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGiven Trump's commanding lead in the polls, one might instinctively think Silver is crazy. But Silver cites historical precedents: \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Col\u003E\n\u003Cli\u003EPolls before the first primary are not that useful\u003C\/li\u003E\n\u003Cli\u003EPolitical outsiders do not win elections\u003C\/li\u003E\n\u003Cli\u003EEstablishment candidates do win elections\u003C\/li\u003E\n\u003C\/ol\u003E\n\u003Cbr \/\u003E\nTo that Silver adds \"\u003Ci\u003ETrump could lose New Hampshire either to a surging Cruz or if one of the several establishment candidates — Marco Rubio, Chris Christie, Jeb Bush, John Kasich — can consolidate the support of more moderate\/establishment Republican voters.\u003C\/i\u003E\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn defense of Silver, I would personally add there are 12 Republican candidates and anything could happen, in theory. One chance in 12 would be just over an 8 percent chance.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EBit of Realism \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nChances are not all equal. So let's place some odds on some additional candidates.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhat are the realistic odds that Ben Carson, Chris Christie, Carly Fiorina, Jim Gilmore, Mike Huckabee, John Kasich, Rand Paul, or Rick Santorum will win the nomination?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAs long as we are taking history into consideration, Ben Carson has flamed out. Has a flame-out ever recovered? Does Rand Paul (my preference) have more than a 0.1% chance? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDoes anyone in the above group of eight have more than a 0.5% chance? If so, who and why?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEven if you gave them all a 1% chance, which seems generous, the total combined odds would be 8%. Nonetheless, let's make that assumption and place it in a new chart.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EInterpretation of Nate Silver Odds\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgGRhoxuqGriMxC2zPnqBFk0XAedxk3u346H__IJSbDD4vV5j4ZYndVCiaZgPGAH9y3FWcvtm-FYj8zWb2UoESzq1ujNUW24WoNjVcZG-X-iQNniCxvsPtxpmAvb_sik3v4HxUfMQ\/s1600\/Trump+Odds2.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgGRhoxuqGriMxC2zPnqBFk0XAedxk3u346H__IJSbDD4vV5j4ZYndVCiaZgPGAH9y3FWcvtm-FYj8zWb2UoESzq1ujNUW24WoNjVcZG-X-iQNniCxvsPtxpmAvb_sik3v4HxUfMQ\/s400\/Trump+Odds2.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDoes the combination of Bush, Rubio, and Cruz really have a 79% of winning the nomination? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI think not.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDouble the combined odds of Ben Carson, Chris Christie, Carly Fiorina, Jim Gilmore, Mike Huckabee, John Kasich, Rand Paul, and Rick Santorum to an amazing 16% and the Bush, Cruz, Rubio odds would still be 71%. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTriple the odds of the \"group of eight\" winning the nomination to a preposterous 24% and the \"group of three\" would still have a 63% chance of winning.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EMathematical Bias\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBy focusing solely on the odds of Trump winning, while placing no odds on the others, Silver introduces a mathematical bias far beyond what history can reasonably suggest.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLet's put a spotlight on Bush. Jeb Bush is polling 4.8% nationally.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSilver discounts national polls. I sympathize. But how far does one want to take that idea given that primaries start less than two weeks away? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDo candidates polling less than 5% at this stage often win nominations? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf one generously gives a Bush 5-15% chance of winning the momination, the combined Cruz Rubio odds would be something in the 65-75% range, assuming the group of eight has an 8% chance and Trump a 13% chance.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt all has to add up to 100%.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nArguably, the best chance for Bush and the ABT (Anybody But Trump) crowd has is\n if the Republican convention is deadlocked.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nUntil we see the results \nfrom Super-Tuesday and the polls of the states that follow, a deadlocked convention is a distinct possibility, but not one I have seen Silver depend on.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EOther Flaws in Silver's Odds Estimates\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWe are dealing with humans, in real time, not history.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHistory suggests fringe candidates don't usually win elections, but they can. Jimmy Carter was\u0026nbsp; unknown, but he won. Obama was not supposed to beat Hillary, but he did.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nYet, flame-outs are more likely. Carson did just that. So have many others.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTrump hasn't yet.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRather than insisting a historical flame-out is still likely, Silver just might wish to consider reasons Trump will not flame out.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor example, a Gallup Poll headline from January 18 plays straight into Donald Trump's hands: \u003Ca href=\"http:\/\/www.gallup.com\/poll\/188402\/majority-dissatisfied-security-terrorism.aspx\"\u003EMajority in U.S. Now Dissatisfied With Security From Terrorism\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgzzbnfGsOZiVs1e7R7R6RON4ZSWQpnbTKIAIvzuREEOKLjeMgvSfKXQCSxYj_CChdTwu5gAf9uPreQukdcrjnQgn1DbXxqQwSx6DvRQ319xlBe2uj6NB7A90Z8cOnk8kI7LmCIsA\/s1600\/security+satisfaction.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgzzbnfGsOZiVs1e7R7R6RON4ZSWQpnbTKIAIvzuREEOKLjeMgvSfKXQCSxYj_CChdTwu5gAf9uPreQukdcrjnQgn1DbXxqQwSx6DvRQ319xlBe2uj6NB7A90Z8cOnk8kI7LmCIsA\/s400\/security+satisfaction.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EDoes Unpopularity Matter? When?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSilver notes \u003Ca href=\"http:\/\/fivethirtyeight.com\/features\/donald-trump-is-really-unpopular-with-general-election-voters\/\"\u003EDonald Trump Is Really Unpopular With General Election Voters\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDoes unpopularity mean \"People won't vote for the guy?\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI don't particularly like Trump. But I would vote for him over Clinton or Sanders. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhat did Carson have before he flamed out other than he was \"likable\"? Amusingly, he's still the most likable Republican.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCarson comes across as sincere, and he is likable. But I would not vote for Carson under any circumstances. I would instead \"waste my vote\" and write in Rand Paul or vote for the Libertarian candidate.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTrump draws amazing crowds. Silver dismisses that. Yet, the last time someone generated this much crowd energy was Ronald Reagan.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis is not a basketball game. Nor is this a one-on-one play with polls all breaking one way at the last minute. Those are areas in which Silver excels.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis is a one-on-many play, where voter attitudes have consistently sided with Trump, no matter who he offends. It's a mistake to discount such sentiment. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLike him or not, Trump is clever. For Republicans, he is on the right side of security, guns, abortion, and China. That's quite a bit.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnd he's also a genuine outsider at a time nearly every other Republican is pretending to be one.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIs there any reason to suspect voter attitudes on terrorism, on Trump, or on Washington insiders will change in the next few weeks? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EOdds of Winning it All\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI suggest Trump's odds of winning the nomination are far more than what odds makers presume.\u0026nbsp; And if Trump wins the nomination, I suspect his odds of him winning it all would be about 50%.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMy rationale is that Hillary may not win the nomination. There is some chance of a criminal indictment related to emails. Sanders could pull out an upset. Odds of one of those have to be higher than the alleged 13% chance Silver assigns to Trump.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAWM (Angry White Men) will be a factor, perhaps totally negating any personal dislike of Trump.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMost importantly, I think the US is approaching, if not already in a recession. Eight years ago, Obama blew dissatisfied Republicans out of the water on the heels of a big recession that had just started.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhy can't that happen again? If anything, history suggests it will.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/6139746863601516107\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/6139746863601516107?isPopup=true","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/6139746863601516107"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/6139746863601516107"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/nate-silver-off-mark-on-donald-trump.html","title":"Nate Silver's Continual Underestimation of Donald Trump's Chances"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh2KWBFW84YDcnc2K3Zy1L8yOEsCXqZljxn79OrjQ5vR2xMQUuUfsJ2APYC540CqzVWIfZu0ZnfMJRuCBBsYtgGfAEDW_7AsUASt3PV611zvjEpZT2u3N1Uk2khndF3t4p12N6S0A\/s72-c\/Trump+Odds1.png","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-532203195819753997"},"published":{"$t":"2016-01-31T12:32:00.000-06:00"},"updated":{"$t":"2016-01-31T12:33:09.258-06:00"},"title":{"type":"text","$t":"Economists in Fantasyland: Economists See 20% Chance of Recession That's at Least 20% Likely Already Here"},"content":{"type":"html","$t":"Economists have a perfect track record of 100% failure in ability to predict a recession. In a recession that's at least 20% likely to have already started, \u003Ca href=\"http:\/\/www.ft.com\/intl\/cms\/s\/0\/da2ed38a-c6bd-11e5-b3b1-7b2481276e45.html#axzz3yqUBlVjE\" target=\"_blank\"\u003EEconomists See 20% Chance of US Recession this Year\u003C\/a\u003E.\n\u003Cblockquote \u003E\nA Financial Times survey of 51 economists, conducted in the days after the Fed’s January meeting, underscores the impact of the past month’s severe market turbulence and a string of lacklustre economic reports out of the US and China. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe fear that the world’s largest economy — considered the lone engine of global growth — is on the verge of recession has intensified. In the FT’s December survey economists had put the odds of a US recession at 15 per cent during the next two years. Now, they see a one-in-five chance of recession in the next 12 months.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEconomists surveyed by the FT emphasised that while the odds of a recession had climbed, a large majority still expected the US to escape one. Several who have fielded increased investor calls on the subject said that the conversation had been skewed because of the near obsession with the price of oil — a point that they argued had more to do with supply than global demand.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMr Gapen, who put the odds of a recession between 10 and 15 per cent, said that he still thought strong consumption trends would keep the US economy from contraction.\u003C\/blockquote\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ERate Hikes Odds \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgIXEYi1_Y-UkdeVEzln_dhtL_ZETuy40mXuqSAXqTKW83xAXKMzzLo6JA0lJws1CYyHYmfCsG3AcRs7YwAu9PkkzW0i3SUiia0b_NMKYGBO0uQZm8-8I3DpwxNH8vNykesch1Pnw\/s1600\/Recession+Odds.png\" imageanchor=\"1\" nbsp=\"\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgIXEYi1_Y-UkdeVEzln_dhtL_ZETuy40mXuqSAXqTKW83xAXKMzzLo6JA0lJws1CYyHYmfCsG3AcRs7YwAu9PkkzW0i3SUiia0b_NMKYGBO0uQZm8-8I3DpwxNH8vNykesch1Pnw\/s400\/Recession+Odds.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLess than 5% of economists see a greater than 50% chance of recession.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHikes Foreseen in December Survey\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiOav5NdvTIT2z0eD424XzM4XRhQS_aBYanxlVihmLXHA8maeJmrZPSqOsCIEELwx7lrcc6AZBON30rMpd5eSp3mVSc47ka-B3GZqGYarJaF940sYUcB9M7a-DrVLqSVMWc58T3VQ\/s1600\/Hikes+December.png\" imageanchor=\"1\" nbsp=\"\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiOav5NdvTIT2z0eD424XzM4XRhQS_aBYanxlVihmLXHA8maeJmrZPSqOsCIEELwx7lrcc6AZBON30rMpd5eSp3mVSc47ka-B3GZqGYarJaF940sYUcB9M7a-DrVLqSVMWc58T3VQ\/s400\/Hikes+December.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn December not a single economist thought the Fed would hike zero times in 2016.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHikes Foreseen in January Survey\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgjVXANYfCVMmwMLsPaiPvqbL6xDgIDvPVpBb4v6OtqI-C1Cv6E5haOo3hD3flxamVF-1NtA1qqVCUmLrWQIu_hQL8uxhml6eujK0aFAJV_BciZS3Flv6w1R-JXwdNLN3pBNHzbnA\/s1600\/january+Hikes.png\" imageanchor=\"1\" nbsp=\"\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgjVXANYfCVMmwMLsPaiPvqbL6xDgIDvPVpBb4v6OtqI-C1Cv6E5haOo3hD3flxamVF-1NtA1qqVCUmLrWQIu_hQL8uxhml6eujK0aFAJV_BciZS3Flv6w1R-JXwdNLN3pBNHzbnA\/s400\/january+Hikes.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ECME Fedwatch Odds\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDzupGPA_wcUiuho72swxHiyCm5p7XnjYAOtEpzt4hkHu5iPMvFPda-6VJRibz2OpCI9M86dUqEubGkm8i3q4aX04EvZ7I-DdiRkgr99LlUBqOLCTwzu3h0qvfkZTqYDC3KUNPuQ\/s1600\/fedwatch+2016-01-31.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDzupGPA_wcUiuho72swxHiyCm5p7XnjYAOtEpzt4hkHu5iPMvFPda-6VJRibz2OpCI9M86dUqEubGkm8i3q4aX04EvZ7I-DdiRkgr99LlUBqOLCTwzu3h0qvfkZTqYDC3KUNPuQ\/s400\/fedwatch+2016-01-31.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Fed Fund futures show a nearly 50% chance of no hikes this year.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFantasyland Material\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn contrast to Fed Fund futures, the latest Financial Times survey shows economists still expect two or three hikes this year. Over 10% of the economists foresee four hikes. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis is truly Fantasyland material.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/532203195819753997\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/532203195819753997?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/532203195819753997"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/532203195819753997"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/economists-in-fantasyland-economists.html","title":"Economists in Fantasyland: Economists See 20% Chance of Recession That's at Least 20% Likely Already Here"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgIXEYi1_Y-UkdeVEzln_dhtL_ZETuy40mXuqSAXqTKW83xAXKMzzLo6JA0lJws1CYyHYmfCsG3AcRs7YwAu9PkkzW0i3SUiia0b_NMKYGBO0uQZm8-8I3DpwxNH8vNykesch1Pnw\/s72-c\/Recession+Odds.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-5588029894766362618"},"published":{"$t":"2016-01-30T20:35:00.002-06:00"},"updated":{"$t":"2016-01-31T12:43:48.205-06:00"},"title":{"type":"text","$t":"Lacy Hunt – \"Inflation and 10-Year Treasury Yield Headed Lower\" "},"content":{"type":"html","$t":"No one has called long-duration treasury yields better than Lacy Hunt at Hoisington Management. He says they are going lower. If the US is in or headed for recession then I believe he is correct.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGordon Long, founder of the \u003Ci\u003EFinancial Repression\u003C\/i\u003E website interviewed Lacy Hunt last week and Hunt stated \"\u003Ca href=\"http:\/\/financialrepressionauthority.com\/2016\/01\/29\/lacy-hunt-inflation-10y-ust-yield-headed-lower\/\" target=\"_blank\"\u003EInflation and 10-Year Treasury Yield Headed Lower\u003C\/a\u003E\".\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ciframe allowfullscreen=\"\" frameborder=\"0\" height=\"350\" src=\"https:\/\/www.youtube.com\/embed\/UN3vXx_MzxE\" width=\"450\"\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFed Tactics\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“\u003Ci\u003EDebt only works if it generates an income to repay principle and interest.\u003C\/i\u003E”\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nResearch indicates that when public and private debt rises above 250% of GDP it has very serious effects on economic growth. There is no bit of evidence that indicates an indebtedness problem can be solved by taking on further debt.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOne of the objectives of QE was to boost the stock market, on theory that an improved stock market will increase wealth and ultimately consumer spending. The other mechanism was that somehow by buying Government securities the Fed was in a position to cause the stock market to rise. But when the Fed buys government securities the process ends there. They can buy government securities and cause the banks to surrender one type of government asset for another government asset. There was no mechanism to explain why QE should boost the stock market, yet we saw that it did. The Fed gave a signal to decision makers that they were going to protect financial assets, in other words they incentivized decision makers to view financial assets as more valuable than real assets. So effectively these decision makers transferred funds that would have gone into the real economy into the financial economy, as a result the rate of growth was considerably smaller than expected.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“\u003Ci\u003EIn essence the way in which it worked was by signaling that real assets were inferior to financial assets. The Fed, by going into an untested program of QE effectively ended up making things worse off.”\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFlattening of the Yield Curve\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“\u003Ci\u003EMonetary policies currently are asymmetric. If the Fed tried to do another round of QE and\/or negative interest rates, the evidence is overwhelming that will not make things better. However if the Fed wishes to constrain economic activity, to tighten monetary conditions as they did in December; those mechanisms are still in place.\u003C\/i\u003E”\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThey are more effective because the domestic and global economy is more heavily indebted than normal. The fact we are carrying abnormally high debt levels is the reason why small increases in interest rate channels through the economy more quickly.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf the Fed wishes to tighten which they did in December then sticking to the old traditional and tested methods is best. They contracted the monetary base which ultimately puts downward pressure on money and credit growth. As the Fed was telegraphing that they were going to raise the federal funds rate it had the effect of raising the intermediate yield but not the long term yields which caused the yield curve to flatten. It is a signal from the market place that the market believes the outlook is lower growth and lower inflation. When the Fed tightens it has a quick impact and when the Fed eases it has a negative impact.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe critical factor for the long bond is the inflationary environment. Last year was a disappointing year for the economy, moreover the economy ended on a very low note. There are outward manifestations of the weakening in economy activity.\u0026nbsp; One impartial measure is what happened to commodity prices, which are of course influenced by supply and demand factors. But when there are broad declines in all the major indices it is an indication of a lack of demand. The Fed tightened monetary conditions into a weakening domestic global economy, in other words they hit it when it was already receding, which tends to further weaken the almost non-existent inflationary forces and for an investor increases the value.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFailure of Quantitative Easing\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“\u003Ci\u003EIf you do not have pricing power, it is an indication of rough times which is exactly what we have\u003C\/i\u003E.”\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe fact that the Fed made an ill-conceived move in December should not be surprising to economists.\u003Ci\u003E A detailed study was done of the Fed’s 4 yearly forecasts which they have been making since 2007. They have missed every single year.\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat was another in a series of excellent interviews by Gordon Long. There's much more in the interview. Give it a play.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFinally, lest anyone scream to high heavens, Lacy is obviously referring to price inflation, not monetary inflation which has been rampant.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFrom my standpoint, consumer price deflation may be again at hand. Asset deflation in equities, and junk bonds is a near given.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Fed did not save the world as Ben Bernanke proclaimed. Instead, the Fed fostered a series of asset bubble boom-bust cycles with increasing amplitude over time.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe bottom is a long, long ways down in terms of time, or price, or both.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/5588029894766362618\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/5588029894766362618?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5588029894766362618"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5588029894766362618"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/lacy-hunt-inflation-and-10-year.html","title":"Lacy Hunt – \"Inflation and 10-Year Treasury Yield Headed Lower\" "}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/img.youtube.com\/vi\/UN3vXx_MzxE\/default.jpg","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-1998926405902694018"},"published":{"$t":"2016-01-29T17:54:00.003-06:00"},"updated":{"$t":"2016-01-29T17:54:53.172-06:00"},"title":{"type":"text","$t":"Poll Shows Nearly 40% of Germans Want Merkel to Resign "},"content":{"type":"html","$t":"As proof of how badly German chancellor Angela Merkel has handled the refugee crisis, a new \u003Ca target=\"_blank\"  href=\"http:\/\/news.yahoo.com\/40-percent-germans-want-merkel-quit-over-refugees-095601265.html\"\u003EPoll Shows 40 Percent of Germans want Merkel to Quit\u003C\/a\u003E. \n\u003Cblockquote\u003E\nNearly 40 percent of German voters think Chancellor Angela Merkel should quit over her liberal asylum policy after almost 1.1 million newcomers arrived last year, a poll showed Friday.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAs the mood in Germany has shifted from a euphoric welcome for people fleeing war and persecution last September to growing doubts about the country's ability to accommodate and integrate the record influx, the popular Merkel has come under increasing pressure.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHowever, the poll for Focus news magazine conducted by the independent opinion research institute Insa among 2,047 German citizens showed that a larger share -- nearly 45 percent -- did not think Merkel should resign.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAmong members of her conservative Christian Union bloc, nearly 27 percent said they wanted Merkel, who has been in power since 2005, to step down.\u003C\/blockquote\u003E\n\u003Cb\u003EPeak Merkel\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI called for this well in advance, on October 18, 2015 to be precise: \u003Ca target=\"_blank\" href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2015\/10\/swamped-by-stupidity-peak-merkel.html\"\u003ESwamped By Stupidity; Peak Merkel\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut politicians don't resign. They just keep on insisting they are right until they are forced out or voted out of office.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAs recently as January 20, \u003Ca target=\"_blank\"  href=\"http:\/\/news.yahoo.com\/support-merkel-dips-further-german-refugee-fears-080855632.html\"\u003EMerkel insisted Austrian cap on refugees 'not helpful' for European solution\u003C\/a\u003E. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nYesterday, Merkel supposedly \"\u003Ci\u003Estruck an accord late Thursday with her fractious left-right coalition to tighten asylum policies, notably by making it easier to send back arrivals from North Africa and by delaying family reunifications.\u003C\/i\u003E\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhat a joke!\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe family reunification proposal is a rehash of an announcement from months ago. And deporting refugees requires approval from the nation of origin. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDo Syria and the African nations want the refugees back?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMerkel doesn't get it, and she likely never will. Her time is past. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/1998926405902694018\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/1998926405902694018?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1998926405902694018"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1998926405902694018"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/poll-shows-nearly-40-of-germans-want.html","title":"Poll Shows Nearly 40% of Germans Want Merkel to Resign "}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-3660974750649602838"},"published":{"$t":"2016-01-29T13:57:00.002-06:00"},"updated":{"$t":"2016-01-29T16:19:02.411-06:00"},"title":{"type":"text","$t":"BEA 4th Quarter GDP 1st Estimate 0.7%; Q\u0026A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? "},"content":{"type":"html","$t":"The BEA \"Advance GDP\" estimate for 4th quarter came in today at +0.7% vs. an \u003Ca href=\"http:\/\/bloomberg.econoday.com\/byshoweventfull.asp?fid=472135\u0026amp;cust=bloomberg-us\u0026amp;year=2016\u0026amp;lid=0\u0026amp;prev=\/byweek.asp#top\" target=\"_blank\"\u003EEconoday Consensus Estimate of 0.9%\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nConsumer spending is the central driver of the economy but is slowing, at least it was during the fourth quarter when GDP rose only at a 0.7 percent annualized rate. Final demand rose 1.2 percent, which is the weakest since first quarter last year but is still 5 tenths above GDP.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPrice data are not accelerating, at plus 0.8 percent for the GDP price index which is the lowest reading since plus 0.1 in the first quarter last year. The core price reading is only slightly higher, at plus 1.1 percent which is also the weakest reading in a year.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere are definitely points of concern in this report, especially the weakness in exports and business investment, but it's the resilience in the consumer, despite a soft holiday season, that headlines this report and should help confirm faith in the domestic strength of the economy.\u003C\/blockquote\u003E\n\u003Cb\u003EGDPNow Final Estimate 1.0%\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Atlanta Fed \"Final\" \u003Ca href=\"https:\/\/www.frbatlanta.org\/cqer\/research\/gdpnow.aspx?panel=1\" target=\"_blank\"\u003EGDPNow Estimate\u003C\/a\u003E for the 4th quarter was posted on January 28. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiyXJNORr2AE-IRRPxdJth3fS0h73wlkgOBmtc9t-Mk-875RPmT8rYVAKPwoItUUhxQ6fAEpW-THWPXvTAoL7HJYzZZKY0VRYv4zNgrxzhO2rSWc8cM0p7o6DxlkIG1xpskdHTEQg\/s1600\/GDP+Now+2016-01-29.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiyXJNORr2AE-IRRPxdJth3fS0h73wlkgOBmtc9t-Mk-875RPmT8rYVAKPwoItUUhxQ6fAEpW-THWPXvTAoL7HJYzZZKY0VRYv4zNgrxzhO2rSWc8cM0p7o6DxlkIG1xpskdHTEQg\/s400\/GDP+Now+2016-01-29.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat was the final estimate the GDPNow model will make for the 4th quarter.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Atlanta Fed's first estimate of 2016 1st quarter GDP growth will be released Monday, February 1.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #1: Why Did GDPNow Rise After Durable Goods Report?\u0026nbsp; \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe above question pertains to the Atlanta Fed model which rose from 0.7% to 1.0% following a disastrous durable goods report on the 28th (See \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/shocking-crash-durable-goods-orders.html\" target=\"_blank\"\u003EShocking Crash: Durable Goods Orders Plunge 5.1%, Shipments Drop 2.2%, Huge Negative Revisions; Recession Here?\u003C\/a\u003E) \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnswer: Patrick Higgins, Senior Economist for the Atlanta Fed, explains via email ...\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"Hi Mish, As you probably noticed the model forecast for the contribution of equipment investment to fourth quarter GDP growth declined 0.07 percentage point after the durable goods manufacturing report.\u0026nbsp; But this was more than offset by a 0.20 percentage point increase in the contribution of inventory investment to fourth quarter growth after that same report.\u0026nbsp; The model didn’t use the December data on shipments of nondefense aircraft \u0026amp; parts which had an unusually large decline last month (from $16.0 billion to $10.8 billion).\u0026nbsp; That data isn’t ever folded in until the exports and imports data for civilian aircraft and parts is released. The net shipments measure fed into the model is aircraft \u0026amp; parts shipments plus imports minus exports. Since the December international trade data won’t be released until after the GDP release, the December aircraft data won’t ultimately be used for the fourth quarter GDPNow forecast.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #2 - Are Econoday Economists Tracking GDPNow? \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnswer: It appears so at first glance. The Econoday consensus estimate of 0.9% is remarkably close to the 1.0% GDPNow estimate on the 28th and the prior estimate of 0.7% on the 20th. Then again, the Econoday range was a remarkable 0.0% to 2.3%. Why any economist would have predicted 2.3% is a mystery. That alleged economist ought to be following GDPNow more closely. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #3 - When Will Revisions Come?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnswer: Any time between February 26, 2016 and the next 10 years. The first revision to 4th quarter GDP will come on February 26. The BEA won't call it a revision though. Instead they will label the next revision the \"preliminary\" estimate for 4th quarter. At that time, first quarter 2016 will be nearly two-thirds over. The alleged \"final\" estimate for 4th quarter 2015 will come on March 25. Here's the \u003Ca href=\"http:\/\/www.bea.gov\/newsreleases\/news_release_sort_national.htm\" target=\"_blank\"\u003EBEA Schedule\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #4 - What About Construction Revisions?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe above question pertains to a massive GDP revision announced on January 4.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor details please see \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/diving-into-revisions-construction.html\" target=\"_blank\"\u003EDiving Into the Revisions: Construction Spending Revised Lower 7 Consecutive Months! 2015 GDP Will Decline vs. Estimates: By How Much?\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe BEA blames a \"\u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/government-processing-error-sinks.html\" target=\"_blank\"\u003EProcessing Error\u003C\/a\u003E\" for one of its biggest errors in history. That processing error will affect GDP all the way back to 2005. My statement that revisions can come for 10 years was not a joke. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen will we know how construction affected GDP? I called the BEA on this in early January. The date I recall was July 26. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThese guys are fast aren't they? \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe main effect of the processing error is that construction spending for 2014 was way lower than reported. This will cause GDP in 2014 to rise.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn a research note, IHS Global Insight US economist Patrick Newport wrote \"\u003Ci\u003EThe upward revision to spending in 2014 is enough to raise growth that year from 2.4% to 2.6%-2.7%. The revisions are likely to boost growth for 2015 as well.\u003C\/i\u003E\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNewport's assessment about 2015 is undoubtedly wrong. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn January 5, I posted this table of construction revisions that I calculated from the BEA's revision announcement.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ETotal Residential Construction Spending vs. Previous Reports\u003C\/b\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable class=\"blue\"\u003E\n\u003Ctbody\u003E\n\u003Ctr\u003E\u003Cth\u003EDate\u003C\/th\u003E\u003Cth colspan=\"3\"\u003ETotal Residential Construction Spending\u003C\/th\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Cth\u003E\u003C\/th\u003E\u003Cth\u003EPrevious M\/M Increase\u003C\/th\u003E\u003Cth\u003ERevised M\/M Increase\u003C\/th\u003E\u003Cth\u003EDifference\u003C\/th\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EOct-15\u003C\/td\u003E\u003Ctd\u003E0.98%\u003C\/td\u003E\u003Ctd\u003E0.22%\u003C\/td\u003E\u003Ctd\u003E-0.77%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ESep-15\u003C\/td\u003E\u003Ctd\u003E1.58%\u003C\/td\u003E\u003Ctd\u003E1.14%\u003C\/td\u003E\u003Ctd\u003E-0.44%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EAug-15\u003C\/td\u003E\u003Ctd\u003E1.73%\u003C\/td\u003E\u003Ctd\u003E1.06%\u003C\/td\u003E\u003Ctd\u003E-0.67%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJul-15\u003C\/td\u003E\u003Ctd\u003E1.60%\u003C\/td\u003E\u003Ctd\u003E0.33%\u003C\/td\u003E\u003Ctd\u003E-1.28%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJun-15\u003C\/td\u003E\u003Ctd\u003E0.74%\u003C\/td\u003E\u003Ctd\u003E0.66%\u003C\/td\u003E\u003Ctd\u003E-0.08%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EMay-15\u003C\/td\u003E\u003Ctd\u003E1.71%\u003C\/td\u003E\u003Ctd\u003E1.26%\u003C\/td\u003E\u003Ctd\u003E-0.45%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EApr-15\u003C\/td\u003E\u003Ctd\u003E2.60%\u003C\/td\u003E\u003Ctd\u003E0.79%\u003C\/td\u003E\u003Ctd\u003E-1.81%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EMar-15\u003C\/td\u003E\u003Ctd\u003E-0.76%\u003C\/td\u003E\u003Ctd\u003E-0.07%\u003C\/td\u003E\u003Ctd\u003E0.69%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EFeb-15\u003C\/td\u003E\u003Ctd\u003E0.50%\u003C\/td\u003E\u003Ctd\u003E0.65%\u003C\/td\u003E\u003Ctd\u003E0.16%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJan-15\u003C\/td\u003E\u003Ctd\u003E1.25%\u003C\/td\u003E\u003Ctd\u003E1.29%\u003C\/td\u003E\u003Ctd\u003E0.04%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EDec-14\u003C\/td\u003E\u003Ctd\u003E2.22%\u003C\/td\u003E\u003Ctd\u003E2.85%\u003C\/td\u003E\u003Ctd\u003E0.63%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ENov-14\u003C\/td\u003E\u003Ctd\u003E1.52%\u003C\/td\u003E\u003Ctd\u003E2.09%\u003C\/td\u003E\u003Ctd\u003E0.58%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EOct-14\u003C\/td\u003E\u003Ctd\u003E1.38%\u003C\/td\u003E\u003Ctd\u003E2.12%\u003C\/td\u003E\u003Ctd\u003E0.74%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003ESep-14\u003C\/td\u003E\u003Ctd\u003E2.24%\u003C\/td\u003E\u003Ctd\u003E2.40%\u003C\/td\u003E\u003Ctd\u003E0.16%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EAug-14\u003C\/td\u003E\u003Ctd\u003E0.15%\u003C\/td\u003E\u003Ctd\u003E-0.05%\u003C\/td\u003E\u003Ctd\u003E-0.19%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJul-14\u003C\/td\u003E\u003Ctd\u003E0.03%\u003C\/td\u003E\u003Ctd\u003E-0.28%\u003C\/td\u003E\u003Ctd\u003E-0.30%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJun-14\u003C\/td\u003E\u003Ctd\u003E-1.13%\u003C\/td\u003E\u003Ctd\u003E-0.88%\u003C\/td\u003E\u003Ctd\u003E0.24%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EMay-14\u003C\/td\u003E\u003Ctd\u003E-2.20%\u003C\/td\u003E\u003Ctd\u003E-0.72%\u003C\/td\u003E\u003Ctd\u003E1.48%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EApr-14\u003C\/td\u003E\u003Ctd\u003E-0.46%\u003C\/td\u003E\u003Ctd\u003E0.56%\u003C\/td\u003E\u003Ctd\u003E1.02%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EMar-14\u003C\/td\u003E\u003Ctd\u003E-1.11%\u003C\/td\u003E\u003Ctd\u003E0.98%\u003C\/td\u003E\u003Ctd\u003E2.09%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EFeb-14\u003C\/td\u003E\u003Ctd\u003E-0.76%\u003C\/td\u003E\u003Ctd\u003E0.45%\u003C\/td\u003E\u003Ctd\u003E1.21%\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd\u003EJan-14\u003C\/td\u003E\u003Ctd\u003E-1.25%\u003C\/td\u003E\u003Ctd\u003E1.69%\u003C\/td\u003E\u003Ctd\u003E2.94%\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nA quick glance at that table should convince you that GDP will go up in 2014 and down in 2015.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWe will find out by how much in July. Lovely.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI guessed GDP would go up by about 25 basis points in first quarter of 2015, and down by about 50 basis points in second and third quarters.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf so, that would subtract about 75 basis points from 2015. My guess could be way off, but at least I have the sign correct. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #5: What About Recession? \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAt the start of recessions, GDP is frequently revised way lower for prior quarters, long after the fact, and without a doubt the US economy is flirting with, if not in recession right now.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThus, construction spending is not the only subtraction I foresee.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor my take on recessions vs. the Fed model (not the Atlanta Fed GDFP model), please see \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/fed-workhorse-model-says-odds-of.html\" target=\"_blank\"\u003EFed \"Workhorse\" Model Says Odds of Recession in Next Year Only 3.56%; What are the Real Odds?\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhether or not you accept my statement the US economy is very close to if not in recession right now, the Fed 12-month look ahead model of 3.56% is preposterous.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EQ\u0026amp;A #6: What About the Consumer? \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBloomberg repeated the widely held belief \"\u003Ci\u003EConsumer spending is the central driver of the economy\u003C\/i\u003E.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI dispute that. So do others. See my article \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/debunking-myth-consumer-spending-is-67.html\"\u003EDebunking the Myth \"Consumer Spending is 67% of GDP\"\u003C\/a\u003E\u003Cbr \/\u003E\n\u0026nbsp;\n\u003Cbr \/\u003E\nI cannot claim credit for the idea. To fully understand why the consumer is not the driver of the economy, please see ... Gross Domestic Output: \u003Ca href=\"https:\/\/www.google.com\/url?sa=t\u0026amp;rct=j\u0026amp;q=\u0026amp;esrc=s\u0026amp;source=web\u0026amp;cd=2\u0026amp;cad=rja\u0026amp;uact=8\u0026amp;ved=0ahUKEwjaqby75c_KAhVCZCYKHX8xCLsQFgghMAE\u0026amp;url=http%3A%2F%2Fjournal.apee.org%2Findex.php%3Faction%3Dajax%26rs%3DGDMgetFile%26rsargs%255B%255D%3DParte7_Journal_of_Private_Enterprise_vol_30_no_4.pdf\u0026amp;usg=AFQjCNFTqqo8ZsrGJf610ivIHIAVHv8sFQ\u0026amp;sig2=VsTC2pYe_MkHLz5YqpBVRw\u0026amp;bvm=bv.113034660,d.eWE\" target=\"_blank\"\u003ELinking Austrian and Keynesian Economics: A Variation on a Theme\u003C\/a\u003E by Mark Skousen.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSkousen destroys the fallacy that consumer spending drives the economy.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/3660974750649602838\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/3660974750649602838?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/3660974750649602838"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/3660974750649602838"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/bea-4th-quarter-gdp-1st-estimate-07-q.html","title":"BEA 4th Quarter GDP 1st Estimate 0.7%; Q\u0026A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? "}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiyXJNORr2AE-IRRPxdJth3fS0h73wlkgOBmtc9t-Mk-875RPmT8rYVAKPwoItUUhxQ6fAEpW-THWPXvTAoL7HJYzZZKY0VRYv4zNgrxzhO2rSWc8cM0p7o6DxlkIG1xpskdHTEQg\/s72-c\/GDP+Now+2016-01-29.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-2151199250746719318"},"published":{"$t":"2016-01-29T01:03:00.001-06:00"},"updated":{"$t":"2016-01-29T01:31:18.291-06:00"},"title":{"type":"text","$t":"Bank of Japan Adopts Negative Interest Rates: Surprise, Surprise We Lied Again; Meaning of \"Now\""},"content":{"type":"html","$t":"\u003Cb\u003EMeaning of \"Now\"\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEight days ago, the Bank of Japan governor Haruhiko Kuroda, said \u003Ca href=\"http:\/\/www.reuters.com\/article\/us-japan-economy-boj-idUSKCN0UZ0AN\" target=\"_blank\"\u003E\u003Ci\u003ENo Plan to Adopt Negative Rates Now\u003C\/i\u003E\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWell, that was then, and this is now.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ENegative Rates Announced\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nToday we learn \u003Ca href=\"https:\/\/next.ft.com\/content\/23ff8798-c63c-11e5-b3b1-7b2481276e45#axzz3yIKIiVWI?ftcamp=crm\/email\/2016\" target=\"_blank\"\u003EBank of Japan Adopts Negative Interest Rates\u003C\/a\u003E. \n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe Bank of Japan has slashed interest rates to minus 0.1 per cent in a shock move that adds a new dimension to its record monetary stimulus.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nShowing its willingness to expand the policy further, the BoJ said it “will cut the interest rate further into negative territory if judged necessary”.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“The bank will lower the short end of the yield curve by slashing its deposit rate on current accounts into negative territory and will exert further downward pressure on interest rates across the entire yield curve.”\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHowever, the BoJ will use a complicated three-tier system, which makes the negative rate much weaker than comparable moves by the ECB and other European central banks.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCrucially, it will only pay negative rates on any new bank reserves resulting from its programme of asset purchases. All existing bank reserves — which amount to about $2.5tn or 50 per cent of gross domestic product — will continue to be paid interest at 0.1 per cent.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat means there is unlikely to be any impact on bank profits or bank depositors in the short term. The negative interest rate will only have an impact over time as the BoJ keeps buying assets and creating new bank reserves.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EThe move will add to Mr Kuroda’s reputation for surprises, suddenly adopting policies he has vehemently denied were even possible. Eight days ago he told parliament the BoJ was “not seriously considering” a negative rate\u003C\/i\u003E.\u003C\/blockquote\u003E\n\u003Cb\u003ESurprise, Surprise, We Lied Again\u003C\/b\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ciframe allowfullscreen=\"\" frameborder=\"0\" height=\"325\" src=\"https:\/\/www.youtube.com\/embed\/2TnkJ8_BmSI\" width=\"450\"\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSurprised minds may be interested in how the Yen reacted to this surprise move.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EYen vs. US Dollar 15 Minute\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEird4MvzjJbSCdvkF5m4sG_IAKDwMl8eTavTHBvozmBOh_krr6O2DzsEurN-84sZpolyG7poPqC9ndeB-mr0bA_8wm661fTY2vf4bvNyngaqL-tZD6LgNYeu5TIJD-l-vmvseOAaQ\/s1600\/Yen+15+Minute.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEird4MvzjJbSCdvkF5m4sG_IAKDwMl8eTavTHBvozmBOh_krr6O2DzsEurN-84sZpolyG7poPqC9ndeB-mr0bA_8wm661fTY2vf4bvNyngaqL-tZD6LgNYeu5TIJD-l-vmvseOAaQ\/s400\/Yen+15+Minute.png\" \/\u003E\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe two consecutive long green candles represents a decline in the Yen vs. the US dollar of about 2.3%. That sounds big but the next chart puts the move in perspective.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EYen vs. US dollar Monthly\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEidyC4EU3mSWRggphpUCgXTqEpnx5yErKHtAD5XkbhXmISSyX5JXtl2p8bnDgG6kZy6-OdbJ3bCAx0qRwy-3cquH-iNcpIKb5eZaGs5-95cMpr8l7qWqjGtNS1GAf5nB9w3RS4qYg\/s1600\/YEN+Monthly.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEidyC4EU3mSWRggphpUCgXTqEpnx5yErKHtAD5XkbhXmISSyX5JXtl2p8bnDgG6kZy6-OdbJ3bCAx0qRwy-3cquH-iNcpIKb5eZaGs5-95cMpr8l7qWqjGtNS1GAf5nB9w3RS4qYg\/s400\/YEN+Monthly.png\" \/\u003E\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSince January of 2012, the Yen has declined nearly 37% against the US dollar. Yet, Japan is still mired in deflation.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf any of these surprises ever accomplished anything, we wouldn't keep having them.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/2151199250746719318\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/2151199250746719318?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2151199250746719318"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2151199250746719318"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/bank-of-japan-adopts-negative-interest.html","title":"Bank of Japan Adopts Negative Interest Rates: Surprise, Surprise We Lied Again; Meaning of \"Now\""}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/img.youtube.com\/vi\/2TnkJ8_BmSI\/default.jpg","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-1659335558184086469"},"published":{"$t":"2016-01-28T15:18:00.001-06:00"},"updated":{"$t":"2016-01-28T15:18:43.483-06:00"},"title":{"type":"text","$t":"World's First Robot-Run Lettuce Farm to Produce 30,000 Heads Daily; Tipping Point for Workerless Agriculture"},"content":{"type":"html","$t":"\u003Cb\u003EFuture of Farming\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe future of farming has arrived. It's vertical, soilless, and run by robots.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTech Insider reports \u003Ca href=\"http:\/\/www.techinsider.io\/spreads-robot-farm-will-open-soon-2016-1\" target=\"_blank\"\u003EWorld's First Robot-run farm will harvest 30,000 heads of lettuce daily\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe Japanese lettuce production company Spread believes the farmers of the future will be robots.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSo much so that Spread is creating the world's first farm manned entirely by robots. Instead of relying on human farmers, the indoor Vegetable Factory will employ robots that can harvest 30,000 heads of lettuce every day.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDon't expect a bunch of humanoid robots to roam the halls, however; the robots look more like conveyor belts with arms. They'll plant seeds, water plants, and trim lettuce heads after harvest in the Kyoto, Japan farm.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Vegetable Factory follows the growing agricultural trend of vertical farming, where farmers grow crops indoors without natural sunlight. Instead, they rely on LED light and grow crops on racks that stack on top of each other.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn addition to increasing production and reducing waste, indoor vertical farming also eliminates runoff from pesticides and herbicides — chemicals used in traditional outdoor farming that can be harmful to the environment.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe new farm, set to open in 2017, will be an upgrade to Spread's existing indoor farm, the Kameoka Plant. That farm currently produces about 21,000 heads of lettuce per day with help from a small staff of humans. Spread's new automation technology will not only produce more lettuce, it will also reduce labor costs by 50%, cut energy use by 30%, and recycle 98% of water needed to grow the crops.\u003C\/blockquote\u003E\n\u003Cb\u003EGo Vertical\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh8WLxuKImFkQfFTRfP5Q1Tf1CwfLziwn70u3mYVrDuX29Y8BUK95MXTJSDHQWf0B7uTZZ203ETq71qUqP9sTh_-j0Jb-Wh4JxjX7TfO2mROFK7ZWvfQDM2EWISW2eEOLUAhVNi4g\/s1600\/Future+of+Lettuce.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh8WLxuKImFkQfFTRfP5Q1Tf1CwfLziwn70u3mYVrDuX29Y8BUK95MXTJSDHQWf0B7uTZZ203ETq71qUqP9sTh_-j0Jb-Wh4JxjX7TfO2mROFK7ZWvfQDM2EWISW2eEOLUAhVNi4g\/s400\/Future+of+Lettuce.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhat starts with lettuce, won't stay with lettuce. Strawberries, cabbage, tomatoes, beans, eggplant, and many other vegetables can be grown this way.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPotatoes, peanuts, and things that grow in the ground may be off limits. Corn is too tall with acreage requirements too big. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EVertical Farms Half the Size of a Wal-Mart\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAlso consider \u003Ca href=\"http:\/\/www.techinsider.io\/indoor-vertical-farm-is-the-future-of-agriculture-2015-10\" target=\"_blank\"\u003EIndoor Vertical Farm Half the Size of a Wal-Mart\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nMatt Matros reads about the 34,000 bags of spinach Dole just recalled and shudders. A Salmonella contamination never would have happened on his farm.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMatros is CEO of FarmedHere, the largest indoor vertical farm in North America. At 90,000 square feet, the Bedford, Illinois farm is a leader in a growing agriculture movement that grows crops without soil and sunlight. Instead, these crops are grown indoors, where they're always monitored and kept away from harmful bacteria.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFarmedHere also prioritizes locally sourcing its produce, Matros says. It wants to deliver its herbs and leafy greens to consumers living at most 200 miles away, as part of a larger mission to reduce its carbon footprint.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn Matros' eyes, the move follows in the footsteps of the fast-casual chain Chipotle, which recently updated its mission to source from farms at most 350 miles away.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith 18 FarmedHere facilities, 75% of the US population would fall within that 200-mile radius, ensuring the produce can reach consumers quickly.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSo far, the main crops are basil, mint, lettuce, and kale. Those are the low-hanging fruit that are easy to grow, Matros says.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWithout the hassle of Mother Nature's changing climate, farmers can enjoy year-round growing seasons indoors, using less water, fewer pesticides, and avoid biological invaders that cause diseases like Salmonella, Escherichia coli (E. coli), and Listeria.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EThe company is anticipating an industry-wide tipping point a couple years down the line in which the winners are the local farmers who can provide nutritious food to nearby residents who need it, taking a big chunk of all long-haul trucks filled with produce off the road for good\u003C\/i\u003E. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEju51NOXcoBu8aaJ7GUQVVw5UPSI4_kEJIgjCxuesPkk8esKygeuzaRO6hibyC5l19RyR8Zp5MDt8apD8B3c1UAUncH22ZL_9qvlGuNqEqLno2fYoELvWQRL_8KDM8uARq9zGHhKQ\/s1600\/vertical+farming.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEju51NOXcoBu8aaJ7GUQVVw5UPSI4_kEJIgjCxuesPkk8esKygeuzaRO6hibyC5l19RyR8Zp5MDt8apD8B3c1UAUncH22ZL_9qvlGuNqEqLno2fYoELvWQRL_8KDM8uARq9zGHhKQ\/s400\/vertical+farming.png\" \/\u003E\u003C\/a\u003E\u003C\/blockquote\u003E\n\u003Cb\u003ETipping Point \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nInstead of digging deeper and deeper wells in the California desert to grow things, water in these farms is 95-98% recycled. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnd commenting on labor issues, Matros points to Amazon's use of factory robots: \"\u003Ci\u003EWe're going to have that in our next farm, which will be open in about a year.\u003C\/i\u003E\"\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nJapan will have similar technology in a similar timeframe.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe tipping point for worker-less agriculture has arrived.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/1659335558184086469\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/1659335558184086469?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1659335558184086469"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1659335558184086469"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/worlds-first-robot-run-lettuce-farm-to.html","title":"World's First Robot-Run Lettuce Farm to Produce 30,000 Heads Daily; Tipping Point for Workerless Agriculture"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh8WLxuKImFkQfFTRfP5Q1Tf1CwfLziwn70u3mYVrDuX29Y8BUK95MXTJSDHQWf0B7uTZZ203ETq71qUqP9sTh_-j0Jb-Wh4JxjX7TfO2mROFK7ZWvfQDM2EWISW2eEOLUAhVNi4g\/s72-c\/Future+of+Lettuce.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-9040990576096358828"},"published":{"$t":"2016-01-28T12:35:00.002-06:00"},"updated":{"$t":"2016-01-28T16:07:45.456-06:00"},"title":{"type":"text","$t":"Shocking Crash: Durable Goods Orders Plunge 5.1%, Shipments Drop 2.2%, Huge Negative Revisions; Recession Here?"},"content":{"type":"html","$t":"\u003Cb\u003ECrash!\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDurable goods orders and shipments crashed in December. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe \u003Ca href=\"http:\/\/www.bloomberg.com\/markets\/economic-calendar\" target=\"_blank\"\u003EEconoday Consensus Estimate\u003C\/a\u003E for durable goods new orders was a 0.2% rise. Here are the amazing results.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEim2stAfpexRk4HVCvm3m5mFod1RarybIcX-JbNA0PS2geIMtHU07zINRkqOYdqZqp_dx-VhS3xF-5x7wCeI_i7iu5j5aV0nFLf8vEKVtaMCwh2D01eN88p1Qcqy28JWclkWjKYFg\/s1600\/Durable+Goods+2016-01-28.png\" imageanchor=\"1\" nbsp=\"\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEim2stAfpexRk4HVCvm3m5mFod1RarybIcX-JbNA0PS2geIMtHU07zINRkqOYdqZqp_dx-VhS3xF-5x7wCeI_i7iu5j5aV0nFLf8vEKVtaMCwh2D01eN88p1Qcqy28JWclkWjKYFg\/s400\/Durable+Goods+2016-01-28.png\" \/\u003E\u003C\/a\u003E\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ECrash vs. Thud \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEconoday called the results a \"giant thud\". The words \"giant crash\" seem more appropriate. In retrospect, both terms may be inappropriate. Have we landed yet, or are we still falling?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEconoday reports ...\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe factory sector ended 2015 with a giant thud. Durable goods orders fell 5.1 percent in December vs expectations for a 0.2 percent gain and a low-end estimate of minus 3.0 percent. Aircraft orders didn't help but they weren't the whole cause of the problem as ex-transportation orders fell 1.2 percent vs expectations for no change and a low-end estimate of minus 0.4 percent. Core capital goods, which exclude defense equipment and also aircraft, are especially weak, down 4.3 percent following a 1.1 percent decline in November. Shipments for core capital goods, which are an input into GDP, slipped 0.2 percent following a downward revised 1.1 percent decline in November (initially minus 0.4 percent).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOrders for civilian aircraft lead the dismal list, down 29 percent in December. The other main subcomponent for transportation, motor vehicles, also fell, down 0.4 percent in a reminder that vehicle sales were slowing at year end. Capital goods industries show deep declines: machinery down 5.6 percent, computers down 8.7 percent, communications equipment down 21 percent, and fabricated metals down 0.5 percent.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOther readings include a surprising 2.2 percent monthly drop in total shipments and a 0.5 percent drop in total unfilled orders. All this weakness isn't a plus for inventories which rose 0.5 percent to lift the inventory-to-shipments ratio sharply, to 1.69 from 1.64. The rise in inventories poses a headwind to the sector and will dampen future shipments as well as employment and is a reminder of the inventory warning in yesterday's FOMC statement.\u003C\/blockquote\u003E\n\u003Cb\u003EInventories Up 5 Consecutive Months\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThose who wish to dive into the details can do so at the Census Bureau report \u003Ca href=\"http:\/\/www.census.gov\/manufacturing\/m3\/adv\/pdf\/durgd.pdf\" target=\"_blank\"\u003EAdvance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders December 2015\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHere are some additional inventory highlights:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cul\u003E\n\u003Cli\u003EInventories of manufactured durable goods in December, up following five consecutive monthly decreases, increased $2.1 billion, or 0.5 percent, to $397.9 billion. This followed a 0.2 percent November decrease.\u003C\/li\u003E\n\u0026nbsp;\n\u003Cli\u003ETransportation, up following three consecutive monthly decreases, led the increase, $1.8 billion or 1.4percent to $131.8 billion. \u003C\/li\u003E\n\u003C\/ul\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EAutos Down 4th Quarter\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOf other note, the auto sector that had been on fire in 2015 went negative in the fourth quarter.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cul\u003E\n\u003Cli\u003EOctober, November, December shipments for motor vehicles and parts were -2.9%, +1.1%, -0.4%.\u003C\/li\u003E\n\u0026nbsp;\n\u003Cli\u003EOctober, November, December orders for motor vehicles and parts are -3.0%, +1.0%, -0.4%.\u003C\/li\u003E\n\u003C\/ul\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ERecession Here?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn contrast to the preposterous Fed model that says the odds of a recession in all of 2016 is a mere 3.56%, this report strengthens the odds the US economy is already in recession.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor further discussion, please see \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/fed-workhorse-model-says-odds-of.html\" target=\"_blank\"\u003EFed \"Workhorse\" Model Says Odds of Recession in Next Year Only 3.56%; What are the Real Odds?\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/9040990576096358828\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/9040990576096358828?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/9040990576096358828"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/9040990576096358828"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/shocking-crash-durable-goods-orders.html","title":"Shocking Crash: Durable Goods Orders Plunge 5.1%, Shipments Drop 2.2%, Huge Negative Revisions; Recession Here?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEim2stAfpexRk4HVCvm3m5mFod1RarybIcX-JbNA0PS2geIMtHU07zINRkqOYdqZqp_dx-VhS3xF-5x7wCeI_i7iu5j5aV0nFLf8vEKVtaMCwh2D01eN88p1Qcqy28JWclkWjKYFg\/s72-c\/Durable+Goods+2016-01-28.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-118163082043718466"},"published":{"$t":"2016-01-28T02:39:00.001-06:00"},"updated":{"$t":"2016-01-29T01:46:00.041-06:00"},"title":{"type":"text","$t":"Fed \"Workhorse\" Model Says Odds of Recession in Next Year Only 3.56%; What are the Real Odds?"},"content":{"type":"html","$t":"Of all the ridiculous opinions as to why the US is not about to enter a recession, the \u003Ca href=\"http:\/\/finance.yahoo.com\/news\/heres-feds-workhorse-recession-model-163835206.html?l=1\" target=\"_blank\"\u003EFed's \"Workhorse\" Model\u003C\/a\u003E is at the top of the list.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nTorsten Sløk, chief international economist at Deutsche Bank, is taking the optimistic route by drawing attention to a certain economic model that currently puts the chance of an imminent contraction in the single digits. The Federal Reserve's so-called probit model looks at the difference between 10-year and three-month U.S. Treasury rates to gauge the probability of a U.S. recession over the next 12 months.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"The Fed has a workhorse recession model where [the] yield curve today is a predictor of future recessions, and running the Fed’s probit model with today’s values for 10-year and 3-month rates shows that there is currently a 4 percent probability of a recession over the next 12 months,\" Sløk said in an e-mail.\u003C\/blockquote\u003E\n\u003Cb\u003EThe Model\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPrepare to have your eyes gloss over because here is the model.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhEsjuIV7PifHUSNyxmdWU1r2GWUMIzprgFLrAnnCfBm6-YrQAi6_i9aVtC_1JrrllYoliU-F7ToyF2n5k9kHkt69GiLEcbA3w8JlP1K917l3W0aoPWgBH_p3p0IugojKUUcy0W1A\/s1600\/Fed+Probit+Model.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhEsjuIV7PifHUSNyxmdWU1r2GWUMIzprgFLrAnnCfBm6-YrQAi6_i9aVtC_1JrrllYoliU-F7ToyF2n5k9kHkt69GiLEcbA3w8JlP1K917l3W0aoPWgBH_p3p0IugojKUUcy0W1A\/s400\/Fed+Probit+Model.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHighlights in yellow are mine. Note that two constants are \u003Ci\u003Eestimated\u003C\/i\u003E using data from January 1959 to December 2005. Not only that, the constants were \u003Ci\u003Efitted\u003C\/i\u003E to match what happened. Lovely. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EPractical Considerations\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThose hand-picked constants happened to work in prior recessions with varying degrees of success as noted in a New York Fed paper appropriately called \u003Ca href=\"https:\/\/www.newyorkfed.org\/medialibrary\/media\/research\/current_issues\/ci12-5.pdf\" target=\"_blank\"\u003EThe Yield Curve as a Leading Indicator: Some Practical Issues\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe report failed to mention the most practical of practical issues: It's damn hard for the 3-month to invert with 10-year treasuries when the Fed has artificially held short-term yields close to zero.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOf course there is a practical reason for the Fed not pointing out that practicality. The article was written in 2006 before short-term yields went to zero.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nYou might have thought chief international economists would have stopped to consider such practical issues, but you would be wrong.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOne might also have thought such issues would have crossed the minds of the New York Fed, but please banish that thought as well. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe New York Fed research still promotes this ridiculous model on its page \u003Ca href=\"https:\/\/www.newyorkfed.org\/research\/capital_markets\/ycfaq.html\" target=\"_blank\"\u003EThe Yield Curve as a Leading Indicator\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nYou can download the current data to play with in Excel. You can also download the current \u003Ca href=\"https:\/\/www.newyorkfed.org\/medialibrary\/media\/research\/capital_markets\/Prob_Rec.pdf\" target=\"_blank\"\u003E12-month look-ahead probability chart\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEht71wGz6pUzd7qyHw1dfnsVYKwVKFvUvP5hhDj4FMEj6KVqhZX1kR1VOGGPGu2Ah-rDGrAlhXpTYUa-kZ9ncGgJaYMnh90xkMQkIeFKAT9T52vXVSuRJvcjMnA-_Kgyi1_tmyunw\/s1600\/probability+spread.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEht71wGz6pUzd7qyHw1dfnsVYKwVKFvUvP5hhDj4FMEj6KVqhZX1kR1VOGGPGu2Ah-rDGrAlhXpTYUa-kZ9ncGgJaYMnh90xkMQkIeFKAT9T52vXVSuRJvcjMnA-_Kgyi1_tmyunw\/s400\/probability+spread.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EYield Curve and Recessions \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDespite the obvious uselessness of the indicator under current conditions, others are on the same bandwagon.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPater Tenebrarum at the acting man took them to task back in 2014 with his post \u003Ca href=\"http:\/\/www.acting-man.com\/?p=31732\" target=\"_blank\"\u003EYield Curve and Recessions\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nOne popular theme gets reprinted in variations over and over again. Here is a recent example from Business Insider, which breathlessly informs us of the infallibility of the yield curve as a forecasting tool: “\u003Ca href=\"http:\/\/www.businessinsider.com\/inverted-yield-curve-predicts-recessions-2014-7\"\u003EThis Market Measure Has A Perfect Track Record For Predicting US Recessions\u003C\/a\u003E” the headline informs us – and we dimly remember having seen variants of this article on the same site at least three times by now:\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\n\u003Ci\u003EAt a breakfast earlier today, LPL Financial's Jeffrey Kleintop noted that the yield curve inverted just prior to every U.S. recession in the past 50 years. \"That is seven out of seven times — a perfect forecasting track record,\" he reiterated.\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003E\u003Cbr \/\u003E\u003C\/i\u003E\n\u003Ci\u003EThe yield curve is inverted when short-term interest rates (e.g. the 3-year Treasury) are higher than long-term interest rates (e.g. the 10-year Treasury yield). \"The yield curve inversion usually takes place about 12 months before the start of the recession, but the lead time ranges from about 5 to 16 months,\" wrote Kleintop in a recent note. \"The peak in the stock market comes around the time of the yield curve inversion, ahead of the recession and accompanying downturn in corporate profits.\"\u003C\/i\u003E\u003C\/blockquote\u003E\nThis is it! The holy grail of forecasting, Jeffrey Kleintop has discovered it. You'll never have to worry about actual earnings reports, a massive bubble in junk debt, the sluggishness of the economy, new record levels in sentiment measures and margin debt, record low mutual fund cash reserves, the pace of money supply growth, or anything else again. Just watch the yield curve!\u003C\/blockquote\u003E\n\u003Cb\u003EHoly Grail\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNo need to sell now. The holy grail has been perfected. When the yield curve inverts, wait another six months for stocks to peak then sell.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTenebrarum points out the amazing success of that method for Japan.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgF_DgTjcutJO4b-U0gV9lGjsw5w0_sL-Z8-CZ0gSf8rxAaNHhzxu3jVq8zlOQIwOQqjUPQleeU13P4hf5eYCPJoh1hXZksDJ-DYHhfo-UXClDRSvau9dnvJ3vB1e9_jjEKuOMQAg\/s1600\/Japan+Recessions.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgF_DgTjcutJO4b-U0gV9lGjsw5w0_sL-Z8-CZ0gSf8rxAaNHhzxu3jVq8zlOQIwOQqjUPQleeU13P4hf5eYCPJoh1hXZksDJ-DYHhfo-UXClDRSvau9dnvJ3vB1e9_jjEKuOMQAg\/s400\/Japan+Recessions.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe model last worked in1991. Since then, the yield-curve method has had a perfect track record of failure. In at least 6 recessions since, counting one in 2014 the above chart does not show, the model has failed.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ERecession Odds\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI think there is a 25% chance or better the US \u003Ci\u003Ealready\u003C\/i\u003E went into recession as of December 2015 or January 2016. A couple of bad jobs reports will seal the deal, and it may not even take that. But that's just a guess. I have no economic formula for economists to go gaga over.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nJohn Hussman does have a nice discussion in his latest post \u003Ca href=\"http:\/\/www.hussmanfunds.com\/wmc\/wmc160125.htm\" target=\"_blank\"\u003EWicked Skew: When Extreme Losses are Standard Outcomes.\u003C\/a\u003E \n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nOn the economic front, I continue to believe that a U.S. recession is not only a risk, but is now the most probable outcome. As I noted last week, among confirming indicators that generally emerge fairly early once a recession has taken hold, we would be particularly attentive to the following: a sudden drop in consumer confidence about 20 points below its 12-month average (which would currently equate to a drop to the 75 level on the Conference Board measure), a decline in aggregate hours worked below its level 3-months prior, a year-over-year increase of about 20% in new claims for unemployment (which would currently equate to a level of about 340,000 weekly new claims), and slowing growth in real personal income.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLast week, new claims for unemployment jumped to 293,000, a level we’ve observed only once since last April. Even at this early point (given that employment measures are among the most lagging economic indicators), we already observe a pickup in claims from last year’s lows. To put this increase into perspective, the chart below shows points where the ISM Purchasing Managers Index was below 50, the S\u0026amp;P 500 was below its level of 6 months prior, and the 4-week average of initial unemployment claims was at least 5% above its 12-month low. While a year-over-year increase in unemployment claims closer to 20% would be a more reliable confirmation of recession, it’s clear that even here, the current combination of evidence is more associated with recession than not. \n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh5w7F1B_p4tknpgwaYy2e-e9YpTMXgq-y8oim-BiqYOeNqZlrHRgdv5lDPaXRtjW4w4jSB1pt43Q0QCSBuuA6ezeHQMoY-dSa2OvpZe7vAF7rqomf9PMCxsKYAV1UPPgleU7HfXg\/s1600\/Recession+Conditions.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh5w7F1B_p4tknpgwaYy2e-e9YpTMXgq-y8oim-BiqYOeNqZlrHRgdv5lDPaXRtjW4w4jSB1pt43Q0QCSBuuA6ezeHQMoY-dSa2OvpZe7vAF7rqomf9PMCxsKYAV1UPPgleU7HfXg\/s400\/Recession+Conditions.png\" \/\u003E\u003C\/a\u003E\n\u003C\/blockquote\u003E\n\u003Cb\u003EOne Model is Wrong\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSeven out of seven times we have been in these conditions, the economy was close to or in recession.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat's one possible model. It contrasts with the Fed's model which says the 12-month look ahead odds are only 3.56%. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTake your pick.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSome economists take the Fed's model.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhy? Because the Fed put a formula to it. That makes it official even though the model has no scientific basis under current conditions.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSimply put, some economists refuse to think.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EReflections on Economic Modeling\u003C\/b\u003E \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nConstants α and β are on the verge of massive revisions.\u0026nbsp; After the next recession (which we may already be in), the Fed will see fit to dream up a revised formula that will take into account conditions at zero bound.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat revision will work for the last two recessions but it may not work for the next three.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/118163082043718466\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/118163082043718466?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/118163082043718466"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/118163082043718466"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/fed-workhorse-model-says-odds-of.html","title":"Fed \"Workhorse\" Model Says Odds of Recession in Next Year Only 3.56%; What are the Real Odds?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhEsjuIV7PifHUSNyxmdWU1r2GWUMIzprgFLrAnnCfBm6-YrQAi6_i9aVtC_1JrrllYoliU-F7ToyF2n5k9kHkt69GiLEcbA3w8JlP1K917l3W0aoPWgBH_p3p0IugojKUUcy0W1A\/s72-c\/Fed+Probit+Model.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-75882706334710218"},"published":{"$t":"2016-01-27T20:45:00.002-06:00"},"updated":{"$t":"2016-01-27T20:50:35.010-06:00"},"title":{"type":"text","$t":"Chicago Board of Education Yanks $875 Million Bond Sale Over 7.75% Yield; Five Questions for Chicago"},"content":{"type":"html","$t":"On Wednesday, the Chicago Board of education pulled the plug on a proposed \u003Ca href=\"http:\/\/www.cnbc.com\/2016\/01\/27\/reuters-america-update-1-chicago-board-of-educations-875-mln-bond-sale-postponed.html\" target=\"_blank\"\u003E$875 Million Bond Sale\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nFacing hefty yields, the financially ailing Chicago Public Schools (CPS) postponed Wednesday's planned $875 million bond sale and will evaluate the timing on a day-to-day basis, a school official said.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe nation's third-largest public school system is struggling with a structural budget deficit of at least $1 billion. Its fiscal woes led Illinois Governor Bruce Rauner and Republican lawmakers last week to push for a state takeover and potential bankruptcy for CPS - moves that were quickly shot down by Chicago Mayor Rahm Emanuel, who controls the school system, and leaders of the Democratic-controlled legislature.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA pre-pricing marketing scale circulated by underwriters on Tuesday for the \"junk\"-rated general obligation bonds showed yields topping out at 7.75 percent with coupons of 7.25 percent for bonds due in 2041 and 7 percent for bonds due in 2044. That yield indicated a so-called credit spread over Municipal Market Data's benchmark triple-A yield scale of as much as 506 basis points.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat spread was wider than the 464 basis-point spread the school system's 19-year bonds were fetching in secondary market trading last week.\u003C\/blockquote\u003E\n\u003Cb\u003EFive Questions for Chicago\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Col\u003E\n\u003Cli\u003EWill the yields be any lower tomorrow? Next week? Why?\u003C\/li\u003E\n\u003Cli\u003EHow the heck is the school district going to close a hole of at least $1 billion?\u003C\/li\u003E\n\u003Cli\u003EWill Emanuel push for yet another massive tax hike just to pay teacher pensions? \u003C\/li\u003E\n\u003Cli\u003EHow can another tax hike do anything but postpone the problem?\u003C\/li\u003E\n\u003Cli\u003ESince the most likely outcome is bankruptcy, why was the yield offering so good?\u003C\/li\u003E\n\u003C\/ol\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EReflections on Bankruptcy\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn regards to question number five, 7.75% seems very attractive given the high likelihood those bonds will soon be worthless.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHeck, even 10% would be a bargain for the city and a horrid deal for the bondholders.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut that's not the way markets work. No one thinks bankruptcy is coming until it's a few weeks away. And of course, for bankruptcy to be possible, the Illinois legislature has to approve it.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGovernor Bruce Rauner needs to hold firm until Emanuel begs the union-controlled Illinois legislature to pass a municipal bankruptcy bill. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003E\"I'll Be a Better Mayor\"\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn his mayoral victory speech, Emanuel promised \u003Ca href=\"https:\/\/www.dnainfo.com\/chicago\/20150407\/west-loop\/rahm-emanuel-wins-chicago-mayoral-race-defeats-chuy-runoff\" target=\"_blank\"\u003E\"I'll Be a Better Mayor\"\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nStepping back, recall that Emanuel defeated Cook County Commissioner Jesus \"Chuy\" Garcia in a runoff on April 7, 2015.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn debates ahead of the runoff, Emanuel said Garcia's promises would require tax hikes to fund them. Emanuel called tax hikes failed \"\u003Ci\u003Epolitics of the past\u003C\/i\u003E.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEmanuel forgot to say he would undertake the same failed measures as Garcia, only much bigger.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSix months later, Emanuel passed the largest property tax hike in Chicago history. And in the understatement of the year, Emanuel commented \"\u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2015\/10\/chicagos-aldermatic-sheep-dogs-approve.html\" target=\"_blank\"\u003EIt's Not a Piece of Art\u003C\/a\u003E\".\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith that I have one final question for the mayor. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EBonus Question \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHello Rahm, when will you put city taxpayers and the good of the city itself ahead of the unions and your perpetual reelection campaign that's currently nothing but lies and deceit followed by monstrous tax hikes?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/75882706334710218\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/75882706334710218?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/75882706334710218"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/75882706334710218"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/chicago-board-of-education-yanks-875.html","title":"Chicago Board of Education Yanks $875 Million Bond Sale Over 7.75% Yield; Five Questions for Chicago"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-5286259340616435691"},"published":{"$t":"2016-01-27T14:49:00.002-06:00"},"updated":{"$t":"2016-01-27T14:53:24.010-06:00"},"title":{"type":"text","$t":"Oil Inventory Hits \"Levels Not Seen in 80 Years\"; Crude Jumps on News Russia May Cooperate with OPEC"},"content":{"type":"html","$t":"\u003Cb\u003E\"Levels Not Seen in 80 Years\"\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe supply glut in oil storage continues as crude. Inventories hit new all-time highs this past week.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzJGR81aAbzb0PZlf1Wvr8Mjl99s8F52I_BZC5U6j-EnYLv70zr7OjOcldqY4_ZGnMhOrE9HM5gJCZQ0oq4eHhyyhItYJ_ndJkjx5mwl0wWsaCIX_WptoR0N2kqhn6yaArC-I06A\/s1600\/Weekly+Oil+Supply.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzJGR81aAbzb0PZlf1Wvr8Mjl99s8F52I_BZC5U6j-EnYLv70zr7OjOcldqY4_ZGnMhOrE9HM5gJCZQ0oq4eHhyyhItYJ_ndJkjx5mwl0wWsaCIX_WptoR0N2kqhn6yaArC-I06A\/s400\/Weekly+Oil+Supply.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe above charts from \u003Ca href=\"https:\/\/www.eia.gov\/petroleum\/supply\/weekly\/\" target=\"_blank\"\u003EEIA Weekly Supply Data\u003C\/a\u003E shows the crude inventory of 494,920,000 (not counting strategic reserves) passed the previous high of 490,912,000 set on April 24, 2015.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nReserves, including the Strategic Petroleum Reserve (SPR), reached 1,190,038 barrels, also a record high.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EComments From EIA Weekly Report\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHere are some interesting comments from the \u003Ca href=\"http:\/\/ir.eia.gov\/wpsr\/wpsrsummary.pdf\" target=\"_blank\"\u003EWeekly EIA Report\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"\u003Ci\u003EAt 494.9 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years\u003C\/i\u003E. Total motor gasoline inventories increased by 3.5 million barrels last week, and are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. \u003Ci\u003EDistillate fuel inventories decreased by 4.1 million barrels last week but are near the upper limit of the average range for this time of year\u003C\/i\u003E. Propane\/propylene inventories fell 6.2 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 1.0 million barrels last week.\" \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ECrude Jumps on News Russia May Cooperate with OPEC\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDespite the record inventory surge, crude jumped a bit from extremely oversold levels on news \u003Ca href=\"http:\/\/www.reuters.com\/article\/us-global-oil-idUSKCN0V42VR\" target=\"_blank\"\u003ERussia Dangles Prospect of OPEC Cooperation\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nOil futures surged on Wednesday, after Russia said it was discussing the possibility of co-operation with OPEC, fanning hopes that a deal was in the works to reduce oversupply that sent prices the lowest levels in a dozen years last week.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRussia's energy ministry said possible coordination with the Organization of the Petroleum Exporting Countries (OPEC) was discussed at a meeting with Russian oil companies on Wednesday. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"I remain skeptical, at the end of the day, about that happening as the oil producers are looking at the other guy to cut production while maintaining their own levels,\" Andrew Lipow of Lipow Oil Associates said.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCrude was looking firm before the Russia news on the back of a U.S. Energy Department report showing a \u003Ci\u003Esurprise spike in demand\u003C\/i\u003E for refined products like heating oil last week, when a massive blizzard hit the U.S. Northeast.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EThe U.S. Energy Information Administration said inventories of distillates, fell more than 4 million barrels, trumping expectations for a rise of about 2 million\u003C\/i\u003E. \u003C\/blockquote\u003E\n\u003Cb\u003EEconomists Surprised Again\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDespite the small drawdown in fuel oil please recall the report stated \"Distillate fuel inventories are near the upper limit of the average range for this time of year.\" \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEconomists can be surprised by anything including the possibility blizzards and cold weather may increase the demand for fuel oil in the Northeast!\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock \u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/5286259340616435691\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/5286259340616435691?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5286259340616435691"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/5286259340616435691"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/oil-inventory-hits-levels-not-seen-in.html","title":"Oil Inventory Hits \"Levels Not Seen in 80 Years\"; Crude Jumps on News Russia May Cooperate with OPEC"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzJGR81aAbzb0PZlf1Wvr8Mjl99s8F52I_BZC5U6j-EnYLv70zr7OjOcldqY4_ZGnMhOrE9HM5gJCZQ0oq4eHhyyhItYJ_ndJkjx5mwl0wWsaCIX_WptoR0N2kqhn6yaArC-I06A\/s72-c\/Weekly+Oil+Supply.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-4461013379692480259"},"published":{"$t":"2016-01-27T12:17:00.002-06:00"},"updated":{"$t":"2016-01-27T15:43:48.161-06:00"},"title":{"type":"text","$t":"New Home Sales Surge but Prices Down Sharply; Prices Have Room to Fall; Is Everybody In?"},"content":{"type":"html","$t":"December new home sales surged well over the high end \u003Ca href=\"http:\/\/www.bloomberg.com\/markets\/economic-calendar\" target=\"_blank\"\u003EEconoday estimate\u003C\/a\u003E. \n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe outlook for the housing sector just got a boost from a sharp jump in new home sales, up 10.8 percent to a 544,000 annualized rate that is 44,000 over the Econoday consensus and 24,000 over the high estimate. The gain, however, may have been boosted by discounting as the median price slipped 2.7 percent to $288,900 for a year-on-year rate of minus 4.3 percent.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith builders slow to bring new homes to market, low supply remains a central factor holding back sales. Supply did rise 6,000 in the month to 237,000 but supply relative to sales fell back to 5.2 months from 5.6 months. A reading of 6.0 months is considered to be the balance point between supply and demand.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRegional data show a 32 percent sales surge in the \u003Ci\u003EMidwest where the year-on-year rate of 39 percent is the strongest\u003C\/i\u003E. Sales in the West and Northeast both rose 21 percent in the month with the year-on-year rate in the West, which is a key region for new housing, up 22 percent while the Northeast, which is a very small region in this report, down 6.5 percent on the year. The South, which is the largest region, shows a fractional gain in the month and no change on the year.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor full year 2015, new home sales rose 14.7 percent to 501,000 from 437,000 in 2014. Sales of new homes have been noticeably higher than prices, suggesting that \u003Ci\u003Eprices have room to accelerate\u003C\/i\u003E. This report follows special strength in existing home sales with both perhaps benefiting from December's warm weather but with both pointing nevertheless to \u003Ci\u003Enew momentum for 2016\u003C\/i\u003E.\u003C\/blockquote\u003E\n\u003Cb\u003ENegative Momentum\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhy did sales surge 39% in the Midwest? Because this was one of the warmest December on record even discounting global warming silliness.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBloomberg calls this \"\u003Ci\u003Enew momentum\u003C\/i\u003E\" for 2016. Indeed it is, but that momentum is negative.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis statement by Bloomberg caught my eye: \"\u003Ci\u003ESales of new homes have been noticeably higher than prices, suggesting that prices have room to accelerate.\u003C\/i\u003E\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EPrices Have Room to Fall\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI suggest home prices have room to fall. Curiously so does Bloomberg, albeit in different ways, and in a different article.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPlease consider Bloomberg's article \u003Ca href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-01-26\/at-3-68-million-this-california-home-has-everything-but-buyers\" target=\"_blank\"\u003EThe Surge in U.S. Mansion Prices Is Now Over\u003C\/a\u003E, published just two days ago.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe world’s economic woes -- from China to Russia to South America -- are damping sales in the high-end real estate market. Haywire overseas stock markets and dropping currency values caused in part by plummeting oil prices are dulling demand for mansions, penthouses and winter escapes.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLuxury Pfft\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjHXlyIHihh8YEBVN_DuREy9cCjy07XT_BjMgCnynZYjJj_-59HSZfZ5b0n35I-CjBS4UlE4cNxXYK772-vsaz9CCGPUl_eRUyW4DZHXk6cYFBl9Ohg1Vd7XsxJ03iKd6U3Tg3U2g\/s1600\/Luxury+Home+Prices.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjHXlyIHihh8YEBVN_DuREy9cCjy07XT_BjMgCnynZYjJj_-59HSZfZ5b0n35I-CjBS4UlE4cNxXYK772-vsaz9CCGPUl_eRUyW4DZHXk6cYFBl9Ohg1Vd7XsxJ03iKd6U3Tg3U2g\/s400\/Luxury+Home+Prices.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPrices for the top 5 percent of U.S. real estate transactions remained flat in 2015 while all other houses gained 4.9 percent, according to data from Redfin Corp., a real estate brokerage and data provider. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nStronger Dollar\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe stronger dollar is driving South American buyers away from the 23,000 condos in the pipeline for Miami’s downtown area, said Peter Zalewski, owner of South Florida development tracker CraneSpotters.com. Buyers signed about one-fourth fewer pre-construction contracts last year than in 2014, according to Anthony M. Graziano, senior managing director at Integra Realty Resources Inc., which tracks condo data for the Miami Downtown Development Authority.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn nearby Sunny Isles, Florida, faraway currency fluctuations are endangering the sale of a $3.7 million condominium.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn Houston, the plunge in oil prices to a 12-year low is killing the luxury boom. Sales for homes priced at $500,000 or more dropped 17 percent in December from a year earlier, according to the Houston Association of Realtors.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nManhattan resale prices for the top 20 percent of the market peaked in February and have fallen every month since, according to an analysis through October by listings website StreetEasy.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nEven in San Francisco, where the market for luxury properties remains strong, the inventory of listings for $2 million or more jumped in October to a record level, said Patrick Carlisle, chief market analyst for Paragon Real Estate.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“More sellers are jumping in and more buyers are holding off because they’re worried about where the volatility is going,” Carlisle said.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBuyers are now on the hunt for deals, said Nela Richardson, chief economist at Redfin.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“\u003Ci\u003EThere’s a limit even to what a wealthy person will spend\u003C\/i\u003E,” she said.\u003C\/blockquote\u003E\n\u003Cb\u003EIs Everybody In?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBloomberg did not make the necessary connection, but they did provide the chart. Let's tie up some loose ends.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn bonds, rot starts with junk and spreads to the core. With homes, price rot starts at the high end. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith Chinese West-coast buyers now not feeling so wealthy after a 47% plunge in the stock market, and with \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/temporary-capital-controls-coming-to.html\"\u003E\"Temporary\" Capital Controls\u003C\/a\u003E likely on the way, that segment of the high-end market is toast.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe strong dollar is having the same effect in Florida. And in New York, well ... \"There’s a limit even to what a wealthy person will spend.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnd every decrease in the price at the high end, affects every level below it. A mansion that was $1,000,000 but is now $900,000 will affect the price of homes listed for $850,000 to $900,000, etc., all the way down the ladder. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EIs Everybody In?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLet's return to the Econoday \"room to accelerate\" misanalysis. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf homebuilders could sell more expensive homes, they surely would. And at the very high end, it appears we have hit the peak. That group is \"all in\". \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg3DnRnOU2Q8vYnnCSHvo_5984R0Krv2730vEw9dHwhG4GA3LvqBIC_hu9C_b_8UDjvtjawhLfpSQz2wICI_jvHDSUCEor6qtrefsaZJAZVyKKiurLUO0_4KY6mzwB0bGcmhssBaw\/s1600\/Median+Home+Sales+Price.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg3DnRnOU2Q8vYnnCSHvo_5984R0Krv2730vEw9dHwhG4GA3LvqBIC_hu9C_b_8UDjvtjawhLfpSQz2wICI_jvHDSUCEor6qtrefsaZJAZVyKKiurLUO0_4KY6mzwB0bGcmhssBaw\/s400\/Median+Home+Sales+Price.png\" \/\u003E\u003C\/a\u003E \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt was one hell of a bubble-reblowing effort by the Fed, but another slide lower awaits. New homes prices will likely get cheaper and cheaper with more and more features added. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn turn that will lower the price of similar existing homes. This stuff does cascade. We have seen it before.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ELack of Supply\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere's plenty of talk about lack of supply. Actually, there's an ample supply of homes. There's just no supply at prices people are willing and able to pay. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nExpect lower, not higher prices. And if you need to get out, beat the rush, if you still can.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/4461013379692480259\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/4461013379692480259?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/4461013379692480259"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/4461013379692480259"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/new-home-sales-surge-but-prices-down.html","title":"New Home Sales Surge but Prices Down Sharply; Prices Have Room to Fall; Is Everybody In?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjHXlyIHihh8YEBVN_DuREy9cCjy07XT_BjMgCnynZYjJj_-59HSZfZ5b0n35I-CjBS4UlE4cNxXYK772-vsaz9CCGPUl_eRUyW4DZHXk6cYFBl9Ohg1Vd7XsxJ03iKd6U3Tg3U2g\/s72-c\/Luxury+Home+Prices.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-721983642038821152"},"published":{"$t":"2016-01-27T01:25:00.000-06:00"},"updated":{"$t":"2016-01-27T01:30:06.059-06:00"},"title":{"type":"text","$t":"Financial Engineering Chart of the Day: Fed Balance Sheet vs. S\u0026P 500"},"content":{"type":"html","$t":"\u003Cb\u003EFed Balance Sheet vs. S\u0026amp;P 500\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI was playing around with some ideas on the St Louis Fed \"Fred\" database and came up with this.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgxz6e92XVJOzCfWwZNpTb7q_c1edGOAyhxP2rD0Rhc4aS3LsGnXm0YHRpKfRBcEGBpDsOpcBQTIjFEgWFsiV2wtRc01YYIOfM3sdHm7DC_BoNU72xGAU2dRxqNLWU0xMM1-XJOHg\/s1600\/QE+vs+S%2526P+500.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgxz6e92XVJOzCfWwZNpTb7q_c1edGOAyhxP2rD0Rhc4aS3LsGnXm0YHRpKfRBcEGBpDsOpcBQTIjFEgWFsiV2wtRc01YYIOfM3sdHm7DC_BoNU72xGAU2dRxqNLWU0xMM1-XJOHg\/s400\/QE+vs+S%2526P+500.png\" \/\u003E\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/721983642038821152\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/721983642038821152?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/721983642038821152"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/721983642038821152"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/financial-engineering-chart-of-day-fed.html","title":"Financial Engineering Chart of the Day: Fed Balance Sheet vs. S\u0026P 500"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgxz6e92XVJOzCfWwZNpTb7q_c1edGOAyhxP2rD0Rhc4aS3LsGnXm0YHRpKfRBcEGBpDsOpcBQTIjFEgWFsiV2wtRc01YYIOfM3sdHm7DC_BoNU72xGAU2dRxqNLWU0xMM1-XJOHg\/s72-c\/QE+vs+S%2526P+500.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-7163249649095888385"},"published":{"$t":"2016-01-26T20:24:00.003-06:00"},"updated":{"$t":"2016-01-26T20:26:12.275-06:00"},"title":{"type":"text","$t":"French Taxi Drivers Burn Tires Block Airports in Mass 24-Hour Strike; 20% of French Flights Cancelled"},"content":{"type":"html","$t":"\u003Cb\u003EUnfair Competition\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe nation pastime in France is striking against \"unfair competition\". To French socialists, the term \"unfair competition\" means any competition. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn Tuesday French unions decided once again to do something about the unfairness: make everyone miserable as best they can. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EFlights Cancelled\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBloomberg reports \u003Ca href=\"https:\/\/next.ft.com\/content\/4a8dd502-c3ff-11e5-808f-8231cd71622e\" target=\"_blank\"\u003ETaxi Drivers Take to the Streets in 24-Hour French Strikes\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nFrance endured mass strikes on Tuesday as taxi drivers, air traffic controllers, civil servants and teachers demanded more purchasing power, job creation and an end to disruptive competition to traditional industries.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHundreds of taxi drivers took to the streets of Paris, burning car tyres and blocking routes to principal airports in a demonstration that spread disruption across the capital.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA protest by air traffic controllers prompted France’s Civil Aviation Authority to ask airlines to cancel 20 per cent of their flights in France. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe strikes stand to create further problems for President François Hollande and his socialist government as he battles with low economic growth and record unemployment. Mr Hollande has promised not to run for re-election in 2017 if he does not manage to reverse the upward trend in joblessness.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn Tuesday, hundreds of taxi drivers blocked the road at Paris’s Porte Maillot, one of the capital’s principal entry points. By early morning, they had already succeeded in blocking one direction of the eight-lane highway. Television images showed the strikers lighting fireworks and dragging metal barriers in front of commuter cars desperate to pass.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWaving flags and burning tyres, the taxi drivers were protesting about the rise of disruptive competition such as Uber, the US ride-sharing application, and Heetch, a French ride-sharing app that has become popular among young people.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAmong other things, they argue that minicab drivers working with services such as Uber do not have to pay the elevated prices for a regular licence — which have reached as high as €240,000 — and therefore compete under different conditions.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn June last year, police in riot gear used tear gas to break up a protest by taxi drivers, who had all but stopped transport to and from the capital’s airports.\u003C\/blockquote\u003E\n\u003Cb\u003EEconomic Emergency\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith today's strike, the economic emergency in France just got bigger. On January 18, I noted \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/hollande-declares-economic-emergency-to.html\" target=\"_blank\"\u003EHollande Declares \"Economic Emergency\" to Save Jobs - His\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\n\u003Cb\u003EEmergency Effort to Save Hollande's Job\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWith a national election 15 months away and unemployment not falling, a crisis in France emerged: French president Francois Hollande's own job is at risk.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHaving\u0026nbsp; promised to step down as president if unemployment in France fails to drop this year, Hollande took the necessary action.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHe declared a state of emergency to save jobs, namely his.\u003C\/blockquote\u003E\nHollande's job creation proposal centered around training schemes and apprenticeships. Few if any jobs would be created with such schemes. However, unemployment would drop because people in those programs are not considered unemployed.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHow to Create Jobs\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe primary reason French companies will not hire workers is that it's so damn hard to get rid of them later if they do.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAdd to that mountains of regulations including inane laws that tell businesses when they can or cannot open the doors. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf Hollande wants to create jobs, this is what he needs to do.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Col\u003E\n\u003Cli\u003EMake it easier for businesses to fire workers.\u003C\/li\u003E\n\u003Cli\u003ELet any business that wants to do so, open the doors on Sunday. \u003C\/li\u003E\n\u003Cli\u003EReduce unemployment benefits.\u003C\/li\u003E\n\u003Cli\u003EGet rid of countless regulations telling businesses what they can and cannot do.\u003C\/li\u003E\n\u003Cli\u003EGet rid of tariffs and subsidies.\u003C\/li\u003E\n\u003Cli\u003ECut taxes, both corporate and personal. Become a pro-business country. \u003C\/li\u003E\n\u003C\/ol\u003E\n\u003Cbr \/\u003E\nHe won't do that because it would cost Hollande his job.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAnd saving one's ass is always the top priority, so much so, it's now a national emergency.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/7163249649095888385\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/7163249649095888385?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7163249649095888385"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/7163249649095888385"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/french-taxi-drivers-burn-tires-block.html","title":"French Taxi Drivers Burn Tires Block Airports in Mass 24-Hour Strike; 20% of French Flights Cancelled"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-698508788022349891"},"published":{"$t":"2016-01-26T19:08:00.002-06:00"},"updated":{"$t":"2016-01-26T19:15:15.902-06:00"},"title":{"type":"text","$t":"How Healthy Is the Labor Market, Really?"},"content":{"type":"html","$t":"What's the \"official\" unemployment rate vs. economic reality?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn my analysis of the monthly jobs reports on the first Friday of the month, I make a statement similar to this: \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\"The official unemployment rate is 5.0%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is 9.9%. Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.\" \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere is no way to track disability fraud for sure, But I suspect it's 75% of those on disability.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EHornstein-Kudlyak-Lange Non-Employment Index (NEI)\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhile not addressing disability fraud or forced retirement issues, Richmond Fed economists Andreas Hornstein and Marianna Kudlyak, and McGill University economist Fabian Lange came up with the \u003Ca href=\"https:\/\/www.richmondfed.org\/research\/national_economy\/non_employment_index\" target=\"_blank\"\u003ENon-Employment Index (NEI)\u003C\/a\u003E as a better way to track the true health of the labor market.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThe NEI differs from the standard unemployment rate as a measure of resource utilization in two important ways:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n1. It counts not only the unemployed, but also those out of the labor force. The latter is a diverse group that includes individuals who want a job (such as the marginally attached who are willing and able to work and sought employment in the past, but have stopped searching) and those who do not want a job (such as retirees, the disabled, students, and those who are neither retired, nor disabled, nor in school).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n2. It weights the different groups of non-employed (that is, both the unemployed and people out of the labor force) according to their labor market attachment, or the likelihood that a non-employed person will transition back into the job market. Specifically, \u003Ci\u003Eeach group is weighted by its historical transition rate to employment relative to the highest transition rate among all groups\u003C\/i\u003E (the transition rate of the short-term unemployed).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAn additional version of the NEI is calculated to include people who are working part time but would like to work full time, a category called \"part time for economic reasons\" (NEI+PTER).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhe1HtKziZfQuDuh1_tzmPeP1GPHsDWRtB_1hDz0eSvcDP1hhX22nHq-AUiQr4pcnKZ9z2e9W2zCdOrRRNuyhXd_REI1rnqKnCex4NY39eFwGZ_QwvwhnLic1W_axrZ74yn66ALZg\/s1600\/NEI+Trends.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhe1HtKziZfQuDuh1_tzmPeP1GPHsDWRtB_1hDz0eSvcDP1hhX22nHq-AUiQr4pcnKZ9z2e9W2zCdOrRRNuyhXd_REI1rnqKnCex4NY39eFwGZ_QwvwhnLic1W_axrZ74yn66ALZg\/s400\/NEI+Trends.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDuring the period prior to June 2007, there was a close linear relationship between the standard unemployment rate and the NEI. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EWhy Does it Matter for Policy?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe decline of the unemployment rate after the 2007-09 recession has coincided with an increase in the number of individuals out of the labor force. These observations lead to the question: Post-2007, is there substantial labor market weakness beyond what is measured by the unemployment rate? For example, discouraged individuals who are not counted in the labor force aren’t included in the standard unemployment measure, but they do factor into labor market resource utilization. Economic research has shown that discouraged workers are not as distinct from those counted as unemployed as they might appear. They return to work at rates similar to those who have been unemployed for longer than 26 weeks. Therefore, excluding discouraged workers or similar groups from the standard unemployment measure may misstate the degree to which resources in the labor market are utilized. \u003C\/blockquote\u003E\n\u003Cb\u003ENEI Chart\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjNr4EinRSeOrHsO9WA3D8eKC0gtaPBBPMW6OfBC4yG7McjWYPeJhbiIK5l5Nhrs5srP61BO1bcvw_Kml7a2yoW67ESp-Vu5fDVQPhvQJpSE9ucvgNNwxpdRdOHVJefgY8n1WFbKg\/s1600\/NEI.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjNr4EinRSeOrHsO9WA3D8eKC0gtaPBBPMW6OfBC4yG7McjWYPeJhbiIK5l5Nhrs5srP61BO1bcvw_Kml7a2yoW67ESp-Vu5fDVQPhvQJpSE9ucvgNNwxpdRdOHVJefgY8n1WFbKg\/s400\/NEI.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe above chart is from the Fred Blog \u003Ca href=\"https:\/\/fredblog.stlouisfed.org\/2016\/01\/how-healthy-is-the-labor-market-really\/\"\u003EHow healthy is the labor market, really?\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe article gives you the means to recreate the chart. It does not allow you to see how the authors determined the weights.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMy suspicion is that their index undercounts massive disability fraud (those people who would want a job had they not been able to bilk the system). Then again, those people are not likely to be looking for a job, until the fraud stops.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFraud and similar issues aside, this chart is a step in the right direction in terms of understanding how over-hyped the decline in the unemployment rate has been.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor those interested in how disability fraud has artificially lowered the labor force I can provide numerous examples.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EDisability Fraud \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI have written about \u003Ca href=\"http:\/\/www.google.com\/cse?cx=partner-pub-8016246264838965%3Aim2m3485isl\u0026amp;ie=ISO-8859-1\u0026amp;q=disability+fraud\u0026amp;sa=Search\u0026amp;siteurl=globaleconomicanalysis.blogspot.com%2F\u0026amp;ref=\u0026amp;ss=6881j4407873j22#gsc.tab=0\u0026amp;gsc.q=disability%20fraud\u0026amp;gsc.page=1\" target=\"_blank\"\u003EDisability Fraud\u003C\/a\u003E at least a dozen times. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"color: #660000;\"\u003E\u003Cb\u003E60 Minutes\u003C\/b\u003E\u003C\/span\u003E: \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2013\/10\/mainstream-media-finally-catches-on-to.html\" target=\"_blank\"\u003EMainstream Media Finally Catches on to Disability Fraud: 60 Minutes Reports on \"Disability USA\"\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nSteve Kroft on 60 Minutes reports on the alarming state of the federal \ndisability program, which has exploded in size in the last six years and\n could become the first federal benefits program to run out of money.\n\u003C\/blockquote\u003E\n\u003Cspan style=\"color: #660000;\"\u003E\u003Cb\u003ENPR\u003C\/b\u003E\u003C\/span\u003E: \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2013\/03\/unwilling-to-work-1-in-4-in-hale-county.html\" target=\"_blank\"\u003EUnwilling to Work; 25% in Hale County AL Collect Disability, 14 Million Nationwide\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\n\u003Cb\u003EHow Easy is it to Get Disability?\u003C\/b\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHale county's Dr. Timberlake asks a simple question to all his patients.\n \"What grade did you finish?\" If you claim \"back pain\" and do not have a\n degree, Timberlake believes you are disabled.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EThe Disability Deal\n\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGetting disability seems easy enough in some states, and especially easy\n in Hale County Alabama. But is disability better than minimum wage? The\n answer is yes. NPR author Chana Joffe-Walt explains: ....\u003C\/blockquote\u003E\n\u003Cspan style=\"color: #660000;\"\u003E\u003Cb\u003EStates Promote Fraud\u003C\/b\u003E\u003C\/span\u003E: \u003Ca href=\"http:\/\/globaleconomicanalysis.blogspot.com\/2013\/09\/in-response-to-just-how-distorted-is-u.html\" target=\"_blank\"\u003EStates Have an Incentive to Promote (Not Stop) Disability Fraud; So How Much Fraud Is There?\u003C\/a\u003E\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nThis all goes back to 1996 when president Bill Clinton promised to \"\u003Ci\u003Eend welfare as we know it\u003C\/i\u003E\". He did indeed do just that, and fraud is the result.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhy?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EThe federal government pays disability, but states pay part of welfare \ncosts\u003C\/i\u003E. This creates a huge incentive for states to actively promote \ndisability fraud (simply to get people off state-sponsored welfare \nprograms).\u003C\/blockquote\u003E\n\u003Cb\u003EResults of Clinton Ending Welfare \"As We Know It\"\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cul\u003E\n\u003Cli\u003EEvery month 14 million Americans receive a disability check. \u003C\/li\u003E\n\u003Cli\u003EIn 1961 the leading cause of disability was heart disease and strokes, totaling 25.7% of cases. Back pain was 8.3% of cases. \u003C\/li\u003E\n\u003Cli\u003EIn 2011 the leading cause of disability was a hard to disprove back \npain, totaling 33.8% of cases. The second leading cause was an equally \ndifficult to disprove \"mental illness\" at 19.2%. Strokes and heart \ndisease fell to 10.6%.\u003C\/li\u003E\n\u003Cli\u003EIn West Virginia, a whopping 9% of the population collects \ndisability checks. In Arkansas, 8.2% are on disability, and in Alabama \nand Kentucky, 8.1% collect disability. In Alaska, Hawaii, and Utah, the \nfigure is 2.9%.\u003C\/li\u003E\n\u003Cli\u003EIn Hale County Alabama 1 in 4 receive disability checks.\u003C\/li\u003E\n\u003Cli\u003ENearly every case in Hale County Alabama has \nDr. Perry Timberlake in common.\u003C\/li\u003E\n\u003Cli\u003EThose on Supplemental Security Income, a program for children and \nadults who are both poor and disabled is nearly seven times larger than \n30 years ago.\u003C\/li\u003E\n\u003Cli\u003EOnce people go onto disability, they almost never go back to work. \nFewer than 1 percent of those who were on the federal program for \ndisabled workers at the beginning of 2011 have returned to the \nworkforce.\u003C\/li\u003E\n\u003C\/ul\u003E\n\u003Cbr \/\u003E\nDr. Timberlake asks a simple question to \nall his patients. \"What grade did you finish?\" If you claim \"back pain\" \nand do not have a degree, Timberlake believes you are disabled.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTimberlake gets paid for his \"\u003Ci\u003Eanalysis\u003C\/i\u003E\".\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nStates are willing to go along thanks to Bill Clinton who \"\u003Ci\u003Eended welfare as we know it\u003C\/i\u003E\", creating an even worse disability fraud scheme in the wake.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere has been no president since, Republican or Democrat, willing to \nstop fraud at the federal level. And clearly Obama is doing his best to \nexpand fraud.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EDisability Deal Explained\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EIf Democrats give enough free benefits to enough people, no one can ever vote them out of office.\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/698508788022349891\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/698508788022349891?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/698508788022349891"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/698508788022349891"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/how-healthy-is-labor-market-really.html","title":"How Healthy Is the Labor Market, Really?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhe1HtKziZfQuDuh1_tzmPeP1GPHsDWRtB_1hDz0eSvcDP1hhX22nHq-AUiQr4pcnKZ9z2e9W2zCdOrRRNuyhXd_REI1rnqKnCex4NY39eFwGZ_QwvwhnLic1W_axrZ74yn66ALZg\/s72-c\/NEI+Trends.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-2860400991741530856"},"published":{"$t":"2016-01-26T13:32:00.000-06:00"},"updated":{"$t":"2016-01-26T13:56:16.643-06:00"},"title":{"type":"text","$t":"Retail Sales vs. Consumer Confidence; Unwarranted Fed Faith in Wrong Surveys"},"content":{"type":"html","$t":"\u003Cb\u003EConference Board Consumer Survey \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe consumer conference board does a paper survey every month on consumer confidence.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe board's \u003Ca href=\"https:\/\/www.conference-board.org\/pdf_free\/press\/TechnicalPDF_4134_1298367128.pdf\" target=\"_blank\"\u003Etechnical notes\u003C\/a\u003E say (emphasis mine) \"The targeted \u003Ci\u003Eresponding\u003C\/i\u003E sample size - approximately 3,000 \u003Ci\u003Ecompleted\u003C\/i\u003E questionnaires - has remained essentially unchanged throughout the history of the CCI.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI called up the board with a simple question: How many surveys do you send out to get 3,000 \u003Ci\u003Ecompleted\u003C\/i\u003E questionnaires?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe very snooty person who answered the phone told me to look in the technical notes. However, the information isn't there or I cannot find it. I had already read the technical notes before I called. Besides, my question was quite simple.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ERetail Sales vs. Consumer Confidence\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Fed places a lot of faith in this survey. Yellen cites strong \nconsumer confidence frequently, as did Bernanke before her.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe numbers are out today. Consumer confidence is up. In general, confidence been high and rising for years.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHappy consumers are supposed to be shopping like mad, especially given the collapse in the price of gasoline.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLet's investigate those theories from today's \u003Ca href=\"http:\/\/www.bloomberg.com\/markets\/economic-calendar\" target=\"_blank\"\u003EEconoday Report\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhwWJASodMHPQ_Uaa6h40WZQ_5wsGoE-NlryRfm3ol7Kc-35Mx-CWOcj-xRxwds7nBxQUjbDRUrZjI3RIEtCeuXkCHdK4Xur40Os2Y4T830jBztWvEKUkOXizXmoCqiU8TafwWUOA\/s1600\/Consumer+Confidence+2016-01-26.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhwWJASodMHPQ_Uaa6h40WZQ_5wsGoE-NlryRfm3ol7Kc-35Mx-CWOcj-xRxwds7nBxQUjbDRUrZjI3RIEtCeuXkCHdK4Xur40Os2Y4T830jBztWvEKUkOXizXmoCqiU8TafwWUOA\/s400\/Consumer+Confidence+2016-01-26.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAlleged ties of this survey to consumer spending appear to be a complete bunch of hooey.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI keep wondering if paper surveys are part of the problem. Are the people who respond to random paper surveys more likely to be happier than those who don't?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003ENew York Fed Survey\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe New York Fed also does a survey. Every month, the New York Fed interviews a rolling group of 1200 people to produce a detailed \u003Ca href=\"http:\/\/www.newyorkfed.org\/microeconomics\/sce.html\"\u003ESurvey of Consumer Expectations\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHere are the results of the Fed's latest survey.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EOne Year Look Ahead Household Spending Projections \u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjoZsl8gLlvZfvQN-So8JHKI0CTVtZ4TVb2BtB-oW23GlKdzX1DCPKuXMP4XXnBFWbnk2EQMkquDEvLo3rtUHnnQG7Fbdb8IIRenrlSmzORengFijBUELZyWtSMrHMojR50MGxXXQ\/s1600\/Household+Spending+Projections+2016-01-26.png\" imageanchor=\"1\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjoZsl8gLlvZfvQN-So8JHKI0CTVtZ4TVb2BtB-oW23GlKdzX1DCPKuXMP4XXnBFWbnk2EQMkquDEvLo3rtUHnnQG7Fbdb8IIRenrlSmzORengFijBUELZyWtSMrHMojR50MGxXXQ\/s400\/Household+Spending+Projections+2016-01-26.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"color: #660000;\"\u003Eclick on chart for sharper image\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGiven the Fed places so much faith in various consumer confidence numbers, I have a simple question: Why don't they believe their own survey?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/2860400991741530856\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/2860400991741530856?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2860400991741530856"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/2860400991741530856"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/retail-sales-vs-consumer-confidence.html","title":"Retail Sales vs. Consumer Confidence; Unwarranted Fed Faith in Wrong Surveys"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhwWJASodMHPQ_Uaa6h40WZQ_5wsGoE-NlryRfm3ol7Kc-35Mx-CWOcj-xRxwds7nBxQUjbDRUrZjI3RIEtCeuXkCHdK4Xur40Os2Y4T830jBztWvEKUkOXizXmoCqiU8TafwWUOA\/s72-c\/Consumer+Confidence+2016-01-26.png","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-1616126082737312445"},"published":{"$t":"2016-01-25T23:56:00.002-06:00"},"updated":{"$t":"2016-01-26T00:02:22.129-06:00"},"title":{"type":"text","$t":"\"Temporary\" Capital Controls Coming to China?"},"content":{"type":"html","$t":"\u003Cb\u003EMassive Reserve Hemorrhage\u003C\/b\u003E \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nChina hemorrhaged $663 billion of its reserves since June 2014 in a misguided attempt to prop up the yaun. Once the biggest buyer of US treasuries \u003Ca href=\"http:\/\/www.wsj.com\/articles\/once-the-biggest-buyer-china-starts-dumping-u-s-government-debt-1444196065\" target=\"_blank\"\u003EChina Starts Dumping U.S. Government Debt\u003C\/a\u003E. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNote the irony of that headline. Misguided analysts long clung to the belief that the US dollar would go to hell when China started dumping treasuries, \"certificates of confiscation\" as they were commonly called.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nInstead, China has used a significant portion of its reserves to prop up the Yuan. It still has about $3.3 trillion left according to estimates, but China cannot keep the current pace up forever.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003E\"Temporary\" Capital Controls the Solution?\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Financial Times reports \u003Ca href=\"https:\/\/next.ft.com\/content\/5213ea3e-c35d-11e5-b3b1-7b2481276e45\" target=\"_blank\"\u003ECapital Controls May be China’s Only Real Option\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nChinese officials readily admit that communication has not been their strong point when it comes to dealing with international investors. Policymakers have now made it explicit that they have no wish to engineer a big devaluation. However, they are much less forthcoming about how they plan to reconcile a desire for currency stability with the realities of capital flight and a slowing economy.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCentral bank guidance is most effective when the policy is clear and it is relatively straightforward to work out how it will evolve in response to changes in economic data. At present, the reality in China is that the PBoC has no clear course of action and wants to leave itself flexibility.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNo amount of clarification would help to varnish the underlying problem: capital flight. The corruption clampdown and a lack of investment opportunities at home are driving Chinese people to take their money out of the country, just as the prospect of higher US interest rates is prompting companies to pay off dollar debt. Fear of a devaluation has fuelled the outflows. Far from seeking a weaker renminbi, the central bank has been forced to spend a big chunk of its reserves to prop it up \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis goes against the grain of recent liberalising measures, which last year helped China win the renminbi’s inclusion in the International Monetary Fund’s special drawing rights basket, alongside traditional reserve currencies. However, the IMF has become far more willing to accept the case for temporary capital controls since quantitative easing sparked huge flows of hot money into emerging markets.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nCapital controls are not a long-term solution but, at present, they are the correct step for Beijing to take in a very difficult situation. However, they will only work if China uses the breathing space to articulate a clear policy to rebalance its economy and liberalise its currency in the longer term — a process that will take many years. \u003C\/blockquote\u003E\n\u003Cb\u003EYuan’s Fall Is Just ‘Noise’ Amid Deeper China Woes\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Wall Street Journal hits the nail on the head with this headline: \u003Ca href=\"http:\/\/www.wsj.com\/articles\/yuans-fall-is-just-noise-amid-deeper-china-woes-1453781114\" target=\"_blank\"\u003EYuan’s Fall Is Just ‘Noise’ Amid Deeper China Woes\u003C\/a\u003E.\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nWhen the financier George Soros attacked the British pound in 1992 and famously “broke the Bank of England” he was trading on a conviction that the currency was misaligned.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBritain devalued after squandering its reserves in a vain defense. Mr. Soros walked off with $1 billion or more. To the surprise of many, though, the U.K. economy soon picked up once the pound found its proper level.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nChina’s raging battles with currency speculators are unlikely to end as happily for the country. That’s because turmoil in the currency markets reflects a much more perilous imbalance than an overvalued yuan: China is now lopsidedly dependent on ever larger inputs of local bank credit to keep sputtering growth from declining further.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe country is already littered with “zombie” factories, empty apartment blocks that form ghostly suburbs, mothballed power stations and other infrastructure that nobody needs. But yet more wasteful projects are in the pipeline, even as the government talks about cutting industrial overcapacity.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n“That’s the misalignment—everything else is noise,” says Rodney Jones, the Beijing-based principal of Wigram Capital Advisors, who was a partner at Soros Fund Management during the 1990s.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf debt keeps piling up at the current rate, China faces an eventual financial crisis, perhaps leading to years of subpar growth, mirroring the fate of Japan after its bubble burst in the early 1990s.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMr. Jones argues that global equity markets haven’t property adjusted to this risk, even after a 16% decline in U.S. dollar terms from their May peak. “The world will have to learn to live without demand from China,” he says. “It’ll come as a shock.”\u003C\/blockquote\u003E\n\u003Cb\u003EManaging a Crisis of China's Own Doing\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAs we sit here discussing \"temporary\" measures that often seem to last decades, we need to step back and ask: What caused this mess?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe answer is a ridiculous growth targets. To hit 7% growth targets for years on end, China had to waste a lot of money on projects, many of which are now worthless.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhile the boom lasted, China, like Japan before it, was considered an \"economic miracle\". \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTo top it off, China did not float the yuan, but now wants to defend an untenable target.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nUnlike the above writers, I suggest China do what it should have done a decade ago: \u003Ci\u003Efloat the yuan and stop micro-managing the economy\u003C\/i\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSure there will be a lot of short term pain. But short term pain is a lot better than three lost decades as Japan is experiencing\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/1616126082737312445\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/1616126082737312445?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1616126082737312445"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/1616126082737312445"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/temporary-capital-controls-coming-to.html","title":"\"Temporary\" Capital Controls Coming to China?"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-11324386.post-4206863953065514217"},"published":{"$t":"2016-01-25T13:28:00.002-06:00"},"updated":{"$t":"2016-01-25T13:28:53.802-06:00"},"title":{"type":"text","$t":"Dallas Fed Region Activity Plunges to Lowest Reading Since 2009; Production Collapsed"},"content":{"type":"html","$t":"Those expecting a bounce in manufacturing following an alleged improvement in the \u003Ca href=\"https:\/\/www.philadelphiafed.org\/research-and-data\/regional-economy\/business-outlook-survey\/2016\/bos0116\" target=\"_blank\"\u003EPhiladelphia Region\u003C\/a\u003E were mistaken.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn Philadelphia, all that really happened was that things got worse at a decreasing rate.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixzIJcvhdCRGdv-C0FWFDMJyyDZU6KGTnY-KjUexoGIBxz0lHlkZvaE_LTLdS1ueyXrCmA5u4Hg5f7JCRUjnv17IkTVFYRbbb8zXczfU-lgVvHbBgJHmsyhz_R4Rnv0xU-eTXJ1A\/s1600\/Philly+fed+2016-01-25.png\" imageanchor=\"1\" nbsp=\"\" target=\"_blank\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixzIJcvhdCRGdv-C0FWFDMJyyDZU6KGTnY-KjUexoGIBxz0lHlkZvaE_LTLdS1ueyXrCmA5u4Hg5f7JCRUjnv17IkTVFYRbbb8zXczfU-lgVvHbBgJHmsyhz_R4Rnv0xU-eTXJ1A\/s400\/Philly+fed+2016-01-25.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EDallas Region Collapse\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Dallas Fed General Activity Index plunged to -34.6 from a revised reading last month of -20.1. The \u003Ca href=\"http:\/\/www.bloomberg.com\/markets\/economic-calendar\" target=\"_blank\"\u003EEconoday Consensus Estimate\u003C\/a\u003E was -14.0 in a range of -17.0 to -10.0. The production index, also plunged. Last month the index was in positive territory at 12\/7. It's now -10.2.\n\u003Cblockquote \u003E\nManufacturing data from the Dallas Fed, along with that of the Kansas City Fed, have been offering the most striking evidence of oil-related contraction. Dallas' general activity index came in at an extremely negative score of minus 34.6 for the January report which is the lowest reading since the beginning of the recovery in 2009.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNew orders are falling deeper into contraction as are unfilled orders. Hours worked are now in the negative column as is employment. And finally falling into contraction -- and in a big way -- is the production index which had through last year, despite long weakness in orders, held in positive ground, but not anymore with the reading at minus 10.2 for a nearly 23 point monthly plunge. Price data in this report remain well into the minus column, at nearly double-digit monthly declines.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nManufacturing reports this month have been mixed, with this and Empire State pointing to another buckling but not the most closely followed report, the Philly Fed which is pointing to stability for the sector. Watch for the Richmond Fed report tomorrow and the Kansas City report on Thursday.\u003C\/blockquote\u003E\n\u003Cb\u003EProduction vs. Activity\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca target=\"_blank\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjEUbbj5uizF9XK0m6iSgJ4shdMtwjwpTUhRvVZmP-3WeYop1TdPAsVhSkHD1TqT3scRr5IVYkM4NH6B7puVwwVL54hWTwzCNNpFOPOa6jpg2S10Kv67P0Mp3bDoBwULSOjnoCsjg\/s1600\/Dallas+Fed+2016-01-25.png\" imageanchor=\"1\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjEUbbj5uizF9XK0m6iSgJ4shdMtwjwpTUhRvVZmP-3WeYop1TdPAsVhSkHD1TqT3scRr5IVYkM4NH6B7puVwwVL54hWTwzCNNpFOPOa6jpg2S10Kv67P0Mp3bDoBwULSOjnoCsjg\/s400\/Dallas+Fed+2016-01-25.png\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nPrice of oil and gas is so low, production is a money-losing effort. This month we finally see the production spigots have been turned to low throttle. It's a needed step for oil prices to bottom.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMike \"Mish\" Shedlock\u003Cdiv class=\"blogger-post-footer\"\u003EMike \"Mish\" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.\nVisit http:\/\/www.sitkapacific.com\/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.\u003C\/div\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"http:\/\/globaleconomicanalysis.blogspot.com\/feeds\/4206863953065514217\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"http:\/\/www.blogger.com\/comment\/fullpage\/post\/11324386\/4206863953065514217?isPopup=true","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/4206863953065514217"},{"rel":"self","type":"application/atom+xml","href":"http:\/\/www.blogger.com\/feeds\/11324386\/posts\/default\/4206863953065514217"},{"rel":"alternate","type":"text/html","href":"http:\/\/globaleconomicanalysis.blogspot.com\/2016\/01\/dallas-fed-region-activity-plunges-to.html","title":"Dallas Fed Region Activity Plunges to Lowest Reading Since 2009; Production Collapsed"}],"author":[{"name":{"$t":"mikeshedlock"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/07844630325255577301"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixzIJcvhdCRGdv-C0FWFDMJyyDZU6KGTnY-KjUexoGIBxz0lHlkZvaE_LTLdS1ueyXrCmA5u4Hg5f7JCRUjnv17IkTVFYRbbb8zXczfU-lgVvHbBgJHmsyhz_R4Rnv0xU-eTXJ1A\/s72-c\/Philly+fed+2016-01-25.png","height":"72","width":"72"},"thr$total":{"$t":"0"}}]}});