Monthly Archives: April 2013

Current Economic Situation

With regard to our current economic situation,  my thoughts can best be described/summarized by the posts found under the 23 “Building Financial Danger” posts.

My thoughts concerning our ongoing economic situation – with future implications – can be seen on the page titled “A Special Note On Our Economic Situation,” which has been found near the bottom of every blog post since August 15, 2010.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1555.25 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – April 19, 2013 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reiterated the view that the U.S. economy is currently in a recession, seen most recently in these three sources :

Other past notable 2012 reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order)  on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

Also, subsequent to May 2012:

Below are three long-term charts, from Doug Short’s blog post of April 19 titled “Recession Watch:  ECRI’s Weekly Leading Indicator Rises.”  These charts are on a weekly basis through the April 19 release, indicating data through April 12, 2013.

Here is the ECRI WLI (defined at ECRI’s glossary):

(click on charts to enlarge images)

Dshort 4-19-13 ECRI-WLI 130.6

This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

Dshort 4-19-13 ECRI-WLI-YoY 3.5 percent

This last chart depicts, on a long-term basis, the WLI, Gr.:

Dshort 4-19-13 ECRI-WLI-growth-since-1965 6.6

 

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1554.80 as this post is written

St. Louis Financial Stress Index – April 18, 2013 Update

On March 28, 2011 I wrote a post (“The STLFSI“) about the  St. Louis Fed’s Financial Stress Index (STLFSI) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on April 18, incorporating data from December 31,1993 to April 12, 2013 on a weekly basis.  The April 12, 2013 value is -.693 :

(click on chart to enlarge image)

STLFSI_4-18-13 -.693

Here is the STLFSI chart from a 1-year perspective:

STLFSI 4-18-13 -.693 1-year

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 19, 2013:

http://research.stlouisfed.org/fred2/series/STLFSI

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1543.83 as this post is written

Revisions Of Economic Data

Revisions of economic data is an important topic for a variety of reasons.  This topic is particularly relevant as most economic data series are either subject to revision, or revised at regular intervals.

While the topic is complex, it is one that I feel generally lacks sufficient recognition.

The extent, complexity, frequency, methodologies, and potential for revisions varies by data series.  As such, attempting to make general statements concerning revisions is difficult.  However, given that various revisions are often large and unpredictable, one should be cognizant of these characteristics when assessing economic data.

One economic data series and its revisions that I have previously commented upon is that of GDP.  That September 5, 2012 post is titled “Comments Concerning GDP Revisions.”

As far as the data depicted on this blog is concerned, I attempt to provide various information, including a date for which the data has last been updated, as well as a link to the data source, which should allow one to read about the data’s revisions and history.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1543.34 as this post is written

Charts Of Equities’ Performance Since March 9, 2009 And January 1, 1980 – April 17, 2013 Update

In the March 9, 2012 post (“Charts of Equities’ Performance Since March 9, 2009 And January 1, 1980“) I highlighted two charts for reference purposes.

Below are those two charts, updated through yesterday’s closing price.

The first is a daily chart of the S&P500 (shown in green), as well as five prominent (AAPL, IBM, WFM, SBUX, CAT) individual stocks, since 2005.  There is a blue vertical line that is very close to the March 6, 2009 low.  As one can see, both the S&P500 performance, as well as many stocks including the five shown, have performed strongly since the March 6, 2009 low:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

EconomicGreenfield 4-17-13 AAPL IBM et al since 2005

This next chart shows, on a monthly LOG basis, the S&P500 since 1980.  I find this chart notable as it provides an interesting long-term perspective on the S&P500′s performance.  The 20, 50, and 200-month moving averages are shown in blue, red, and green lines, respectively:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

EconomicGreenfield 4-17-13 SPX Monthly since 1980

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1559.44 as this post is written

The S&P500 Vs. The Shanghai Stock Exchange Composite Index – April 16, 2013

Starting on May 3, 2010 I have written posts concerning the notable divergence that has occurred between the S&P500 and Chinese (Shanghai Composite) stock markets.

The chart below illustrates this divergence; it shows the S&P500 vs. the Shanghai Composite on a daily basis, since 2006:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

EconomicGreenfield 4-16-13 SPX v SSEC

It is notable that the Shanghai Composite led the SPX (S&P500) significantly in late ’08 – early ’09, yet it has been (generally) declining since that time.

I continue to find this divergence between the S&P500 and  Shanghai Composite to be notable and disconcerting, on an “all things considered” basis.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1552.36 as this post is written

Gold’s Decline And Implications

This post is an update to that of April 5, 2012, titled “The Current Gold Price And Its Broader Implications.”

Below is a chart similar to that displayed in the April 5 post:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

EconomicGreenfield 4-15-13 Gold HUI HUI-Gold

The above chart is depicted on a daily basis from 2008 through April 12, with the thin blue line depicting the 200dma of the Gold price, HUI and HUI:Gold ratio.  The closing price of Gold on April 12 is $1480.50/oz.  I find several items to be noteworthy.  First is the decline in the price of Gold, which can be seen  in the upper plot of the chart.  As one can see, the Gold price has been (relatively) rangebound since its highs in the summer of 2011, but has recently been dropping below that range.   Also, the HUI Index has been (generally) dropping since those Gold highs in the summer of 2011.  Lastly, one can see that the HUI:Gold ratio has been (generally) sinking during the post-summer 2011 Gold highs as well, and is now roughly at the same lows as those experienced during the Financial Crisis.

In aggregate, I believe the movements in Gold and Gold stocks (using the HUI as a proxy) is disconcerting for various reasons, such as that I explained in the aforementioned April 5 post, which references the post of August 25, 2011, “Gold And Deflationary Pressures.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1579.04 as this post is written

The April 2013 Wall Street Journal Economic Forecast Survey

The April Wall Street Journal Economic Forecast Survey was published on April 12, 2013.  The headline is “Economists View Recent Swoon as Mere Hiccup in Growth.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the Q&A found in the spreadsheet.

Notable excerpts from the article include:

The survey respondents expect growth to pick up in the second half of the year. On the whole, they see 2013 growth at 2.5%, which would be the fastest pace since 2005. Growth is forecast to accelerate to 2.9% for 2014 and 3% for 2015.

Even though the economy appears to be slowing in the current quarter, there are significant positives, including the housing market, that keep the odds of recession low. Economists put just a 15% chance of another downturn in the next 12 months.

As well, there are a variety of interesting questions (seen in the spreadsheet), including  “Which major central bank has the most appropriate monetary policy for its home economy?”  Responses were “Federal Reserve” at 51%; “European Central Bank” at 26%; “Bank of Japan” at 19%; and “Bank of England” at 8%.

The current average forecasts among economists polled include the following:

GDP:

full-year 2013:  2.5%

full-year 2014:  2.9%

full-year 2015:  3.0%

Unemployment Rate:

December 2013: 7.4%

December 2014: 6.8%

December 2015: 6.2%

10-Year Treasury Yield:

December 2013: 2.34%

December 2014: 3.01%

December 2015: 3.57%

CPI:

December 2013:  2.1%

December 2014:  2.2%

December 2015:  2.5%

Crude Oil  ($ per bbl):

for 12/31/2013: $94.12

for 12/31/2014: $95.68

(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)

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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1588.85 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – April 12, 2013 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reiterated the view that the U.S. economy is currently in a recession, seen most recently in these three sources :

Other past notable 2012 reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order)  on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

Also, subsequent to May 2012:

Below are three long-term charts, from Doug Short’s blog post of April 12 titled “ECRI’s Weekly Leading Indicator Shows a Small Improvement.”  These charts are on a weekly basis through the April 12 release, indicating data through April 5, 2013.

Here is the ECRI WLI (defined at ECRI’s glossary):

(click on charts to enlarge images)

Dshort 4-12-13 - ECRI-WLI 130.1

This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

Dshort 4-12-13 ECRI-WLI-YoY 2.9 percent

This last chart depicts, on a long-term basis, the WLI, Gr.:

Dshort 4-12-13 ECRI-WLI-growth-since-1965 6.2

 

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1586.33 as this post is written

St. Louis Financial Stress Index – April 11, 2013 Update

On March 28, 2011 I wrote a post (“The STLFSI“) about the  St. Louis Fed’s Financial Stress Index (STLFSI) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on April 11, incorporating data from December 31,1993 to April 5, 2013 on a weekly basis.  The April 5, 2013 value is -.632 :

(click on chart to enlarge image)

STLFSI_4-11-13 -.632

Here is the STLFSI chart from a 1-year perspective:

STLFSI_4-11-13 -.632 1-year

 

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1588.00 as this post is written