The USA TODAY/IHS Global Insight Economic Outlook Index:

http://www.usatoday.com/money/economy/economic-outlook.htm

an excerpt dated 2/24: “The February update of the USA TODAY/IHS Global Insight Economic Outlook Index shows real GDP growth, at a six-month annualized growth rate, above 4% in January through April followed by slower but solid growth in May through July. The slower growth is expected as inventory boosts slow and the government’s monetary and fiscal stimulus programs end.”

The ECRI WLI (Weekly Leading Index):

http://www.businesscycle.com/news/press/1764/

an excerpt dated March 12:  “(Reuters) – A gauge of future U.S. economic growth rose slightly in the latest week while its yearly growth index continued to fall to a 31-week low, upholding expectations the economy will likely decelerate starting mid-year, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index was 130.6 for the week ended March 5, up from 129.8 the previous week.”

Fortune’s Big Picture Index:

http://money.cnn.com/magazines/fortune/storysupplement/recovery_index/index.html

-I was unable to obtain updated values for this index-

The Dow Jones ESI (Economic Sentiment Indicator)

http://solutions.dowjones.com/economicsentimentindicator/

This indicator was at 38.1 as of March 1; as seen on the chart, this index seems to be holding at a relatively steady level since November.

The Aruoba-Diebold-Scotti Business Conditions (ADS) Index

http://www.philadelphiafed.org/research-and-data/real-time-center/business-conditions-index/

Here is the latest chart (updated as of March 6) of this indicator:

The Conference Board LEI (Leading Economic Index) and CEI (Coincident Economic Index)

www.conference-board.org

Per a news release of February 18, the January LEI was at 107.4 and the January CEI was at 100.1.  There exists a notable gap between these two measures.

“New Financial Conditions Index”

I had a post of this index on Wednesday, which can be found here:

http://www.economicgreenfield.com/2010/03/10/new-financial-conditions-index/

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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.

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SPX at 1149.99 as this post is written

First, it contained the survey results and comments of economists with regard to what impact interventions (The Federal Reserve’s actions as well as that of the ARRA) have played in “rescuing the U.S. economy from the financial crisis.”

Second, according to the survey, “…the economists put the odds of a double-dip recession at just 17%…”

Third, to the question “How confident are you that Congress and the president will act to reduce the long-term budget deficit before a major financial market crisis?” these responses were interesting:

“We usually do the right thing after having exhausted all other options.”

“Their record of fiscal discipline is horrific.”

Otherwise, the various forecast averages for such measures as the Ten-Year Treasury Yield, GDP and Unemployment Rate remain largely unchanged.  As seen in the detail, there hasn’t been material change in the average of these forecasted measures for months.

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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 agree with the consensus estimates and much of the commentary in these forecast surveys.

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SPX at 1149.99 as this post is written

Here is a chart of the S&P500 price action of the last two months:

chart courtesy of StockCharts.com

This is yet another notable occurrence presently in the markets.  I will be commenting more on some notable market aspects shortly.

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SPX at 1149.65 as this post is written

This paper discusses and explains this new attempt to create a “financial conditions index” that will accurately predict economic activity.

From the abstract: “As of the end of 2009, our FCI showed financial
conditions at somewhat worse-than-normal levels. The main reason is that quantitative credit measures (e.g. asset-backed securities issuance) remain very weak, especially once we control for past economic growth. Thus, our analysis is consistent with an ongoing modest drag from financial conditions on economic growth in 2010.”

Here is a chart of the “New FCI” from page 43 of the report:

I will reserve comment on this “New FCI” as I have yet to thoroughly review the paper and the “New FCI” methodology.

However, I find it interesting and hope to include it with the other financial and economic indicators I periodically (the last being the January 11 post) review.

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SPX at 1143.84 as this post is written

The four purported bubbles mentioned in the article are Gold, oil, the stock market, and Treasuries.  I have discussed each of these markets, with the exception of oil, in previous posts.

I found the logic and discussion in the article interesting, although I did not agree with various aspects of the article.  I especially disagree with the logic about housing, for reasons I have recently written about.

It is very important for investors to understand whether the markets they are investing in are indeed experiencing bubbles.   My previously written posts are found under the “Bubbles” Category.

Of course, the existence and prevalence of bubbles also has massive ramifications for the economy, especially when viewed from the standpoint of Sustainable Prosperity.

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SPX at 1137.15 as this post is written

This March 5 article from CNBC.com summarizes some of the opinions regarding the double-dip reasoning and possibilities.

I find these worries about a “double-dip” recession interesting for many reasons.  Perhaps chief among these reasons is that even among those who think a “double-dip” recession is likely, these people don’t seem to believe that any further economic weakness will be worse than that which we experienced during the trough set in late ‘08-early ‘09.

I’m not sure for the reasoning behind this belief; and I have seen none offered.  However, per my previous posts I don’t believe this is a logical conclusion.

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SPX at 1138.70 as this post is written

Here is yet another alleged Ponzi scheme as seen in Thursday’s Wall Street Journal article titled “SEC Charges Couple in Florida Ponzi Scheme.”

As seen in the article, this alleged scheme is stated at $135 million.

It is difficult to say how widespread investment frauds are and how much investment fraud is yet to be uncovered.

However, based upon a variety of factors I would say that there is much investment fraud still “out there” (i.e. yet to be uncovered) and the true figure will likely prove to be eye-popping.

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SPX at 1138.70 as this post is written

This is no doubt the case in many areas of the country, especially those that have experienced large declines in residential real estate prices.

Is this condition, where one can own cheaper than renting, a valid justification for buying a home?

I would argue that it is not, for many reasons.  Here are three of the many reasons:

First, “I can own cheaper than I can rent” usually refers to the condition that the monthly mortgage payment is cheaper than the monthly rent payment.  Is this the main criteria that one should use when evaluating what is likely the largest financial commitment one will ever make, that of buying a house?  Of course not -  there should be many factors that weigh into such a decision.

Second, as indicated in the real estate valuation story in my last post, historically when house prices fell to or below the equivalent rent levels, a “bottom in (home) prices” had either been realized or was close.   However, as I have written in previous posts, our national real estate situation is far dissimilar to that of prior years.  As such, comparisons need to be adjusted accordingly.

Third, one should be very mindful of one’s ability to sell real estate in today’s real estate market, should one need to.  Normally, the ability to sell real estate in a timely fashion, and at a “decent price,” is not a major issue.  However, for many people currently looking to sell a house, it has become a very significant factor.  While I could post some statistics with regard to unsold home inventories and the like, I will not do so as I feel these statistics are significantly skewed (and as such unrepresentative) due to a variety of factors.

For these three reasons, as well as many others, I feel that on an “all things considered” basis, the fact that one “can own cheaper than renting” in many areas is to be considered more of a “red flag” than a “green light” as far as buying a house is concerned.

SPX at 1118.79 as this post is written

Of course, given my previous posts on residential real estate I don’t agree with many aspects of the story, especially the statement “Given that analysis, it’s likely that prices will fall another 5% or so nationwide.”

However, I do find the story interesting as it portrays a case for the commonly-held belief that the residential real estate market decline is nearly over.

SPX at 1121.91 as this post is written

What I find interesting is that the chart (pdf, at this link) plotting the current probability of recession indicates an imperceptibly small .04% chance of recession as of January 2010.  As seen in the chart (as well as accompanying data file) the recent peak was in the 40%-50% range in the latter part of 2007 and into 2008.

Of course, I strongly disagree that there is currently a .04% of recession.

On the NY Fed link above, they have posted numerous studies that support the theory that the yield curve is a leading indicator.   My objections with using it as a leading indicator, especially now, are various.  These objections include: I don’t think such a narrow measure is one that can be relied upon;  both the yields at the short and long-end of the curve have been overtly and officially manipulated, thus distorting the curve; and, although the yield curve may have been an accurate leading indicator in the past, this period of economic weakness is inherently dissimilar in nature from past recessions and depressions in a multitude of ways – thus, historical yardsticks and metrics probably won’t (and have not) proven appropriate.

SPX at 1110.87 as this post is written