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March Spending Driven By Surge In Services
- Written by Lance Roberts | Monday, April 29, 2013
The latest personal income and expenditure report for March was of particularly interesting reading. However, as opposed to the mainstream headlines that immediately reported that despite higher payroll taxes consumers were still spending, and therefore a sign of a strong economy, it was where they were spending that was most telling. As I searched the various headlines, and read several of the economic releases, I came across only one analysis that questioned the headline report.
Tyler Durden at...
Durable Goods: Another Straw For The Camel
- Written by Lance Roberts | Friday, April 26, 2013
In the ongoing series of economic reports released as of late which have missed consensus estimates - the durable goods report was the latest straw to be piled onto the "camel's back" showing softness in the economy. Of course, this really isn't surprising given the earnings news as of late from Caterpillar, IBM and even Apple.
After surging in February durable goods plummeted in March and this time it was not just aircraft related - the core rate contracted as well with both measures disappointing...
It's A Bit Early To Declare A Winner In The Economic Debate
- Written by Lance Roberts | Thursday, April 25, 2013
Recently, Henry Blodget wrote that "The Economic Argument Is Over - And Paul Krugman Won." The premise of the article is that the ongoing debate between economic schools of thought, since the financial crisis began, over what policies were necessary to get the domestic and international economies growing again has been resolved.
"On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This 'stimulus' spending, economists like...
Economic Slowdown More Than A "Soft Patch"
- Written by Lance Roberts | Wednesday, April 24, 2013
HOUSTON (MarketWatch) — For months, economists and the media have proclaimed that we are in full-recovery mode. While the markets were at record highs, unemployment had not improved, economic growth was stagnant and most corporate earnings had little to do with an increase in sales and revenue and were based on moves like laying-off thousands of people and shedding non-performing assets.
Last week, Goldman Sachs Group Inc. — one of those bullish outfits projecting enthusiasm — reversed its earlier...
Has Real Estate Sales Activity Peaked?
- Written by Lance Roberts | Tuesday, April 23, 2013
Over the last month I have been discussing the deterioration in the economic data (see here, here and here). However, the one bright spot, economically speaking, has been real estate. However, that "bright spot" has come with many caveats since much of the recovery in real estate has been through "cash only" purchases of distressed homes, hedge funds buying large quantities of homes to turn them into rentals and multifamily units making up a large portion of the new construction. The recovery in...
STA Economic & Employment Composites Paint Weak Picture
- Written by Lance Roberts | Tuesday, April 23, 2013
With the recent release of the Chicago Fed National Activity Index (CFNAI) I can now complete my economic and employment composites for March. The problem, as I see it, with most economic data is that it is generally too specific to a particular region, or industry, to tell us much about the health of overall economy. Furthermore, the data is generally viewed on a month over month basis which obfuscates the real story behind the data which is revealed by analyzing the overall trend.
For example,...
Random Observations & Rising Risks
- Written by Lance Roberts | Thursday, April 18, 2013
I have spent to last few days reviewing, writing, and discussing the economy, markets and investing. While my opinions have been unfavorable amongst the "stock bulls" over the last several months many of the issues I have been discussing, the "risks", are now coming to fruition. My analysis is often misconstrued to mean "get out of stocks and hide in cash" which could not be further from the truth. As investors, and primarily savers, our job is simply this:
"The allocation of capital with the...
Fox Business: Market & Investing Debate
- Written by Lance Roberts | Thursday, April 18, 2013
I recently visited with Melissa Francis on Fox Business News, along with two other panelists, to discuss the current market and investing strategies. My position currently is that holding cash in the short term is the best hedge against market volatility and uncertainty. Moreover, as I discussed with Liz Claman recently, the importance of "harvesting" profits from your portfolio cannot be overlooked. The issue is that if we don't sell from as markets rise we do not have capital to invest with...
Goldman Sachs: A Consumption Setback
- Written by Lance Roberts | Wednesday, April 17, 2013
I recently posted two pieces discussing that the peak of economic growth was likely behind us. (See here and here) In particular both pieces addressed personal consumption expenditures and their importance to the overall strength and direction of the economy. To wit:
"...personal consumption expenditures (PCE) comprise about 70% of the gross domestic product calculation. As PCE goes - so goes the economy."
The importance of consumption on the overall economy should not be overlooked. While,...
More Evidence That The Economic Peak Is In
- Written by Lance Roberts | Tuesday, April 16, 2013
Recently I posted "Economy In Pictures: Have We Seen The Peak?" which was simply a series of charts including GDP, wages, spending, production and employment from which you were allowed to draw your own conclusions. The point of this exercise was to allow your brain to juxtapose visual data to the ongoing mainstream diatribe of economic recovery. I stated then that:
"The general mantra from mainstream analysts and economists since the first of the year is that the 'economy is set to finally turn the...
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