Free Markets, Free People

Dale Franks

Dale Franks’ QandO posts

Economic Statistics for 31 May 12

The following statistics were released today on the state of the US economy:

The Commerce Department has revised 1st Quarter GDP down to an annualized 1.9% from the initial 2.2% estimate. In other words, the 1st quarter was even more lackluster, and the economy even more moribund than it initially appeared.

Initial jobless claims rose 10,000 to 383,000. The 4-week moving average rose 3,750 to 374,500.

Last week’s massive 27,000 layoff announcement from HP swelled the Challenger Job-Cut Report to 61,887 layoffs for May.

ADP estimates that May private payrolls rose 133,000 vs. its revised rise of 113,000 for April. We’ll see how close that estimate is to reality tomorrow morning.

Corporate profits in 1Q 2012 grew to $1.669 trillion annualized, compared to $1.494 trillion in 4Q 2011.

The Chicago Purchasing Manager’s Index came in well below analysts’ expectations at 52.7, the lowest reading since September 2009.

Consumers are reporting their personal finances are in better shape, leading the Bloomberg Consumer Comfort Index to a 4-week high at -39.3.

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Dale Franks
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Economic Statistics for 30 May 12

The following statistics were released today on the state of the US economy:

The Pending Home Sales Index fell 5.5% to 95.5. Unexpectedly, of course. This indicates coming weakness in May and June home sales.

Despite low rates, mortgage applications fell -1.3%, with purchase applications down -0.6%, and refinance applications down -1.5%.

In retail sales, Redbook’s year-over-year same store sales increase of 3.2% still leaves May sales down -0.9% from April. ICSC-Goldman reports store sales fell -0.5% for the week, with year-over-year store sales up 2.9%. This is better than Redbook, but still not good.

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Dale Franks
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Economic Statistics for 29 May 12

The following statistics were released today on the state of the US economy:

The Dallas Fed Mfg Survey’s Business activity index fell to -5.1 from -3.4. The production index fell to 5.5. from 5.6.

The S&P Case-Shiller Home Price Index rose 0.1% in March; however, it’s still -2.6% lower than March 2011.

The Consumer Confidence Index fell 4 points to 64.9.

The State Street Investor Confidence Index fell a bit more than a point to 86.4.

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Dale Franks
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Observations: The QandO Podcast for 27 May 12

This week, Bruce, Michael and Dale talk about the Obama Campaign, the press, and new media.

The direct link to the podcast can be found here.

Observations

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Economic Statistics for 24 May 12

Here are today’s statistics on the state of the economy:

Initial claims for unemployment were 370,000 in the latest week. Last week’s number was revised upwards to 372,000. The 4-week moving average dropped to 370,000.

Durable goods orders rose 0.2% overall in April, and 6.9% over last year. Ex-transportation, however, orders unexpectedly declined by -0.6%, though they’re still up 5.3% for the year.

Lower gas prices pushed the Bloomberg Consumer Comfort index up to -42 in the week ended May 20 after an almost four-month low of -43.6 the prior week.

The Kansas City Fed Manufacturing Index rebounded to its March level of 9 from April’s reading of 3, on growth in durable and nondurable goods producing plants.

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Dale Franks
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Economic Statistics for 23 May 12

The following statistics were released today on the state of the US economy:

New home sales increased 3.3 percent in April to a better-than-expected seasonally adjusted 343,000-unit annual rate.

Mortgage application for last week rose by 3.8%. Purchases fell by -3.0%, while refinance apps rose 5.6%.

The FHFA House Price Index rose 0.6% in the 1st Quarter of 2012. House prices are also up 0.5% from 1Q 2011, which make today’s result the 1st yearly increase since 2007. On a monthly basis, the HPI rose 1.8% from February.

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Dale Franks
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Economic Statistics for 22 May 12

The following statistics were released today on the state of the US economy:

Existing home sales improved in April, but not as much as expected, coming in at a 4.62 million annual rate. Sales were up 3.4%, but that was to be expected after a terrible March report. Sales were up 10% compared to last year.

The Richmond Fed Manufacturing Index shows regional growth slowing sharply for the month, falling to 4 from 14.

In weekly retail sales, ICSC-Goldman reports a-1.7% drop in store sales from last week, with the year on year rate down to 3.8%. Similarly, Redbook reports year on year same-store sales up only 2.7% down a full percentage point from last week.

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Dale Franks
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Fantasy vs. Reality

Greece’s long vacation from reality is very nearly over. Not that you’d believe it from listening to the country’s politicians. In the aftermath of Greece’s last elections, voters rejected further austerity, and instead sought refuge in fantasy. That fantasy is perhaps best exemplified by Alexis Tsipras, who emerged from the election with the power to block approval of any further austerity by blocking the formation of a government.

Indeed, I now have some doubt as to whether Mr. Tsipras is actually sane:

Leftist Alexis Tsipras, 37, emerged with the power to block them. Greece, he said, could ditch its spending cuts and renounce its debts to EU partners, yet enlist their help in keeping the euro currency some 80 percent of Greeks cherish.

Not. Gonna. Happen.

And everybody with a lick of sense knows it’s not gonna happen. Not in Greece. Nor, apparently, anywhere else on the Euro Zone’s periphery, as money is fleeing it with alacrity.

Foreign bank deposits have fallen 64% in Greece, 55% in Ireland and 37% in Portugal; in Italy, the fall is 34% and Spain 13%. Foreign government bond holdings have dropped 56% in Greece, 18% in Ireland and 25% in Portugal; in Italy the fall is 12% and Spain 18%. So if Italy and Spain were to move to the average for the other three, a further 200 billion euros would flow out.

The Greeks are not being punished by rich Germans. They aren’t the victims of speculators or criminals. They are merely being forced to pay the price that reality is about to impose for decades of enthusiastic socialism, and the attendant corruption, debt, and malfeasance it has encouraged. Their problem isn’t "austerity"; it’s the unsustainable political and economic fantasies that have sustained the county’s political culture.

Greece is a failed state.  Spain is about to become a failed state. No doubt a list of "enemies" will be promulgated to try and paper over whose fault all this actually is. The sacrifice of scapegoats in times of crisis is, after all, a venerated European tradition.

But, that won’t help, or stop what is coming. Reality is relentless. And the really scary thing about that is that there are lessons in all this for us, which I am not entirely sure our own political class will heed—or is even capable of recognizing.

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Dale Franks
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