Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list has Felix Salmon asking if we have solved our fiscal problems........ and the last article is Bill Gross' admonition that, although the bond market has peaked, interest rates will not rise immediately.
Econontersect: The minimum required income for a family of four averaged $58,000 in a national poll conducted in April by the Gallup organization. The poll covered more than 2,000 randomly selected adults (18 and older) from all 50 states and the District of Columbia. The results varied with region of the country, income of the respondent and whether the residence was rural, urban or suburban. A telling statistic reflecting upon the diversity of opinion is the significant difference between mean (average) of $58,000 and median (mid-point reponse), which was $50,000. That indicates the distribution of answers was not balanced, with a long tail of responses to higher incomes.
As a nation of multi-taskers we use any moment that our hands are free to send a cheeky text or check the latest facebook updates, so we weren’t surprised when a recent polled revealed that 75% of people admitted to toilet tweeting, emailing and even making a cheeky call whilst sat on the loo. (Tweeting we get, but calling someone?!)
Horror stories of dropping your phone down the loo are increasingly common, with a slip of the hand being all it takes to see your shiny smartphone lying in the deep dark abyss of the toilet bowl. As inevitable is this is, we decided to delve deeper into how exactly your phone can survive this gloomy fate, with a handy info graphic revealing all the steps needed to recover a loo ridden device.
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list has Edward Harrison's discussion of Canadian house prices........ and the last article is about Brooklyn, NY police raiding a tomato patch assuming it to be pot.
Please read The U.S. Business Cycle in the Context of the Yo-Yo Years which is an update on ECRI's recession call. The readings improved again this week - and the current levels of the WLI are still within an improvement channel - and showing positive growth to come within the next six months. ECRI's inflation index has risen and is reported on below.
Econintersect: This week the Department of Homeland Security (DHS) froze funds in the Dwolla account of Mt.Gox's U.S. unit, alleging that it had broken the law regarding money laundering. Dwolla is an online payments firm, similar to the more widely known PayPal. Mt. Gox is a Tokyo-based exchange that handles 80% of the global transactions of Bitcoins.
The specific changes that alleges the company and a subsidiary were conducting transactions "as part of an unlicensed money service business" that should have been registered with the Treasury's Financial Crimes Enforcement Network (FinCen).
California’s Silicon Valley is credited by many to be the epicenter of technology and innovation in the U.S., but as rental rates continue to climb in the area, startups are beginning to evaluate other states to call home.
Fed's Balance Sheet is a record $3.311 trillion (up from the last week's record $3.281trillion). The complete balance sheet data and graphical breakdown of the cumulative and weekly changes follows the "read more".
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list discusses why so few bankers have gone to jail........ and the last article asks why investors can't imagine a collapse of the bond market.
Econintersect: Week 19 of 2013 ending 11 May shows same week total rail traffic improved according to data released by the Association of American Railroads (AAR):
Four week rolling average is improving (normal for this time of year);
13 week rolling average is improving ( normal for this time of year);
52 week rolling average is improving ( normal for this time of year);
The market was expecting 330,000 to 335,000 vs the 360,000 reported. The more important 4 week moving average is marginally worse, moving from 336,750 (reported last week) to 339,250. Econintersect does not view one week's bad numbers as a negative trend.
by Eric S. Rosengren - President & Chief Executive Officer, Federal Reserve Bank of Boston
[Editor's Note: This speech was given at The Global Interdependence Center Central Banking Conference. Milan, Italy on May 16, 2013]
It is a great pleasure to be invited to participate in the Global Interdependence Center’s conference on central banking. This continues to be a period requiring unusual policy actions – even experimentation – at central banks around the world. So it is important to understand the forces affecting policymaking as well as the impact of the policies, both domestically and internationally.
Facebook is booming and business has never been better for the social media giant. However, it’s proliferation in the last few years has resulted in some unintended and unwanted consequences. The alarming numbers on Facebook are on the rise and further climbing. Be it a teen or an employee – effort is needed to ensure that the damaging impact of Facebook is contained and curbed – this is where tools such as the Facebook spy come in.
Econintersect: The EU-17 (Eurozone) suffered the fifth consecutive quarter of negative GDP growth in Q1 2013. The wider Europe (EU-27) saw the fourth contraction in the past five quarters. The first quarter saw a much smaller contraction than for 4Q 2012. For the Eurozone the fifth quarter of contraction matched the length of the Great Recession. The depth of contraction has been much less than in the 2007-2009 event.
Econintersect: The Japanese economy has responded to the declining value of the yen resulting from the expansionary policies of the Abe government with a sharp rebound in GDP growth to 0.9% for the quarter and 3.5% year-over-year for the first quarter 2013 which ended in March. The major factors in the growth spurt were increased exports (as measured in yen), improved domestic consumption and increased government investment which was largely offset by a decline in private investment. The 3.5% growth was stronger than the 2.7% estimate provided by Bloomberg.
Researchers from the University of Illinois recently published a research paper on the geography of Twitter that contains some interesting data on general Twitter use. The data, provided by social media data vendor GNIP, reveals that Twitter usage is very concentrated, i.e. a small percentage of heavy users account for a large chunk of the Tweets that are sent.
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list has Yves Smith discussing the problems for consumers as corporate control of health care increases........ and the last article is about the destruction of a Mayan pyramid recycled for highway building material.
The Nonfinancial leverage subindex of the National Financial Conditions Index increased slightly (less good) this week but still remains well in economic expansion territory. Econintersect focuses on non-financial tools to monitor the economy.
This index remains on a "less good" trend line, and is believed to be a good forward indicator a recession is coming. A value above zero is a recession warning.
The payroll tax cut, which was in place during all of 2011 and 2012, reduced Social Security and Medicare taxes withheld from workers’ paychecks by 2 percent. This tax cut affected nearly 155 million workers in the United States, and put an additional $1,000 a year in the pocket of an average household earning $50,000. As part of the “fiscal cliff” negotiations, Congress allowed the 2011-12 payroll tax cut to expire at the end of 2012, and the higher income that workers had grown accustomed to was gone. In this post, we explore the implications of the payroll tax increase for U.S. workers.
Econintersect: France has dipped into its third recession in the wake of the Great Financial Crisis (GFC). The other "heavyweight" of the Eurozone, Germany, managed to swing back to almost imperceptible growth in the first quarter of 2013.
France saw its GDP shrink by 0.2% in the first quarter, matching the decline in the fourth quarter 2012. Taking the two quarters together, however, France has not seen as much contraction as Germany. The latter had fourth quarter GDP revised down to -0.7%. When that is combined with the first quarter +0.1%, the two quarters recorded a decline of 0.6%, larger than that for France (-0.4%).
The most recent U.S. recession and recovery have been accompanied by a sharp decline in the labor force participation rate. The largest declines have occurred in states with the largest job losses. This suggests that some of the recent drop in the national labor force participation rate could be cyclical. Past recoveries show evidence of a similar cyclical relationship between changes in employment and participation, which could portend a moderation or reversal of the participation decline as the current recovery continues.
Econintersect: The title of the press release from the International Energy Agency (IEA): "Supply shock from North American oil rippling through global markets". This press release (available below) announced the release of the annual Medium Term Oil Market Report for 2013. The report infers that the rapid expansion of North American oil and gas production will have as much of an impact on global markets as did the ascendancy of China as a major consumer for oil and gas over the last 15 years. Of course, the influence on stress and price movement in the market will be exactly in the opposite direction.
Launched from space shuttle Discovery on April 24, 1990, the Hubble Space Telescope orbits at an altitude of about 350 miles (560 kilometers). The telescope is 43.5 feet (13.2 meters) long, weighs 24,500 pounds (11,110 kilograms) and cost $2.5 billion.
Hubble’s six cameras and sensors see visible, infrared and ultraviolet light. At the heart of Hubble is its 8-foot-diameter (2.4 meters) primary mirror. The Hubble telescope is named after the famed late astronomer Edwin Hubble, who has been lauded as the father of modern cosmology and determined the rate of the expansion of the universe.
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list discusses the smallest government spender since Eisenhower........ and the last article is about the poor (ineffective) performance of corporate directors.
Econintersect: The National Federation of Independent Business (NFIB)'s April 2013 monthly optimism index improved 2.6 to 92.1 - just above the recovery average of 90.7. In April’s report, four Index components rose, two fell and six were unchanged.
NFIB reports usually contain blasts directed at Washington by NFIB chief economist Bill Dunkelberg.
Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading. The sub-par recovery persists for the small business sector.
has opened a portal to Amazon's great products. All purchases at Amazon using this link help support Econintersect at the same prices one normally receives.
There have been several posts over the past few weeks discussing college / university education. Goldman Sachs economist Jan Hatzius stated:
[T]he faster job growth among college graduates is entirely due to faster growth in the size of the college-educated population; the employment/population ratio among college graduates has in fact fallen sharply,
The media exhibited much consternation today as economists’ consensus guess on first time unemployment claims turned out to be way too optimistic this week. That raised two questions in my mind. Was the number really that bad, and even if it was, does it matter?
The Labor Department reported that the seasonally adjusted (SA) representation of first time claims for unemployment rose by 32,000 to 360,000 from a revised 328,000 (was 323,000) in the advance report for the week ended May 11, 2013. The consensus estimate of economists of 330,000 for the SA headline number was too optimistic after 3 weeks of guesses that were too pessimistic. Call it “evening things up.” They were wrong one way 3 times in a row, so they overcompensated the other way this week. It’s a ridiculous game, but everybody plays anyway. Forecasters are virtually always wrong, not just because economic forecasting is quackery, but also because the seasonally adjusted number, being made-up, is impossible to consistently guess (see endnote). Read more »
The University of Michigan Consumer Sentiment preliminary number for May came in at 83.7, a major advance over the April final reading of 76.4. This is the highest level since July of 2007, prior to the Great Recession. The Briefing.com consensus was for 78.5.
See the chart below for a long-term perspective on this widely watched index. I've highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
Read more »
The Conference Board Leading Economic Index (LEI) for the U.S. improved 0.6% in April to 95.0 (2004 = 100). Overall, the index value has been slowly trending up, and one month is not a trend.
This index is designed to forecast the economy six months in advance. The market expected a 0.3% improvement in the LEI (versus the +0.6% reported).
Both the LEI and ECRI's WLI are forecasting improving growth for the next six months.
Read more »
One of the most interesting phenomena marking the recent financial crisis was the disruptions in the interbank market, where banks borrow and lend reserves to each other. This post draws upon my paper with Douglas Gale, “Liquidity Hoarding,” to discuss this practice by banks during times of increased uncertainty about future liquidity needs and its consequences for the efficient transfer of liquidity in the interbank market.
The Philly Fed Business Outlook Survey fell into negative (contraction) - after two months in positive territory. This survey has been negative for 9 of the last 13 months. Key element new orders slipped further into contraction territory.
This is a very noisy index which readers should be reminded is sentiment based. The Philly Fed historically is one of the most negative of all the Fed manufacturing surveys.
The market was expecting the index value of 2.0 to 2.5 (actual was -5.2). Positive numbers indicate market expansion, negative numbers indicate contraction.
Read more »
Residential building permits and construction completions in April 2013 continues to show the industry growth.
Our analysis paints a slightly different picture than the headline data.
Apartment building permits comparing April 2012 to April 2013 are stronger this month.
The rate of annual growth for building permits in the last 12 months for this sector has been mostly in a channel between 25% and 40%. This month is above this channel.
Please note that the media concentrates on housing starts as a single metric for this data series - while Econintersect focuses on the general growth trends of the sector (permits versus completions) which are the best indicator of trends which show the health of this sector. Housing starts would give an indication of construction contribution to GDP.
The April 2013 Consumer Price Index (CPI-U) year-over-year inflation rate fell from 1.5% to 1.1% . Core inflation (CPI less food and energy) fell slightly also from 1.9% to 1.7%.
The dynamics were large decreases from the gasoline index (which is not part of core inflation), and some inflationary pressures from electricity and natural gas.
The Producer Price Index (released yesterday) showed finished goods fell to a 0.6% year-over-year inflation rate.
Read more »
We thought it would be amusing to start this discussion with the latest “Smoke and Mirrors” from RealtyTrac. They clearly have an interesting perspective and “scale” in relation to measuring the housing recovery. If a picture can be worth a thousand words, hyperbole has just reached a new level. No prizes for guessing what the consensus view on the housing market is. Read more »
This article was originally published by Voxeu.org(May 3, 2013)
Europe’s austerity-first approach has triggered research-based efforts to evaluate the effectiveness of debt-reduction strategies. This column, based on a US empirical study, suggests that an ‘austerity shock’ in a weak economy may be self-defeating. Public-debt reduction historically occurs gradually amid improved growth. If policymakers, firms and households respond as in the past, we should expect lower deficits amid higher growth and, eventually, decreasing debt ratios.
In many advanced countries, in the wake of the 2008 global financial crisis, deficits skyrocketed and public debt ballooned (see Figure 1). In fact, fiscal stimulus accounted for only a small fraction of the increase in debt, whereas collapsing revenues and higher unemployment and social benefits contributed the largest share (IMF 2011). Read more »
The headlines say Industrial Production (IP) declined 0.5% in April 2013 and up 1.9% year-over-year. Econintersect's analysis using the unadjusted data is that IP was also showed a decline of 0.5% month-over-month but the year-over-year was up 2.5% year-over-year.
The year-over-year rate of growth is trending up using a three month rolling average, but is down using any rolling average between 6 to 12 months.
Industrial production is being affected by large movements in utilities, but the data was soft in most categories.
The market was expecting a month-over-month decrease of 0.2% to 0.5% (vs the headline growth decline of 0.5%).
The manufacturing sub-index (which is more representative of economic activity) was down 0.4% month-over-month - and up 1.3% year-over-year - seasonally adjusted.
The Empire State Manufacturing Survey (manufacturing in New York State) in May 2013 shows manufacturing is contracting after expanding for the previous three months in a row.
This noisy index has moved from 17.1 (May), 2.3 (June), 7.4 (July), -5.9 (August), -10.4 (September), -6.2 (October), -5.2 (November), -8.1 (December), -7.8 (January 2013). 10.0 (February) , 9.2 (March), 3.1 (April) - and now -1.4.
Expectation was for a reading of 1.0 to 3.5 versus the -1.4 reported
New orders sub-index also shows this sector is marginally contracting, while unfilled orders continues to say this sector is slightly contracting.
As this index is very noisy, it is hard to understand what these massive moves up or down mean - however this regional manufacturing survey is normally one of the most pessimistic.
Read more »
The Producer Price Index year-over-year inflation is disappearing..
The BLS reported that the Producer Price Index (PPI) finished goods prices year-over-year inflation rate fell from 1.1% in March to 0.6% in April 2013 - with the month-over-month growth down 0.7%. The PPI represents inflation pressure (or lack thereof) that migrates into consumer price.
The market had been expecting a contraction of 0.5% month-over-month in finished goods prices compared to the 0.7% contraction.
Read more »
Note from dshort: I've updated this commentary to include the latest labor force data in May's release of the April employment report.
Every Thursday I post an update on weekly unemployment claims shortly after the BLS report is made available. My focus is the four-week moving average of this rather volatile indicator. The financial press takes a fairly simplistic view of the latest weekly number, and the market often reacts, for a few minutes or a few hours, to the initial estimate, which is always revised the following week.
One of my featured charts in the update shows the four-week moving average from the inception of this series in January 1967. Read more »
In April 2013, year-over-year price deflation continues in import prices for 11 of the last 12 months . Export price price are also deflating this month:
with imports down 0.5% month-over-month, down 2.6% year-over-year
and exports down 0.7% month-over-month, down 0.9% year-over-year.
The dominate factors in the month-over-month changes were falling oil import prices and falling food export prices - however export prices fall was broad based.
Read more »
An amendment to a standing water treaty between the United States and Mexico has received publicity over the past six months as an example of progress in water sharing agreements. But the amendment, called Minute 319, is simply a glimpse into ongoing mismanagement of the Colorado River on the U.S. side of the border. Over-allocation of the river's waters 90 years ago combined with increasing populations and economic growth in the river basin have created circumstances in which conservation efforts -- no matter how organized -- could be too little to overcome the projected water deficit that the Colorado River Basin will face in the next 20 years.
Read more »
Retail sales grew modestly and on trend in April. There was no evidence of either a slowing economy or one that is overheating and about to cause conventional inflation measures to move higher. At the same time, as usual, economists got the outlook wrong, underestimating the growth rate.
According to the Commerce Department’s Advance Retail Sales Report, retail sales rose by 0.1% in April (month to month) and were up 3.7% annually, which was an acceleration from the annual rate of +2.8% in March. These are seasonally adjusted estimates which will be revised several times before they are finalized. Neither figure is adjusted for inflation. The median forecast of economists in mainstream media surveys was for sales to be down -0.3% to -0.6% month to month. The economists’ consensus was too low (what else is new?), with the problem being partly with the seasonal adjustment, and partly just the fact that economic forecasting is quackery. These big forecasting misses happen almost every month lately. Read more »
Econintersect's analysis of final business sales data (retail plus wholesale plus manufacturing) for March 2013 is closer to the headline data.
business sales with this month's data is continuing to trend less good (positive growth, slower rate of improvement).
The inventory levels are not sending any warning signals but are on the high side.
This is a record current dollar month for sales - with a record sales in 19 of the last 20 months. Note that real (inflation adjusted) dollars are used in GDP, and the headlines are not inflation adjusted.
This data shows business sales are contracting if you inflation adjust.
Editor's note: Two days ago Elliott Morss published an Op Ed on flaws in U.S. governance represented by the failure to even debate proposed background check legislation for gun buyers. A discussion ensued between Dr. Morss and a reader and contributor, Richard P. Rust, which has led to this posted debate. Read more »
Princeling Jiang Mianheng, son of former leader Jiang Zemin, is spearheading a project for China's National Academy of Sciences with a start-up budget of $350m.
The aim is to break free of the archaic pressurized-water reactors fueled by uranium -- originally designed for US submarines in the 1950s -- opting instead for new generation of thorium reactors that produce far less toxic waste and cannot blow their top like Fukushima.
He has already recruited 140 PhD scientists, working full-time on thorium power at the Shanghai Institute of Nuclear and Applied Physics. He will have 750 staff by 2015.
Will investors perpetually bid up an earnings stream that has peaked and may be on the verge of shrinking? We’re about to find out…
With first-quarter earnings season under way, expectations for earnings have rarely been higher. But there are many signs that corporate profits have peaked, including a surge in negative guidance from company management.
Disappointment and lower stock prices are likely; it makes no sense for investors to pay ever higher prices for a shrinking earnings stream.
Back in February 2012, when Facebook announced its plans to go public, the tech world immediately went crazy. The hype was enormous over what should become one of the biggest IPOs of all time. On May 18, Facebook started trading at $38, giving the company an implied valuation of $104 billion. Unfortunately, what was supposed to be a sure shot investment, turned out to be a dud.
U.S. stocks rose on Friday, ending higher for a fourth consecutive week after a consumer sentiment barometer beat expectations.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.80%, the S&P 500 index ended up 0.95%, while the Nasdaq Composite index rose 0.97%.
We have all heard the phrase, “Trade with the trend, the trend is your friend.” While there is much truth to this statement, what specific rule-based action do we take to make money from this simple concept? To dive into the important details and make sure that by the end of this article you are a better trader, I will use a recent Online Trading Academy Pro Pick in the stock market to make my points. Pro Picks is the Stock, Futures, and Forex picking service for Online Trading Academy graduates in the Extended Learning Track (XLT). The service is delivered daily, giving XLT members an entry zone, stop price, and target or targets. Each trade is also delivered in a very educational way with a detailed explanation of strategy so that users can learn to do this themselves. The core strategy at Online Trading Academy is the simple combination of supply (retail), demand (wholesale), and trends.
Below, technical overviews and analysis for key stock indices, commodities and currency pairs, based on market activity at the end of the 16 May 2013 U.S. session. This information is a comprehensive summary derived from simple and exponential moving averages along with key technical indicators shown for specific time intervals.
Housing starts missed big time, sliding 16.5% in April. Single-family was down 2.1% and apartments were down a whopping 37.8%. CPI also missed, with both total and core coming in at half the expected rate. But, the big news was initial claims, which jumped back up to 360K versus expectations of 330K and last months 328K (revised up from 323K.)
This article was first published by Investing Daily(May 10, 2013)
Over the last 50 years, the yield on 10-year US Treasury issues has averaged 6.7 percent.
During that same period, the average price-to-earnings (P/E) ratio of the Standard & Poor’s 500 has been 15.
Today, with the 10-year Treasury paying only 1.9 percent and official inflation at under 2 percent, the S&P 500 is trading at around its 50-year P/E average.
While all Japanese pairs that we cover remain bullish in the long term, we may expect consolidation in the short term. Everyone who is so desperate to be in JPY trade will be able to buy on a pullback.
This consolidation may be expected any time soon, perhaps even today, or within next two trading sessions, and may be quick or may take few days to unfold.
Below, technical overviews and analysis for key stock indices, commodities and currency pairs, based on market activity at the end of the 14 May 2013 U.S. session. This information is a comprehensive summary derived from simple and exponential moving averages along with key technical indicators shown for specific time intervals.
EURUSD broke below previous 1.2950 area support on Friday but closed the day (and week) back near the 1.3000 round number area. The key currency pair has dropped almost 300 pips from the early May swing high around 1.3250.
The failure to close under previous support may see the euro/dollar pair retest the area around the 200 period SMA and squeeze the weaker euro shorts during early week trading. The 200 SMA is roughly aligned with prior support lows around 1.3030.
We also note the US dollar index has taken out previous USDX 83.42 area resistance, but ultimately closed the week under the recent range high point.
Why does silver move so much further, and faster, than gold...?
The silver market often gets a bum rap. The reason is that often its gyrations are much greater than those of the gold market.
What causes this? There are theories that bankers and investment companies are conspiring to try to manipulate the market. However, buying or selling alone is not a conspiracy. It is called a speculation. Where conspiracy begins is poorly defined in law, especially where it's one through market trading. But one factor is true: market perception can be changed by those with big wallets.
New historical and inter-year highs were made late in the session proving the old bull still had the 'stuff'.
Markets closed out Friday's session on a high note and the news of this 'unbelievable' bull market should bring in the 'sheeples' in groves for the eventual slaughter. I would expect Monday to be a big day – one way or the other.
Our computer models analyze a large basket of fundamental, technical, internal and sentiment data in order to calculate our Secular Trend Score (STS) and our Cyclical Trend Score (CTS). The historical data used by our models extend back to the market crash in 1929 and have enabled our STS to correctly identify every secular inflection [...]
As we note often, context plays a vital role in the development of reliable market forecasts. Short-term price behavior only has meaning when analyzed in the proper context afforded by the long-term view, so all investing and trading strategies should begin with a thorough understanding of the current secular environment. There have been five secular [...]
The cyber currency, Bitcoin, has suffered a setback - US authorities seized the accounts of a major operator and now hampers the process of exchanging Bitcoins. This digital currency gives you control of your assets and no middle man.
Housing starts missed big time, sliding 16.5% in April. Single-family was down 2.1% and apartments were down a whopping 37.8%. CPI also missed, with both total and core coming in at half the expected rate. But, the big news was initial claims, which jumped back up to 360K versus expectations of 330K and last months 328K (revised up from 323K.)
Like bombs, guns are dangerous: in 2011, 87 people were shot every day - 54 suicides, 30 homicides. In addition, 851 people were shot unintentionally, like what happened a week back - a 5-year old boy who was given a gun as a present by his parents and unintentionally shot his 2-year old sister.
In earlier pieces, I have reflected on how we have handled other known killers: cigarettes, alcohol, motor vehicles, and overeating. I have also documented how many deaths have resulted because certain drugs are illegal. This article explains how lessons learned from our efforts to control these other killers apply to guns.
Since the world seems to be interested in Alternative für Deutschland I have translated some of their demands into English. It’s all from the programme which they posted on their website. I selected only a few which I thought interesting:
Walter Young is the owner and CEO of Emery Winslow Scale (EWS) Company, headquartered in Seymour, Connecticut.
Walter is 91 years young. As far as I know, he is the senior-most active CEO in the scale industry, as well as in America. His life story is both legendary and ordinary, but uniquely American ...
Like his former MIT colleague Stanley Fischer, Mario Draghi hinted that their former MIT colleague's "Helicopter" will soon be taking off, in his most recent ECB press conference; but was quick to opine that it won't be flying in Europe[i]. In doing so, he provided more support to the thesis in Terminal Velocity (4)[ii], that "the Eurozone, faced with the prospect of break-up, as the Germans refuse to pick up the tab for fiscal union without a global bank run, provides the lowest fruit on the tree to be picked this summer". Draghi has gone even further than Fischer, by creating the necessary conditions for a fully blown European bank run. He has created these conditions by going one better than Bernanke and moving beyond the "Zero Bound"; to the "Negative Bound", where lenders and depositors pay financial institutions to take their money[iii]. The thought of paying a shaky European bank to take one's deposits, after what happened to depositors in Cyprus, apparently seems like a reasonable quid pro quo to "Super Mario".
(This piece first appeared in The Guardian, 16 April 2013)
Since her death, many eulogies of Thatcher have spoken of her as a revolutionary. Thatcherism (along with the associated Reaganomics) is seen as a radical transformative agenda that changed the face of economy and society. But seen from the developing world decades later, much of this agenda appears familiar, in the form of structural adjustment policies that have been forced upon different countries at different times by international institutions.
I am writing part of this week's letter in the rafters of a huge auditorium as I watch 1100 liberal art graduates at a major university receive their degrees. (I long ago made a promise to be here.) This was an expensive education, and the graduates are smart; yet when you ask them what their plans are, all too often you hear that they have not been able to find jobs or are opting to continue with school, often borrowing yet more money to do so, as they see no other viable options.
The New Yorker carries an interesting article on David Graeber, Occupy Wall Street and anarchy. I have read the first one hundred plus pages of “5,000 years of debt” and found them enlightening. Brad DeLong read on and found a seemingly endless list of flaws, irritating the author who apparently was struck dumbfounded on what he perceived as personal attacks. The author writes about a new book on anarchy by James Scott:
Rising government revenue from tax collections and bailout paybacks are shrinking the federal deficit faster than expected, delaying the point when the government will reach the so-called debt ceiling and altering the budget debate in Washington.
It is always a disaster when devotees of theoclassical economists speak their minds in front of what they think are friendly audiences. Mitt Romney’s attack on 47% of Americans as leeches that it was his job not to represent were he elected President was the final nail in his self-constructed electoral coffin. We now have Niall Ferguson, a history professor at Harvard and Hoover fellow whose theoclassical views have proven so influential with Prime Minister Cameron’s government’s adoption of austerity policies that have killed the UK recovery.
Ferguson has had a terrible last 10 years. He was a strong proponent of invading Iraq and pines for us to stay indefinitely in Afghanistan. He was a Romney supporter who wrote an anti-Obama screed in Newsweek that demonstrated his contempt for facts. He was an advisor to Senator McCain’s campaign for the presidency. Because of his record of getting every important policy issue wrong he was paid a great deal of money to speak to an “alternative investment” conference that began, with no small irony, on May Day. Ferguson was presenting his thesis that the West has become “degenerate.” He certainly proved that point about himself.
I came across a material error of fact in the Jon Jerry Mahoney Hilsenrath piece that has caused such a stir in the financial wackosphere this weekend. Being the good citizen that I am, I felt that it was my obligation and responsibility to notify Mr. Hilsenrath of the error. I knew that he would want to correct the record.
The error regarded two statements that he juxtaposed that implied that employment had improved as a result of QE, which is not true.
Econintersect: This week the Department of Homeland Security (DHS) froze funds in the Dwolla account of Mt.Gox's U.S. unit, alleging that it had broken the law regarding money laundering. 
Econintersect: Week 19 of 2013 ending 11 May shows same week total rail traffic improved according to data released by the Association of American Railroads (AAR):
yen resulting from the expansionary policies of the Abe government with a sharp rebound in GDP growth to 0.9% for the quarter and 3.5% year-over-year for the first quarter 2013 which ended in March. The major factors in the growth spurt were increased exports (as measured in yen), improved domestic consumption and increased government investment which was largely offset by a decline in private investment. The 3.5% growth was stronger than the 2.7% estimate provided by Bloomberg.
The media exhibited much consternation today as economists’ consensus guess on first time unemployment claims turned out to be way too optimistic this week. That raised two questions in my mind. Was the number really that bad, and even if it was, does it matter?
The 
The University of Michigan Consumer Sentiment preliminary number for May came in at 83.7, a major advance over the April final reading of 76.4. This is the highest level since July of 2007, prior to the Great Recession. The Briefing.com consensus was for 78.5.
See the chart below for a long-term perspective on this widely watched index. I've highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
The Conference Board Leading Economic Index (LEI) for the U.S. improved 0.6% in April to 95.0 (2004 = 100). Overall, the index value has been slowly trending up, and one month is not a trend.
This index is designed to forecast the economy six months in advance. The market expected a 0.3% improvement in the LEI (versus the +0.6% reported).
Both the LEI and ECRI's WLI are forecasting improving growth for the next six months.
The Philly Fed Business Outlook Survey fell into negative (contraction) - after two months in positive territory. This survey has been negative for 9 of the last 13 months. Key element new orders slipped further into contraction territory.
This is a very noisy index which readers should be reminded is sentiment based. The Philly Fed historically is one of the most negative of all the Fed manufacturing surveys.
The market was expecting the index value of 2.0 to 2.5 (actual was -5.2). Positive numbers indicate market expansion, negative numbers indicate contraction.
Residential building permits and construction completions in April 2013 continues to show the industry growth.
The April 2013 Consumer Price Index (CPI-U) year-over-year inflation rate fell from 1.5% to 1.1% . Core inflation (CPI less food and energy) fell slightly also from 1.9% to 1.7%.
The dynamics were large decreases from the gasoline index (which is not part of core inflation), and some inflationary pressures from electricity and natural gas.
The Producer Price Index (
For the second month in a row, both import and export container counts are contracting year-over-year - comparing same months in 2012 and 2013.
The headlines say Industrial Production (IP) declined 0.5% in April 2013 and up 1.9% year-over-year. Econintersect's analysis using the unadjusted data is that IP was also showed a decline of 0.5% month-over-month but the year-over-year was up 2.5% year-over-year.
The Empire State Manufacturing Survey (manufacturing in New York State) in May 2013 shows manufacturing is contracting after expanding for the previous three months in a row.
The Producer Price Index year-over-year inflation is disappearing..
The 
Every Thursday I post an 
In April 2013, year-over-year price deflation continues in import prices for 11 of the last 12 months . Export price price are also deflating this month:
Retail sales grew modestly and on trend in April. There was no evidence of either a slowing economy or one that is overheating and about to cause conventional inflation measures to move higher. At the same time, as usual, economists got the outlook wrong, underestimating the growth rate.
According to the Commerce Department’s Advance Retail Sales Report, retail sales rose by 0.1% in April (month to month) and were up 3.7% annually, which was an acceleration from the annual rate of +2.8% in March. These are seasonally adjusted estimates which will be revised several times before they are finalized. Neither figure is adjusted for inflation. The median forecast of economists in mainstream media surveys was for sales to be down -0.3% to -0.6% month to month. The economists’ consensus was too low (what else is new?), with the problem being partly with the seasonal adjustment, and partly just the fact that economic forecasting is quackery. These big forecasting misses happen almost every month lately. 
Econintersect's analysis of final business sales data (retail plus wholesale plus manufacturing) for March 2013 is closer to the headline data.
Retail sales came in much stronger than anticipated.
Editor's note: Two days ago Elliott Morss published an Op Ed on flaws in U.S. governance represented by the failure to even debate proposed background check legislation for gun buyers. A discussion ensued between Dr. Morss and a reader and contributor, Richard P. Rust, which has led to this posted debate. 
Thorium is touted by many as the future energy source for the world. Thorium would be used in place of uranium and plutonium in nuclear reactors:
Will investors perpetually bid up an earnings stream that has peaked and may be on the verge of shrinking? We’re about to find out…
We have all heard the phrase, “Trade with the trend, the trend is your friend.” While there is much truth to this statement, what specific rule-based action do we take to make money from this simple concept? To dive into the important details and make sure that by the end of this article you are a better trader, I will use a recent Online Trading Academy Pro Pick in the stock market to make my points. Pro Picks is the Stock, Futures, and Forex picking service for Online Trading Academy graduates in the Extended Learning Track (XLT). The service is delivered daily, giving XLT members an entry zone, stop price, and target or targets. Each trade is also delivered in a very educational way with a detailed explanation of strategy so that users can learn to do this themselves. The core strategy at Online Trading Academy is the simple combination of supply (retail), demand (wholesale), and trends.
Housing starts
Over the last 50 years, the yield on 10-year US Treasury issues has averaged 6.7 percent.
The silver market often gets a bum rap. The reason is that often its gyrations are much greater than those of the gold market.
Like bombs, guns are dangerous: 
Like his former MIT colleague Stanley Fischer, Mario Draghi hinted that their former MIT colleague's "Helicopter" will soon be taking off, in his most recent ECB press conference; but was quick to opine that it won't be flying in Europe[i]. In doing so, he provided more support to the thesis in Terminal Velocity (4)[ii], that "the Eurozone, faced with the prospect of break-up, as the Germans refuse to pick up the tab for fiscal union without a global bank run, provides the lowest fruit on the tree to be picked this summer". Draghi has gone even further than Fischer, by creating the necessary conditions for a fully blown European bank run. He has created these conditions by going one better than Bernanke and moving beyond the "Zero Bound"; to the "Negative Bound", where lenders and depositors pay financial institutions to take their money[iii]. The thought of paying a shaky European bank to take one's deposits, after what happened to depositors in Cyprus, apparently seems like a reasonable quid pro quo to "Super Mario".
Rising government revenue from tax collections and bailout paybacks are shrinking the federal deficit faster than expected, delaying the point when the government will reach the so-called debt ceiling and altering the budget debate in Washington.
It is always a disaster when devotees of theoclassical economists speak their minds in front of what they think are friendly audiences. Mitt Romney’s attack on 47% of Americans as leeches that it was his job not to represent were he elected President was the final nail in his self-constructed electoral coffin. We now have Niall Ferguson, a history professor at Harvard and Hoover fellow whose theoclassical views have proven so influential with Prime Minister Cameron’s government’s adoption of austerity policies that have killed the UK recovery.
This post is part 2 of 
