With nearly 500 comments on the prior post, I think I’ll toss out a quick comment cleaner!
So with the final trading day of the month upon us, we come to learn that with the stimulus of $18 trillion in borrowing and 0% interest rates have provided us with a GDP that fell 0.7% in Q1 (and this is with government numbers which are surely as sugar-coated as possible). I pity the next President. Actually, no. No, I really don’t.
Excerpted from the May 24 edition of Notes From the Rabbit Hole, NFTRH 344:
US Economy – Semi b2b Amps Up its Trend
A quick review for newer subscribers: In Q1 2013 we noted that the Semiconductor Equipment industry was in “ramp up” mode per a personal source in the industry. After that pivotal period, we have relied on the Semi Equipment ‘book-to-bill’ ratio as a monthly checkup on what is often an important economic leading indicator. The Canary chirped in 2013 and it is still singing a sweet song today.
Well, now that the Fed has plunged us all $18 trillion in debt, their efficacy is starting to become more clear. Based on the latest GDP figures, the economy has ground to a complete halt and, as I’ve been predicting on my Tastytrade show (and here), the bond bears are returning to their glory.
It all conjures up the real prospect of me hearing, again and again, three words that I crave more than “I love you.” Those three are, in order: Yellen. Is. Screwed.
There is so much data flying around out there. From the Credit data we reviewed yesterday to weakening manufacturing and exports to employment up nicely one month and down big the next, to frisky consumers (the economy’s ‘back end’, putting it nicely) out there confidently living it up.
Big pictures help us let it all simmer and take out the noise. Here is a big picture for you… and it is an unchanged story; America has eaten its financial seed corn (replacing it with the soft meal known as credit) and financial market analysis is now in the hands of data freaks parsing and quantifying every little twitch on short time frames to draw conclusions and extrapolations based on little more than a black hole (that would be debt).
Excerpted from the March 15 edition of Notes From the Rabbit Hole, NFTRH 334:
As the title suggests I want to talk more and chart a little less this week. We do so much charting and parameter management that I think we are in no danger of falling behind the curve in those areas. The same goes for the indicators and sentiment tools we use. It is all still there, available and ready for use at the drop of a hat.
As for economic data and projections, that too has been an area that in my opinion we have been on top of. Going back to the early 2013 Semiconductor ramp up right on through late 2014’s projections for European exporters due to currency dynamics, we have been on the job and things have been generally according to plans.
In light of the positive February Employment report NFTRH 333 opened up with some discussion of the details (the devil after all, is in those details)…
Employment, the Economy & Interest Rates
The February Employment report was a strong +295,000 with unemployment dropping to 5.5%. In Friday’s Market Notes update we highlighted that per BLS this was a services-driven report as the leading edge of the economy, the smaller but key manufacturing and industrial sectors, have begun to decelerate (notably in forward-looking ‘New Orders’).
From FloatingPath.com (markups mine) we see the breakdown…
Only minutes ago, an absolutely horrific Chicago PMI number came out, and the market, ever so briefly, reacted as it should have: it went down swiftly. But, in the New Normal in which we live, it certainly didn’t take long to shake off reality. After all, only the Fed matters. The actual “markets” were killed off in early 2009.