{"id":190444,"date":"2009-11-25T10:17:00","date_gmt":"2009-11-25T15:17:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/11\/25\/economics-update-catching-up\/"},"modified":"2009-11-25T10:17:00","modified_gmt":"2009-11-25T15:17:00","slug":"economics-update-catching-up","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/11\/25\/economics-update-catching-up\/","title":{"rendered":"Economics Update (Catching Up)"},"content":{"rendered":"
Click for full size<\/p>\n
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H\/t Calculated Risk<\/a><\/span><\/div>\n

The lede<\/span> here is that the corrected numbers for US GDP are out, and it’s way down<\/a>, to +2.8%, down from the initial estimate of 3.5%.<\/p>\n

Even more worrying is that the primary reason for the drop is that that consumer demand is way down, which does not<\/span> bode well for the holiday season.<\/p>\n

Some things to note on this:
GDP is still down year over year, and at this won’t be back to the pre<\/span>-recession level until sometime in 2011.<\/p>\n

Also, the credit card data has more evidence of consumer deleveraging<\/span>, with late payments on credit cards falling in the 3rd<\/sup> quarter<\/a>, though delinquencies were up in October<\/a>.<\/p>\n

The Conference Boards Consumer Confidence index roses in November<\/a>,<\/span> but still at levels indicating contraction, 49.5, where 90 is more or less neutral.<\/p>\n

The Federal Reserve Bank of Chicago also released its National Activity Index, and it fell slightly<\/a> (PDF<\/span>), to -1.08, which indicates that things are still moving in a recessionary direction.<\/p>\n

In real estate, the 3rd<\/sup> quarter numbers are in, and the S&P\/Case-Shiller<\/span> Home Price Index showed home prices increasing 3.1%<\/a>, though it’s still down 9% year over year, and existing home sales rose an astounding 10% in October<\/a>.<\/p>\n

The timing here shows why this housing “recovery” is a mirage. Existing home sales rose in October because these were people scrambling to get in under the wire for the new home tax credit.<\/p>\n

Some quick math shows that the median existing home prices in the US is $173,100<\/a>, and $8000 is 4.62% of that, so the the degree to which the tax credit is driving price deltas is probably pretty significant.<\/p>\n

Meanwhile, we are having some significant movement in the bond\/central bank world, both nationally and internationally, with Fitch cutting its rating Mexico’s sovereign debt<\/a>, the Bank of Israel yesterday raising its overnight lending rate by a 25 basis points<\/a> (\u00bc%), and Colombia’s central bank cutting its rate by 50 basis points<\/a> (\u00bd%), because inflation is below expectations, and they want to give their economy a boost.<\/p>\n

My guess is also that Columbia wants to push its currency down to help with its trade balance.<\/p>\n

US Treasuries rose in their most recent auction<\/a>, probably because investors are looking for safe havens following the downward GDP revision.<\/p>\n

Certainly the GDP revision pushed oil down<\/a>, though interestingly enough the dollar fell against both the Yen and Euro<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Click for full size H\/t Calculated Risk The lede here is that the corrected numbers for US GDP are out, and it’s way down, to +2.8%, down from the initial estimate of 3.5%. Even more worrying is that the primary reason for the drop is that that consumer demand is way down, which does not …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1080,973,1135,1004,1088,1089,985],"tags":[],"class_list":["post-190444","post","type-post","status-publish","format-standard","hentry","category-currency","category-economy","category-energy","category-finance","category-real-estate","category-recession","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/190444"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=190444"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/190444\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=190444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=190444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=190444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}