{"id":194367,"date":"2008-10-02T18:06:00","date_gmt":"2008-10-02T23:06:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/10\/02\/economics-update-368\/"},"modified":"2008-10-02T18:06:00","modified_gmt":"2008-10-02T23:06:00","slug":"economics-update-368","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/10\/02\/economics-update-368\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

First the Institute for Supply Management’s manufacturing index just fell off a cliff<\/a>, dropping to 43.5%, when the consensus was for 49.6%.<\/p>\n

This is the lowest number since October, 2001, when manufacturers were freaking out over 911, and the biggest drop since 1984.<\/p>\n

The fact that factory orders are down 4%<\/a>, and that the
Baltic Dry Index Tanks<\/a>, a survey of shipping costs are also in the tank, reinforce the idea that something is amiss, though I woul,d be remiss not to note that the Baltic Dry Index has a lot of noise in the data, and so is not particularly reliable.<\/p>\n

Meanwhile, the marginally less noisy weekly jobless claims number have shown an increase<\/a> too, up 1000, to 497K.<\/p>\n

We also have evidence that the credit freeze up continues, with LIBOR spreads rising<\/a>, and commercial paper basically going away.<\/p>\n

In fact, the spread between two year debt swaps and treasuries hit a record<\/a>, 167.25 basis points.<\/p>\n

It doesn’t help that hedge funds are experiencing problems related to the Lehman collapse<\/a>, with billions of dollars still tied up with mess, while facing a surge of withdrawals from their clients.<\/p>\n

Furthermore, there are rumors of a major insurance company on the verge of collapse, and so borrowing costs for the major insurance companies have spiked<\/a>.<\/p>\n

Things aren’t looking great with college’s finances either, with Commonfund restricting withdrawals from its Intermediate Term Fund<\/a>, which serves schools and other non-profits, because of liquidity concerns.<\/p>\n

On the other side of the ocean, the ECB is openly talking about a rate cut<\/a>, which has pushed the Euro below $1.40:\u20ac1.00.<\/p>\n

This is all pushing commodities down in price<\/a>, with Oil, Gold, and Corn falling on the expectation of a stronger dollar and a weaker global economy.<\/p>\n

In banking and real estate, 30-year fixed-rate mortgage rates are up marginally<\/a>, and Citi bought Wachovia for some magic beans<\/a> (actually around $1\/share), and the FDIC got preferred shares.<\/p>\n

While not technically a bank failure, that is what it is in reality.<\/p>\n","protected":false},"excerpt":{"rendered":"

First the Institute for Supply Management’s manufacturing index just fell off a cliff, dropping to 43.5%, when the consensus was for 49.6%. This is the lowest number since October, 2001, when manufacturers were freaking out over 911, and the biggest drop since 1984. The fact that factory orders are down 4%, and that theBaltic Dry …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1080,973,975,1004,1045,1089],"tags":[],"class_list":["post-194367","post","type-post","status-publish","format-standard","hentry","category-currency","category-economy","category-employment","category-finance","category-insurance","category-recession"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/194367"}],"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=194367"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/194367\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=194367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=194367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=194367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}