Financial topics

[Higgenbotham]

http://www.ceridianindex.com/multimedia ... Decreases/

OLD, this will video will probably interest you. This index based on trucking activity was down 1.7% in January as compared to December. The UCLA economist is surprised too and offers his hypothesis.

http://www.eia.gov/oog/info/twip/twip_gasoline.html

US gasoline demand is at the bottom of the page.

The data is conflicting. Most of the recent weakness seems to pertain to transport.

The Dow Jones Transports have been losing ground since early February as noted earlier today.
As noted previously, gasoline sales for January have been down sharply.
The Ceridian Pulse of Commerce Index for January is down 1.7% from December and 2.2% year over year.
The ECRI Leading Index remains weak and fell for the week ending February 10.

Vehicle Miles Traveled were up 1.3% year over year in December, the first year over year increase in several months.
As noted previously, the Restaurant Performance Index was up strongly in December.
Used vehicle prices are recovering toward their old highs and registered additional gains in January.
The semiconductor book to bill has improved of late but is still below 1.00. Sales and bookings are still below their best levels of last year. January data is not available yet.
The employment population ratio has increased but not by a lot.

Overall, I don't know what to make of this. The December leading data is strong. There's not much data available yet for January but what data is available is weaker but mostly transport related. The economist thinks trucking will come around and the excess production from last quarter will leave the warehouses.

[Trevor]

That reminds me: I saw a gallup report that states that unemployment took a sharp spike by the middle of February. Even with the government's attempts to play with the unemployment numbers, things are looking dismal.

With the stock market, I've watched the news and the majority of analysts state that the stock market is going to hit a new high, one even higher than DOW 14,000. I have to wonder: are they paid shills or are they just delusional? The two aren't mutually exclusive, of course. Others are more cautious and these tend to be the independent analysts. I still wait for the stock market to take another dive, but I no longer have any idea as to when that will be.

I live in California, meaning that we have the highest gas prices in the country, but even so, it's a bit shocking to see gas at 3.90 this early in the year. last time, we didn't see that until the Arab Spring really heated up, around Mid-April or so. My family's cut back on their driving and so have many others.

[Higgenbotham]

That reminds me: I saw a gallup report that states that unemployment took a sharp spike by the middle of February. Even with the government's attempts to play with the unemployment numbers, things are looking dismal.

I've been watching the Labor Department's weekly unemployment claims go down and frankly last week's low number of unemployment claims did not make sense to me. The Gallup data does make sense.

[Trevor]

Well, it could be because people are just giving up on that too. I've been looking for months and i can say that there's next to nothing out there. Also, it may not be as easy to receive unemployment benefits as it once was, considering our financial situation.

[Higgenbotham]

I always figured if people lost their jobs, they filed claims for unemployment benefits. Maybe it's not that simple. But the last claims data from the government was for the week ending February 10. It may be that the claims data next week that matches the week of the Gallup survey will be worse.

[Trevor]

This is just speculation on my part, though. The media are hyping this up as much as they can, but I still don't see much confidence in the economic sector. Of course, we're doing well compared to Europe, which is currently imploding. Things are out of our hands now and whether or not we have another recession depends greatly on what happens with Europe. Personally, I think there's a good chance, especially since China's economy is slowing down.

China's economic growth for 2011 was 9.2% That's pretty good, but consider that it's the slowest growth they've had for 20 years and now their housing bubble is popping, just as ours was. I think the crash will begin in 2012, although it may not run its course for a year or two.

[Higgenbotham]

Looking at the long term charts of the 10 year and 30 year bond rates, there's just no way this economy is picking up. The 10 year bond rate is below where it was during the worst of the 2008 and 2009 crisis.

[Trevor]

I've looked at the chart and the response from the majority of analysts is that this is good news, that we can borrow all we want. Even with the low yields, the amount of money we pay in interest is continuing to skyrocket. They'd be higher if everyone else didn't look worse; the U.S. is the least bad option right now.

[Higgenbotham]

That's just it. Who in their right mind would give the US government their money at 2.0% for 10 years unless there was absolutely nothing else they could think of to do with it. I mean, if anyone could build an apartment complex, they would if they thought they could rent the apartments for 10 years and return more than say 4.0% (since they should get a bit more for making the effort and taking the risk) but obviously in general people do not think they can take much risk.

On the other hand, they might be able to make a few percent in stocks over they next few weeks assuming the bubble continues.

[Trevor]

We still look safe compared to the Europeans, so they're willing to invest at low rates. They're going to get hurt, but that's what they think. It'll be interesting to see if this collapse is gradual or immediate. Both the depression and the 1857 panic truly surged after a bank failure, and bank after bank has had to be bailed out, in addition to Greece and Portugal. Something's got to give at some point.