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Sunday, January 04, 2009

Oops, I did it again


It's not quite my fault. Yesterday at 6:30 AM I got up, made coffee and checked the Treasury Daily Statments. December 31st had been posted. Like a lot of recent data, there are conflicting trends. Tax revenues are way down, and WIET is down, but Federal Unemployment Tax (FUT) was up on a YoY basis for December:



There's a lot of flex in this data. The FUT trend is improving and I doubt retail sales did all that badly (except for the high-end sector). Again, it is perilous to just measure in currency; volume measures are important too.

I'm checking a bunch of stuff and doing some programming to get it done. I had to head out to do a bunch of errands yesterday, and then the Chief had a cold so I spent hours taking care of him. More analysis in a couple of days.

Chinese exports are still declining, but the trend there is improving also. What produced this magnificent set of correlations across economies was almost solely fuel costs, and provided we let the economy do its work in rebalancing, you will see the same set of magnificent correlations on the way back up.

The coordinated downturn in the second half of 2008 was not due to the credit situation, but to energy. The credit situation will cause a longer downturn, though. It's a massive drag on recovery.

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