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Tuesday, June 07, 2011

Mainly I Am Thinking About The Europe of Metternich

But as far as economics goes, the monthly rail report (May) was released, JOLTS (April) was released, RBA (Aussie CB) did not raise due to economic slack, and the Aussie dollar dropped, Hong Kong housing is going down on higher mortgage rates, although you'll have a heart attack when you find out how low the rates still are (way below inflation), I am STILL brooding over Singapore's position, and I am guessing both Hong Kong and Singapore's bit of slack have something to do with the Chinese, and any moment now, the US administration is going to wake up and realize that unemployment is a problem.

Regarding JOLTS, my main interest was to confirm that the drop in government jobs is mostly related to retirements, and it sure seems to be given the YoY discharges and layoffs. This has mostly fiscal implications for especially states and localities, because that is when the fiscal impact of the retirement bulge starts to kick in. There were some JOLTS problems earlier in the year which probably have been ironed out by now. There is a pretty high potential error in JOLTS the first month.

Rail - There should have been some pickup in May but there wasn't, and now we have four months (Feb, Mar, Apr, May) of a basically flat YoY for carloads. We are beginning to see a slower-growth trend in intermodal this month, but it's not severe yet.

Consumer credit should be released this afternoon. (Update. Yes, here it is. Revolving -1.4%; non-revolving +5.3%. ) Consumers aren't charging up their CCs, and if they try, their creditors are going to cut their credit limits.

Steel imports into India have attracted my roving eye. You will notice that the drop has been building and in April was supposed to have nothing to do with Japan, although I am a touch suspicious of that. Still, -65% must mean something. Scrap metal is still moving up in price. Indian auto sales this year have been "subdued". In the areas with the high run-ups last year, home prices have generally been dropping.

Regarding China, we need to wait for June residential sales, through April, the YoY was not generally impressive.

India and China still have not generated enough
domestic demand. China depends on the ROW
and when we slow they slow. It could all wind down
due to to much debt on household balance sheets
and to poor government policies.

Spork - I think it is just slowing, but when you look at incomes! Real incomes I mean - it is hard to see how we get out of this.

There's not going to be tons of help for the US overseas, and the economies we are looking at to generate demand are looking at us to generate demand.

Until fuel prices fall, it looks like the wheels of commerce just keep running a bit slower each month.
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