Tuesday, September 20, 2011
Parts of the new residential construction report are statistically significant, and parts aren't. Under construction is down from July, but not to a degree that's statistically significant. YoY is down 7.9%, and that is statistically significant. However the authorizations side offers more hope of some rebound off the bottom next year, with August authorizations up 7.8% YoY, which is most definitely statistically significant. So right now, we're not seeing economic boost, but the case for next year is more optimistic. One has to wonder what effect our current economic troubles will have on that, but with the pace of housing activity being so remarkably low viewed against history, it's not hard to argue that there is space for improvement.
Struggling for optimism, this Bloomberg article starts out by suggesting shipping companies could be helped by a last minute surge to restock if consumers all of a sudden start to spend like gangbusters for the holidays. I started snickering on the first paragraph with the comparisons to 2009 and the theory that retailers are just taking this terrible risk by understocking for the mad rush of consumers hellbent on spending their last dollar. Further in, the article gets more realistic:
Shipping data currently show retailers preparing for a “muted” holiday season, Hartford said. The combined inbound- container volume at the Los Angeles and Long Beach ports fell 9.4 percent in August from a year earlier, following declines of 2.3 percent and 4.6 percent in July and June, according to Bloomberg data. These ports, the two largest in the U.S., account for about 40 percent of total imports, Hartford said.Heh. You read all that about the shipping at Snarky Mark's first.
I don't think retailers are taking a fearful risk. In 2009 we were months out of recession and real incomes were rebounding. Consumers with jobs felt a lot more confident about keeping them by the end of 2009, and having a bit of extra money, they spent it. That's the reason I posted all those graphs! Neither holds true this year:
Tomorrow we get existing home sales. I note in my driving around that there is tremendous inventory out there. If consumers want to buy a home and can qualify, they have plenty of options. It seems to me that the housing crash has diffused and spread to new areas and homes at higher price points. We'll see, but I am not that optimistic.
We also get the FOMC meeting announcement tomorrow, with the big bet being on Operation Twist (Fed shifting Treasury purchases to push long rates down). I don't think that will do much if any good, but I don't think it will do much harm either. Another round of quantative easing would produce another round of Main Street strangulation.
I do have some good news for you - we are not going to die from CO2 levels, the negative feedback effect from clouds is real, rather than the IPCC's assumed positive feedback. Of course, if you are truly a dedicated pessimist you can still work yourself up into a fit over this - you could assume that the sun's lower activity levels continue, that we go into a Maunder-type minimum, that CO2-engendered warming doesn't save us, that northern grain harvests fail and that the world endures another round of starvation-induced global warfare.
I am worried about the sun's lack of activity, but I would argue in mitigation that Maunder-type minimums seem to be somewhat rare, that aridity often goes along with cold spells, and that lower cloud formation might help the CO2 kick back in. Still, at this time it might be wise to stop burning the corn and stockpile it, just in case.
If you would - prayers for Carl of NOFP. He's had some severe health challenges and is facing another; he's in very real pain now. Pray for guidance for the doctors and Carl, and good healing.
More like a bunkered holiday season!
"Another round of quantative easing would produce another round of Main Street strangulation."
Can the Fed save the day -- again?
"But the actual hard economic data based on things like retail sales and industrial production has held up remarkably well."
Meanwhile, down here on planet earth...
Restaurants are stalling again.
for Main Street. The top 10 percent receive half the nation's income, and the top 1 percent receive
the majority of that. A healthy economy can not exist
when income distribution is so out of whack.
Austerity for the poor won't work.
That's the bureaucratic mindset - if their idea didn't work it can't be because it's a bad idea, it has to be because they didn't do it good and hard enough.
Thanks for the link.
Jerry Pournelle and I are on exactly the same page. There is too darn much pessimism and doom and gloom around. We have great economic strengths which are being strangled by the government's anti-business policies. We have to move beyond that and we can.
The link to the WUWT paper was enjoyable as well. However, after reading all the comments, it is seems that this is merely another step toward trying to understand the drivers of climate change. For those of us who don't believe that catastrophic AGW is assured, it is also true that we are looking for really solid evidence of why that is our position. This paper is one small bit of evidence in solving a really humongous puzzle. Not the silver bullet that will end finish off the belief in CAGW
Oh and here's that Obama story I read. See if you can recognize the President they are talking about: link
(WV is "quityma". Coincidence? I think not!)
The bottom line is that we will have to get off our butts and work, and we need to dissemble any obstacles to doing it.
No magic spells are gonna save us.
How many unicorns per TEU?
"How many unicorns per TEU?"
That depends. Is that with or without the Candy Mountains? ;)
"Three More Years of Goldilocks?" - Larry Kudlow, November 21, 2007
Links to this post: