Market Fueled

Quote of the Day

2009-12-30T08:47:00.000-05:00

“The free market punishes irresponsibility. Government rewards it."
-Harry Browne

Christmas Shopping, Stereo System: 1958 v. 2009

2009-12-15T10:59:00.000-05:00

Christmas Shopping, Stereo System: 1958 v. 2009: "

In 1958, the “best stereo sound equipment' Sears had to offer was advertised for sale in its Christmas catalog for $84.95 (pictured on left above), boasting that “You’ll be amazed at the ‘living sound’ you’ll hear on this newest development in portable phonographs. Four tubes per rectifier. Hear every note, every shading of tone.”

I doubt anybody today would be too amazed at the sound quality of that 1958 state-of-the-art stereo equipment, and nobody would trade his or her iPod for that system, especially considering that the 'time cost' of today’s iPod (12.51 hours of work at today’s average hourly manufacturing wage of $18.59 to earn enough income [ignoring taxes] to purchase a $229.99 iPod at Wal-Mart ) is almost 71 percent cheaper than Sears’ best stereo equipment in 1958 for (42.9 hours of work at the average wage of $1.98 per hour to earn enough income to purchase the $84.95 stereo in 1958).

Read more here at the Enterprise Blog.

"

Steve: Not to mention the iPod is mobile and holds a lot more music.

Economic Alert

2009-12-04T08:48:00.000-05:00

Unemployment Rate (United States) {US} OBSERVATION PERIOD: NOV (Monthly)

ACTUAL : 10.0%

PRIOR : 10.2%

REVISED : - -

SURVEY : 10.2% (Mean: 10.2%, High: 10.4%, Low: 9.9%)

Change in Nonfarm Payrolls (United States) {US} OBSERVATION PERIOD: NOV (Monthly)

ACTUAL : -11K

PRIOR : -190K

REVISED : -111K

SURVEY : -125K (Mean: -121K, High: -30K, Low: -185K)

Average Weekly Hours (United States) {US} OBSERVATION PERIOD: NOV (Monthly)

ACTUAL : 33.2
PRIOR : 33.0

REVISED : - -

SURVEY : 33.1 (Mean: 33.1, High: 33.1, Low: 33.0)

Unemployment rate falls to 10% in November. Nonfarm payrolls dropped by 11,000 in November, a number not seen since December 2007. Also, September and October numbers were revised lower by a total of 159,000. Economist expected a loss of 125,000 jobs in November. Futures spiked after the report.

Economic Alert

2009-11-25T09:38:00.000-05:00

Initial Jobless Claims (United States) {US} OBSERVATION PERIOD: NOV 21 (Weekly)

ACTUAL : 466K

PRIOR : 505K

REVISED : 501K

SURVEY : 500K (Mean: 496K, High: 512K, Low: 460K)

Continuing Claims (United States) {US} OBSERVATION PERIOD: NOV 14 (Weekly)

ACTUAL : 5423K

PRIOR : 5611K

REVISED : 5613K

SURVEY : 5565K (Mean: 5559K, High: 5630K, Low: 5400K)

Personal Income (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : 0.2%

PRIOR : 0.0%

REVISED : 0.2%

SURVEY : 0.1% (Mean: 0.1%, High: 0.4%, Low: -0.2%)

Personal Spending (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : 0.7%

PRIOR : -0.5%

REVISED : -0.6%

SURVEY : 0.5% (Mean: 0.5%, High: 0.8%, Low: 0.0%)

Durable Goods Orders (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : -0.6%

PRIOR : 1.0%

REVISED : 2.0%

SURVEY : 0.5% (Mean: 0.5%, High: 2.1%, Low: -1.0%)

Durables Ex Transportation (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : -1.3%

PRIOR : 0.9%

REVISED : 1.8%

SURVEY : 0.7% (Mean: 0.7%, High: 1.5%, Low: -0.6%)

The number of initial unemployment claims dropped to a seasonally adjusted 466,000 in the week ending Nov. 21. This marks the lowest level of filings for initial claims in over a year, finally breaking the 500,000 mark. Continuing claims were also below analyst expectations. They came in at 5,423,000 compared to an estimated 5,565,000. Some of which may be attributable to seasonal part-time employment.

Personal income rose 0.2% for the second straight month, slightly better than expected. Spending increased 0.7% for the month, showing that the consumer is still spending despite the unclear future of the economy. Personal spending grew faster than income, therefore Americans' personal savings rate dipped to 4.4% in October from 4.6% in September.

However, the durable goods order was somewhat disappointing. New orders for durable (long-lasting) U.S. manufactured goods fell in october. Durable good orders are a leading indicator of manufacturing activity.

The World According to Americans

2009-11-24T08:27:00.000-05:00

The World According to Americans: "

This got big laughs in Berlin (despite the description of Europe)

Hat tip Prieur!

Not to be confused with Saul Steinberg’s New Yorker cover (March 29, 1976) “View of the World from 9th Avenue.”

Leading Indicators Rise for 7th Month to 2-Yr. High

2009-11-19T11:54:00.000-05:00

Leading Indicators Rise for 7th Month to 2-Yr. High: "

The Leading Economic Index (LEI) increased for the 7th straight month to 103.8, the highest level since the fall of 2007, and the first time in more than five years of 7-consecutive monthly increases (since early 2004).

Details:

Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in October. The positive contributors – beginning with the largest positive contributor – were the interest rate spread, average weekly initial claims for unemployment insurance (inverted), stock prices, average weekly manufacturing hours, real money supply and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were index of consumer expectations, building permits, index of supplier deliveries (vendor performance), and manufacturers’ new orders for nondefense capital goods.

Baltic Dry Index Roars Back: 102.5% Gain in 39 Days

2009-11-18T07:56:00.000-05:00

Posted my Mark J. Perry at Carpe Diem.

Baltic Dry Index Roars Back: 102.5% Gain in 39 Days: " The Baltic Dry Index closed today at 4381, advancing for the 14th straight day, and registering positive gains in 31 out the last 35 days. From the late-September low of 2163, the benchmark index for freight costs to ship dry bulk commodities such as iron ore, coal and grains has more than doubled in just 39 days, and has reached the highest level since September 24, 2008, almost 14 months ago. The global economic recovery is underway and gaining momentum.

See related post here from Scott Grannis, who says that:

Clearly, the wheels of global commerce are spinning back up. Everything I see is consistent with a global recovery in confidence, in demand, and in production.

The "Good Old Days" Are Now and It Gets Better All the Time, Thanks to Free-Market Capitalism

2009-11-15T18:50:00.000-05:00

The "Good Old Days" Are Now and It Gets Better All the Time, Thanks to Free-Market Capitalism: "Click to enlarge.

From the BLS report '100 Years of U.S. Consumer Spending':

1. The material well-being of families in the United States improved dramatically, as demonstrated by the change over time in the percentage of expenditures allocated for food, clothing, and housing. In 1901, the average U.S. family devoted 79.8 percent of its spending to these necessities. By 2002–03, allocations on necessities had been reduced substantially, for U.S. families to 50.1% of spending (see top chart above).

2. The continued and significant decline over the century in the share of expenditures allocated for food also reflected improved living standards. In 1901, U.S. households allotted 42.5% of their expenditures for food; by 2002–03, food’s share of spending had dropped to just 13.2%.

3. Over the 100-year period, expenditure shares for clothing steadily declined. In 1901, the average U.S. household allocated 14% of total spending for apparel. By 2002–03, spending shares for clothing had decreased to 4.2%.

4. In 2002–03, the average U.S. family could allocate about 50% ($20,333) of total expenditures for a variety of discretionary consumer goods and services, while the average family in 1901 could allocate only 20.2%, or $155, for discretionary spending (see bottom chart above).

Conclusion: Perhaps as revealing as the shift in consumer expenditure shares over the past 100 years is the wide variety of consumer items that had not been invented during the early decades of the 20th century but are commonplace today. In the 21st century, households throughout the country have purchased computers, televisions, iPods, DVD players, vacation homes, boats, planes, and recreational vehicles. They have sent their children to summer camps; contributed to retirement and pension funds; attended theatrical and musical performances and sporting events; joined health, country, and yacht clubs; and taken domestic and foreign vacation excursions. These items, which were unknown and undreamt of a century ago, are tangible proof that U.S. households today enjoy a higher standard of living.

MP: As I wrote in a previous post: Teenagers today can afford products today like cell phones with cameras, digital cameras, GPS systems, CD players, DVD players, laptop computers, and iPods that even a billionaire couldn't have purchased 2 0 years ago. As much as we might complain, just by being alive in the 21st century America, even if you're earning the minimum wage, you've already 'won first prize in the lottery of life.'

HT: Lyle Meier

Public Option = Single Payer = Gov't. Monopoly

2009-11-06T09:18:00.000-05:00

Public Option = Single Payer = Gov't. Monopoly: "1. Among the things that people complain about under the present medical care system are the costs, insurance company bureaucrats' denials of reimbursements for some treatments and the free loaders at hospital emergency rooms whose costs have to be paid by others. Will a government-run medical system make these things better or worse? This very basic question seldom seems to get asked, much less answered.

If the government has some magic way of reducing costs — rather than shifting them around, including shifting them to the next generation — they have certainly not revealed that secret. The actual track record of government when it comes to costs — of anything — is more alarming than reassuring.

2. Ironically, it is politicians who have already made medical insurance so expensive that many people refuse to buy it. Insurance is designed to cover risk. But politicians have mandated that insurance cover things that are not risks and that neither the buyers nor the sellers of insurance want covered.

In various states, medical insurance must cover the costs of fertility treatments, annual checkups and other things that have nothing to do with risks. What many people most want is to be insured against the risk of having their life's savings wiped out by a catastrophic illness. But you cannot get insurance just for catastrophic illnesses when politicians keep piling on mandates that drive up the cost of the insurance. These are usually state mandates but the federal government is already promising more mandates on insurance companies — which means still higher costs and higher premiums.

All this makes a farce of the notion of a 'public option' that will simply provide competition to keep private insurance companies honest. What politicians can and will do is continue to drive up the cost of private insurance until it is no longer viable. A 'public option' is simply a path toward a 'single payer' system, a euphemism for a government monopoly.

~Thomas Sowell's latest column on the 'costs' of medical care.

Unemployment Rate Climbs

2009-11-06T08:46:00.001-05:00

Unemployment Rate (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : 10.2%

PRIOR : 9.8%

REVISED : - -

SURVEY : 9.9% (Mean: 9.9%, High: 10.1%, Low: 9.8%)

Change in Nonfarm Payrolls (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : -190K

PRIOR : -263K

REVISED : -219K

SURVEY : -175K (Mean: -175K, High: -105K, Low: -250K)

Average Weekly Hours (United States) {US} OBSERVATION PERIOD: OCT (Monthly)

ACTUAL : 33.0

PRIOR : 33.0

REVISED : - -

SURVEY : 33.1 (Mean: 33.1, High: 33.1, Low: 33.0)

The unemloyment rate climed to 10.2% in October, a number not seen in over 26 years. Nonfarm payrolls dropped by 190,000, bringing the total number of jobs lost in the recession to 7.3 million. Economists estimated an unemployment rate of 10%, with 150,000 lost jobs in October. If you include discouraged workers and those forced to work part-time, the estimated rate is 17.5% unemployment.

Futures were down slightly after the announcement.

Quote of the Day

2009-11-04T08:47:00.002-05:00

"By virtue of exchange, one man's prosperity is beneficial to all others." -Frederic Bastiat

Quote of the Day

2009-11-02T10:09:00.000-05:00

"When you subsidize poverty and failure, you get more of both." -James Dale Davidson

Jobs Saved? What About the Jobs Destroyed?

2009-11-02T09:59:00.000-05:00

Jobs Saved? What About the Jobs Destroyed?: "

Washington Post -- The White House on Friday embraced reports showing that the $159 billion in grants and loans made so far under the economic stimulus package has created or saved about 640,000 jobs, even as Republicans and government watchdogs questioned the reliability of the figures.

White House officials said the reports -- the first batch of filings by states, cities and other recipients of stimulus grants and loans -- buttressed their calculation that the full $787 billion package passed in February has saved or created 1 million jobs.

From Henry Hazlitt's 'Economics in One Lesson' (originally published in 1946), Chapter 4 'Public Works Mean Taxes:'

There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. An enormous literature is based on this fallacy, and, as so often happens with doctrines of this sort, it has become part of an intricate network of fallacies that mutually support each other.

A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works — of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

A bridge is built. If it is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money had it had not been taxed away from them, there can be no objection. But a bridge built primarily “to provide employment” is a different kind of bridge.

The bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

Thanks to Dennis Gartman, who featured a quote from this chapter of Economics in One Lesson in today's The Gartman Letter.

"

Steve: Not to mention, if one-third of the $787 billion was spent to save/create 1 million jobs, that comes out to about $259,710 per job. Sounds like inefficiency to me since probably none of those jobs paid a salary of $259,710.

Announcing Google Maps Navigation for Android 2.0

2009-10-28T11:05:00.001-04:00

Announcing Google Maps Navigation for Android 2.0: "(Cross-posted with the Google Mobile Blog)

Since 2005, millions of people have relied on Google Maps for mobile to get directions on the go. However, there's always been one problem: Once you're behind the wheel, a list of driving directions just isn't that easy to use. It doesn't tell you when your turn is coming up. And if you miss a turn? Forget it, you're on your own.

Today we're excited to announce the next step for Google Maps for mobile: Google Maps Navigation (Beta) for Android 2.0 devices.

This new feature comes with everything you'd expect to find in a GPS navigation system, like 3D views, turn-by-turn voice guidance and automatic rerouting. But unlike most navigation systems, Google Maps Navigation was built from the ground up to take advantage of your phone's Internet connection.

Here are seven features that are possible because Google Maps Navigation is connected to the Internet:

The most recent map and business data
When you use Google Maps Navigation, your phone automatically gets the most up-to-date maps and business listings from Google Maps — you never need to buy map upgrades or update your device. And this data is continuously improving, thanks to users who report maps issues and businesses who activate their listings with Google Local Business Center.

Search in plain English
Google Maps Navigation brings the speed, power and simplicity of Google search to your car. If you don't know the address you're looking for, don't worry. Simply enter the name of a business, a landmark or just about anything into the search box, and Google will find it for you. Then press 'Navigate', and you're on your way.

Search by voice
Typing on a phone can be difficult, especially in the car, so with Google Maps Navigation, you can say your destination instead. Hold down the search button to activate voice search, then tell your phone what you want to do (like 'Navigate to Pike Place in Seattle'), and navigation will start automatically.

Traffic view
Google Maps Navigation gets live traffic data over the Internet. A traffic indicator light in the corner of the screen glows green, yellow or red, depending on the current traffic conditions along your route. If there's a jam ahead of you, you'll know. To get more details, tap the light to zoom out to an aerial view showing traffic speeds and incidents ahead. And if the traffic doesn't look good, you can choose an alternate route.

Search along route
For those times when you're already on the road and need to find a business, Google Maps Navigation searches along your route to give you results that won't take you far from your path. You can search for a specific business by name or by type, or you can turn on popular layers, such as gas stations, restaurants or parking.

Satellite view
Google Maps Navigation uses the same satellite imagery as Google Maps on the desktop to help you get to your destination. Turn on the satellite layer for a high-resolution, 3D view of your upcoming route. Besides looking cool, satellite view can help you make sense of complicated maneuvers.

Street View
If you want to know what your next turn looks like, double-tap the map to zoom into Street View, which shows the turn as you'll see it, with your route overlaid. And since locating an address can sometimes be tricky, we'll show you a picture of your destination as you approach the end of your route, so you'll know exactly what to look for.

Since there's nothing quite like seeing the product in action, we made this video to demonstrate a real-life example:

The first phone to have Google Maps Navigation and Android 2.0 is the Droid from Verizon. Google Maps Navigation is initially available in the United States. And like other Google Maps features, Navigation is free.

Visit google.com/navigation to learn more and browse a gallery of product screenshots. Take Google Maps Navigation for a spin, and bring Internet-connected GPS navigation with you in your car.

Posted by Keith Ito, Software Engineer

"

Steven: Now this looks awesome. I'm sure a version for iPhone and other adroid builds are in the works.

Quote of the Day

2009-10-28T08:22:00.000-04:00

"Today’s widening income disparities will be partly self-correcting. Granted, income statistics show the increasing disadvantages of persons with education deficits. But that is the market saying — shouting, really — “Stay in school!” Over time the voice of the market is rational, credible and therefore a potent instrument for changing behavior." -George Will

Google Voice with your existing number

2009-10-27T09:49:00.001-04:00

Google Voice with your existing number: "Google Voice is all about enabling choice: which phone you pick up your calls on, where to review your voicemail messages, how to send and reply to text messages, etc. So when it comes to your phone number, it was logical for us to also offer a choice of which number to use with Google Voice.

Previously, when you created a Google Voice account, we asked you to select a new Google phone number. This allowed us to offer features like call forwarding, screening, and recording. But we know not everyone wants to start using a new phone number, so we've been working on another option for people who are willing to trade some features for the ability to keep their existing number.

We're excited to announce that you now can get Google Voice with a Google number OR with your existing mobile phone number. If you choose to use Google Voice with your existing number, you won't get some features (like call screening and recording), but you'll still get many others -- including Google voicemail:

More specifically, if you sign up for Google Voice with your existing number, you'll get:

Online, searchable voicemail
Free automated voicemail transcription
Custom voicemail greetings for different callers
Email and SMS notifications
Low-priced international calling

If you decide to also get a new Google number, you'll get all of the above PLUS:

One number that reaches you on all your phones
SMS via email
Call screening
Listen In
Call recording
Conference calling
Call blocking

If you already have a Google number, this new feature should also help with the transition to your new number, as you can now forward unanswered calls to your mobile phone to your Google Voice account. This way, people who still call your old number will reach the same voicemail as people who call your Google Voice number.

If you already use Google Voice, you can add Google voicemail to any mobile phone you've linked to your account. If you're not using Google Voice yet, you can request an invitation or ask someone with a Google Voice account to invite you. When you receive the invitation to sign-up, you decide whether you'd like to use Google Voice with your existing number or get a Google number.

Posted by Pierre Lebeau, Product Manager

"

Steve: I love Google Voice. It's like having an assistant.

Why Not Cut Taxes and Spending?

2009-10-26T14:56:00.000-04:00

Why Not Cut Taxes and Spending?: "Here’s a question: If unemployment is the problem, then why aren’t supply-side tax cuts, along with tougher government budgetary restraints, a possible solution?

Top Obama economic advisor Christy Romer delivered a very gloomy forecast to Congress late last week. She said that unemployment will remain at a “severely elevated level” and that the U.S. jobs market will stay painfully weak next year. She was just being honest. Romer even said the Obama stimulus plan will not contribute much to economic growth next year.

So the administration is searching for a jobs-recovery plan, just like the rest of the country. Meanwhile, big-government spending and temporary tax credits have not worked, by the administration’s own admission. That’s basically what Ms. Romer was saying.

So why not try something different? Why not go for lower tax rates across-the-board on individuals, businesses, and investors? Why not go for permanent tax cuts that will create new growth incentives? To paraphrase economist Art Laffer, if it pays more, after tax, to work, produce, and invest, folks will work, produce, and invest more. It’s worked in the past. And I believe it will work again.

Incidentally, this idea of cutting spending and cutting tax rates is attracting a lot of attention in many of the key state races right now — like the governor’s race in New Jersey, where unemployment is also hovering around 10 percent. The idea is also looming large in Virginia, as well as in some of the early skirmishing in California.

If it’s happening in the states, when will Washington finally get the message?

Quote of the Day

2009-10-23T09:27:00.000-04:00

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." -Ronald Reagan

Quote of the Day

2009-10-21T08:29:00.000-04:00

Quote of the Day: "

“When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on. When a man spends someone else’s money to buy something for himself, he is very careful about what he buys, but doesn’t care at all how much he spends. And when a man spends someone else’s money on someone else, he does’t care how much he spends or what he spends it on. And that’s government for you.”

~ Milton Friedman

Bond Market's Expectation of Inflation: Only 1.75%

2009-10-16T09:22:00.000-04:00

Bond Market's Expectation of Inflation: Only 1.75%: "

The top chart shows the bond market-based 10-year TIPS-derived expected inflation back to 2003, calculated as the weekly difference between 10-year regular, nominal Treasury yields and 10-year Treasury inflation-indexed yields (a measure of the real interest rate), both on a constant maturity basis (St. Louis Fed data here for 10-year TIPS and here for regular 10-year Treasuries); the bottom chart shows those yields graphed separately.

After an unusual period in late 2008 resulting in a narrowing spread when the TIPS 10-year yields were unusually high and approaching 3%, and regular Treasury yields were unusually low and approaching 2%, the Treasury market seems to have stabilized, and the bond market's 10-year expectation of inflation is now around 1.75%, lower than the inflationary expectations from 2003-2007 of around 2.5%.

Many analysts and economists seem to be worried about future inflation, resulting from the easy Fed monetary policy in 2008 (which has also contributed to a falling dollar). Apparently the bond mark doesn't necessarily share those concerns. According to the inflationary expectations derived from the bond market, future inflation is less of concern now in 2009 than it was during the 2003-2007 period.

“Inequality” and Fairness

2009-10-16T08:48:00.000-04:00

“Inequality” and Fairness: "

Are market-generated differences in income unfair? Nope.

"

Steve: This is a great article.

Jobless Claims (4Wk. Avg.) Fall to Lowest Level in 38 Weeks, Down 119,000 (-19.3%) From April Peak

2009-10-15T10:22:00.000-04:00

Jobless Claims (4Wk. Avg.) Fall to Lowest Level in 38 Weeks, Down 119,000 (-19.3%) From April Peak: "

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless insurance unexpectedly fell last week to the lowest level since January, according to a government report on Thursday that hinted at stabilization in the labor market.

Initial claims for state unemployment benefits fell 10,000 to a seasonally adjusted 514,000 in the week ended October 10, the Labor Department said. New jobless claims have declined for five of the last six weeks. The four-week moving average for new claims dipped 9,000 to 531,500 last week, declining for a sixth straight week (see top chart above).

MP: From the early April peak of 658,750, jobless claims (four-week average) have fallen by 127,250 to 531,500 (-18%), and that measure of jobless claims has fallen in 21 out of the last 27 weeks, including the last six months in a row. Jobless claims are now at the lowest level since January 17, 38 weeks ago. The bottom chart above shows that the 19% decline in jobless claims since the peak in April is consistent with the similar drops that marked the end of the 1990-91 recession (-15%) and the 2001 recession (-19%).

Great Review of Sprint's Android Phone at Android Central

2009-10-15T10:18:00.000-04:00

Sprint's Android phone, the HTC Hero, got a great review from Android Central.

I love the phone so far, but I'm still learning it.

Northern Trust Focus Conference Takeaways

2009-10-15T09:30:00.000-04:00

Paul Kasriel – Director of Economic Research
•There will be a feeble recovery with housing leading (most affordable in 40 years and he thinks sales have bottomed).
•Consumer spending has stabilized
•Exports have hit a record high (13% of GDP), the weak dollar has helped. The U.S. has “stolen” exports from Germany and Japan who have declining populations
•Capital expenditures declining at a slower pace
•Growth is all about emerging markets
•U.S. to become export demand economy
•EM consumers (especially China) will drive global growth
•The U.S. will have a jobless recovery
•GDP Growth will be too slow to re-employ the laid of workers very quickly (He expects unemployment to peak at 10.5% by mid 2010)
•The work week is at record lows
•Many jobs that were lost are not coming back
•40% of stimulus has been spent
•He is negative on commercial real-estate
•Lending among financial institutions is strong, but future losses will come from commercial real-estate
•He believes a move away from the dollar and to a basket of currencies to trade oil would have a limited impact on the dollar
•He thinks this would also be a mistake by countries who hold large amounts of dollars (i.e. China)
•Yields are low on U.S. treasuries (even given the increase in borrowing) are because of low consumer borrowing
•Does not see inflation until at least 2011
•Inflation must be fed by demand, no demand for products and labor
•Low money supply growth
•U.S. dollar weakening to due increased risk appetite

Jim McDonald – Chief Investment Strategist
•Developing economies will do better than developed economies due to stronger financial markets and institutions
•Inflation will be muted because of no wage pressures

Jason Desana Trennert – Chief Investment Strategist of Strategas Research
•Government spending to drive growth… until the bill comes due
•Consumers have hit a ceiling
•Overweight- Commodities, Materials, Consumer Staples, Health care
•Underweight – Consumer Discretionary, Utilites, Telecom
•He believes the next couple of quarters will be better than expected
•Referenced Japan’s “lost decade” and that there were 7 rallies of over 60% in that time frame
•Japan’s growth during that decade was dependent of the government’s spending and the U.S. could see that same outcome
•Compared 1982 to current times and pointed out how much worse it looked
•Thinks buy and hold is dead for now
•Average holding period for stocks has fallen from 8 years in 1960 to 0.7 years in 2007
•Money market assets as a % of U.S. market capitalization are at 34%, much higher than the historical average of around 12%

Main Themes
•Extremely bullish on international (especially emerging markets) Northern Trust is now 50/50 domestic/international in its aggressive growth portfolio
•Still bullish on stocks in general
•No one is worried about inflation, in the near term

Gold (Inflation Adjusted)

2009-10-07T13:28:00.002-04:00

Originally posted at The Big Picture.

Gold (Inflation Adjusted): "
While everyone seems to be all abuzz over Gold’s new highs, you should be aware that these are nominal, not real highs.

Adjusted for Inflation, Gold is nowhere near its all time peak — in real terms, its only about half its prior highs:

*gt;
courtesy of Bianco Research
"
*Click to enlarge.

Steve: I thought this was an interesting chart to share. It puts the price of gold in perspective.