Posts Tagged ‘L-shaped recovery’

When will the Fed start hiking?

When will the Fed start hiking?

Courtesy of Mish

Calculated Risk has an interesting chart and discussion on the unemployment rate and Fed rate hikes.

Unless inflation picks up significantly (unlikely in the near term with so much slack in the system), it is unlikely that the Fed will increase the Fed’s Fund rate until sometime after the unemployment rate peaks.

Following the peak unemployment rate in 2003 of 6.3%, the Fed waited a year to raise rates. The unemployment rate had fallen to 5.6% in June 2004 before the Fed raised rates.

Although there are other considerations, since the unemployment rate will probably continue to increase into 2010, I don’t expect the Fed to raise rates until late in 2010 at the earliest – and more likely sometime in 2011.

I think CR is a little optimistic on the recovery. However, I certainly agree with him on the inflation front. Please see Is Pent-Up Inflation From Fed Printing Waiting On Deck? for details.

Here is Calculated Risk’s chart. My annotations are in hot pink.

click on chart for sharper image

Look for unemployment to rise until late 2010 at a minimum. Mid-to-late 2011 is a distinct possibility as is an unemployment rate north of 11%. Of course real unemployment is already approaching 20%.

Assessing the Odds of a Double-Dip Recession

It is rare that I agree with Paul Krugman, even more so when I like his assessment more than Paul Kasriel’s. However, I agree with Krugman’s assessment that unemployment will not peak until 2011 and a double dip recession is a possibility.

Please consider this snip from Assessing the Odds of a Double Dip Recession for details.

Unemployment in the United States will peak only in early 2011 because of a slow and painful recovery from the global economic crisis, Nobel Prize-winning economist Paul Krugman said on Wednesday. He said the global economy seems to be stabilizing at a level that is "unacceptably poor" and added it is possible that the recession will be a double-dip one.

In this recession, assuming one believes it has ended now, unemployment is likely to keep rising for another 18 months. Yes I know that unemployment is supposed to be a "lagging indicator" but "lag" does not do justice to what happened in 2001 or what I think is likely


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Assessing the Odds of a Double Dip Recession

Assessing the Odds of a Double Dip Recession

recessionCourtesy of Mish

If you have a job and it is not in jeopardy, pull out the party hats and toot your horns. The OECD calls an end to the global recession.

The global downturn was effectively declared over yesterday, with the Organisation for Economic Co-operation and Development (OECD) revealing that "clear signs of recovery are now visible" in all seven of the leading Western economies, as well as in each of the key "Bric" nations.

The OECD’s composite leading indicators suggest that activity is now improving in all of the world’s most significant 11 economies – the leading seven, consisting of the US, UK, Germany, Italy, France, Canada and Japan, and the Bric nations of Brazil, Russia, India and China – and in almost every case at a faster pace than previously.

Each of the 11 economies saw an improvement in July, the OECD said, with only France improving at a slower rate than in June. The July figures are the most encouraging since the indices began ticking downwards during the first quarter of last year.

The OECD’s leading indicators are considered a key economic yardstick because they measure the sectors of countries’ economies that tend to react first to upswings and downturns. As such they provide early evidence of the way in which the overall economy is progressing.

Unemployment Likely To Rise For A Year

If you don’t have a job or your job is in jeopardy you may not feel like partying much. Unemployment is likely to rise for another year.

Moreover, there are strong reasons to expect Structurally High Unemployment For A Decade.

In the Incredible Shrinking Boomer Economy I noted a harsh reality quote of Bernanke:

"It takes GDP growth of about 2.5 percent to keep the jobless rate constant. But the Fed expects growth of only about 1 percent in the last six months of the year. So that’s not enough to bring down the unemployment rate."

Pray tell what happens if GDP can’t exceed 2.5% for a couple of years? What about a decade (or on and off for a decade)?

If you have come to the conclusion that we are going to have structurally high unemployment for a decade, you have come to the right conclusion. Ask yourself: Is that what the stock


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Phil's Favorites

When will there be a coronavirus vaccine? 5 questions answered

Reminder: We are available to chat with Members, comments are found below each post.

 

When will there be a coronavirus vaccine? 5 questions answered

A security guard wears a mask as she keeps watch at arriving passengers at Manila’s international airport in the Philippines on Jan. 23, 2020, as part of efforts to contain the coronavirus. Aaron Favila/AP Photo

Courtesy of Aubree Gordon, University of Michigan and Florian Krammer, ...



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Biotech

When will there be a coronavirus vaccine? 5 questions answered

Reminder: We are available to chat with Members, comments are found below each post.

 

When will there be a coronavirus vaccine? 5 questions answered

A security guard wears a mask as she keeps watch at arriving passengers at Manila’s international airport in the Philippines on Jan. 23, 2020, as part of efforts to contain the coronavirus. Aaron Favila/AP Photo

Courtesy of Aubree Gordon, University of Michigan and Florian Krammer, ...



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Zero Hedge

Stocks Soar To Best Day In 4 Months As "Devil"-Virus Death-Count Spikes

Courtesy of ZeroHedge View original post here.

The death toll in China has soared past 100 while the number of confirmed cases doubled overnight. Health officials around the world have confirmed more than 4,500 cases, more than triple the number from Friday.

And domestically, while 'soft' data improved - headline consumer confidence ticked up and Richmond Fed saw its 2nd biggest rebound in its 27 year history, 'hard' data collapsed as Durable Goods orders were a disaster...

All of which explains (not...



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Insider Scoop

JPMorgan Downgrades Beyond Meat On Valuation

Courtesy of Benzinga

One of Beyond Meat Inc's (NASDAQ: BYND) earliest bull analysts downgraded the stock on Tuesday.

The Analyst

Ken Goldman downgraded the plant-based food maker's stock from Overweight to Neutral with a price target lowered from $138 to $134.

The Thesis

Goldman was among the first Street analysts to initiate coverag...



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Chart School

Top Patterns for Retail Investors

Courtesy of Read the Ticker

Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..

Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.

You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.  

More from RTT Tv







Some charts from the video


...

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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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