Sunday, January 18, 2015

Some Sunday evening news

Here's a bit more reading for ya:

New Deal Demoncrat - weekly indicators. Rail in particular still looks fantastic, despite the supposed imminent collapse of oil transport. Summary:
One year ago we had decided weakness in some long leading indicators, especially housing and corporate profits. This looks like it has finally spread into some of the coincident indicators. I don't see any actual negative results, just a backing off from Q2 and Q3 strong growth. Aside from that, the recent story of global weakness, but an advancing positive US economy remains the case. With the return of federal, state, and local government spending, and a big tailwind from low gas prices, I expect that to remain the case.
I would expect that there'd be some bad numbers regionally in the next while if the oil patch has to wind down, by the way.

Liz-Ann Sonders - talking down the guy with the gun to his head. Some sense for you:
Traditionally, volatility has increased in the period leading up to an initial Fed rate hike, so investors may need to keep their seatbelts buckled for a while.
The implications of oil’s crash are starting to be felt; with multiple corporate layoffs and falling rig counts recently announced by several key energy companies. But the supply reduction may not occur quite as quickly as some believe. The costs of production being quoted for various sites in the United States generally include fixed and variable costs. But fixed costs are also known as sunk costs, meaning they’re not recoverable, so the decision to stop pumping oil is likely being made based on variable costs, which are likely lower than published costs.
We remain optimistic that the bull market for US stocks will remain intact in 2015, but the early increase in volatility seems likely to persist. Investors should be cautious not to be whipsawed by the sharp moves in the market and focus on the longer term perspective.
So quit piddling yourself cos Liz is getting sick of changing your diapers.

Calculated Risk - how do you predict the next recession? For those of you who are concerned with the wharrgarbl emanating from the Russian propagandists and Republican retards. Quote:
I think the most likely cause of the next recession will be Fed tightening to combat inflation sometime in the future - and residential investment (housing starts, new home sales) will probably turn down well in advance of the recession. In other words, I expect the next recession to be a more normal economic downturn - and I don't expect a recession for a few years.
Don't ignore the sensible truth.

Brett Steenbarger - three market measures and what they're telling us. He still thinks this is a rangebound move and the US market will go back up. It's a sensible opinion, but nobody ever said the market had to act sensibly.

Calculated Risk - the reason homebuilders got whacked. Seems everybody was assuming they'd have fat margins forever, but the reality is that eventually prices have to come down to balance demand to the massive supply. Econ 101, bitches.

FT Alphaville - Switzerland's problem isn't a strong currency but anemic consumption. And the Franc depeg fixes this.

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