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Tag Archives: GDP

Managing Economic Recovery Expectations With Payrolls Data

We’re all desperate for a quick economic recovery, but desperation can be the enemy of informed thinking for looking ahead. As an example, consider recent commentary in some corners that a V-shaped economic recovery (a strong, quick bounce-back) for the US is likely because that’s the usual path, based on reviewing the history of gross domestic product (GDP), the broadest measure of economic activity. This spin on macro history looks encouraging, but assuming GDP is last word on...

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11/5/20: G7: Fading into Economic Absurdity

G7 is a rather exclusive club of the 7 'largest' and, according to their own aspirations, most important - economically and geopolitically - economies. Except, of course, it isn't.The latest IMF data (through 2019) and forecasts (for 2020-2021) published last month show just how bizarre the geopolitical influencer game got over the recent years and just how more bizarre it is likely to get over the next two.Here are the actual ranks of the countries based on their GDP, taking into account...

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6/5/20: 1Q 2020 US GDP:

From Factset: "The decrease in first-quarter real GDP was largely driven by the 7.6% decline in consumer spending, which subtracted 5.3% from the total GDP number. Investment was also a drag on growth, while an improvement in the trade deficit partially offset these negatives. We may see downward revisions to these numbers with the next two data revisions, and second-quarter growth is expected to be far worse. Analysts surveyed by FactSet are currently expecting a 29.9% contraction in...

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Synchronized, Like A Cheap Imported Suit

Trading partners like Mexico didn’t have a labor participation problem by which to hide the economic downturn last year. The whole idea of “decoupling” in the 2018 sense of the word was how the US economy, by virtue of its 50-year low unemployment rate, couldn’t possibly be as weak as it increasingly appeared overseas. The US was good, they kept saying. If there was a problem it was China. And Germany. South Korea. Japan. South America. All of Europe. Mexico, too.The truth was more...

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Just One More And Q1 Will Be A Clean Sweep Of Fragility

The Japanese went ahead with it anyway. Real GDP had bounced back, sort of, from a near recession in 2018. Central bankers at the Bank of Japan had reassured Shinzo Abe that the economy was on the mend. Therefore, the second round of the VAT tax hike, an imposition which had been postponed since 2015, could go ahead in 2019. The government had put it off long enough. In this way, Japan made the same mistake late last year about the tax everyone made this year about the pandemic response....

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EA GDP + GFC = HOLY CR$%

Following along the same top-down model, what unites central bankers and socialists is equality. Handing over significant authority to either results in everyone being equally impoverished. And, therefore, those very authorities fighting over minute scraps so as to display some sense of accomplishment.In October 2015, safely nested within the cozy confines of Brookings, being paid handsomely to opine on matters he’d shown no talent for, former Federal Reserve Chairman Ben Bernanke was given...

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GDP + GFC = Fragile

March 15 was when it all began to come down. Not the stock market; that had been in freefall already, beset by the rolling destruction of fire sale liquidations emanating out of the repo market (collateral side first). No matter what the Federal Reserve did or announced, there was no stopping the runaway devastation.It wasn’t until the middle of March that the first major shutdown orders began to appear – on Twitter feeds – and these weren’t the total lockdowns we’re stuck with now, either....

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Research Review | 24 April 2020 | Covid-19 Blowback

Pandemics and Systemic Financial Risk Howell E. Jackson (Harvard Law School) and Steven L. Schwarcz (Duke U.)April 19, 2020The coronavirus has produced a public health debacle of the first-order. But the virus is also propagating the kind of exogenous shock that can precipitate – and to a considerable degree is already precipitating – a systemic event for our financial system. This currently unfolding systemic shock comes a little more than a decade after the last financial crisis....

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Technically Speaking: The 4-Phases Of A Full-Market Cycle

In a recent post, I discussed the “3-stages of a bear market.”  To wit: “Yes, the market will rally, and likely substantially so.  But, let me remind you of Bob Farrell’s Rule #8 from our recent newsletter: Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend Bear markets often START with a sharp and swift decline. After this decline, there is an oversold bounce that retraces a portion of that decline. The longer-term decline then continues, at...

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Previous Employment Concerns Becoming An Ugly Reality

“Every financial crisis, market upheaval, major correction, recession, etc. all came from one thing – an exogenous event that was not forecast or expected. This is why bear markets are always vicious, brutal, devastating, and fast. It is the exogenous event, usually credit-related, which sucks the liquidity out of the market, causing prices to plunge. As prices fall, investors begin to panic-sell driving prices lower which forces more selling in the market until, ultimately, sellers are...

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