Economic Reports 09/20/07
Summary: Goldman $1.7 Billion hit; Bear Stears $828 Million hit, no problem.
Initial claims "improving", but something "funny" happened on the way to the forum.
Leading indicators showing that real estate declines are impacting consumer spending.
Philly Fed rebounding, but input prices rising while margins, employment & cap ex all got cut.
Beat the number...
Goldman Sachs taking a $1.7 Billion hit on leveraged loans. Bear Stearns reported a 62% slide in Q3 profit on an 88% slump in fixed income or a $828 Million hit.
Initial Claims 09/15 -9K at 311K vs 320K Full Report
Inside the number: 4 week MA -3.5K at 320.75K; Continuing unemployment -53K
at 2.544M; 4 week MA -5.5K at 2.576M.
STATES WITH AN INCREASE OF MORE THAN 1,000
State Change State Supplied Comment
GA +1,268 textile, manufacturing
MI +1,741 automobile
A Funny Thing Happened on The Way To The Forum... or some Wall Street derivatives type accounting methods?
In August, with negative -4K non farm jobs created, the civilian labor force declined -340K, thus magically maintaining the current unemployment rate.
Since March, population increased +1.177M and +443K non farm jobs were created, yet, the civilian labor force declined -88K. How?
+373K became unemployed, while the number of employed declined -460K, the difference is the -88K. But those not in the labor force increased +1.264M.
In other words, the total population increase +1.177M + 88K in civilian labor force shrinkage, were ALL NOT in the labor force?
Remember, those who have stopped looking for work are not included. So then -340K people stopped looking for work or retired in August?
The U-6 % of unemployed or marginally attached is now at 8.3%. The 6 month diffusion index for employment is in decline: March 65.3, August 59
In all likelyhood, the real unemployment number is far worse than advertised as the number of people not being counted continues to grow.
Leading Indicators Aug -0.6% vs +0.7% Full Report
Inside the number: Just one of the 10 leading economic indicators was positive in August: the real money supply.
The negative contributors – beginning with the largest negative contributor – were index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), stock prices...
building permits, vendor performance, manufacturers’ new orders for nondefense capital goods, interest rate spread, and manufacturers’ new orders for consumer goods and materials.
The problem: Sagging business confidence and weaker consumer spending as household wealth declines along with home prices.
"This loss of household assets, if combined with weak employment growth, could have a negative impact on consumer spending going forward."
Philadelphia Fed Sep +10.9 vs FLAT Full Report
Inside the number: about 33% of the firms have had negative effects on business...
while over 25% of the firms said they are scaling back employment and capital spending plans...
both due to the recent deterioration in the construction industry and uncertainty in financial markets.
Despite oil price declines in Aug, price input pressure remains, margins eroded, employee levels and future cap ex were reduced.
Wonder what $90 a barrel oil will do for this survey?
New orders 15.1 vs 7.1; shipments 16.9 vs 12.4; prices paid 23.1 vs 15.4; prices received 3.3 vs 6.8; employment 7.5 vs 21.2; capital expenditures 21.3 vs 26.3
Initial claims "improving", but something "funny" happened on the way to the forum.
Leading indicators showing that real estate declines are impacting consumer spending.
Philly Fed rebounding, but input prices rising while margins, employment & cap ex all got cut.
Beat the number...
Goldman Sachs taking a $1.7 Billion hit on leveraged loans. Bear Stearns reported a 62% slide in Q3 profit on an 88% slump in fixed income or a $828 Million hit.
Initial Claims 09/15 -9K at 311K vs 320K Full Report
Inside the number: 4 week MA -3.5K at 320.75K; Continuing unemployment -53K
at 2.544M; 4 week MA -5.5K at 2.576M.
STATES WITH AN INCREASE OF MORE THAN 1,000
State Change State Supplied Comment
GA +1,268 textile, manufacturing
MI +1,741 automobile
A Funny Thing Happened on The Way To The Forum... or some Wall Street derivatives type accounting methods?
In August, with negative -4K non farm jobs created, the civilian labor force declined -340K, thus magically maintaining the current unemployment rate.
Since March, population increased +1.177M and +443K non farm jobs were created, yet, the civilian labor force declined -88K. How?
+373K became unemployed, while the number of employed declined -460K, the difference is the -88K. But those not in the labor force increased +1.264M.
In other words, the total population increase +1.177M + 88K in civilian labor force shrinkage, were ALL NOT in the labor force?
Remember, those who have stopped looking for work are not included. So then -340K people stopped looking for work or retired in August?
The U-6 % of unemployed or marginally attached is now at 8.3%. The 6 month diffusion index for employment is in decline: March 65.3, August 59
In all likelyhood, the real unemployment number is far worse than advertised as the number of people not being counted continues to grow.
Leading Indicators Aug -0.6% vs +0.7% Full Report
Inside the number: Just one of the 10 leading economic indicators was positive in August: the real money supply.
The negative contributors – beginning with the largest negative contributor – were index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), stock prices...
building permits, vendor performance, manufacturers’ new orders for nondefense capital goods, interest rate spread, and manufacturers’ new orders for consumer goods and materials.
The problem: Sagging business confidence and weaker consumer spending as household wealth declines along with home prices.
"This loss of household assets, if combined with weak employment growth, could have a negative impact on consumer spending going forward."
Philadelphia Fed Sep +10.9 vs FLAT Full Report
Inside the number: about 33% of the firms have had negative effects on business...
while over 25% of the firms said they are scaling back employment and capital spending plans...
both due to the recent deterioration in the construction industry and uncertainty in financial markets.
Despite oil price declines in Aug, price input pressure remains, margins eroded, employee levels and future cap ex were reduced.
Wonder what $90 a barrel oil will do for this survey?
New orders 15.1 vs 7.1; shipments 16.9 vs 12.4; prices paid 23.1 vs 15.4; prices received 3.3 vs 6.8; employment 7.5 vs 21.2; capital expenditures 21.3 vs 26.3
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