CERF Blog

The United States employment situation improved substantially in November.  The unemployment rate fell a bit and quarter-on-quarter job losses slowed dramatically, almost to zero.  This welcome news has been greeted with rises in equities and a fall in Treasury bonds.  I have attached four charts below. Are we out of the woods?  No.  Is this… Read more

The October California jobs report was released November 20. The statewide unemployment rate increased from 12.3 in September to 12.5 percent in October. We are encouraged by the slight uptick in payroll job counts in October. However, there are still 4.6 percent fewer jobs than a year ago and 6.3 percent fewer than two years… Read more

I had to pause when I read George Melloan’s Wall Street Journal piece today. Seems he sees a conspiracy between Treasury and the Federal Reserve to fund the national deficit with bank funds to the detriment of business and economic growth. In Melloan’s world, the co-conspirators do this by regulation, giving banks little choice but… Read more

The BEA’s second estimate of total United States Economic activity, just out today, is 2.8 percent. This is down 70 basis points from the “advance” estimate published a month ago. The change in the estimate was driven mainly by upward revisions to imports and downward revisions to personal consumption expenditures and to nonresidential fixed investment… Read more

The Gartner Group released a new outlook report for the global semiconductor industry yesterday, November 16th. There is a bit of optimism in this report! The group has raised their forecast for 2009 based on recent data. This is the second time the group has raised their forecast in less than three months. From their… Read more

The Association of American Railroads released its Rail Time Indicators report last Wednesday. October United States rail carloads were down 15.3 percent from October 2008 while intermodal traffic was down 11.2 percent. For the first ten months of 2009, rail carloads were down 17.9 percent while intermodal traffic was down 16.2 percent. Canadian carloads and… Read more

After the kids went to bed last night, I checked the web to see if there was anything new. The Wall Street Journal posts the next day’s op-eds the evening before print publication. So, I checked those out. I started reading a piece by Judy Shelton provocatively titled The Fed’s Woody Allen Policy. Hey, I… Read more

Japan stepped up their purchases of United States Treasuries during October to $105 billion dollars, boosting their total holdings of United States Treasury Issues to $731 billion, more than 10 percent of the total market. Japan and China are typically the largest purchasers, by far, of United States Treasuries. Why do we care about this?… Read more

The United States unemployment rate rose from 9.8 percent in September to 10.2 percent in October, exceeding our forecast and the consensus forecast. We appear to be in-between everyone else and reality again. The data, either quarter-on-quarter or year-on-year, indicate ongoing job losses that are typical for a serious recession. We have said in the… Read more

The Mysterious Effective Demand tweeted and blogged on a paper by University of Arizona Professor Brent T. White. I haven’t read the full paper, but the portion quoted by Effective Demand presents a pretty simple and predictable argument that “Millions of American homeowners are “underwater” on their mortgages – owing more than the value of… Read more

Carry trade is the name of the strategy of going short in a low-interest rate currency such as the Japanese Yen or the U.S. dollar while going long in a high-interest rate currency such as the New Zealand dollar. Commentary about the carry trade has reached a high pitch. Professor Roubini asserts that it will… Read more

Recent United States economic indicators have provided mixed signals. Measures of GDP, industrial production, factory orders, and trade have been encouraging while homeownership rates, foreclosure rates, and bank charge-offs still remain discouragingly high. A manufacturing rebound would be a welcome boost to the still-ailing United States and World economies. However, the ongoing weaknesses in housing… Read more

I ran across the “Distress Index” today. It’s put out by the Foundation for Economic Education, an outfit I’ve never heard of before. They even have a nice chart showing how their index has performed over time. I’m not a fan of indices. (Indices is preferred over indexes. Indexes proper usage is as a verb,… Read more

The United States government reported that real Gross Domestic Product increased at a seasonally adjusted annualized rate of 3.5 percent in the third quarter. Improvements in Consumer Durables consumption, up 22.3 percent, and Residential Fixed Investment, up 23.4 percent, were the key components driving the increase. Both of these gains were in turn driven by… Read more

This recession and its accompanying financial crises started with large financial institutions making headlines with bad loans, liquidity problems, and in many cases insolvency. The driving factors at that point were the toxic residential-real-estate-based securities filtering their way through the financial system. Many large financial institutions were highly exposed to securitized packages of residential mortgages… Read more