Archive for June 2019

The Friday File: The 76% of the US population that plans to celebrate Father’s Day will spend a record $16 billion on dads this year, up from $15.3 billion last year. Average planned spending/person is expected to be $139, also a record. Interestingly, men spend more than women for both Mother’s Day and Father’s Day.…

Global manufacturing sentiment fell to 49.8 in May from 50.4 in April. Not only was this the 13th straight monthly decline in the index and the weakest reading since late 2012, but readings below 50 suggest declining activity! Closer to home, the US manufacturing sentiment index fell to 52.1 in May, its lowest reading since…

Credit card delinquency rates hit 8.1% in 19Q1, the highest rate in years. While rates are rising slowly for card holders over 30, rates are up sharply for those 18-29. Highest interest rates in decades are partly to blame, but the Card Act of 2009 caused a steep decline in accounts among those 18-29. Since…

Among many, there is a belief that economic expansions behave like people. That is, the longer an economic recovery, the greater is the probability of a recession. This is based on the fact that older persons are, all else equal, more likely to die than younger persons. Except expansions don’t behave that way. The chances…

With 75,000 net new jobs in May, and downward revisions totaling 75,000 for March and April, job growth is demonstrably slowing. Additionally, Y-o-Y wage growth fell to 3.1%. This makes a July rate cut very possible. However, the unemployment rate remained at 3.6% and the broadest measure of unemployment fell to 7.1%; best since 12/2000.…

The Friday File: There are 29 monarchs and 44 sovereign nations with a monarch as head of state. Queen Elizabeth II, who acceded to the throne in 1952 is the longest serving monarch; 67 years. In addition to the UK, she is head of state of 16 other nations. All other monarchs are head of…

The widening tariff wars are a double whammy for banks. First, falling interest rates are squeezing the gap between what banks charge borrowers and what they pay depositors, known as net interest margin, which necessarily discourages lending. Moreover, as firms and households get nervous, they borrow less and that reduces loan demand. Not surprisingly, bank…

Since 1/1/1978, there have been five inversions between 3-month and ten-year Treasuries. Each inversion lasted months, moreover each recession began, on average, 627 days after the initial inversion. The shortest gap: 293 days, the longest, 1,073 days. Assuming the current inversion that began on 5/13/2019 persists, and assuming the average recession lead time, the next…

30 years ago today the Chinese government murdered hundreds, if not thousands, of student protestors across China, but particularly in Tiananmen Square, agitating for nothing more than freedom and democracy. In China, this event has been completely expunged. The Tiananmen Massacre was when the regime fully exposed itself and its guiding principles, which continue unabated.…

Trump’s threat of up to 25% tariffs on Mexican imports is shocking! In 2018, total trade with Mexico, our third largest trading partner, was $611.5 billion! Moreover, two-thirds of US-Mexico trade is between factories owned by the same firm. Think auto supply chains that are hard to alter. Lastly, this gambit weakens Trump’s negotiating position…