Recap 9-28-12


Great piece on US Housing, h/t Riholtz:
A caveat is that if home sales are mostly of the more expensive type, the home sales price / median income ratio can stay elevated for a while.

Separately, the Hilsenrath article in the WSJ today was quite interesting. It is appears that Bernanke has been able to get a very broad consensus of FOMC members to come to his point of view. His conversion of Kochlerkota from a hawk to a dove is especially enlightening. IMO, the article supports the view that, given the fairly consensus views, Fed policy is likely to be easy for a very long time. (Certainly longer than market pricing)


  • Spanish Stress tests results were better than expected. 7 of the 14 banks need capital, totally 59.3 bn.
  • Chicago PMI declined to 49.7 vs 52.8 exp and 53 prev. Lowest print since Sept 2009.
  • US Savings Rate declined to 3.7% in Aug from 4.5% in June

Upcoming Data:

  • Fri: US Personal Income, Spending, PCE Deflator, Chicago PMI, China HSBC Mfg PMI
  • Mon: ChinaMfg PMI, ItalyMfg PMI, UKMfg PMI, US ISM, Australia Mfg PMI
  • Tues: RBA, China Non-Mfg PMI
  • Wed: Italy Services PMI, UK Services PMI
  • Thu: BoE, ECB
  • Fri: US Employment, CA Employment

2 thoughts on “Recap 9-28-12

  1. Great recap and insights.

    It seems though that “his point of view” is akin to continuing to hit a nail that has reached a titanium surface. These people are lunatics in their ideology and the political system is such that no government body or institution can stop them. Printing money is not what is needed. Its funny that the main stream media and market pundit never speak about *capitalism* or *free markets*. A capitalistic society isn’t one where one sticks her hand out in hopes of a bail out and gets it. You take your medicine for living out of your means. Poor investments don’t get bailed out. They get purged through bankruptcy and defaults. Capitalism is unfortunately dead. I don’t know what to make of what we have today – crony capitalism or out right kleptocracy?

    1. The Fed appears constrained by the data, which basically says lower rates are always good, unless there’s inflation. There has not been much of an effort to quantify how bad low rates are for the economy. And we will all find out over the coming years…

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