Four Elections And A Market Myth Funeral | ZeroHedge - Since 11/7/2000, the first election of Bush, the S 500 is down 0.25%. The USD has lost a remarkable 30% of its purchasing power relative to the world's major currencies (36% Trade-weighted). But it gets better because energy costs (WTI) have risen 65% since then. The Long Bond has gained a remarkable 50% while the clear winners in a Greenspan/Bernanke era has been precious metals - up around 550% since November 2000.
Just to check where the employment was lost in the US between 2008 and 2010 I dug out the US Bureau of Labour Statistics data – Industry Output and Employment and compiled the following graph. We should recall that the US housing bubble burst in 2006 but growth continued across the industry structure until overall demand started to falter in 2008. billy blog
As Bloomberg Briefs notes, spending on dining out has fallen from 4.5% growth at the beginning of the year to under 1.8% growth currently (the lowest since May 2010). Add to this the slowdown in jewelry spending and the drag on discretionary spending likely from Sandy and we suspect the modicum of estimate revisions that have started to be published by sell-side analysts will need a little more adjustment.
US economic data may be surprising to the upside (of economist's expectations - weighted by what is clearly now the most bullshit pre-election datasets we have seen) but as we have said before - there is no decoupling, it is lagging and leading behavior (combined with the normal pre-election upward bias of hopium in sentiment). The chart above makes it clear that the rest of the core international economies are doing decidedly badly - and US equities remain ignorant (for now).
We update the chart below, which we first posted here, which shows how US trade balance looks like with and without petroleum and petroleum products balance. Excluding petroleum, trade deficit is currently running at about half the level of the pre-financial crisis peak.
Next Steps: Fiscal Cliff | ZeroHedge - Tonight it's all Obama-corns and Biden-faeries but the market is already 'adjusting' to the new old new normal regime. Unfortunately in 'Obama II - This Time Its Different' the odds of going over the Fiscal Cliff just got real. As we noted here (and in more detail here and here), there is now a 55% chance we go over the cliff (given the status quo of no compromise) and the market is a long way from pricing that kind of GDP shock..
China CPI inflation fell to 1.7% yoy in October - Inflation continues to be subdued, which confirms our long-standing view that inflationary pressure in non-food categories is minimal because of overcapacity, and our worries on the possibility of a temporary food inflation is not materialising for the time being, which contributes to the overall price stability as food tends to be the volatile component which drive inflation higher. For more news and analysis, visit Also sprach…
The above chart compares the real yield on 5-yr TIPS to the running 2-yr annualized growth rate of real GDP. The underlying premise of the chart is that government-guaranteed real yields that are available for purchase in the TIPS market can tell us a lot about the market's expectations for real economic growth. If I buy a 5-yr TIPS bond today, I have locked in a risk-free real rate of return of -1.4% per year for the next 5 years.