Dynamics behind plummeting U.S. home ownership and rental reliance

posted in: Credit, Economy | 0

Sales of new homes are struggling to maintain their earlier momentum.  The three-month moving average flat-lined for nearly a year before peaking at 448k (SAAR) in January this year.  Those for sale (supply) has been gradually inching up as well … Continued

Bond market is trying to tell us something – part two

posted in: Credit, Economy | 0

In discussing the dynamics behind the U.S. bond market early this week, an important variable got left out.  The chart below plots the budget situation of the U.S. government against issuance by the Treasury of notes and bonds.  This gives … Continued

Bond market is trying to tell us something

posted in: Credit, Derivatives, Economy, Technicals | 0

As 2014 began, growth expectations were very high for the U.S. economy.  In fact, every year since the recession ended mid-2009, economists’ GDP forecasts have been on the optimistic side, only to be progressively cut back as the year progresses.  … Continued

Bond yield/earnings yield ratio lousy metric in present circumstances

posted in: Credit, Economy, Equities | 0

One valuation tool equity bulls consistently use to justify current stock valuations – as well as to argue for further multiple expansion – is by comparing bond yield to earnings yield.  There is a metric known as ‘bond equity earnings … Continued

Mismatch between capex-cautious but profit-rich corporations and already-levered but ready-to-take-on-more-debt consumers

posted in: Economy, Equities | 0

The 1Q14 GDP print was a shocker, to say the least!  Real GDP inched up a mere 0.1 percent SAAR, versus consensus expectations of 1.2-percent expansion.  Sure, it is the advance estimate, with two more still to come.  Sure it … Continued

Suppressed money velocity and recent strength in C&I loans

posted in: Economy, Equities | 0

The release of February’s commercial and industrial loan data ensued a lot of excitement.  ‘Finally!’ was the typical reaction.  The $36bn increase (to $1.67tn) was the largest month-over-month rise since October 2008.  March data just came out, and we learn … Continued

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