US Bureau of Economic Analysis mistakenly issues data early - KXXV-TV News Channel 25 - Central Texas News and Weather for Waco, Temple, Killeen |: "US Bureau of Economic Analysis mistakenly issues data early
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) - The government on Tuesday mistakenly released data on consumer spending for November the day before its scheduled release.
In a statement issued at 8:20 p.m. EST Tuesday, the Commerce Department's Bureau of Economic Analysis said there had been an "inadvertent release" of some data pertaining to consumer spending during November. The statement didn't say how long the data had been public before the mistake was discovered.
The prematurely released data showed that consumer spending for November increased 0.3 percent, in line with analysts' forecasts.
In its statement, BEA said it would "take steps to ensure that this does not happen again and will take all appropriate action to safeguard economic data."
BEA released a more comprehensive November report on spending, along with data on income growth and inflation, at the regularly scheduled time of 8:30 a.m. EST Thursday morning.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed."
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Wednesday, December 23, 2015
Tuesday, December 22, 2015
U.S. existing home sales plunge; new rules seen as drag | Reuters
U.S. existing home sales plunge; new rules seen as drag | Reuters: "U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy although new regulations on paperwork for home purchases may have driven the decline.
The National Association of Realtors said on Tuesday existing home sales plunged 10.5 percent to an annual rate of4.76 million units. That was the sharpest decline since July 2010. October's sales pace was revised slightly lower to 5.32 million units.
Housing has been providing a sizable boost to U.S. economic growth this year as a strengthening labor market and low interest rates have helped young adults to leave their parents' homes.
Economists had forecast sales rising to a rate of 5.35 million units last month."
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The National Association of Realtors said on Tuesday existing home sales plunged 10.5 percent to an annual rate of4.76 million units. That was the sharpest decline since July 2010. October's sales pace was revised slightly lower to 5.32 million units.
Housing has been providing a sizable boost to U.S. economic growth this year as a strengthening labor market and low interest rates have helped young adults to leave their parents' homes.
Economists had forecast sales rising to a rate of 5.35 million units last month."
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Wednesday, December 16, 2015
What Benefits To Savers? Banks Rush To Hike Prime Rate To 3.50%, Forget To Increase Deposit Rate | Zero Hedge
What Benefits To Savers? Banks Rush To Hike Prime Rate To 3.50%, Forget To Increase Deposit Rate | Zero Hedge:
"Someone forgot to give the banks the memo that the Fed's first rate hike since 2006 was supposed to, at least on paper, benefit the savers of America and not so much the, well, banks.. Because the ink hadn't even dried on the Fed's statement and one after another banks revealed that they would promptly boost their Prime lending rate from the current benchmark of 3.25% to the new Fed Funds-implied prime rate of 3.50%.
As a reminder, while generically comparable to LIBOR, a bank's prime rate is the rate at which banks lend to their most creditworthy customers, clients and large corporations. But what makes the Prime hike most important is that it is used as the benchmark for other loans like credit card and small-business loans.
In other words, banks wasted no time to serve their indebted customers with the cost of the Fed's rate hike. Banks such as:
As CNBC reported, "a change in the federal funds rate will have no impact on the interest rates on existing fixed-rate mortgage and other fixed-rate consumer loans, a Wells Fargo representative told CNBC. Existing home equity lines of credit, credit cards and other consumer loans with variable interest rates tied to the prime rate will be impacted if the prime rate rises, the person said."
The good news: the rates on mortgages, auto loans or college tuition aren't expected to jump anytime soon, according to AP, although in time those will rise as well unless the long-end of the curve flattens even more than the 25 bps increase on the short end.
What about the other end of the question: the interest banks pay on deposits? Well, no rush there:
"We won't automatically change deposit rates because they aren't tied directly to the prime," a JPMorgan Chase spokesperson told CNBC. "We'll continue to monitor the market to make sure we stay competitive."
Bottom line: for those who carry a balance on their credit cards, their interest payment is about to increase. Meanwhile, those who have savings at US banks, please don't hold your breath to see any increase on the meager interest said deposits earn: after all banks are still flooded with about $2.5 trillion in excess reserves, which means that the last thing banks care about is being competitive when attracting deposits."
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"Someone forgot to give the banks the memo that the Fed's first rate hike since 2006 was supposed to, at least on paper, benefit the savers of America and not so much the, well, banks.. Because the ink hadn't even dried on the Fed's statement and one after another banks revealed that they would promptly boost their Prime lending rate from the current benchmark of 3.25% to the new Fed Funds-implied prime rate of 3.50%.
As a reminder, while generically comparable to LIBOR, a bank's prime rate is the rate at which banks lend to their most creditworthy customers, clients and large corporations. But what makes the Prime hike most important is that it is used as the benchmark for other loans like credit card and small-business loans.
In other words, banks wasted no time to serve their indebted customers with the cost of the Fed's rate hike. Banks such as:
- Wells Fargo
- US Bankcorp
- JPMorgan
- M&T
- PNC
- Citi
As CNBC reported, "a change in the federal funds rate will have no impact on the interest rates on existing fixed-rate mortgage and other fixed-rate consumer loans, a Wells Fargo representative told CNBC. Existing home equity lines of credit, credit cards and other consumer loans with variable interest rates tied to the prime rate will be impacted if the prime rate rises, the person said."
The good news: the rates on mortgages, auto loans or college tuition aren't expected to jump anytime soon, according to AP, although in time those will rise as well unless the long-end of the curve flattens even more than the 25 bps increase on the short end.
What about the other end of the question: the interest banks pay on deposits? Well, no rush there:
"We won't automatically change deposit rates because they aren't tied directly to the prime," a JPMorgan Chase spokesperson told CNBC. "We'll continue to monitor the market to make sure we stay competitive."
Bottom line: for those who carry a balance on their credit cards, their interest payment is about to increase. Meanwhile, those who have savings at US banks, please don't hold your breath to see any increase on the meager interest said deposits earn: after all banks are still flooded with about $2.5 trillion in excess reserves, which means that the last thing banks care about is being competitive when attracting deposits."
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Federal Reserve raises key interest rate for first time in nearly a decade - The Washington Post
Federal Reserve raises key interest rate for first time in nearly a decade - The Washington Post:
"The unanimous decision will nudge the central bank's benchmark interest rate up from near zero by a quarter of one percent to a range of 0.25 to 0.5 percent. The move is small, but it amounts to a vote of confidence that the American economy -- dogged by volatile oil prices, a slowdown in China and weak global growth -- will stand resilient. But the Fed also pledged to wean the nation off its stimulus slowly, an acknowledgement that further progress is not guaranteed and that the central bank is operating in uncharted territory.
"I feel confident about the fundamentals," Fed Chair Janet Yellen told reporters after the vote. "We have been concerned about the risks from the global economy. Those risks persist, but the U.S. economy has shown considerable strength.""
Keywords - Rates raise Yellen
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"The unanimous decision will nudge the central bank's benchmark interest rate up from near zero by a quarter of one percent to a range of 0.25 to 0.5 percent. The move is small, but it amounts to a vote of confidence that the American economy -- dogged by volatile oil prices, a slowdown in China and weak global growth -- will stand resilient. But the Fed also pledged to wean the nation off its stimulus slowly, an acknowledgement that further progress is not guaranteed and that the central bank is operating in uncharted territory.
"I feel confident about the fundamentals," Fed Chair Janet Yellen told reporters after the vote. "We have been concerned about the risks from the global economy. Those risks persist, but the U.S. economy has shown considerable strength.""
Keywords - Rates raise Yellen
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Marc Faber: This is ‘precisely the wrong time’ for Fed to hike
Marc Faber: This is ‘precisely the wrong time’ for Fed to hike: "Meanwhile, the outlook for American equities looks weak as well, according to Faber.
"I don't think U.S. stocks are attractive by any measurement. They are expensive and earnings are going down, and if anything, eventually interest rates will be higher," he said Tuesday on CNBC's "Trading Nation."
Of course, he has had a bearish outlook on American equities for many years while they have surged.
Meanwhile, when asked where he sees opportunity, Faber turned to Asia, mentioning Vietnam, Cambodia, India, Laos and Myanmar."
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"I don't think U.S. stocks are attractive by any measurement. They are expensive and earnings are going down, and if anything, eventually interest rates will be higher," he said Tuesday on CNBC's "Trading Nation."
Of course, he has had a bearish outlook on American equities for many years while they have surged.
Meanwhile, when asked where he sees opportunity, Faber turned to Asia, mentioning Vietnam, Cambodia, India, Laos and Myanmar."
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The Dawn of the Profitable Unicorn | Michael Moritz | LinkedIn
The Dawn of the Profitable Unicorn | Michael Moritz | LinkedIn: "In 2000 Nortel sported a market value of $209 billion that, like those of its classmates, had been bloated by the enthusiasm of the era; it has since gone bankrupt. While other members of this corporate bracket have avoided that ignominy, their long-term stock charts present bleak pictures. Cisco’s market value has faded from $403 billion to $144 billion; Intel’s from $288 billion to $161 billion; and EMC’s from $218 billion to $51 billion. "
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Chris Blackhurst: What businesses can learn from 'most admired' companies Shell and Unilever | Business | London Evening Standard
Chris Blackhurst: What businesses can learn from 'most admired' companies Shell and Unilever | Business | London Evening Standard: "What characterises them is a strong, long-term management culture. They move people around the organisation, from division to division, product to product. They’re given managerial responsibility early on. They’re taught how to lead, delegate and get the best out of one another. Neither company tolerates egotists; show-offs are soon shown the exit."
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Thursday, December 10, 2015
Massive insider selling spurs stock market concerns
Massive insider selling spurs stock market concerns: "Corporate insiders have been selling their shares at near-record levels, and according to some, this could be a sign for outside investors to start selling as well.
Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record."
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Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record."
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Middle Class Americans 'No Longer Majority,' New Report Says - NBC News
Middle Class Americans 'No Longer Majority,' New Report Says - NBC News: "According to Pew's report, the 21st century has seen "middle-income Americans" fall behind financially. The median income of middle income households fell by 4 percent between the year 2000 and 2014, while median wealth - assets minus debts - fell by 28 percent between 2001 and 2013.
In 2015, 9 percent of Americans were seen as being in the highest income tier, "more than double the 4 percent share in 1971." The percentage of American adults in the lowest income tier has also risen, from 16 percent in 1971 to 20 percent in 2015.
In 2015 12 percent of adults were living in the upper middle tier, up from 10 percent in 1971. Nine percent were seen as being in the lower middle tier, unchanged from 1971.
The report defines middle income homes as "those with an income that is 67 percent to 200 percent... of the overall median household income, after incomes have been adjusted for household size."
It finds that "the hollowing of the American middle class has proceeded steadily for more than four decades," and that the share of Americans residing in middle-income homes "has fallen from 61 percent in 1971 to 50 percent in 2015."
The report finds that the biggest winners since the seventies are those 65 and over. Their poverty rate has fallen from 24.6 percent in 1970 to just 10 percent in 2014. In contrast, young adults - those aged between 18 and 29 - have seen their share in lower income tiers increase. "
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In 2015, 9 percent of Americans were seen as being in the highest income tier, "more than double the 4 percent share in 1971." The percentage of American adults in the lowest income tier has also risen, from 16 percent in 1971 to 20 percent in 2015.
In 2015 12 percent of adults were living in the upper middle tier, up from 10 percent in 1971. Nine percent were seen as being in the lower middle tier, unchanged from 1971.
The report defines middle income homes as "those with an income that is 67 percent to 200 percent... of the overall median household income, after incomes have been adjusted for household size."
It finds that "the hollowing of the American middle class has proceeded steadily for more than four decades," and that the share of Americans residing in middle-income homes "has fallen from 61 percent in 1971 to 50 percent in 2015."
The report finds that the biggest winners since the seventies are those 65 and over. Their poverty rate has fallen from 24.6 percent in 1970 to just 10 percent in 2014. In contrast, young adults - those aged between 18 and 29 - have seen their share in lower income tiers increase. "
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Friday, December 4, 2015
The tale of 2 Economies...Misinformation rules for the mainstream. The usual suspects to start...
And then beneath the covers...
Why This Sucker Is Going Down... Again...Echoes of 1929
Why This Sucker Is Going Down... Again | Zero Hedge:
"Instead, what happened was that the reckless expansion of bank credit during the years prior to the 1929 crash was liquidated because it couldn’t be serviced or repaid.
Total loans outstanding had grown from $15 billion to $40 billion during the proceeding decade and one-half, but much of it had gone into margin loans on Wall Street, real estate speculation and massive over-investment in US export and capital goods industries that collapsed once Wall Street financing of foreign customers dried up after the crash.
So the money supply measured as M1 shrunk by about 30% during the three years after the crash because bad loans were being liquidated and bank deposits extinguished. There was no disappearance of that Keynesian ether called “aggregate demand”. Rather, it was that the phony wealth of the prior credit boom which inexorably evaporated.
Needless to say, the events in the fall of 2008 had nothing to do with what actually occurred after the 1929 crash. Back then the US was the world’s powerhouse exporter and creditor, but like in China today the apparent prosperity of the times depended upon vendor finance.
That is, with the help of the Federal Reserve, the US banking system and bond market had advanced the equivalent of $2 trillion in today’s economic scale to foreign customers of US farmers and manufacturers.
When the stock market bubble collapsed in October 1929, however, the Wall Street market in foreign debt went stone cold, triggering a cascade of worldwide defaults. By early 1933, the booming foreign debt market of the 1920s had become the subprime mortgage market of its day—-with debt prices sinking to less than ten cents on the dollar.
In short order, Warren Buffett’s famous metaphor about naked swimmers being exposed when the tide goes out was well demonstrated; it transpired that US export customers had been borrowing new money in order to pay interest on their accumulating debts, but without access to new credits they had no option but to drastically curtail new orders.
Accordingly, US exports collapsed by 80% during the three years after the 1929 peak, leaving US industry stranded in excess capacity and overloaded with working inventories of raw materials, intermediate goods and finished products.
The latter, for example, dropped from $40 billion to $18 billion and capital spending dropped by 75% during 1930-1933. Likewise, with the collapse of the stock market and the easy credit boom, sales of durable goods like autos, washing machines and radios dropped by upwards of 70%.
In short, the Great Depression was not an avoidable mistake of the Fed during 1930-1933 as Bernanke falsely demonstrated when he xeroxed Milton Friedman’s erroneous history of the 1930s; it was the economic consequence of the unsustainable 1916-1929 credit and financial bubble that had been fostered by the Fed."
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"Instead, what happened was that the reckless expansion of bank credit during the years prior to the 1929 crash was liquidated because it couldn’t be serviced or repaid.
Total loans outstanding had grown from $15 billion to $40 billion during the proceeding decade and one-half, but much of it had gone into margin loans on Wall Street, real estate speculation and massive over-investment in US export and capital goods industries that collapsed once Wall Street financing of foreign customers dried up after the crash.
So the money supply measured as M1 shrunk by about 30% during the three years after the crash because bad loans were being liquidated and bank deposits extinguished. There was no disappearance of that Keynesian ether called “aggregate demand”. Rather, it was that the phony wealth of the prior credit boom which inexorably evaporated.
Needless to say, the events in the fall of 2008 had nothing to do with what actually occurred after the 1929 crash. Back then the US was the world’s powerhouse exporter and creditor, but like in China today the apparent prosperity of the times depended upon vendor finance.
That is, with the help of the Federal Reserve, the US banking system and bond market had advanced the equivalent of $2 trillion in today’s economic scale to foreign customers of US farmers and manufacturers.
When the stock market bubble collapsed in October 1929, however, the Wall Street market in foreign debt went stone cold, triggering a cascade of worldwide defaults. By early 1933, the booming foreign debt market of the 1920s had become the subprime mortgage market of its day—-with debt prices sinking to less than ten cents on the dollar.
In short order, Warren Buffett’s famous metaphor about naked swimmers being exposed when the tide goes out was well demonstrated; it transpired that US export customers had been borrowing new money in order to pay interest on their accumulating debts, but without access to new credits they had no option but to drastically curtail new orders.
Accordingly, US exports collapsed by 80% during the three years after the 1929 peak, leaving US industry stranded in excess capacity and overloaded with working inventories of raw materials, intermediate goods and finished products.
The latter, for example, dropped from $40 billion to $18 billion and capital spending dropped by 75% during 1930-1933. Likewise, with the collapse of the stock market and the easy credit boom, sales of durable goods like autos, washing machines and radios dropped by upwards of 70%.
In short, the Great Depression was not an avoidable mistake of the Fed during 1930-1933 as Bernanke falsely demonstrated when he xeroxed Milton Friedman’s erroneous history of the 1930s; it was the economic consequence of the unsustainable 1916-1929 credit and financial bubble that had been fostered by the Fed."
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