James Pethokoukis

Prof. Copper and the V-shaped recovery

July 27, 2009

Ed Yardeni takes note:

The S&P 500 is one of the ten components of the Index of Leading Economic Indicators. It seems to be forecasting a robust V-shaped economic recovery. This has got to be the most contrary scenario of all right now. Everybody is hung up about the anemic outlook for employment. I am too. So what is the S&P 500 seeing out there? How about yet another global bubble boom? This one is led by China, where M2 was up 28.5% y/y in June. Professor Copper seems to agree with this outlook. The price of this basic metal rose to $2.52 a pound at the end of last week, the highest since October 7, 2008. China’s Dow Jones Shanghai Composite is up 53% since March 6, well ahead of the S&P 500. It actually bottomed on November 4, 2008, and is up 122% since then to 383.78. That’s certainly an impressive meltup. Even more impressive would be if it recovers back to its record high of 588 on October 16, 2007. Anything is possible in a bubble.

Bad economy overwhelming Obama’s agenda

July 22, 2009

Just how much trouble is President Obama and his economic agenda in?  Allies will point to the president’s still-robust 55 percent approval rating, according to pollster Gallup, but that number has been declining steadily from a high of 65 percent in early March. (He’s actually a point lower than George W. Bush at similar points in their presidencies.) And while the House of Representives has passed historic cap-and-trade legislation, the bill seems to be going nowhere in the Senate and the president may have little to crow about at the December climate change conference in Copenhagen. Even his plan for a consumer financial protection agency looks like it’s in doubt. Then, of course, there’s healthcare reform, which Obama again will be making the case for during a prime-time news conference tonight.

Summers: Google searches prove economy is recovering

July 17, 2009

White House economic adviser Lawrence Summers said in a speech today that the number of people searching for the term “economic depression” on Google is back down to normal levels, proof anxiety and fear are on the fade. OK, here is the chart:

Two years into the credit crunch: a status report

July 17, 2009

Where is the US economy, some two years into the credit crunch (numbers gathered by David Rosenberg of Gluskin Sheff)?:

Geithner on economy: Two steps forward and one step back

July 14, 2009

America’s Treasury Secretary speaks in Saudi Arabia: “Given the extent of damage to financial systems, the loss of wealth, the necessary adjustments to a long period of excessive borrowing around the world, it seems realistic to expect a gradual recovery, with more than the usual ups and downs and temporary reversals.”

Roubini: ‘Around 11 percent’ unemployment in 2010

July 9, 2009

Nouriel Roubini speaks (or, rather, writes in Forbes):

The other important aspect of the labor market is that if the unemployment rate is going to peak around 11% next year, the expected losses for banks on their loans and securities are going to be much higher than the ones estimated in the recent stress tests. You plug an unemployment rate of 11% in any model of loan losses and recovery rates and you get very ugly losses for subprime, near-prime, prime, home equity loan lines, credit cards, auto loans, student loans, leverage loans and commercial loans–much bigger numbers than what the stress tests projected.

The econ chart that should worry David Axelrod and the Dems

July 9, 2009

Brad DeLong worries that the downturn in bond yields is hinting at an anemic economic recovery.

Fed study: Bailouts and stimulus plans can recessions into depressions

July 9, 2009

Some interesting conclusions from a Minneapolis Federal Reserve Bank study of how country’s deal with financial crises. The White House might want to take a peak at the whole thing. Here is a bit of it (bold is mine):

Unemployment a leading indicator?

July 6, 2009

No, says economist Mike Darda of MKM Partners:

At no time in history — from the deflationary wipeout of the 1930s to the inflationary recessions of the 1970s and early 1980s, to the balance sheet downturn of 1990-1991, to the bursting equity bubble and the 2001 recession — was the labor market or the unemployment rate a leading indicator of either the business cycle or stock market trends.

This is how bad that jobs report was …

July 2, 2009

Economist David Rosenberg thinks the jobs report was, in effect, a boot heel stomping all over the green shoots: