Since the recession ended, businesses had increased their real spending on equipment and software by a strong 26%, while they have added almost nothing to their payrolls.
via It’s Man vs. Machine and Man Is Losing – Real Time Economics – WSJ.
ICI – Exchange-Traded Fund Assets, August 2011
The combined assets of the nation’s exchange-traded funds ETFs were $1.041 trillion in August, according to ICI.
via ICI – Exchange-Traded Fund Assets, August 2011.
A fall of 4.1% from July 2011.
Canada: TSX 60 bull trap
TSX 60 Index also displays an evening star warning. Reversal below 660 would complete a bull trap, indicating a down-swing to 590*. 21-Day Twiggs Money Flow below zero warns of (medium-term) selling pressure.
* Target calculation: 660 – ( 730 – 660 ) = 590
US rally encounters resistance
Dow Jones Industrial Average tall shadow (or wick) on the latest candlestick [R] indicates rising selling pressure. With excitement about a European bailout deal fading, expect a test of support at 10600. Failure would indicate another down-swing, with a target of 10000*.
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
S&P 500 Index shows continued consolidation between 1120 and 1220 on the weekly chart. 13-Week Twiggs Money Flow below zero indicates selling pressure. Failure of support at 1120 would test the 2010 low at 1020*/1000.
* Target calculation: 1120 – ( 1220 – 1120 ) = 1020
NASDAQ 100 Index shows an evening star reversal warning, completed if price reverses below 2200. 63-Day Twiggs Momentum holding below zero reminds that we are in a primary down-trend. Breach of the lower trend channel would warn of another down-swing, with a target of 1750*.
* Target calculation: 2050 – ( 2350 – 2050 ) = 1750
Housing Takes Baby Steps Towards Better Balance – WSJ
Supply of new and existing homes for sale stood at 8.4 months at August’s selling rates, down from a large supply of about 11 months a year ago. Equally important, fewer homes are waiting to go on the market. This so-called “shadow inventory” consists of homes in foreclosures, those already repossessed by the lender or homes with a mortgage delinquent for 90 days or more. Mortgage-data provider CoreLogic estimates the shadow inventory totaled 1.6 million in July, down from 1.9 million a year ago.
via Housing Takes Baby Steps Towards Better Balance – Real Time Economics – WSJ.
Macro Tides: How Much Longer? | The Big Picture
Forty three months after the recession began in January 2008, almost 5% of the labor force remains unemployed. In 7 of the eleven recessions since World War II, all the jobs lost during the recession were filled within 24 months. What’s happening in this ‘recovery’ is simply unprecedented.
The Great Debt Scare – Robert J. Shiller – Project Syndicate
The Consumer Sentiment Survey of Americans, created by George Katona at the University of Michigan in the early 1950’s, and known today as the Thomson-Reuters University of Michigan Surveys of Consumers, has included a remarkable question about the reasonably long-term future, five years hence, and asks about visceral fears concerning that period:
“Looking ahead, which would you say is more likely – that in the country as a whole we’ll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?”
That question is usually not singled out for attention, but it appears spot-on for what we really want to know: what deep anxieties and fears do people have that might inhibit their willingness to spend for a long time. The answers to that question might well help us forecast the future outlook much more accurately.
Those answers plunged into depression territory between July and August, and the index of optimism based on answers to this question is at its lowest level since the oil-crisis-induced “great recession” of the early 1980’s…..
This is a much bigger downswing than was recorded in the overall consumer-confidence indices. The decline occurred over the better part of a decade, as we began to see the end of debt-driven overexpansion, and accelerated with the latest debt crisis.
The timing and substance of these consumer-survey results suggest that our fundamental outlook about the economy, at the level of the average person, is closely bound up with stories of excessive borrowing, loss of governmental and personal responsibility, and a sense that matters are beyond control. That kind of loss of confidence may well last for years.
via The Great Debt Scare – Robert J. Shiller – Project Syndicate.
The Dow tests key support at 10600
Dow Jones Industrial Average is testing support at 10600; failure would add final confirmation of the bear market signaled by 63-day Twiggs Momentum (holding below zero).
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
Loonie turns, will Aussie follow?
Canada’s Loonie broke parity against the greenback, confirming a primary down-trend and offering an initial target of $0.94*.
* Target calculation: 1.00 – ( 1.06 – 1.00 ) = 0.94
The Canadian and Aussie Dollars have tracked each other closely over the last year and it seems inevitable that the Aussie will follow the Loonie below parity.
QE Can’t Save the Day… We’ve Done a Version of It For Over 10 Years | ZeroHedge
While most commentators proclaim that QE is a completely new phenomenon, we have in fact seen a version of it in the form of the Fed’s and Asia’s (especially China’s) purchases of US Treasuries/ currency pegs over the last decade or so.
Indeed, today, the Fed, China, and Japan collectively hold 61% of the $10 trillion of US debt held by “the public.” When you add in the additional $4.6 trillion in US debt held by “intragovernmental holdings” (basically the Federal Government buying Treasuries by raiding Social Security and other pension funds) you find that Asia and the Feds have monetized $10.7 trillion of the US’s total $14.6 debt (roughly 73%) over the last 20 years.
via QE Can’t Save the Day… We’ve Done a Version of It For Over 10 Years | ZeroHedge.