Monday, May 4, 2009

Sunday Night Economic Assessment

The Consumption Index continued to back off of its recent highs last week, settling just below year-ago levels, as scheduled natural gas flows into paperboard facilities (on which the index is based) continued to pull back sharply in the second business week following Easter/Spring Break. The recent actions of the Consumption Index would be indicative of a very good easter shopping-season (especially considering the economy), followed by a pause.

The Production Index set its fifth recession-low in as many weeks, though it was again off only slightly. Much of the Year-over-year weakness in industrial gas-flows (68%) comes from the steel sector group (See "Part 8" post on Investor Village CWEI Board), which is off better than 75% from year-ago levels. Nearly three-fourths (74%) of the YOY industrial weakness comes from the metals group (which includes steel).

The new Inventory Index continues to suggest (if both the Production and Consumption Indexes are right) that industry has been using the recent spurt in consumption to clear out inventory-clogged supply channels, as opposed to increasing production. I am, however, leery that a rising dollar combined with lowered shipping costs might also provide an alternate explanation to the recent weakness in industrial & steel gas-flows. Waves of steel-imports have decimated the US steel industry in past periods of recessions and oil-price weakness. The same could be happening today.

With the big Easter consumption-o-rama now behind us, one has to be wondering where consumers will take us. Are consumers simply regrouping for a couple of weeks, or did consumers do just one last big Easter (for the kids) before reigning in their spending (to take us deeper into the basements of recession)? Time will tell.

(Off topic) I am greatly concerned for the direction that Investor Village has began to move in its attempts to remove "abusive" posts from the IV CWEI board. While I am hoping that IV's actions are limited to angery/abusive posts (though I can't tell what they actually did remove because those posts are gone) the fear is that once the "Censor" geanie is let out of the bottle, you never know what it will do. Human nature, even when meant for good, can go wild.
Problem is, we have two basic groups on the board... One that wants a pure "Energy" board, and another that prefers an "Energy and Pollitics" board.

I have in the past been "invited" to move to a moderated board (both through IV and others), though I have been resistive. I very much prefer an open-forum type board (such as the way the IV CWEI board used to be) where posting is open to all... and the reader can use an "Ignore" type feature to limit the posts to those that he/she prefers to read (though I do wish that posters would go more for quality over quantity).

One feature for IV that I think would be very helpful (I emailed Blue about this last week) would be to make the "Ignore" lists potentially shareable... in such a way (if a board member wanted to take on the task) that that member could make his/her own "Ignore" list shareable... where others could import that ignore list into their own account settings.

Through such a feature, the board could grow (through sugh "Ignore"-based filtering) to whatever the individual reader wanted it to be... A energy board, a politics & energy board, or whatever... based upon that readers own needs and preferences.