Tuesday, December 27, 2011

Tuesday Morning Economic Assessment

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as both industrial production and consumption advanced. The congressional "$40-a-week-payroll-tax-in-two-months" standoff-deal reached Thursday appeared to be poorly received within the gas flows.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for the 10th time in the last 11 weeks, rising to 124.0 (vs last weeks 123.5), its highest reading since June 6th, and closing in on its May 31st all-time high (124.8). In its raw dailies (above) the week started firm then softened late.

The Consumption Index had its second straight weekly gain, rising to 138.9 (from last weeks 136.9). In its dailies the measure started the week strong then sharply weakened midweek.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

The congressional payroll-tax deal appeared to give consumers pause, as Thursday's announced compromise seemed to coincide with a spat of scheduling-downticks within the gas-flows, and with all of the cross-currents of the wind-down of the Christmas-Shopping season, risk to the economy (and the markets) has to be assumed to be growing.

Friday Mornings batch of gas-flow data was so troubling it knocked me out and heavily into cash. Being an investor that relies solely upon personal trading for a living, I tend to play the cowards roll (can't afford a flat year) so I sometimes tend to be on the early side, and the markets should still have some good news in the pipeline (especially for the last week & the month of December) which hopefully will be somewhat supportive and give the consumer (and/or government) a chance to get back on track. Hopefully.

ROBRY VACATION NOTE: As it has been quite a while since our last vacation, we have decided to take a break and will be headed south for warmer climates for a break. While the reservations are not quite done with yet, I anticipate heading out by the weekend, so there will be a break in the economics posts for approx three weeks.

Regarding the early primaries (and considering that payroll-tax-blunder and weakening gas-flows) I suspect the anti-party sentiment gets pumped up from here. I still think a Ron Paul "ascendancy" has to be risked into ones investment/business outlook (whether you like him or not). Gut feeling is (unless economic & political patterns change) Ron Paul takes both Iowa and New Hampshire, then steamrolls (flattening everyone else) after that.

Republicans are looking for a "Ronald Reagan" (Outsider with apparent wisdom) and Reagan was often described as the "Teflon President" in his early years (in that "nothing would stick"). George Bush (Sr) remarked of Reagan's economic ideas as "Voodoo Economics" in the 1980 primaries (anyone remember those... hard to believe 32 years ago!). We had high unemployment back then too. Big-time political change often follows big-time unemployment.

Major political realignment within both political parties over the next three years to me appears likely. If Ron Paul is elected (which assumes further economic deterioration), gut feeling is major political upheaval follows in the Democratic Party (if it survives intact) in 2013-2014.



-Robry825

Monday, December 19, 2011

Monday Morning Economic Assessment

The US Industrial economy took a big leap forward last week (if pipeline scheduling is correct), with pronounced gains to both the production and consumption index, as the 2011 Christmas-shopping season continues to rapidly strengthen. A bullish "event" to the economy appeared to happen Wednesday (Dec 14th) across the gas flows and especially into consumption.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for the 9th time in the last 10 weeks, rising to 123.5 (vs last weeks 122.6), its highest reading since June 15th, and closing in on its May 31st all-time high (124.8). In its raw dailies (above) it was an exceptional week, gaining a whopping 5% over the prior week alone and easily eclipsing seasonals.

The Consumption Index advanced as well (breaking its previous string of three off-weeks in a row), lifting to 136.9 (from last weeks 133.3). In its dailies the measure started the week firm and maintained that strength throughout the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

For the time being, the economy remains firmly supported by last weeks bullishness to both production and consumption, and is well-evidenced in the firmness of the Aluminum, Automotive, Copper, Food, Glass, Paper, and Refining flows, and is also supported by recent-firming trends in Steel (indicative of durable goods starting to rebound), and meekness within the Food-Group measures.



-Robry825

Monday, December 12, 2011

Monday Morning Economic Assessment

The US Industrial economy continued to strengthen again last week (if pipeline scheduling is correct), while consumption continued to moderate from its recent strength.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for the 8th time in the last 9 weeks, rising to 122.6 (vs last weeks 122.0, its highest reading since June 21st. In its raw dailies (above), the measure started modestly soft the first half of the week, then firmed.

The Consumption Index continued its retreat from previously-robust gains (3nd off-week in a row). The measure declined to 133.3 (from last weeks 135.2). In its dailies the measure started the week soft but firmed late.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

For the time being, the economy remains somewhat supported by firmness in industrial (factory) natgas-scheduling, the remaining gap between production and consumption, and the late-week strengthening to both indexes... with good evidence of the turn to recovery evidenced in steel scheduling (evidence of the beginnings of a durable-goods recovery), along with automotive scheduling.

Concern remains for the recent softness in the consumption index, and recent hawkishness in Federal Reserve policy enabling further liquidity-drains from the US, theoretically capping economic expansion and questioning the sustainability of the recent economic advance.

Corporate profitability still looks to be solid (so far) for the 4th quarter.



-Robry825

Monday, December 5, 2011

Monday Morning Economic Assessment

The US Industrial economy continued higher again last week (if pipeline scheduling is correct), consumption continued to moderate from its recent strength, and the US Federal Reserve finally relented and added some stimulus to the economy... of Europe.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for the seventh time in the last eight weeks, rising to 122.0 (vs last weeks 121.0, its highest reading since June 24th. In its raw dailies (above), the measure was only slightly soft for the Thanksgiving holiday weekend, strengthened slightly midweek, then re-softened a tad late. Taking seasonals into account, the week was firm.

The Consumption Index looked like a stock in "Profit-Taking" mode, giving back a little more of its previously-robust gains (2nd off-week in a row). The measure backed off to 135.2 (from last weeks 137.0). In its dailies the measure started the week soft but firmed over the Thanksgiving holiday period.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

Data quality within the gas-flows was a little off, with the significant California utility PG&E's web-site down along

For the time being, the economy remains supported by firmness in industrial (factory) natgas-scheduling, the recently-widened gap between the production and consumption indexes, and perhaps a bit less pessimism in the deeply-pessimistic US industrial sector.

Concern remains for the recent softness in the consumption index, and a somewhat bearish restrengthening of food-group scheduling (indicative of declining consumer confidence). Federal Reserve policy still appears hawkish (allowing liquidity to drain from the US, in spite of last weeks generosity to Europe), theoretically capping economic expansion and questioning the sustainability of the recent economic advance.

Corporate profitability still looks to be solid (so far) for the 4th quarter, and given the caution in the business sector, should surprise on the upside for many quarters to come... as long as business-caution persists.



-Robry825