robry825

Tuesday Morning Economic Assessment

2011-12-27T03:37:00.000-08:00

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 Morning Economic Assessment

2011-12-19T07:51:00.000-08:00

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 Morning Economic Assessment

2011-12-12T03:14:00.000-08:00

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 Morning Economic Assessment

2011-12-05T09:54:00.000-08:00

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

Monday Morning Economic Assessment

2011-11-28T02:46:00.000-08:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as consumption somewhat backed away 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 sixth time in the last seven weeks, rising to 121.0 (vs last weeks 120.1), its highest reading since June 29th. In its raw dailies (above), the measure was very strong early through Wednesday before trailing off for the Thanksgiving holiday weekend.

The Consumption Index backed off from its highs of the prior week, dipping to 137 (from last weeks revised 140.1). In its dailies the measure started the week soft but firmed over the Thanksgiving holiday period.

"Black Friday" sales, though talked up in the press (vs year ago numbers) appeared lackluster in the gas-flows... beating last-years "micro-recession" numbers only barely but failing to beat 2-week-ago numbers. (Note the year-ago downward-plunge above in that green consumption line... last years "Black Friday" sales were horrid.)

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 continues to appear supported by firmness in industrial (factory) natgas-scheduling, and the recently-widened gap between the production and consumption indexes.

Of concern is last weeks 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), theoretically capping economic expansion and questioning the sustainability of the recent economic advance.

Corporate profitability continues to look 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

Monday Morning Economic Assessment

2011-11-21T06:20:00.000-08:00

The US Industrial economy gained further ground last week (if pipeline scheduling is correct), as the consumption index gained as well.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) retook most of what it lost the prior week , rising to 120.1 (vs last weeks 119.9). In its raw dailies (above), the measure was very strong throughout the week.

The Consumption Index also put in a gain (for its second week in a row), advancing to to 140.6 (from last weeks 139.6). In its dailies the measure started the week firm but softened sharply Wednesday on.

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 appears well-supported by the recent firmness in consumption, and it appears industry is still somewhat behind in catching up to the recent up-tick in consumption.

Corporate profitability looks to be solid so far for the 4th quarter, and the corporate-caution that is well-evidenced in the gas flows would suggest corporate profits are probably well-protected from economic softness that will likely (unless the Federal Reserve reverses its course) once past Christmas.

On the consumption side, the Federal Reserve still appears hawkish (allowing liquidity to drain from the US), and until that changes... the lid remains on the consumer and on the economy.

The OWS movement is right in that something out there is trying to crush the "little guy", they are just clueless as to who (or what) it is. Unfortunately, so are the vast majority of other folks as well.

-Robry825

Monday Morning Economic Assessment

2011-11-14T07:17:00.000-08:00

The US Industrial economy (if pipeline scheduling is correct) technically took a break last week, while consumer spending came back to life.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for the first time in five weeks, dipping to 119.9 (vs last weeks 120.3). In its raw dailies (above), the measure started the week flat but strengthened sharply mid-week. The dip in the "Official" 28-day average was entirely due to a stronger week dropping off of the back-end of its four-week moving average, and in its dailies it was clearly stronger than the prior week.

The Consumption Index, conversely, reversed its two-week slump and advanced, gaining to 139.6 (from last weeks 136.6). In its dailies the week was very firm throughout.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continues to re-accelerate downwards.

The weeks numbers (in spite of that "technical" weakness actually looked quite good, as the re-ignition in consumption (late in the prior week) looked to reignite production Monday Morning on.

---Position on Trade---

I was challenged over the weekend on trade. Specifically, whether I am suggesting (by my mention of the linkage with the economy with the trade deficit) I was suggesting the US go "protectionist". Quite the contrary... I believe strongly in a free-trade concept globally, and I believe it would be reprehensible and disastrous to close off free-trade.

Ending free trade would effectively cut out $600 billion plus (per year) of goods from US consumers (lowering the standard of living in an instant), and unleash instantaneous waves of inflation in the US (as the laws of supply and demand forced prices higher to cope with that $600-billion cut). (Ending free trade would plunge many parts of the world into depression as well, as the loss of US demand would chill all of the worlds export-economies... and absolutely crush economies such as China and India who have not yet found the capability to balance off their own economies without the presence of the US-Jumper-Cables).

Further, from a Christian standpoint (trying very hard to keep the "religious" stuff out of the posts but can not on this point) I believe the US has been very much been blessed by God, and (as the old scriptural adage goes)... "To whom much is given, much is required"... Meaning I believe there is an "expectation" of us all not to get to "greedy" and "self-centered". The US has been a blessing to many in the world (by way of opening its borders to both trade and employment to others), and I would not like to see that stop.

Yes, free trade can lead to "exploitation" of workers in other countries. But will shutting down free trade elevate those under-$2-an-hour labor rates to $10-an-hour plus? Or will it push folks out of those $2-an-hour industrial jobs and into 25-cent-an-hour agricultural jobs?

(That is not to say we should "give-away-the-store" either. Rather, we should begin to set aside emotion and pursue logic and reason in both politics and economics) (Yes, I said it, I see more "Emotion" than "Logic" and "Reason" in both... with only forms of contrived "Logic" and "Reason" thrown in to justify "Emotion" in present day US politics and economics)

Maybe I am just too pragmatic, but I see better ways of doing things.

-Robry825

Monday Morning Economic Assessment

2011-11-07T06:26:00.000-08:00

The US Industrial economy (if pipeline scheduling is correct) added a little more ground last week, as consumer spending looked to not know which way to go.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) had its fourth up-week in a row, rising to 120.3 (vs last weeks 119.7). In its raw dailies (above), the measure was mostly flat and in line with the previous weeks numbers.

The Consumption Index, conversely, had its second down-week in a row, dropping to 136.6 (from last weeks 137.5). In its raw dailies the measure started soft to the previous week but firmed late over the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continues to re-accelerate downwards.

Internally, food-group scheduling and steel-manufacturing scheduling continues a slightly-improved look in spite of the recent stall in the consumption dailies. Still, stress remains evident in the underlying numbers, and the economy reminds one of a rock balancing on top of a fence on a windy day... where you just can't tell when and on which side it is going to fall off.

The numbers remain bullish to strong corporate profits regardless, and the fourth quarter (aside from the battered steel group) looks to be solid. Given the bearishness in the investment/business end of the US economic spectrum, that profitability appears well-protected.

The Federal Reserve (as expected) announced nothing again in its stage-appearance last week, and appears "out-of-the-game" (or maybe "out-to-lunch") permanently... leaving the support of the US economy solely to governmental deficit spending.

The question is... when does the next US-Government debt downgrade come... and what will be the result? In corporate bankruptcies, there is usually an unstoppable downward spiral where downgrades increase debt-service costs, which in turn weaken a companies cash-flows... generating further downgrades... making bankruptcy unavoidable.

At some point (unless the government gets its act together quickly) that happens to the US government as well. The only question is when.

When that happens, the massive imports into the US stop (and maybe reverse), striking the US standard of living, emptying store shelves, creating shortages, price-increase spirals, inflation, and inevitably political upheaval.

There is probably some time still left, and a chance to turn things around, but that time is getting very short.

A long time ago (late 1990's) when I first started posting, I remember posting a call on the old Yahoo boards for Oil to go above and hold above $25, and was derided by others who thought it unlikely. That was an easy call, predicated on an imminent end to north-sea production increases which had previously contained oil pricing. This likewise is an easy call.

It is a shame, when, for two centuries citizens have risked their lives and reputations to defend the US from without, that it would be allowed to rot from within.

-Robry825

Monday Morning Economic Assessment

2011-10-31T08:42:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) gained more ground last week, even as consumer spending stalled and eased off a notch.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) had its third up-week in a row, rising to 119.7 (vs last weeks revised 118.8). In its raw dailies (above), the measure was mostly flat and followed quite closely the previous weeks numbers.

The Consumption Index, conversely, broke its string of five weekly gains, dropping to 137.5 (from last weeks revised 137.6). In its raw dailies the measure had a flat, somewhat lackluster look.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continues to re-accelerate downwards.

As with last week, food-group scheduling continues to underpin consumption, even as consumption stalls... a sign that consumer confidence, though up, may be more confidence in "the other guy" than self. Steel group receipts (reflective of durable goods) continue to look lousy.

Overall, until steel improves, everything is questionable and Federal-Reserve policy makes it doubtful. My thinking remains that nothing less that a QE-3 will do, and the economy heads south within the next few weeks without the Federal Reserve.

(Political wild-speculation department... my thoughts from a couple months past...)
"Perry campaign gets killed from within (by its own staffers), Romney from without (boredom), and Ron Paul
takes the Republican Primaries and the Presidency in 2012. Possible Democratic "Hail-Mary"... Democrats
accept the Republican balanced-budget amendment idea (it gets forced anyway in next few years) in return
for token higher Republican Taxes, then fire the whole of the Federal Reserve board and ... ... ...) (That is, if
the Federal Reserve is freezing up politically and unemployment retakes double digits.)"

The thoughts on the Perry and Romney campaigns look to right so far, although Ron Paul has yet to emerge. Instead, Herman Cain has come to the top, which I think makes sense given the deep troubles within the gas flows (am thinking all of America is going to be in a real mood to "Roll the Dice") and extremism on taxes (Herman Cain) and a bunch of other stuff (Ron Paul) will actually be liked once the thick of the Republican Primaries and 2012 Elections commence.

(This very much reminds me of the late-1970's malaise when Ronald Reagan was elected, and that little old "Voodoo economics" tag by then-candidate George Bush probably helped to cement Reagan's eventual election by an electorate that then was ready to "Roll the dice" too.)

But will it be Herman Cain or Ron Paul? Tougher question than Perry vs Romney vs Paul, and investing will be a lot different under Herman Cain than under Ron Paul. I am still thinking Ron Paul, but a lot tougher call.

On the Democratic side, nobody should (rationally) want to run against the president (without infuriating a lot of folks and being made to look an out right traitor), although in the end (by looking at the gas flows) the President is toast in the 2012 elections. One would think the Federal Reserve is Republican and trying to undermine the economy to destroy the Democrats in 2012 (judging by the Federal Reserves ending of the Quantitative Easing programs as the primaries approach and the economy slides), and no doubt there is knowledge of all of this at the White house.

So on the Democratic side, one has to risk ones investments outlook to an extreme move on Federal Reserve oversight by the Executive Branch, and I think it more than likely than not that the Federal Reserve gets "Shook up" by the 2012 elections (more likely by the end of 2011) unless the Federal Reserve does something really, really bold quickly before the economy really, really tanks.

-Robry825

Monday Morning Economic Assessment

2011-10-24T06:35:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) advanced again smartly last week, while consumer spending added to its recent string of gains.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its second week in a row, climbing to 118.9 (vs last weeks 117.7). In its raw dailies (above), the measure was impressive...looking firm throughout the entire week.

The Consumption Index also gained (for its fifth week-in-a-row), lifting to 137.6 (from last weeks revised 135.5). In its raw dailies the measure was slightly softer than the previous week, though the overall measure reflected stronger gains as a much-softer week fell off the end of its 4-week moving average.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), again continues its re-acceleration to the downside as the spread between consumption and production continues to widen.

Within the gas-flows, there remains support for the consumptive upturn (of the past 5 weeks), however, steel-group scheduling continues a grave concern (durable-goods still look a mess), and without some further external stimulus (Federal Reserve QE-3, foreign binge-buying of US equities, etc) long-term extensions of the present short-term trends look questionable.

Saw a bumper sticker the other day, something to the effect of ... "Care About Jobs... Stop Buying Foreign !". Now Michigan (Robry's home state) is big on automotive production (the Detroit area known as the "Motor City"), and folks up here are really suffering unemployment in this economy... even as imports of all types (including automotive) soar.

Now that bumper sticker has (more or less) been around Michigan for decades (can remember them in the 70's), and it evokes tensions between employment and consumption... with employment (especially the big auto-unions) pushing for trade-protection (to defend industry and jobs) even as consumers prefer the choice that imports give them on style and price.

But that bumper sticker, for the first time, really struck me... as I (for the first time) saw a third element in it that I am sure those two sides miss completely.

That third element relates to neither employment or consumption. It has nothing to do with neither union or consumer. It is neither Democratic nor Republican. That element is an assumption that is insidious (and if I might say as a Christian, pure evil) that (in its truth) tears at the heart of the economy and the nation.

The third element of that simple little"Care About Jobs... Stop Buying Foreign" bumper sticker is an implied, forced, like-it-or-not choice... that we must choose between a foreign-built car, or a US-built car (and by extension the US must choose between foreign goods and US-produced goods)... meaning that we are NOT allowed both.

That is, there is someone (or some thing) that puts a cap on the free market, rationing supply to demand. Literally... Buy a car from India, Detroit must make and sell one car less. Buy a car from Detroit, India must send one car less. Build an automotive plant in China dedicated solely to US consumption, and one automotive plant in the US must be shut down!

The trouble is... I see reality in that "Care About Jobs... Stop Buying Foreign" bumper sticker. I see a Federal Reserve, in its blind ambitions to defend against non-existing inflation, restraining the US economy to the point of forcing that choice.

And if that is true (that production of goods are capped), then... (1) the production of ALL goods is capped (including goods made in the US),... (2) the US standard-of-living is capped,... (3) the US economy is capped, and... (4) US employment is capped.

(I believe it to be true.)

Unfortunately, it appears to me at present, that the US is all but blind to this economic-capping, and that the US population is lowering itself to a "Democrat vs Republican" fight over each-others slices of a rapidly-shrinking economic-pie, rather than to join together to defend the whole of that economic-pie.

I think that the nature of the shrinking of that "economic pie" is well evident in the growth of the US National Debt, the growth of the US Gross External Debt, the growth of US consumer-debt of all types, the ultra-low interest rates (courtesy of the US Federal Reserve) to keep the borrowing growing, and the growing ownership of US equities and industry by foreign interests.

When will the US wake up to this? Time will tell.

-Robry825

Monday Morning Economic Assessment

2011-10-17T05:36:00.000-07:00

The summer micro-recession appears over as industrial natural-gas scheduling finally ignited last week on the heals of three-straight weekly gains to the consumption index.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of seven down-weeks in a row and took off, rising to 117.7 (vs last weeks 116.4), after reaching its lowest point since October-2010 the week before. In its raw dailies (above), the measure firmed early, surged Tuesday, and finished the week strong.

The Consumption Index also climbed (for its fourth week-in-a-row), gaining to 135.5 (from last weeks revised 134.5). In its raw dailies the measure was choppy though generally firm, with a one-day surge on Tuesday coinciding with the surge in the Production Index.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continues to re-accelerate to the downside as the spread between consumption and production widens.

Also of note... the "polarity" (phase) of the economy shifted back from negative to positive (even as the economy shifted from contraction to expansion), meaning that the leadership within the economy is assumed to have changed back to consumption (as is normal in both upturns and downturns), and away from the strange patterns throughout the summer downturn of industrial production leading consumption.

Within the gas-flows, there remains good support for the consumptive upturn (of the past 4 weeks) in food-group scheduling, which remains well-off of their bearish-looking strength of the summer.

Steel-group scheduling, however, remained flat for the week... an indication that the emerging uptrend has yet to hit the durable-goods sector.

Outlook for 3rd-quarter equity earnings remains positive as consumption never broke down below production (as it did three years ago when the deep recession appeared unanticipated in the gas flows), and 4th-quarter earnings outlook remains positive as well given the quarter-beginning economic strength within the gas-flows.

For the longer-term... Federal Reserve policy remains repressive to the economy, maintaining and encouraging strong liquidity flows out of the US and into foreign interests (by way of the enormous trade deficits siphoning liquidity out of the US, where that liquidity is not subsequently replaced by the Federal Reserve), so substantial economic gains will be difficult probably once past the Christmas-shopping rush (if not before).

-Robry825

Monday Morning Economic Assessment

2011-10-10T05:31:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) backed off one more notch last week, while consumer spending again pressed upward.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) had its seventh down-week in a row, backing off a notch to 116.4 (vs last weeks 116.5), and at its lowest point since October 16th, 2010. The measure put in a low of 116.2 on Thursday, before turning up Friday and Saturday. In its raw dailies (above), the measure was soft early before flattening late.

The Consumption Index gained for its third week-in-a-row, rising to 134.5 (from last weeks revised 129.1). In its raw dailies the measure started soft (to the previous week) but benefited from weaker numbers falling off the back of its 28-day moving average.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), is now re-accelerating to the downside as the spread between consumption to production has increased.

The quarters-beginning (spoken of in last weeks comments) failed to see a response in the Production Index to the recent rally in consumption, reaffirming the strange nature of the present "Micro-recession", as the Production Index thus far continues to resist (rather than follow) the consumer. We very much need to see both Fridays upturn in the Production Index (and the three-week-old rally in the Consumption Index) continue... to re-establish normalcy back into the economy.

Absent that, we will have what is best described as a "negative-polarity" recession (to borrow a phrase from electronics), or a "negative recession"... which would (if it continues to follow its patterns of the last few months) be a monster quite different from the beasts of the last recessions (and I assume the great depression), with theoretical surges in unemployment, corporate profitability, and inflation all at the same time... leading initially to massive transfers of wealth out of the lower & middle class and into the hands of the upper-class, then ultimately out of the upper-class and out of the country by way of panic-driven taxation (upper-class to consumers to foreign interests) where ownership of US industry follows the ownership of US money-supply out of the country (via export drains) and the US goes third-world.

Unfortunately, all this remains to look like a "Federal-Reserve-Problem" and not a "Government-Problem", and any attempt by government to "fix" the problem (aside from either reforming or replacing Federal Reserve policies) probably will serve only to "enable" Federal-Reserve oversight of the continual drain of wealth out of the US.

-Robry825

Monday Morning Economic Assessment

2011-10-03T05:01:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) continued to backtrack last week, while consumer spending continued to rise.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its sixth straight week, easing to 116.5 (vs last weeks 116.8), and at its lowest point since November 22nd, 2010. In its raw dailies (above), the measure was soft throughout the week.

The Consumption Index, on the other hand, continued to build on its gains of the past two weeks and accelerated... rising to 129.1 (from last weeks revised 124.3). In its raw dailies the measure was strong throughout the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, continues its attempt to flatten out as consumption trends have been falling faster that production.

Last weeks noted "sliver of hope" has blossomed quite nicely (in the gas flows) into a respectable attempt at recovery, with good support building in the food-group, which finally completed a decent month in September... breaking a long string of bearish record-breaking months

We now look to the Production index for signs of conformation as the new quarter begins. (Major changes to the Production Index like to occur on monthly or quarterly changeovers... presumably as industrial production scheduling gets adjusted to prior months/quarters actuals.)

We very much need to see the unfolding consumer-gains both (A) continue, (B) spread into the production index, and (C) spread into steel-group scheduling (as per the "Part 8" posts on InvestorVillage CWEI board) to abort recession.

The US consumer has had to overcome a mountain of negativism in press, government, and finance (declining equities) th achieve what it has so far, and industry will have to overcome its own negativism and allow consumption to lead once again (as consumption has led the economy in prior years).

If consumption can keep it going a couple more weeks, I think it will get a boost from a turn in equities as investors should like what they see in 3rd quarter earnings (Production has held below consumption on industrial negativity, which in the past has lead to good quarterly-earnings results... so I look for rising stock markets as the fourth-quarter unfolds).

The longer-term-downside-risk remains, however, with the Federal Reserve remaining on the sidelines as trade-deficits continue to hemorrhage liquidity and build US debt. While the economy can gain on a bounce, serious longer-term economic (and employment) gains remain to look unlikely... without Fed accommodation.

-Robry825

Monday Morning Economic Assessment

2011-09-26T04:35:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) continued to ease last week, while consumer spending inched modestly higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its fifth straight week, easing to 116.8 (vs last weeks 117.0), and at its lowest point since November 24th, 2010. In its raw dailies (above), the measure was somewhat flat with just a bit of re-softening late in the week.

The Consumption Index, conversely, again showed a sliver of strength (2nd up-week in a row) by rising to 124.3 (from last weeks revised 123.8). In its raw dailies the measure continued to show the firmness of the prior weeks-end, though the week only was modestly bullish vs seasonals.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, continues its attempt to flatten out as consumption trends have been falling faster that production.

Overall, gas-flows continue to look like mush, with the economy continuing to recede from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether the present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.

Government ineptitude appeared to hit a new high last week, with the President talking up tax hikes (doubled-down to $3 trillion from $1.5 trillion last week), as key Republicans lobbied the Federal Reserve to end the monetary stimulus of its recent quantitative-easing programs. The Federal Reserve, for its part, entertained itself by doing the "Chubby-Checker-Twist"... sending global stock and commodities markets reeling.

However, the smallest of slivers of hope is appearing, in that consumption is trying to make a turn the last couple of weeks, even while industry retrenches and investment retreats. The consumption index remains meekly above the production index, so we are hanging on just above levels where downward spirals can commence, hence the economy is trying to make a stand.

-Robry825

Monday Morning Economic Assessment

2011-09-19T09:21:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) gave more ground last week, while consumer spending woke from its long nap with a yawn.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its fourth week in a row, now down to 117.0 (vs last weeks revised 117.7), and at its lowest point since November 25th, 2010. In its raw dailies (above), the measure was soft vs the prior week, and especially soft against seasonals.

The Consumption Index, however, showed some signs of life, breaking a string of 5 down-weeks in a row by rising to five straight weeks, dipped to 123.8 (from last weeks revised 122.2). In its raw dailies the measure started very soft but quickly firmed against the prior weeks excessively-dismal numbers surrounding the Presidential-Address / Republican-Debate Combo Wednesday & Thursday nights.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, continues its attempt to flatten out as consumption trends have been falling faster that production.

Overall, gas-flows continue to look mushy, with the economy slowly receding from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether this present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.

Some good news on the political front... President Obama announced a very aggressive plan to combat governmental-deficit spending, by hiking taxes by 1.5 Trillion on investors. Democratic researchers have come into discovery of a tendency by investors to invest more in capital-formation (which generates more hiring) when the government takes a much higher share of their income.

The theory is the more investors are taxed, the more money they have left to hire and boost employment, and that 1.5 Trillion will be sufficient to reach full employment. The economy will be humming in no time!

Republican researchers, on the other hand, are exploring emerging trends that cutting government spending to drain money from consumers hands is likewise stimulative of consumption, and are expected shortly to announce draconian plans for similar cuts to consumers to spur their consumption. This should be a boom to retail sales... further propelling the economy.

(How hard it is to think "outside the box", when your campaign contributions come from "inside the box".)

Not to worry, though... the US dollar is hitting 6 month highs as we speak against the DXY... so that little unemployment check will go a little further at the local (foreign) retail store than it used to.

-Robry825

Monday Morning Economic Assessment

2011-09-12T06:56:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) continued its retreat last week along with consumer spending, while Washington's mid-week "scare-em-up" was a resounding success...sending consumers scurrying for cover.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its third week in a row, dipping to 117.7 (vs last weeks revised 119.0), and is now at its lowest point since November 30th, 2010. In its raw dailies (above), the measure was somewhat firm vs the prior week, though the week was very soft once seasonal norms were added in.

The Consumption Index, now down for five straight weeks, dipped to 122.0 (from last weeks revised 125.3). In its raw dailies the measure was very week, and dismally weak Tuesday, Wednesday, and Thursday as consumers looked as if they hunkered-down for the Presidential-Address / Republican-Debate Combo Wednesday & Thursday night, before finally scurrying out of the bomb shelter to buy a few necessities Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, is trying to flatten out as consumption has been falling faster that production.

Overall, gas-flows continue to look mushy, with the economy slowly receding from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether this present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.

-Robry825

Tuesday Morning Economic Assessment

2011-09-06T06:34:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) continued its retreat last week, consumer spending continued to languish, and signs of the beginnings of the traditional (seasonal) September-ramp-to-Christmas were (so far) meek.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gave ground for its second week in a row, dropping to 118.9 (vs last weeks revised 120.0). In its raw dailies above, the measure was soft the start of the week then strengthened a bit late on the transition to September and the Labor-Day Holiday. Against seasonals the measure was very soft throughout the week.

The Consumption Index extended its slide for its fourth straight week, dipping to 124.8 (from last weeks 132.1). In its raw dailies the measure was choppy but overall week, and against seasonals especially so.

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

Overall, gas-flows continue to look like mush, with the economy dead-in-the-water. Employment (not business profitability) looks to be taking most of the hit at the moment, though as the consumption index nears the production index, business will have to cut production runs if consumption slides much further if it wants to isolate itself from financial harm.

-Robry825

Monday Morning Economic Assessment

2011-08-29T06:46:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) backtracked last week, while consumer spending continued to retreat and the Federal Reserve sat on its hands.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its three-week string of gains, backing off a notch to 120.0 (vs last weeks revised 120.2). In its raw dailies above, the measure was bland.

The Consumption Index extended its fall for a third week-in-a-row, slipping to 132.1 (from last weeks 139.6). In its dailies the measure was likewise bland (to production) except for Monday's comparison with the previous weeks anomaly.

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

Overall, gas-flows look like mush, with the economy dead-in-the-water, though employment (not business profitability) looks to be taking the hit at present.

Federal Reserve starting to look like it is becoming politically paralyzed... with some leading Republican-presidential-wannabes sending strong signals of stimulus-intolerance (Perry) or Federal-Reserve menevolence (Ron Paul), while the Democratic party (and president) 2012-hopes get eaten alive by the economy.

If so, the entire burden of monetary expansion falls to the US government... to expand the pseudo-money supply (by way of deficit spending) at the sole cost of inflating government debt, as the US dollar holds firm... and $2 billion-a-day of US liquidity continues to get siphoned from the US economy.

(Wild-speculation department... Perry campaign gets killed from within (by its own staffers), Romney from without (boredom), and Ron Paul takes the Republican Primaries and the Presidency in 2012. Possible Democratic "Hail-Mary"... Democrats accept the Republican balanced-budget amendment idea (it gets forced anyway in next few years) in return for token higher Republican Taxes, then fire the whole of the Federal Reserve board and ... ... ...) (That is, if the Federal Reserve is freezing up politically and unemployment retakes double digits.)

-Robry825

Monday Morning Economic Assessment

2011-08-22T05:48:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) reclaimed a bit more ground last week, while consumer spending retreated. All models were revised as additional points were added to the respective samplings on which the modeling is based.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its third week in a row, gaining to 120.2 (vs last weeks revised 119.9). In its dailies, the measure lethargic, starting the week firm early-on but quickly softening as the week progressed.

The Consumption Index conversely fell for the second straight week, dipping to 139.6 (from last weeks 143.9). In its dailies the measure was choppy but overall soft as well.

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

Overall, its the same-ol'-same-ol'... with the economy dead-in-the-water... along with the Federal Reserve.

Bear market in stocks starting to look a bit overdone (in terms of the gas-flows)... this does not look like anything like an earnings-hit for the third quarter but if anything the opposite given the "reverse" nature of the slow-down (it is business-confidence that is being hit... along with investor-confidence... but not consumer spending so it will be bullish for earnings, not bearish).

What is being hit right now (big time) is employment... and over the last three weeks one can see a real split in the "Republican" side of the US economy (business vs investment community) with the business-side looking like it liked the centrist-budget compromise (gas-flow-scheduling increased to industry briefly following the announced budget-compromise three-weeks ago, while investors discouragingly dumped their investments and consumers appeared little-changed in their spending habits).

This recent three-way split has me rethinking my 2-Party Republican-vs-Democrat Gas-Flow Theories... Perhaps we actually have a three-party system with Democrats representing the consumer, Centrist-Republicans representing business, and Conservative-Tea-Party-Republicans representing investors.

If you think about it, the theory makes sense as the business community has to bridge the gap between consumer and investor... delivering quality and economy to consumers balanced with earnings to investors... compromising along the way to keep things balanced to make the business work, even while consumers and investors focus in on their own bargains or profits.

Of course, government (like business) would have to also balance the needs of all three of these three groups (consumer, business, & investment), which it is having great difficulty doing given the political-divide in Washington where folks think the problem is fiscal.

Raising taxes on investors will not encourage them to invest more on new businesses and new employment. And cutting spending to consumers will not encourage them to spend more to soak up excess industrial capacity. What we have at the root is monetary-policy failure, with fiscal-policy failure attempting to negate that monetary-policy-failure.

Think about it... we dropped interest rates to zero and bumped deficit-spending past a trillion-dollars-a-year to boost the economy... with nothing to show for it. It is not supposed to work that way.

-Robry825

Monday Morning Economic Assessment

2011-08-15T06:53:00.001-07:00

The US Industrial economy (if pipeline scheduling is correct) gained last week, while consumer spending was flat and the Federal Reserve entertained itself... saying it would change nothing, but seeking to reassure everyone with the promise that it would do so for the next two years.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for its second week in a row, rising to 120.4 (vs last weeks 119.3). In its dailies, the measure was mostly firm over the prior week.

The Consumption Index followed two weeks of gains by going flat, settling at 146.5 (from last weeks 146.5). In its dailies the measure was very soft.

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

Overall, gas-flows are mush and the economy appears to remain dead-in-the-water... neither advancing nor retreating... while consumption, steel-plant scheduling, and food-group scheduling all look ominously bearish.

Economically-speaking, I assume the economy to be barely hanging on by its fingernails, in spite of massive governmental deficit spending to prop it up.

Over the last 12 months, over $538 Billion left the US through the continuing trade deficits (see link below for data). Over the past 2 years... $995 Billion. Over the past 4 years... $2.2 Trillion. Over the past 8... $4.9 Trillion. Over the past 16... $6.4 Trillion. That is goods & services imbalances only... not including interest payment on debt, foreign aid, or all those dollars good-natured Americans send to help the needy in other countries, etc.

Check my math (please) at http://www.census.gov/foreign-trade/statistics/historical/exhibit_history.prn to see for yourself.

Those billions of dollars are gone... now in possession of foreign central banks around the world, who (viewing the US dollar as the worlds reserve currency) stockpile dollars the way they used to stockpile gold. The whole of the US monetary base (as of July 2011) was only $2.68 Billion (see http://www.federalreserve.gov/releases/h3/hist/h3hist1.txt), leaving the US deeply in debt (14.8 Trillion Gross External Debt, as of 03/31/11, as per http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/debta311.html)

With the Federal Reserve holding down the Monitary Base in the face of these monitary outflows, that cash has to be recycled back into the US economy by means of borrowing and deficit spending (by the US Government) to get that cash back into consumers hands. In the process all forms of debt accumulates... from government debt, to consumer debt, business debt, student debt, credit-card debt, etc... with Federal-Reserve-pushed ultra-low interest rates to entice people to borrow more to extend the madness.

One has to wonder at the success of the Federal Reserve at controlling inflation. Does the Federal Reserve control inflation by means of money supply... or does the Federal Reserve control inflation by means of the costs of foreign goods? To me, much of economic theory surrounding the Federal Reserve seems antiquated... Born of the 1930's "Great Depression" (and before)... before which the US was (I am told) a net exporter, computers & the internet (and derived analysis) did not exist, and public information was scarce.

At some point (sooner-or-later) Federal Reserve Thinking (and economic thinking in general) is going to change radically (or growing economic pressures fill force change by means of the markets). I very much hope that thought and reason will dominate the change, not the brutality of the markets.

In the meantime, the economy awaits the next QE3'ish announcement, and the return of sanity to Government.

-Robry825

Monday Morning Economic Assessment

2011-08-08T04:51:00.000-07:00

While investors and consumers fretted last week, the business sector got some feet as the US Industrial economy (if pipeline scheduling is correct) turned and advanced mildly, while consumption and the financial markets tumbled.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of 8 consecutive weekly declines, gaining slightly to 119.3 (vs last weeks 119.0). In its dailies, the measure started soft over last weekend then firmed on Monday..

The Consumption Index rose for its second week in a row, climbing to 146.5 (from last weeks 145.5). In its dailies the measure started the week firm then softened Monday-on.

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

Pattern-changes last Monday revolved around both the changeover to a new calender-month, and the US governmental budget-compromise.

The much-dreaded US-credit-downgrade occurring on Friday, though talked up in the press and rattling the markets in Sunday-night pre-trade, appeared to cause no significant changes as of yet in preliminary weekend gas-flow scheduling... we will wait to see if that holds up following Monday-night & Tuesday-night actuals on the weekend estimates.

Overall, breaking of the recent pattern of receding industrial activity is a positive, though it is temporarily outweighed by weakness in consumption. Apart from the last 8 weeks, it has been consumption that leads the economy, and consumption peaked in March.

The US economic "ball" appears to remain in the Federal Reserves end of the court. Where are you, QE3?

-Robry825

Monday Morning Economic Assessment

2011-08-01T08:03:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) continued to backtrack last week, while consumer spending rebounded midweek and a divided US government strained to find compromise on its budgetary focus.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its eighth week in a row, dropping to 119.0 (vs last weeks 119.5), and is at its lowest point now since 12/07/10. In its dailies, the measure had a rather bland look...starting the week (last Saturday) with just a tad of firmness then resoftening Tuesday on.

The Consumption Index reversed its prior two-week decline, gaining to 145.5 (from last weeks 143.4). In its dailies the measure started the week soft then firmed abruptly Wednesday on.

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

Overall, the recent pattern of receding industrial activity (with all of its implied stress on employment numbers) remains intact but needs to be broken in order to avoid recession. Last weeks attempt at a rebound in consumption needs to echo into the industrial numbers, and we very much need to see consumption take back its initiative and lead production higher. Consumers look to be (at least momentarily) optimistic and likely not the problem. It is the defensiveness within the business/investment side that is the problem.

Key to rebuilding confidence short-term will be a last-minute compromise on the impending "Econo-geddon" in a couple days. The compromise (though upwardly portrayed) is a necessary cave to the status quo... with the borrowing & deficit spending frontloaded and the cost-cutting backloaded... where it can eventually be killed. Accountability (by means of a balanced budget amendment) has been effectively avoided.

As noted previously, I believe deficit-spending and government borrowing to be hard-wired into government by means of the constant drain of liquidity out of the US (by means of trade deficits) that (by way of the absence of Federal Reserve Replacement) has to be recycled back into the US... by the US government first re-borrowing those funds then deficit-spending them back to consumers... who repeat the process of buying foreign goods.

The whole of the US national debt represents that continual recycling ("spooling") of the US money supply back into the US economy, and that spooling cannot be broken without either (A) Killing the economy, (B) Going Protectionist, or (C) the Federal Reserve index the money supply to the trade deficit by some means (such as quantitative easing QE3, QE4, QE5, etc).

Further complicating the picture, the Government And Federal Reserve account for quantitative easing as a loan (Government borrowing from the Federal Reserve).

As such, the "Cave to the status quo" was likely unavoidable, and hard-wired in (though one has to wonder how many in government know their strings are being pulled in ways they don't want to go). Watching government the last few weeks was like watching a box full of rats all disparately looking for a way out... when there is no way out).

That is not to say that there is not antagonism against the compromise. There is a lot... and it is uncertain if the center will survive the anger of the extremes and the compromise actually pass. Who knows... we may yet test the waters of "Econo-geddon".

Another possible downside... should the compromise pass, and foreign interests like what they think they see, they may rally the dollar... further pumping the trade deficit and ramping up that governmental borrow-and-spend "spooling" of the US money supply back into the US economy.

-Robry825

Sunday Night Economic Assessment

2011-07-25T06:12:00.000-07:00

The US Industrial economy (if pipeline scheduling is correct) gave more ground last week, as both the Production Index and Consumption index retreated.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its seventh week in a row, dropping to 119.5 (vs last weeks 120.2), and is at its lowest point now since 12/11/10. In its dailies, the measure was soft throughout the entire week, especially against seasonals.

The Consumption Index declined for its second week in a row, dropping to 143.4 (from last weeks 145.2). In its dailies the measure was firm most of the week, though it too was soft against seasonals.

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

As was noted last week, the Production Index still looks as if it is wanting to lead into recession, with higher corporate profit margins and higher unemployment numbers both implied. This pattern is not typical of the historical modeling (2004-date). Food-group deliveries (now at bearishly high levels) suggest high anxiety amongst consumers in the economy in general, and the whole of the US economy appears very vulnerable to the downside should any negativity spook consumers.

And with political interests holding out the possibility of a governmental-default "Econo-geddon" in their posturing over debt/spending limits, opportunity abounds for negativity to suddenly start to snowball.

I personally find it very troubling that government-debt obligations have not been taken off the table (by the executive branch) by executive order to the Department of Treasury . It would be a small thing to do, as the entity is under the President who has the authority to guide on exactly what is subject to default, and holding the door open to default on US debt obligations for purposes of political posturing has to be the height of political foolishness.

I worry... US corporations under US law that miss debt payments can be forced into taken into bankruptcy. Could the US Federal Government be forced to go "Debtor-In-Possession"? US courts are open to all, and there is that little thing called the "Equal Protection Clause". The US supreme court could surprise if a default lands on their steps. I would not take that chance!

I saw posted elsewhere a suggestion that the public should elect less lawyers and more accountants to congress. Perhaps not such a bad idea...

-Robry825

Sunday Night Economic Assessment

2011-07-18T05:25:00.001-07:00

The US Industrial economy (if pipeline scheduling is correct) lost a little more ground last week, with small losses in both the Production and Consumption indexes.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its sixth week in a row, dropping to 120.2 (vs last weeks 120.9). In its dailies, the measure was soft throughout the entire week.

The Consumption Index also declined, dropping to 145.2 (from last weeks 146.0). In its dailies the measure both started and ended flat, with a two-day weak spot in the middle Tuesday and Wednesday.

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

Overall, US natural gas flows are a tale of two economies, with the "Consumer Economy" (Consumer-spending) holding flat and the "Business Economy" (Industrial & Investment) slowly receding. It is a recipe (if it continues) for both soaring unemployment and soaring corporate profits... and eventually soaring prices and inflation should it continue and become entrenched.

In short, since February, the business & investment side of the US economy took the initiative over the whole of the US economy starting in February, and has begun to lead the economy ever since.

Will it continue and for how long? Is it an aberration? I do not know. But the emerging reality (in the gas-flows) is non-typical and rare historically, and will be interesting to see if it continues.

The bottom of the previous industrial recession (05/29/09) was preceded by a bottom in consumption months earlier (12/28/08), with consumption leading the economy out of recession. The industrial side of the US economy had its run June-2009 through May-2010, well behind the consumer-side, which had its run January-2009 through October-2009.

Prior to that, within the 2008 slide that started the recession, consumption lead the slide (09/08/08 high vs 12/28/08 low) over the business side (09/23/08 high vs 05/29/09 low).

In fact, throughout the life of the gas-flow-economic models (2004-2011) it has been typical for the production model to follow the consumption model, exposing corporate profitability to the whim of the consumer, with corporate profits both soaring and diving in response to changes in consumer-spending.

Has there been a grand change in the scheme of things? Is there some very long-term super-cycle in initiative that is in the process of flipping from the consumer to business? I am taken aback by all this, and it has not (until now) been in the gas-flows, but I have to start thinking of the possibility of it now as it is (at least for now) emerging within the gas flows.

There is probably some political-coloring within all this... There was quite a bump in raw Industrial gas-flow scheduling around the time of last falls November-Elections... presumably in response to the Republican landslide (Republicans being seen as the representative of business and investment).

So has the drop-off on the business end (since Feb-2011) been due to a fall-off of that election-optimism... or has something else changed, with businesses "wising up" to the new (and emerging) political and economic realities (that the consumer may be missing)... to take the initiative within the US economy.

It is one more frightening aspect for US consumers (and the "little-guy"), as we march off toward that potential "Econo-geddon" in a couple more weeks.

-Robry825

***ROBRY-CALC UPDATE: For those using the Robry-Calc Spreadsheet... the software has been revised and I would encourage you to download the latest copy (http://robry825.com/). The update is free to anyone who previously downloaded and I want to encourage its use.

Improvements include speed-optimizations throughout (complex spreadsheets should be significantly faster than the previous Robry-Calc... with my own gas-flow worksheets testing at 200% to 700% faster within the new spreadsheet)

New functionality includes Pivot tables, a PDF-option for saving workbooks, and new sorting/lookup flags within Match/Lookup-type functions. Also, text-sorting functionality has been greatly improved, including a "fast-sort" option for sorted text which may (for very large tables) be hundreds of times faster than previously.

Sunday Night Economic Assessment

2011-07-11T06:04:00.000-07:00

Another lackluster week for the US Industrial economy last week (if pipeline scheduling is correct), while consumption held its ground and the US took a break over its traditional July-4th holiday period.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its fifth week in a row, dropping to 120.9 (vs last weeks 121.5). In its dailies, the measure was soft early (over the July-4th holiday period), firmed up a bit midweek, then softened again into the weekend.

The Consumption Index went the other way with a small gain, edging up to 146.0 (from last weeks 144.8). In its dailies the measure was soft throughout the week, with only a brief one-day firming on Thursday.

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

Seasonally, the first couple weeks of July are historically soft (within the gas flows), presumably due to industrial retooling (especially in the automotive groups... which are themselves a significant part of the US industrial economy. We move out of the retooling period shortly, so we will be looking for signs of redirection (for better or for worse) the next couple weeks.

All the world seems to be waiting for the signal(s) the US government sends in the next couple weeks... with threatened government default only about three weeks away. Whether the signal is to advance the economy or kill it will depend solely on two negotiators at the table, but the markets, US consumers, US businesses, US investors, and a wide array of foreign interests will all be watching.

Best move (in my opinion) would be the a very slanted 90%-spending-cut / 10%-loophole-tax-increase... but only if combined with a very aggressive QE3 (too late for the half-strength QE3 I had thought of earlier).

(The Federal Reserve should definitely be at the bargaining table too... if not in the woodshed.)

-Robry825

Tuesday Morning Economic Assessment

2011-07-05T07:29:00.001-07:00

The anemia in the US Industrial economy continued last week (if pipeline scheduling is correct), with consumption joining with production to head lower.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) had its fourth decline in as many weeks, dropping to 121.5 (vs last weeks 122.5). The Consumption Index broke its short 2-week-gain-stint, dropping to144.8 (from last weeks 145.7). The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued in its long-term decline.

Very poor quality within the July-4th-weekend gas flows makes gaging the start-of-the-month (July) changes difficult for the moment, though the back side of June retains the stagnant, dead-in-the-water look of the past several weeks

Steel-group scheduling showed a little life, with the June average inching up to .156 (from last weeks .154 and May's .153), though still well off of the May '10 recovery high (.206). Food-group scheduling continued its bearish ascent, with the June average gaining to .0498 (from .0489 last week), hovering at record heights for the measure.

Interestingly, Asphalt-plant scheduling has been torrid the last couple months, even as the economy stalled. Contrasting the strength in asphalt-plant imputs the last six months vs the topping out in the economy, the long-term assumption that construction/roadbuilding is stimulative to the economy appears flawed at best, and possibly totally wrong as it may actually (in fact) be a drain on consumption by drawing liquidity away from programs aimed toward lower-wage-earners (consumption-side) and redirect it towards higher-wage-earners (savings/industrial-production-side).

(High-wage union employment, like any other high-wage employment, should probably be considered more investment/savings-oriented than consumption-oriented... as higher-lifestyles have a better chance of generating a buffer of savings... to absorb changes in earnings... as opposed to lower-earnings-lifestyles where earnings-changes carry down to consumption.).

We continue to wait upon the governments response (or lack thereof) to the continuing budgeting/default issue, a quagmire that poses great risk to the economy even if it appears well-founded (which it may eventually not be at all).

My take on the signals coming from government is not good at all, and I fear the parties are bogged down in a choice between a bad deal (to satisfy political interests) or no deal at all. Problem is... cutting spending (to retirees/lower wage-earners) undermines consumption, and cutting spending to upper wage-earners (and raising taxes on the wealthy) undermines capital formation & investment.

Even cutting benefits to welfare cheats, and going after tax-dodgers, lowers their impact on the economy! (Though we all agree it should be done.)

And raising Taxes on investors and business... the last 12 months the foreign-trade deficit ran more than $522 Billion (approx $1,700 per person if you believe census estimates, or $6,800 for a family of four). That equates to $6,800 of US consumption (for that family of four) that goes away should that imbalance end, or $13,600 if it reverses. Per year! Eventually that imbalance will go away... one way or another... and unless investment is allowed to expand the US industrial base, that $6,800 (or $13,600) comes right out of the US standard of living.

-Robry825

Sunday Night Economic Assessment

2011-06-27T06:27:00.000-07:00

The US Industrial economy continued to backtrack last week (if pipeline scheduling is correct), while consumer spending turned and (at least for the moment) showing a few signs of remaining life.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its third week in a row, dropping to 122.5 (vs last weeks 123.7). In its dailies (raw, non-seasonally adjusted flows) the week was choppy, though (as last week) ended with some weekend strength.

The Consumption Index conversely headed higher (its second weekly gain in a row), rising to 145.7 (from last weeks 143.2). In its dailies the measure had a nice reversal, starting very soft but firming sharply Wednesday-on

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

Again a little bit better last week in steel-group scheduling, which inched up its June '11 average up to .154 (though still off a bit from May (.153) and well off of the May '10 recovery high (.206). Food-group scheduling again bearishly gained and continues to hover at record heights for the measure.

The US economy retains its dead-in-the-water look, waiting for whatever change-in-momentum comes along first, whether for good or for bad.

Concern remains for the imminent end of the Federal Reserves QE2 (and lack of QE3 commitment), and for the ongoing budgeting & spending standoffs in government. Getting a budgeting compromise that reduces budget deficits without draining liquidity from consumers (and thus slowing already-stagnant consumer spending), and without draining liquidity from an already-defensive business community (further constraining capitol-formation and hiring) will be an impossible stunt. Unless they plug the import-liquidity drain in the bottom of the bathtub (or the Federal Reserve replace it), bailing water from one end of the tub to the other isn't going to achieve anything!

-Robry825

Sunday Night Economic Assessment

2011-06-20T05:59:00.000-07:00

The US Industrial economy backtracked last week (if pipeline scheduling is correct), while consumer spending held at low levels.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its second week in a row, dropping to 123.7 (vs last weeks 124.2). In its dailies (raw, non-seasonally adjusted flows) the week began soft, strengthened slightly midweek, then ended soft.

The Consumption Index broke its 2-week string of losses and headed higher, gaining to 143.2 (from last weeks 137.5), mostly due to an extremely soft week falling off the end of its 28-day moving average. In its dailies the measure was choppy but generally soft throughout.

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

A little bit better again last week in steel-group scheduling, which inched up its June '11 average up to .152 (though still off a bit from May (.153) and well off of the May '10 recovery high (.206). Food-group scheduling bearishly gained and hovers at record heights for the measure.

The US economy can best be described (judging strictly by the gas-flows) as dead-in-the-water... neither advancing nor declining overall... waiting for the winds of overall direction to show and replace the dead-calm, stagnant air of status-quo. Increments in retail sales appear to be covering up for decrements in bigger-ticket "durable-goods" sales, as a worried populace awaits.

Concern remains for the imminent end of the Federal Reserves QE2 (and lack of QE3 commitment), and for the ongoing budgeting & spending standoffs in government.

-Robry825

Sunday Night Economic Assessment

2011-06-13T01:22:00.001-07:00

The US Industrial economy eased last week (if pipeline scheduling is correct), while consumer spending worked lower.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four straight weekly record highs and headed lower last week, dropping to 124.2 (vs last weeks ). In its dailies (raw, non-seasonally adjusted flows) the week was soft throughout.

The Consumption Index eased for its second week in a row, falling to 137.5 (from last weeks 139.8). In its dailies the measure was choppy but generally soft.

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

A little bit better last week in some of the problem areas (Steel & Food) with steel-group scheduling inching up the June '11 average up to .149 (though still off a bit from May (.153) and well off of the May '10 recovery high (.206). Food-group scheduling (though a bit better than last week) still hovers at bearish heights.

Concern remains for the imminent end of the Federal Reserves QE2 (and lack of QE3 commitment), and for the ongoing budgeting & spending standoffs in government.

-Robry825

Wednesday Economic Updates and Corrections

2011-06-08T09:42:00.001-07:00

Am (gladly) able to backtrack on yesterdays dire economics post. There was an error that overemphasized the drop off in industrial activity. While the economy is sluggish at present, it is no where near approaching that "point of no return" as feared within yesterdays post. A "corrected" commentary follows...

The US Industrial economy advanced meekly last week (if pipeline scheduling is correct), while consumer spending softened.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the ninth time in the last ten weeks to 124.8 (vs last weeks revised 124.7). It was the fourth straight weekly record-high in a row for the index. In its dailies (raw, non-seasonally adjusted flows) the week started firm but weakened midweek. (In the last two days, the index declined to 124.6)

The Consumption Index reversed its recent short-term surge, slumping to 139.8 (from last weeks 144.9). In its dailies the measure was very strong early through the 31st, Then ratcheted down sharply June 1st on.. (In the last two days, the index declined to 137.3)

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

Steel-manufacturing scheduling dropped precipitously to start June (averaging .145 BCF/day, down from .153 in May and well below the recovery high of .206 in May of 2010). Steel-scheduling (though I haven't had a chance to roll it into these posts) is consistent with durable-goods orders, and its rapid-weakening had been a harbinger of recessions past.

Food-Group scheduling, which bearishly broke above previous-recession highs in April, also remains a worry. The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending.

-Robry825

Re. Yesterdays "Tuesday Night Economic Assessment"

2011-06-08T09:26:00.000-07:00

Yesterdays "Tuesday Night Economic Assessment" is to be revised as an error was found and corrected relating to an error in the summarization of gas-flows (the fall-off in fundamentals is not nearly as dire as originally thought... keeping the US economy "in the game"... though we are still backtracking at the moment).

Sunday Night Economic Assessment

2011-06-07T08:17:00.000-07:00

The US Industrial economy has turned into recession. That is the call as the US Industrial economy weakened suddenly and dramatically last week (if pipeline scheduling is correct), as the prior-weeks surge in strong consumer spending evaporated.

This is an early call and perhaps the recession can be aborted in its early stages (if the Federal Reserve acts Very quickly and the press can drop its negativism), but the seeds of a downward spiral have been planted. Otherwise, this will be my last weekly economics post until fundamentals swing back to positive.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) pulled away from its streak of three-record-highs in a row, tumbling to 120.4 (vs last weeks revised 124.7). In its dailies (raw, non-seasonally adjusted flows) the week was extremely soft.

The Consumption Index reversed its recent short-term surge, slumping to 139.8 (from last weeks 144.9). In its dailies the measure was very strong early through the 31st, Then ratcheted down sharply June 1st on..

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

Steel-manufacturing scheduling dropped precipitously to start June (averaging .116 BCF/day, down from .146 in May and well below the recovery high of .206 in May of 2010). Steel-scheduling (though I haven't had a chance to roll it into these posts) is consistent with durable-goods orders, and its rapid-weakening had been a harbinger of the last recession as well.

Food-Group scheduling, which bearishly broke above previous-recession highs in April, is also strengthening. The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending.

The Federal Reserve needs to announce QE3 (or some other similar measures) very quickly. And we very much need a turn away from the bearishness in the press.

-Robry825

Tuesday Night Economic Assessment

2011-06-01T03:06:00.000-07:00

The US Industrial economy gained ground again last week (if pipeline scheduling is correct), amidst a turn to very strong consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the eighth time in the last nine weeks to 124.7 (vs last weeks revised 123.9). It was the third straight weekly record-high in a row for the index. In its dailies (raw, non-seasonally adjusted flows) the week was firm throughout.

The Consumption Index shook off its recent short-term weakness, gaining to 144.9 (from last weeks 143.7). In its dailies the measure was very soft early, showed signs of life Monday, then surged abruptly Wednesday-on.

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

Took some time off last weekend and made it a longer Memorial-Day weekend (hence the "Tuesday-Night" rather than the traditional "Sunday Night Economic Assessment". In the intervening two days, both the Production and Consumption Indexes gained to 125.1 and 145.1, respectively.

-Robry825

Sunday Night Economic Assessment

2011-05-23T05:42:00.001-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), amidst very weak consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the seventh time in the last eight weeks to 123.9 (vs last weeks revised 123.3). It was the second weekly record-high in a row for the index. In its dailies (raw, non-seasonally adjusted flows) the first three days of the week were slightly soft, then strengthened sharply Wednesday through the weeks end.

The Consumption Index broke lower for the first time in four weeks, dropping to 143.7 (from last weeks 148.5). In its dailies the measure was very soft throughout the entire week.

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

On a little brighter note...Food Group scheduling (see "Part 8" posts on the Investor Village site) is somewhat backing away from its late-April / early-May strength (The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending). Seasonally however the softness is minimal, and the May-2011 monthly average bearishly at record high levels.

In looking at the economic-implied turns of the past three weeks, it appears most likely an Osama-Bin-Lauden reaction... with the May-1st jump in consumption coinciding with the May-1st news announcement of the taking out of Bin Lauden... and lasting exactly ten days.

The economic recovery remains supported (for the moment) by increases to the consumption index, the lead of consumption over production (in the 28-day indexes), and continuing declines in the inventories measure.

Concern remains however, over the recent weakening in cunsomption-index dailies (the seasonally-adjusted dailies of the consumption index the past three days have been well below the production index).

Concern also remains on the upcoming end of the Fed's second round of quantitative easing (My preference would be to see to see at least a meek "QE-3"... perhaps 1/2 of QE-2), as well as the continuing threat of government saber-rattling leading to ineptitude within the present split government.

With unemployment hovering near 9%, should the Federal Reserve not announce a QE-3, and consumers react and take us back into recession, that 9% unemployment could become 13% to 14% very quickly.

With foreign-trade-imbalances draining the US portion of the US money supply (we give our money to them for their goods, then the US government borrows it back and deficit-spends... to replentish the US citizens portion of the US money supply) we are stuck in a quagmire... with Trade-deficits, government-deficit-spending, and increasing-national-debt hardwired into the economy.

Simply put (as I see it) unless there is some break in fundamentals (Strong-dollar leading to trade-deficit leading to government-borrowing & deficit-spending leading to further trade-deficits) the present political status quoe of increased government debt and rampent deficit-spending is unreversible... no matter what the politicians do... as economic-softness will force their hand (either deficit-spend, or go into recession once the consumer is again out of cash).

-Robry825

Sunday Night Economic Assessment

2011-05-16T05:44:00.000-07:00

The US Industrial economy forged ahead again last week (if pipeline scheduling is correct), while consumer spending vacillated .

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for the sixth time in the last seven weeks, to 123.4 (vs last weeks 122.6), breaking its previous February high of 123.0. In its dailies (raw, non-seasonally adjusted flows) the week started strongly but softened slightly vs the prior weeks strong ending.

The Consumption Index also gained a lot of ground last week (second up-week in a row), climbing to 148.5 (from last weeks revised 142.3). In its dailies the measure was strong through midweek, then trended down sharply into the weekend.

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

Food Group scheduling (see "Part 8" posts on the Investor Village site) echoed the late-week softness in the consumption index... bearishly restrengthening throughout the week. The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending.

In looking at the economic-implied turns of the past couple weeks, it is starting to look like the sharp upward turn may prove to be something more on the brief, temporary side. The Food-Group continues to scream pessimism... pushing upwards again to levels not seen since the bottom of the recession, while the volatility the past couple of weeks in the consumption index dailies is suggestive of uncertainty and uneasiness on the part of consumers.

I have not checked the time line, but I wonder if all this coincides with the US's takeout of Osama Bin Laden. An emotional reaction to current events.

Concern remains on the upcoming end of the Fed's second round of quantitative easing (My preference would be to see to see at least a meek "QE-3"... perhaps 1/2 of QE-2), as well as the continuing threat of government saber-rattling leading to ineptitude within the present split government.

-Robry825

Sunday Night Economic Assessment

2011-05-09T05:37:00.000-07:00

A dramatic swing in the gas-flows last week, as a first-of-the-month surge in the consumption index Sunday lead to sharp-strengthening in the industrial index three days later.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the fifth time in the last six weeks, to 122.6 (vs last weeks 122.1) (highest was 123.0). In its dailies (raw, non-seasonally adjusted flows) the week started flat through midweek, then strengthened Wednesday-on.

The Consumption Index pushed ahead sharply last week (first up-week in seven weeks), climbing to 142.3 (from last weeks revised 134.5). In its dailies the measure surged Sunday and was strong the week throughout.

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

We very much needed to see a turn in consumption following the slowing implied within the gas-flows and the listlessness of the Easter-Holiday break, and we appeared to get it last week. The short-term dip in the economy (evidenced by last weeks reported bump in the unemployment numbers) was very much threatening to snowball as the raw dailies on the consumption index were threatening the dailies on the production index... leading into a period of traditional seasonal softness.

Food Group scheduling (see "Part 8" posts on the Investor Village site) also joined the first-of-the month party... backing off of its bearish strength starting the same day as the consumption index took off.

On the turn, the economy (for the moment) appears well-supported by the surge in the consumption index, continuing gains in the production index, a widening gap/lead of the production index, and continuing declines in the inventories measure.

Concern remains on the upcoming end of the Fed's second round of quantitative easing (My preference would be to see to see at least a meek "QE-3"... perhaps 1/2 of QE-2), as well as the continuing threat of government saber-rattling leading to ineptitude within the present split government.

-Robry825

Sunday Night Economic Assessment

2011-05-02T06:18:00.001-07:00

The US Industrial economy moved forward again last week (if pipeline scheduling is correct), while consumer spending was flat with the Easter holiday week.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for the fourth time in the last five weeks, to 122.1 (vs last weeks revised 121.8, and within a point of its all-time high of 123.0). In its dailies (raw, non-seasonally adjusted flows) the week was boringly flat throughout, though it benefitted in the 28-day model on seasonals.

The Consumption Index held steady in the latest week (breaking its string of 5 down-weeks in a row), at 134.5 (same as last weeks 134.5). In its dailies the week was very soft, though in line with the Easter-Holiday seasonals.

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

Food Group scheduling (see "Part 8" posts on the Investor Village site) is of great concern and made further gains last week. The measure has been ominously strengthening as of late, rising to near levels not seen since the January/February 2009 recessionary-bottom. Such activity is strongly indicative of deep consumer mistrust in the economy (probably the reason for that 5-week decline in the consumption index). The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending.

The state of the recovery for the moment is very uncertain... almost akin to a gas leak in the basement that has yet to ignite (where you hope you can get the gas shut off and basement aired out before something produces a spark). Hopefully one of those sparks won't be the saber-rattling between Democrats and Republicans regarding budgeting and threatened government default, or the forthcoming end of QE2 (second round of quantitative easing).

(My preference would be to see to see at least a meek "QE-3"... perhaps 1/2 of QE-2 (though it will continue to pressure the dollar)... and to see the White House take default off the table by executive order.)

But for the moment... the recovery continues to appear supported by the lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure... assuming no sparks! Once past the Easter holiday we are really going to need to see consumer spending reaffirm itself to keep fundamentals in place.

-Robry825

Sunday Night Economic Assessment

2011-04-25T04:47:00.000-07:00

The US Industrial economy advanced slightly last week (if pipeline scheduling is correct), while consumer spending continued to fade.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) moved higher in the latest week (third gain in four weeks) at 121.8 (vs last weeks revised 121.4). In its dailies (raw, non-seasonally adjusted flows) the week started soft, firmed midweek, then ended somewhat flat.

The Consumption Index eased again (5th down-week in a row), slipping to 134.5 (from last weeks 135.4). In its dailies the week was choppy but overall soft.

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

Food Group scheduling (see "Part 8" posts on the Investor Village site) is of great concern... the measure has been ominously strengthening as of late, rising to near levels not seen since the January/February 2009 recessionary-bottom. Such activity is strongly indicative of deep consumer mistrust in the economy (probably the reason for that 5-week decline in the consumption index). The Food group has a contra-relationship with consumption, and gains to the measure historically have tended to coincide with weakness in consumer spending.

The state of the recovery for the moment is very uncertain... almost akin to a gas leak in the basement that has yet to ignite (where you hope you can get the gas shut off and basement aired out before something produces a spark). Hopefully one of those sparks won't be the saber-rattling between Democrats and Republicans regarding budgeting and threatened government default, or the forthcoming end of QE2 (second round of quantitative easing).

(My preference would be to see to see at least a meek "QE-3"... perhaps 1/2 of QE-2 (though it will continue to pressure the dollar)... and to see the White House take default off the table by executive order.)

But for the moment... the recovery continues to appear supported by the lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure... assuming no sparks! Once past the Easter holiday we are really going to need to see consumer spending reaffirm itself to keep fundamentals in place.

-Robry825

Sunday Night Economic Assessment

2011-04-18T04:45:00.000-07:00

The US Industrial economy held steady last week (if pipeline scheduling is correct), while consumer spending continued to whittle away at it self.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) was unchanged in the latest week (breaking its string of two up-weeks in a row) at 121.4 (vs last weeks revised 121.4). In its dailies (raw, non-seasonally adjusted flows) the week was soft though in line with seasonals.

The Consumption Index again backtracked (fourth down-week in a row), dipping to 135.4 (from last weeks 141.9). In its dailies the week started somewhat soft-to-flat, then weakened midweek on.

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

For the moment, the recovery appears supported by the lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

However, the declines in the Consumption Index are worrisome, and once past the Easter holiday we will need to see consumer spending reaffirm itself to keep fundamentals in place.

-Robry825

Sunday Night Economic Assessment

2011-04-11T04:00:00.001-07:00

The US Industrial economy gained a little more ground last week (if pipeline scheduling is correct), while consumer spending continued to give back gains.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for it's second week in a row, advancing 121.3 (vs last weeks revised 120.9). In its dailies (raw, non-seasonally adjusted flows) the week started off strongly, but softened as the week progressed..

The Consumption Index continued lower (third down-week in a row), dipping to 141.9 (from last weeks 145.5). In its dailies the week started somewhat firm, strengthened through Wednesday, then declined through to the weekend.

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

First-quarter results (due out starting in another weeks) look to be exceptionally strong, as large gaps (in the past) of consumption over production have generally been consistent (in the modeling) with large jumps in profitability. And that gap widened at the end of the quarter... probably to add to optimism as CEO's prepare their comments toward the 2nd quarter.

-Robry825

Sunday Night Economic Assessment

2011-04-04T04:58:00.000-07:00

The US Industrial economy turned and advanced last week (if pipeline scheduling is correct), consumer spending continued to ease, and the calender-page turned to start the second quarter.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four down-weeks in a row, gaining to slipped for it's fourth week in a row, easing to 120.9 (vs last weeks revised 120.4). In its dailies (raw, non-seasonally adjusted flows) the week started flat and finished strong. Seasonally-adjusted, there was a pronounced change precisely at quarters-end, with the first two days of April exceptionally strong.

The Consumption Index edged lower (second down-week in a row), dipping to 145.5 (from last weeks 148.1). In its dailies the week started soft but finished very strongly, paralleling the Production Index's quarters-end flip to positive..

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

First-quarter results (due out starting in about 3 weeks) look to be exceptionally strong, as large gaps (in the past) of consumption over production have generally been consistent (in the modeling) with large jumps in profitability. And that gap widened at the end of the quarter... probably to add to optimism as CEO's prepare their comments toward the 2nd quarter.

(One has to wonder at that softening in the Production Index the last four weeks of the quarter... that looks to have ended in the gas-flows precisely at quarters-end. Makes one think industry is sandbagging... seeing a strong quarter coming and cutting production runs & inventory abnormally to cut expenses... to "juice" an anticipated strong quarter into a barn-burner.)

-Robry825

Sunday Night Economic Assessment

2011-03-28T03:30:00.000-07:00

The US Industrial economy again continued to gradually ease last week (if pipeline scheduling is correct), while consumer spending edged off of it's prior-week surge.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) slipped for it's fourth week in a row, easing to 120.3 (vs last weeks 121.2). In its dailies (raw, non-seasonally adjusted flows) the week was choppy, starting soft and ending with a flattish look.

The Consumption Index also declined (breaking it's string of four up-weeks in a row), gaining to 148.1 (from last weeks 150.6). In its dailies the week started strong in its raw (non-seasonally adjusted) numbers then softened mid-week.

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

Overall, the recovery (despite the weeks declines) continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

First-quarter results (due out starting in about 3 weeks) look to be exceptionally strong, as large gaps (in the past) of consumption over production have generally been consistent (in the modeling) with large jumps in profitability. And that gap is widening near the end of the quarter... probably to add to optimism as CEO's prepare their comments toward the 2nd quarter.

One possible good sign in the gas flows over the weekend - a large plunge in the gas-flows for the food-group (See the "Part-8" postings on the Investor-Village CWEI site) , which has been fearfully-robust virtually the whole winter (The food group has served as a contra-indicator in the past, probably because that junk-food-laden sampling picks up on America's habit of comforting its nervousness by heading for the fridge).

I took the news as quite economically-positive late last week... perhaps that food-group (if its premature weekend scheduling numbers hold up) is early confirmation... we shall see in coming weeks.

This upcoming week is both an end-of-month week and an end-of-quarter week. Industrial gas-flow numbers can sometimes change rapidly at such times (up or down), and with the gas-flow implied strength in consumption, a pickup in industrial activity once past quarters-end would not be (historically) unexpected.

Of course, with the slow-slide in the past few weeks on the industrial-side, an unexpectedly-bad unemployment report would also not be unexpected, so this game of watching and waiting goes on...

ROBRY DATA On ENERCAST

(http://www.firstenercastfinancial.com/energy/)

As a reminder, Enercast Financial now hosts several web pages on their site for viewing and downloading the data I post, and I would want to encourage it's use (Enercast now offers the most comprehensive, accurate, and up-to-date site for the data I post... and has become the preferred site on the natural-gas side of the data).

(First Enercast also shares my appreciation for the public domain, so the Robry825 data downloads will continue to be free of cost and free of restrictions... and can be shared with friends, reposted, published (etc) at your discretion... for the better of all).

Also linked through the Enercast site is the new "Robry-Calc" spreadsheet application (another project that I have become both deeply involved with the past couple of years and have mentioned previously), which I hope will serve to be of value for many as well. In many ways I believe "Robry-calc" to be revolutionary, and it is at it's foundation what I rely upon for the number-crunching I do daily. It is (by its nature) simple enough that the kids can easily use it to check their homework at night, and at the same time complex and powerful enough to be able to open up to process millions (or even billions) of cells of data in seconds.

-Robry825

Sunday Night Economic Assessment

2011-03-21T02:53:00.001-07:00

The US Industrial economy continued to ease last week (if pipeline scheduling is correct), while consumer spending surged.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) had its third decline in a row, easing to 121.2 (vs last weeks 121.9). In its dailies (raw, non-seasonally adjusted flows) the week had a soft-to-flat look throughout.

Different story on the consumption side, with the Consumption Index surging to a record high (its fourth weekly gain in a row), gaining to 150.6 (from last weeks 147.1). In its dailies the week started soft in its raw (non-seasonally adjusted) numbers then took off starting on Monday and especially Tuesday.

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

I suspect first-quarter results (due out starting in about 3 weeks) are going to be exceptionally strong, as large gaps (in the past) of consumption over production have generally been consistent (in the modeling) with large jumps in profitability. And that gap is widening near the end of the quarter... probably to add to optimism as CEO's prepare their comments toward the 2nd quarter.

There is a "teeter-totter" like effect behind all this (and those following this blog for some time have undoubtedly picked up on this) in that the Production Index often moves conversely to the direction of the Consumption Index, and I have postulated in the past that those "converse" moves are often politically-driven... with positive effects to the Productive end of US society (and negative effects to the Consumptive end of US society) when Republicans (perceived as representing business & investor interests) get their way...and positive effects to the Consumptive end of US society (and negative effects to the Productive end of US society) when Democrats (perceived as representing consumer interests) get their way.

We are now in a phase (have been the past 3 weeks) where that teeter-totter is strongly tipped in the consumers direction (thanks also both to accommodative Federal Reserve policy and stimulative governmental policy), which is consistent with good corporate profitability. (the direction of the "fulcrum" (mid-point) of that "teeter-totter" would also strongly consistent with economic direction in past data).

Also consistent in past data when the economic "teeter-totter" gets tipped strongly in the consumers direction (as it is today) is a bit of inflationary pressure and commodity-bullishness... which we are also seeing a little bit of in here too.

-Robry825

Sunday Night Economic Assessment

2011-03-14T02:09:00.000-07:00

(My heart goes out to the many suffering in the wake of the devastation in Japan, where tens of thousands have doubtlessly perished (and multitudes been left homeless) in the trampling footsteps of a massive earthquake and tsunami, and those who face the difficult and daunting task of putting things back together in the face of the further fear of a possible nuclear-reactor-meltdown catastrophe.)

The US Industrial economy again eased off a tad last week (if pipeline scheduling is correct), while consumer spending continued to strengthen.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) put in its second down-week in a row, easing to 121.9 (vs last weeks 122.4). In its dailies (raw, non-seasonally adjusted flows) the week started soft but firmed as the week progressed.

The Consumption Index went the other way (having its third weekly gain in a row), gaining to 147.1 (from last weeks 145.9). In its dailies the week (as last week) looked soft in its raw (non-seasonally adjusted) numbers but benefited from seasonals.

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, recent firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

-Robry825

Sunday Night Economic Assessment

2011-03-07T02:28:00.000-08:00

The US Industrial economy gave back a little last week (if pipeline scheduling is correct), while consumer spending strengthened.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four up-weeks in a row, dipping to 122.4 (vs last weeks record 123.0). In its dailies (See the "Part 7" posts on the Investor Village site) the index was soft (vs the prior week) throughout.

The Consumption Index conversely had its second weekly gain in a row, gaining to 145.9 (from last weeks 142.1). In its dailies the measure (as last week) was soft in its raw (non-seasonally adjusted) numbers but benefited from seasonals.

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, recent firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

-Robry825

Sunday Night Economic Assessment

2011-02-28T05:07:00.000-08:00

The US Industrial economy pushed ahead last week (if pipeline scheduling is correct), while consumer spending turned and similarly gained.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for its fourth week in a row, rising to 123.0 (vs last weeks record 122.5). In its dailies (See the "Part 7" posts on the Investor Village site) the index was mostly soft (vs the prior week) though firm late.

The Consumption Index broke its string of three down-weeks in a row, rising to 142.1 (from last weeks 141.7). In its dailies the measure was soft but benefited from seasonals.

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

Overall, the recovery continues to appear strongly supported by elevated consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

-Robry825

Sunday Night Economic Assessment

2011-02-21T04:37:00.000-08:00

The US Industrial economy gained a little more ground last week (if pipeline scheduling is correct), while strong consumer spending continued to slowly ease.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its third week in a row, gaining to 122.4 (vs last weeks record 121.8). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week on the firm side, which carried through most of the week before softening on Friday.

The Consumption Index continued its recent trend of easing (third down-week in a row), edging down to 141.7 (from last weeks 142.4). In its dailies the measure saw the softness of the previous week carry throughout the week.

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

Of other interest, Food-group numbers finally softened (for a change) last week. The food-group has served as a very sharp contra-indicator in the past... soaring during the recession (nervous folks heading to the fridge???) and falling diring the recovery.

Overall (as last week) the recovery appears strongly supported by buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

-Robry825

Sunday Night Economic Assessment

2011-02-14T04:14:00.000-08:00

The US Industrial economy ratcheted ahead again last week (if pipeline scheduling is correct), while strong consumer spending eased off slightly.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained slightly to 121.8 (vs last weeks record 121.6). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week was choppy and a tad softer than the previous weeks strength, though firming late.

The Consumption Index eased off fo its second week in a row, edging down to 142.4 (from last weeks 145.0). In its dailies the measure was choppy and ended the week soft.

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

Overall (as last week) the recovery appears strongly supported by buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

Of Concern remains the strength of the food group (a contra-indicator to consumption), suggesting a shallowness to the recovery in spite of its apparent breadth (suggested in the gas flows).

-Robry825

Sunday Night Economic Assessment

2011-02-07T06:14:00.000-08:00

The US Industrial economy advanced slightly last week (if pipeline scheduling is correct), while consumer spending paused.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose slightly to 121.6 (vs last weeks record 121.4). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week firm then softened Tuesday through to the weeks end. Mondays raw gas-flow tracking picked up 2.077 Billion Cubic Feet scheduled for delivery to US factories, another record for the tracking model.

The Consumption Index was revised higher for the past several weeks on pipeline-reported revisions. For the latest week, the measure slipped to 145.0 (from last weeks 145.8), though it did set a record on early-week strength. In its dailies the measure began the week a tad soft, softened sharply Monday, then recovered late-week.

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

Overall, the recovery appears strongly supported by buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, firmness in industrial gas-flow scheduling, and continuing declines in the Inventories measure.

-Robry825

Daily Tracking (Natural Gas Scheduled Deliveries)
=====================================

...............................Industrial..................Paperboard
Gas Day...............(Production)..............(Consumption)
-------------..............-------------------...........----------------------
01/28/11...............2.074r.(BCF)...........42.63r.(MMCF)

01/29/11...............2.065r.....................39.36r
01/30/11...............2.067......................39.77
01/31/11...............2.077......................29.45
02/01/11...............1.993......................31.69
02/02/11...............1.963......................30.97
02/03/11...............1.963......................35.53
02/04/11...............1.992......................40.18

02/05/11...............1.995i.....................42.23i

Sunday Night Economic Assessment

2011-01-31T05:58:00.000-08:00

The US Industrial economy held steady last week (if pipeline scheduling is correct), while consumer spending.continued to grow. In the dailies (which I am including for this weeks post) there seemed to be a good, positive reaction in both consumption and production midweek following the Presidents State-Of-The-Union address.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) following three weekly advances in a row was unchanged last week (121.4 vs last weeks record 121.4). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week soft but firmed extremely sharply with the Wednesday/Thursday scheduling. Fridays raw gas-flow tracking (see below) picked up 2.07 Billion Cubic Feet scheduled for delivery to US factories, a record for the tracking model.

The Consumption Index also rose (for its second week in a row) to 144.2 (from last weeks 142.9, and just shy of its record 146.5 high). In its dailies the measure (echoing the Production Index) also reached record levels on Thursday and again on Friday.

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

Overall, the recovery appears strongly supported by last weeks post State-Of-The-Union surge, buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

-Robry825

Daily Tracking (Natural Gas Scheduled Deliveries)
=====================================

..............................Industrial..................Paperboard
Gas Day..............(Production)..............(Consumption)
-------------..............-------------------............----------------------
01/21/11...............1.915..(BCF)............31.94..(MMCF)

01/22/11...............1.951.......................33.90
01/23/11...............1.958.......................33.80
01/24/11...............1.950.......................33.80
01/25/11...............1.983.......................32.42
01/26/11...............2.000.......................37.10
01/27/11...............2.051.......................41.38
01/28/11...............2.073.......................42.63

01/29/11...............2.064i......................39.36i

Sunday Night Economic Assessment

2011-01-24T01:56:00.000-08:00

The US Industrial economy continued to slowly push ahead last week (if pipeline scheduling is correct), amidst continuing robust consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for the third week in a row to a record 121.4 (from last weeks 121.2). In its dailies (See the "Part 7" posts on the Investor Village site) the index was again volatile throughout the week but softened late.

The Consumption Index also rose (for its second week in a row) to 144.2 (from last weeks 142.9, and just shy of its record 146.5 high). In its dailies the measure (contrary to the Production Index) softened early and firmed late-week.

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

Overall, the recovery appears strongly supported for the time being by buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

Concerns still center mostly on the strength of the food group (a contra-indicator to consumption), suggesting a shallowness to the recovery in spite of its apparent breadth (suggested in the gas flows).

Another concern is the continual foot-dragging (in the business end of society) implied by the slowness in response of the Production Index, which I think (in spite of Novembers elections) belies continuing nervousness in the productive end of society (not good when you want businesses to hire to bring that 9%-ish unemployment rate down).

On the table (for that productive end of society) the past couple of weeks is the Republicans attempt for a repeal vote on the recent health care reform bill in the Senate (The US house, now dominated by newly-elected Republicans, already voted to repeal).

The whole process is fraught with risk at both ends. If the repeal-vote fails, it's another blow to business confidence. If they actually repeal, it's a potential larger blow to consumer-confidence. And if consumers get a whiff of higher medical expenses anywhere throughout the process and start to cut back other spending to accommodate it, 12% unemployment here we come.

It's an issue that I wish would go away for a while. Or perhaps even better... be shelved for a couple months so that cooler political heads could sort through the whole mess. President Obama and Republicans were able to put together a last minute compromise on taxes & unemployment late last year that (by the look of the gas-flows) kept Novembers "Micro-recession" from becoming real.

And with that frighteningly-strong food group (as mentioned above), small things (like brief market pull-backs) could potentially ignite consumer-fear quickly.

For the moment (all things considered) the economy remains (for the moment) underpinned by gas-flow-suggested fundamentals, and should (assuming none of these worries pop up) continue to slowly advance.

-Robry825

Sunday Night Economic Assessment

2011-01-17T02:01:00.001-08:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as robust consumer spending strengthened into January.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its second week in a row (and again set a new high), rising to 121.2 (from last weeks 120.5). In its dailies (See the "Part 7" posts on the Investor Village site) the index was volatile though firm throughout the week (especially against seasonals).

The Consumption Index also rose smartly to 142.9 (from last weeks 139.0). In its dailies the measure was impressively strong throughout the week.

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

The Food Group (see "Part 8" posts on the Investor Village site) continues as a concern, hovering near recession-highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending.

Overall, the economy looks to be well supported by the resurgence of strong consumer spending, renewed and continuing strength in industrial production (and presumably hiring), declining inventories, and probably (on the investor / business end of society) higher confidence from political changes since November.

ROBRY DATA MOVES TO ENERCAST (http://www.firstenercastfinancial.com/energy/)

For those following the natural gas markets, First Enercast Financial has picked up the data I share on their web site, and (in a collaborative effort) offers Robry825 modeled data both in text and in downloadable ".ods" (Open Document Spreadsheet) data formats. The new Enercast site is now the primary, most comprehensive site for obtaining Robry825 gas-flow data... including years of historical back-data from my modeling that you can now download and access for spreadsheet modeling, charting, etc.

(First Enercast also shares my appreciation for the public domain, so the Robry825 data downloads will continue to be free of cost and free of restrictions... and can be shared with friends, reposted, published (etc) at your discretion... for the better of all).

Also linked through the site is a computer spreadsheet application ("Robry-Calc")... an offering of the software that I personally use to produce the data that I share, which was progressively developed by Citadel5 Software Development Services (a European firm that I consider the worlds foremost in spreadsheet design).

I am very excited for the chance to offer this spreadsheeting software, and I believe it to be in many ways revolutionary (a photo of one of my worksheets can be found below, which when clicked upon will enlarge to an example from a dual-monitor configuration). The spreadsheet is simple to use on its surface (for a novice), but is packed with advanced features buried within to allow it to unfold into very large, complex, powerful configurations.

Moreover, having a spreadsheet to offer gives me a path to explore in the future... towards perhaps publicly sharing the models themselves in the future (even the possibility of going open source), in the hopes that others might be able to build upon and improve upon what I offer.

Also, should the software really take off, its revenues could help not only to fund and expand the new Enercast collaborative site, but potentially to purchase whole data sets and analysis for conversion to public domain (at least one can dream).

-Robry825

Sunday Night Economic Assessment

2011-01-10T02:51:00.000-08:00

The US Industrial economy turned higher last week (if pipeline scheduling is correct), while consumer spending remained at very strong levels.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of two down-weeks in a row (and took out its December-2010 high in the process), rising to 120.5 (from last weeks 120.1). In its dailies (See the "Part 7" posts on the Investor Village site) the index was on the soft side on seasonals (down about 1% from the prior week) though still very respectable given the passing of the Christmas holidays.

The Consumption Index broke its string of four consecutive weekly gains, slipping to 139.0 (from last weeks 141.8). In its dailies the measure was soft early (mostly on seasonals) then firmed late-week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to accelerate in is resumption of its long-term decline.

The Food Group (see "Part 8" posts on the Investor Village site) remains a concern, hovering near recession-highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending.

Overall, the economy looks to be strongly underpinned by the resurgence of strong consumer spending, renewed and continuing strength in industrial production (and presumably hiring), declining inventories, and probably (on the investor / executive end of society) higher confidence born of the political-landscape changes of November.

Of course, the flip-side of that "political-landscape change" may be increased consumer-nervousness (hinted at by the food-group numbers). That "Consumer-nervousness" card is a trump card. If played into consumer-spending, it beats all else.

-Robry825

Sunday Night Economic Assessment

2011-01-03T03:06:00.001-08:00

The US Industrial economy eased off another notch again last week (if pipeline scheduling is correct), amidst continuing strong consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) edged lower for its second strait week, dipping to 120.1 (from last weeks 120.2). In its dailies (See the "Part 7" posts on the Investor Village site) the index started off flat on Christmas eve seasonals then firmed sharply as the week progressed.

The Consumption Index put in its fourth weekly gain in a row, climbing to 141.8 (from last weeks 137.8). In its dailies the measure (as last week) was seasonally-soft though still strong relative to prior weeks.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to accelerate in is resumption of its long-term decline.

Overall, the economy looks to be continuing its recovery from its November "micro-recession", as gas-flow-estimated consumption has regained its composure. Within the individual sectors tracked (see "Part 8" posts on the Investor Village site) the metals group (and in articular the steel group) continue to show good progress in recovering from their November-lows.

The steel group sampling (now up to 174 mmcf/day in December vs its 147 mmcf/day 16-month low in November) is especially reassuring as it has been a bellwether of the recession over the past couple of years (as it should... given the prominent usage of metals used within industrial production, especially in durable goods).

One warning sign that remains, however, is the Food group, which leapt in November to surplus and is now approaching 2008-recession highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending. I take it as a sign of deep nervousness within consumers, who (given the strength in the consumption index) are presumably continuing to spend even while nervous... hopefully reflecting unfounded nervousness in the future of others, rather than themselves.

Overall, the US industrial economy looks (as last week) to be firmly underpinned by an excess of consumption over production, the recent surge in consumption, and the resumption of declining Inventories measure.

-Robry825

Sunday Night Economic Assessment

2010-12-27T00:43:00.000-08:00

The US Industrial economy took a Christmas- break and eased off a notch last week (if pipeline scheduling is correct), while by reinvigorated consumer spending continued in holiday-earnest.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four up-weeks in a row, edging down to 120.2 (from last weeks record 120.3). In its dailies (See the "Part 7" posts on the Investor Village site) the index started off firm and held its strength until late week when Christmas eve approached.

The Consumption Index had its third weekly gain in a row, recovering to 137.8 (from last weeks 130.3). In its dailies the measure (as last week) remained a tad soft but remained very strong relative to the previous several weeks..

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to accelerate in is resumption of its long-term decline.

Overall, the economy looks to be continuing its recovery from its November "micro-recession", as gas-flow-estimated consumption has regained its composure. Within the individual sectors tracked (see "Part 8" posts on the Investor Village site) the metals group (and in articular the steel group) continue to show good progress in recovering from their November-lows.

The steel group sampling (rising to 172 mmcf/day in December vs its 147 mmcf/day 16-month low in November) is especially reassuring as it has been a bellwether of the recession over the past couple of years (as it should... given the prominent usage of metals used within industrial production, especially in durable goods).

One warning sign that remains, however, is the Food group, which leapt in November to surplus and is now approaching 2008-recession highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending. I take it as a sign of deep nervousness within consumers, who (given the strength in the consumption index) are presumably continuing to spend even while nervous... hopefully reflecting unfounded nervousness in the future of others, rather than themselves.

Overall, the US industrial economy looks (as last week) to be firmly underpinned by an excess of consumption over production, the recent surge in consumption, and the resumption of declining Inventories measure.

-Robry825

Sunday Night Economic Assessment

2010-12-20T05:40:00.001-08:00

The US Industrial economy pushed ahead last week (if pipeline scheduling is correct), buoyed by reinvigorated consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for its fourth week in a row, rising to 120.3 (from last weeks 119.8), and edging out its May-30th record high of 120.2. In its dailies (See the "Part 7" posts on the Investor Village site) the index started off on the firm side then softened just a tad as the week progressed.

The Consumption Index had its second up-week in a row, recovering to 130.3 (from last weeks 123.3). In its dailies the measure softened just a tad but remained very strong relative to the previous several weeks..

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) broke its string of two-unchanged weeks, resuming its long-term decline.

Overall, the US industrial economy looks now to be strongly underpinned by an excess of consumption over production, the recent surge in consumption, and the resumption of declining Inventories measure.

-Robry825

Sunday Night Economic Assessment

2010-12-13T07:02:00.000-08:00

The US Industrial economy gained again last week (if pipeline scheduling is correct), consumer spending strongly reversed course and turned up, and the consumption index re-crossed the production index (on extremely strong dailies) into positive territory.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for its third week in a row, lifting to 119.8 (from last weeks 119.0). In its dailies (See the "Part 7" posts on the Investor Village site) the index waffled... softening early and staying soft through most of the week before firming up late.

The Consumption Index broke its string of six down-weeks in a row, gaining to 123.3 (from last weeks 116.9). In its dailies the measure had a very dramatic reversal... started the week strongly and maintaining its firmness through to the weeks close.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) was unchanged for its second week in a row (at 18.4). In its dailies it crossed into inventory declines again on Thursday, along with the Production/Consumption index crossing.

Last week was a very dramatic week (according to the gas-flows), as natural-gas-flows into paperboard facilities ignited... suggesting consumer-caution abated abruptly about a week ago. The gas-flow dailies suggest what could best be described as a very deep micro-recession... an approximately one-month plunge in consumer-spending... beginning November 3rd (in the dailies) slowly, climaxing November 28th, then ending by December 1st.

The consumption-pause coincided very nicely with the November elections (started the day after and built progressively downward thereafter), and seemed (from my viewpoint) very consistent with positive press about a likely Democratic/Republican "Deal" of a continuation of extended unemployment benefits and avoidance of planned/scheduled tax increases at the end of 2010.

My assumption is that consumers foresaw a drop to their incomes forthcoming with the turn of the elections and compensated... cutting and over-cutting spending "just in case".

I am very glad for the governmental compromise... I believe we likely averted something bad last week.

-Robry825

Sunday Night Economic Assessment

2010-12-06T05:01:00.000-08:00

The US Industrial economy edged higher again last week (if pipeline scheduling is correct), consumer spending remained week, and the consumption index (for the first time since March-2009) crossed the production index.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its second week in a row, lifting to 119.0 (from last weeks 117.9). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index had another good week, exiting the Thanksgiving-weekend shutdowns on a firm footing and working higher to a record high to close the week Friday.

The Consumption Index however continued its sharp decline (6th down-week in a row), falling to 116.9 (from last weeks 120.8). In its dailies the measure started the week extremely soft, firmed slightly midweek, and ended the week somewhat flat.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) was flat on the week, though in its dailies it crossed into inventory builds on Monday Morning, along with the Production/Consumption index crossing.

Technically the recovery (for the moment) has ended, and momentum is to the downside until consumers regain their confidence.

We got a big positive break in terms of press last week, as the weak employment numbers were questioned in the press and press talk of a "Bush-Tax-Cut-Deal" seemed supportive (we actually had a small bounce in the production index dailies Thursday, and talk of an impending unemployment-and-taxcut-extension deal probably will probably help as well in the short term.

However, the economy can now be compared to a child perched on top of a cliff with its toes curled up over the edge. One wrong step... and there will be no opportunity for a "right step" anytime soon.

Thursdays employment numbers were (in my judgement) the real deal. Although pipeline gas flows showed gains to industrial gas flows in November (up 0.054 BCF/day vs October as per the "Part 7" posts on the InvestorVillage site), the combination of Refining, Fertilizer, and Ethanol flows accounted for all of that and then some (up 0.064 BCF/day vs October combined), leaving everything else negative.

Refining, Fertilizer, and Ethanol are not as employment intensive as other sample groups (such as the metals... which were down in November). In terms of raw (non-seasonally adjusted numbers) November was a lackluster, slightly down-month.

With the overwhelming weakness in the Consumption Index in November, The retail sales figures (to be released December 14, 2010) look to be dismal as well.

Expiring unemployment benefits and expiring tax-cuts will both drain from consumption. Lets hope we get that "Impending unemployment-and-taxcut-extension" deal soon!

-Robry825

Sunday Night Economic Assessment

2010-11-29T02:04:00.000-08:00

The US Industrial economy turned and edged up last week (if pipeline scheduling is correct), amidst retreating consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of three weekly declines in a row, gaining to 117.9 (from last weeks 117.2). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index had a very good week, starting firm and working higher midweek to a record high on Wednesday before the Thanksgiving-weekend shutdowns.

The Consumption Index (on the other hand) continued its sharp decline (5th off-week in a row), falling to 120.8 (from last weeks 127.3). In its dailies the measure started the week soft and ended very weak, to levels not seen since September 2009.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) on a positive note has slowed its decline marketdly on the narrowing of the gap between consumption and production, and may be looking to put in its first weekly advance in nearly two years next week.

Technically (and probably emotionally) the recovery (as last week) remains intact with the consumption index barely above the production index, although risk to the US economy appears very high for the moment, with the post-election loss of inertia (especially to consumption).

However, on the dailies the consumption index is now solidly below the production index, and unless consumption can turn quickly (like this week) we are going to get a crossing of the two indexes and whatever we have left of our economic inirtia will be lost.

Furthermore, as the consumption index dailies came off sharply right after the election, we are probably looking at a really ugly suprise once the "Official" Retail Sales numbers come out for November, which (if everything goes wrong) could bread a lot of negatism in the press (which in itself could hammer the recently-surging markets and further build that negativism)... causing consumers to stop in their tracks... and bringing the hole economy back down into recession. With unemployment at 9 1/2% plus, the last thing one wants to see is slowing consumption.

One hope is the optimism on the business/investment side. With the inventories measure so low, there is (if the inventories measure is correct) ample room for inventory-build. And if businesses get confident enough (they got a good push from the November elections) they could (in theory) get to the point where they decide to run up inventories and go out and compete for market-share, which could help to underpin the economy for a short time to give consumers a chance to regain their bravery.

Still, this whole thing looks scary to me, and I am very uncomfortable at the thought of an index crossing by means of plunging consumption. Risk remains to look extremely high to the economy and the markets right now. We really, really, do need to see those volatile consumption-dailies turn back up... and quickly.

Pending negatives that certainly bear on optimism also include the expiration of the "Bush" tax-cuts (Consumers spend less on consumption so they can spend more on tax payments), and potentially-expiring extended unemployment-compensation benefits(Consumers spend less on consumption because they have less income).

Now, if Democrats and Republicans can come together and make a trade (Bush-Tax-Cut-Extensions for Unemployment-extensions). And if we can get a good spin out of the press somehow on the dismal retail sales report to come (Retail sales were down only because of abnormally high sales in 2009, but were higher than other years?). And if Santa can give everybody cash this year (Instead of all those trinkets that end up thrown in the closit or tossed the day after). And if the Good-Tooth farry raises her rates to $500-per-tooth in 2011, And if...

Aw, forget it !!!

-Robry825

Sunday Night Economic Assessment

2010-11-22T02:31:00.000-08:00

The US Industrial economy continued its post-election retreat last week (if pipeline scheduling is correct), as both industrial production and (especially) consumption backtracked.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gave ground for its third straight week, dropping to 117.2 (from last weeks 118.1). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index actually looked supportive, starting the week very soft but firming up mid-to-late week, though it had trouble keeping up with seasonals.

The Consumption Index continued its sharp descent (4rd off-week in a row), falling to 127.3 (from last weeks 133.2). In its dailies the measure started the week very depressed, firmed only modestly midweek, then softened again through the weeks close.

Technically (and probably emotionally) the recovery remains intact with the consumption index still above the production index, although risk to the US economy appears very high for the moment, with the post-election loss of inertia (especially to consumption). But we really, really, need to see those volatile consumption-dailies turn back up... and quickly.

-Robry825

Sunday Night Economic Assessment

2010-11-15T02:20:00.000-08:00

The US Industrial economy again backtracked last week (if pipeline scheduling is correct), as industrial production softened late-week on the heels of a week-long plunge in consumption.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its second straight week, slipping slightly to 118.1 (from last weeks 118.5). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index was actually moderately firm throughout much of the week but softened sharply as the week closed.

The Consumption Index gave back a lot of ground (3rd off-week in a row), falling to 133.2 (from last weeks 140.8). In its dailies the measure extended and sharpened its pullback from its election-day peak, starting the week soft and declining sharply as the week progressed.

Overall, last week appears to be an important one... marking the re-emergence of risk (at least temporarily) to the economy, especially considering the coupling of rising equities and declining consumption. A decline in the markets (which itself is of sharply growing risk) would be (from a historical standpoint) additionally detrimental, and with last weeks loss of economic-inertia the full burden appears to shift to the Federal reserve.

Technically (and probably emotionally) the recovery remains intact. But we really, really, need to see those volatile consumption-dailies turn back up... and soon.

-Robry825

Sunday Night Economic Assessment

2010-11-08T04:04:00.000-08:00

The US Industrial economy eased off just a bit last week in the wake of US elections (if pipeline scheduling is correct), as both industrial production and recently-strong consumption gave a little bit back.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of five consecutive weekly advances, slipping slightly to 118.5 (from last weeks 118.7). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week very soft, bottomed-out just before election-day, then rose with the markets as perhaps investors and business interests were satisfied by gains from their champions (the Republicans), who picked up control of the US House of Representatives as well as several senate seats and a host of governorships.

The recently red-hot paperboard-based Consumption Index also slipped (2nd off-week in a row) to 140.8 (from last weeks 142.5). Interestingly, the measure (opposite the Production Index) sharpened up quite nicely once the week began and actually peaked on election day, then weakened steadily into the close of the week and especially into the very-preliminary weekend data, as perhaps consumers looked to losses by their champions (the Democrats).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern steep decline.

Overall, its a big "nothing changed"... The US industrial economy continues to remain firmly supported by that ongoing excess of consumption over production.

With the US midterm elections giving Republicans a much larger say in what the Government does over the next two years, the Democrats chances to undermine and ruin the US economy alone are coming to an end, and the Republicans now get their chance to join them in keeping the ball bouncing downhill.

So, with tongue planted firmly in cheek, and a healthy warped sense of humor... Ten suggestions follow to help newly-elected Republicans join with Democrats to kill the economy...

1. MAKE LOTS OF TALK ABOUT SHUTTING DOWN GOVERNMENT! As millions of folks work for the government and therefore rely upon it for their salaries (and resultant spending for their families needs)... Scare the pants off of them by threatening to shut down government (and suspend their paychecks) in hopes that they cut their spending way back (just in case)... slowing their spending. It hopefully will produce a snow-ball effect as store-owners also cut back in reaction and anticipation. Better yet, start the negative talk right away so that you can scuttle the quickly-developing Christmas-rush. Time is of the essence!

2. MAKE LOTS OF TALK ABOUT ENDING EXTENDED UNEMPLOYMENT BENEFITS and add several million additional consumers into that pool from suggestion #1 above. The more folks you scare, the more folks will cut back spending, and the faster store and business owners will react, curtail hiring, and join in the layoff-party. You might even be able to ignite a downward spiral that could take unemployment to 15 or 20 percent!

3. GIVE EVERY CONGRESSMAN, SENATOR, AND THE PRESIDENT A 1-800 NUMBER, connected to a cell-phone that he/she must keep on his/her person at all times (switched on), but that may be only used by entities with "Corporation", "Association", "Mutual", "Pack", "Brotherhood", or "Union" in their names. All other folks should be connected by a $5.00 pay-per-minute phone service, connected by a voice-mail system that takes at a minimum 30 minutes to reach an active, working, answering machine, whose contents are to be sealed in the national archives (except by court order) for the next two years until the next election cycle (To prevent situations where conflicts of interests might arise).

4. ELIMINATE THE TERM "TORT REFORM" FROM YOUR VOCABULARY! A dirty little secret... open up your local "Yellow Pages" directory and count the number of pages listed in the "Physicians and MD's" section. Then count the number of pages in the "Attorneys" section. (If you are like me, you will probably find many more "attorneys" pages than doctors pages. Then consider the fact that attorneys earnings come from less than 50% of their take (the litigants get a larger portion). It is vital that litigation keep medical insurance costs in the $15,000+ range a year for consumers, and tort-reform threatens to free up thousands of that which consumers could potentially spend elsewhere, disastrously threatening to expand the economy via consumer spending.

5. MOVE IMMEDIATELY TO PROPOSE A "GOLD STANDARD"! Foreign central banks hold trillions of dollars worth of US debt, and allowing convertibility would quickly allow them to stock up on all the hard assets left in the US, relieving them of their burdens of risky US paper. And while you are at it, throw in silver, the SPR, the national parks, the US military, ANWR, and the like. With all their trillions, foreigners are going to need more stuff than just our gold stocks to convert into. If that is not enough, throw in farm-land, commercial property, and eventually US residences. You could call away peoples homes through some random means such as a negative lottery... Your number comes up, you loose your house! Folks could then protect themselves by buying "Lottery Insurance" (so they could purchase something and not be homeless), which would then add a revenue stream to the insurance companies to replace what is lost when you implement single-payer (oops, forgot that suggestion above) so thy wouldn't go out of business (remember Insurance companies are covered under suggestion #3 above)..

6. CONSIDER THE POSSIBILITY OF NEW CONSUMER TAXES including energy, gas, value-added, anything that could relieve consumers of income that would otherwise be spent by them in the general economy. The more spent by them on taxes, the more they will cut back on other purchases, slowing business and generating layoffs.

7. TALK UP THE NEED TO RAISE THE MINIMUM WAGE TO $10 AN HOUR... but absolutely, under all circumstances DO NOT ACTUALLY DO IT! The point here is to scare the business end of US society, so that they will do all they can to avoid new hiring to keep the economy depressed. But if you go through with it, it would actually stimulate consumer spending as low-income folk are much more likely to spend the extra income (as opposed to high-end business/investment folk, who would more likely just add it to their savings as they already would have more income than they know what to do with). Point here is to talk up the minimum wage hike on business shows and within business publications (Wall Street Journal, Investors Business Daily, etc) and not on the nightly news or other media outlets that consumers watch, lest they get excited and raise their spending in anticipation (stimulating the US economy).

8. PROSECUTE MICROSOFT AGAIN... Remember that Anti-Trust lawsuit against Microsoft years ago regarding Internet Explorer... it didn't go far enough. There's Defrag, Backup, Disk Cleanup, Wordpad, Notepad, Calculator, Windows Update, Outlook Express, all those freebie games, and hundreds of other Microsoft handouts that are bundled for free within Windows as well. Make consumers pay for 'em all. that way consumers will have less to spend elsewhere in support of the economy. And don't stop with Microsoft. Prosecute anyone that offers consumers anything for free.

9. IT IS HYDROCARBON JAWBONE TIME AGAIN... It's fall-time, when E&P's are drawing up their drilling plans & budgets for 2011. Always, always, demonize heavily anyone that drills for resources during the November/December time-frame when they are budgeting. The rest of the year you need not worry, but always demonize in November/December. Especially in oil. Everyone wants to play the hero, few the villain. You don't need to actually do anything, just use your rhetoric. Remember, less drilling means more imports, which means more foreign outflows of US capital, which means higher foreign holdings of US dollars. This suggestion goes hand-in-hand with suggestion #5 above.

10. ALWAYS REMEMBER, IT IS NOT THE OTHER PARTY THAT IS RUINING THE COUNTRY... IT IS THE PUBLIC THAT SUPPORTS THEM. Never criticize another in government, they are your partners. It is the public that is the problem. Isn't it?

-Robry825

Sunday Night Economic Assessment

2010-11-01T04:18:00.000-07:00

The US Industrial economy pushed ahead again last week (if pipeline scheduling is correct), while consumers retreated.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its fifth week-in-a-row, rising to 118.7 (from last weeks 118.3). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week very strong and tailed off just a bit as the week progressed.

The paperboard-based Consumption conversely broke its string of two up-weeks in a row, easing to 142.5 (from last weeks 143.8). In its dailies the measure started slightly soft and weakened sharply by weeks end.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern steep decline.

For the time being, the US industrial economy looks to remain strongly supported by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure. Unfortunately, the recovery retains its jobless look (given the large comparative weakness of the production index to the consumption index, and the implied inventory declines... and the negative sentiment all of that implies within the business and investment communities).

With the US midterm elections a mere day away, and the assumption (given the press and polls) of a Republican congressional landslide, the danger is on the side of a decline in consumption as consumers react to changes from a strongly pro-consumption anti-business government, to one more divided (and possibly gridlocked). The burden thus falls to the Federal Reserve to continue to stimulate, giving politicians a chance to regain sanity before we hit the inevitable wall that foolishness places before us.

Perhaps the best chance for the US economy is the defibrillator method... vote for anything that talks Republican, looks Republican, or smells Republican... in the hopes that it both re-stimulates investment and hiring by rekindling investment and expansion (and rehiring), while reminding Democrats that while consumers are important, so is the business community that serves the consumer.

Though when the vote is finished and done, rhetoric from both Democrats and Republicans will either make or break the fundamental possibilities of working together. If they tear each-others constituencies apart with their tongues, they will tear the economy apart as well.

But even then most of the burden stays with the Federal Reserve, on reversing the foolishness of the last 30 years. Eventually, the Feds are going to have to both raise interest rates and quantitatively ease (all at the same time), to bring down debt and reverse a money supply that is in reality negative to the tune of many trillions of dollars (except from the vantage point of foreign interests)... and restore sanity to dollar-denominated savings.

You can see what's coming in the gas flows... industrial production is on a tear throughout, likely running towards capacity even as business is frozen in its steps and employment suffers.

You can see what's coming in precious metals, as silver (the "poor-mans gold" of the metals markets) is surging on fears that the Federal Reserve does not know how to extract itself from the hole it dug itself into (lowering interest rates to zero, to preserve a run-up in debt, to replace monetary outflows generated by huge foreign trade deficits).

We are desperately out of balance. Changes have to be made.

Perhaps it will be like 1992, when Republicans swept Congress after President Clinton's first two years. The Republicans forced fiscal restraint, we eventually got a balanced budget, and the economy (and psychology) recovered.

Well, at least one can dream...

-Robry825

Sunday Night Economic Assessment

2010-10-25T01:14:00.000-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), with solid gains implied in both US Industrial Production and Consumption.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for its fourth week-in-a-row, rising to 118.3 (from last weeks 116.5). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started firm and remained robust through to the weeks close.

The paperboard-based Consumption Index added to its Fall-2010 surge, rising (for its second week in a row) to 143.8 (from last weeks 140.1). In its dailies the measure started firm though eased slightly through its close. The Consumption Index is nearing its Oct-2009 all-time high 146.5, suggesting perhaps we may be looking to a similarly-strong Christmas as we had in 2009.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern steep decline.

For the time being, the US industrial economy looks to remain strongly supported by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure. And the recovery looks to remain a jobless recovery (given the large comparative weakness of the production index to the consumption index, and the implied inventory declines... and the negative sentiment all of that implies within the business and investment communities).

In fact (looking at the gas flows), it is very difficult to be able to tell that we are in a "recession" at all. If one were to ignore the abysmal employment data and focus solely on gas-flows, that hole-of-a-recession we dug ourselves into during 2008 has already been filled, and we look about to boom. So why the present-day dismal unemployment?

Within the gas flows, the large gap between implied consumption and industrial production, the duration of that gap (18 months), the seemingly never-ending decline in the inventories measure (especially against the slow build implied within Industrial Production), and the recent reluctance of the Production Index to "break out" to the upside as the Consumption Index has done, all suggest extreme negativism (and caution) within the business & investment end of the US economy.

With such negativism in business and investment, capitol formation (investment) and labor formation (hiring) is severely impaired. Contrast that with the robustness of consumer-spending implied by the Consumption Index, and a terribly unbalanced economy (crafted by a terribly unbalanced political "economy") is betrayed.

With Midterm US Elections now 8 days away (judging by the polls)... the US public is on to this at least to some extent. And given recent press, that unbalanced political "economy" is about to change.

One has to be thinking now of voter fallout after the elections pass. Polls and press seem to be suggesting the possibility of strong Republican gains come November, and allude to I think favor a slim Republican recapture of the House of Representatives with strong Republican gains and a chance of Senate control as well.

But what will that (potential) change of political balance bring about? Will investors & business leaders (seeing the political changes) take heart and invest & hire to chase new business, or sit back and wait to see what happens? Will consumers loose confidence on the political fallout? Will a rebalanced government work wisely, or fall into combative stalemate to the ruin of the economy? Or, will the polls be proved to be wrong? Time will tell.

One thing I know... we have a lot of very sharp business people in the US, very creative workers, very motivated consumers, and a whole lot of people that want to see is this economy work. Just give them the chance...

-Robry825

Sunday Night Economic Assessment

2010-10-18T05:26:00.000-07:00

The US Industrial economy again gained ground last week (if pipeline scheduling is correct), while the ongoing recent surge in consumer-spending inched even further ahead.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for its third week-in-a-row, rising to 116.5 (from last weeks 115.7). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week softened early (following a strong end to the prior week) but sharply firmed as the week progressed.

The paperboard-based Consumption Index reversed its prior-week dip, rising to 140.1 (from last weeks 139.9). In its dailies the measure vacillated but overall was firm through Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern steep decline.

For the time being, the US industrial economy looks to remain strongly supported by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure. And the recovery looks to remain a jobless recovery (given the large comparative weakness of the production index to the consumption index, and the implied inventory declines... and the negative sentiment all of that implies within the business and investment communities).

With Midterm US Elections now 15 days away, one has to be thinking now of voter fallout after the elections pass. Polls and press seem to be suggesting the possibility of strong Republican gains come November, and allude to I think favor a slim Republican recapture of the House of Representatives with strong Republican gains and a chance of Senate control as well. Consumer spending appears robust the past few weeks, and equities are surging.

Now I can understand the equities rally (Republicans tend to champion the business & investment side of US society) but the strong consumption part is a mystery. As Democrats tend to champion consumers, and the press is so dismal for Democrats, are consumers somewhat unaware (with a big dip in consumption coming in late November/December once the surprise is out)?

Or... are consumers aware... and discouraged with their overall champions? These two possibilities both would have big implications.

If consumers are unaware, an economic reversal (and a big equities reversal within presently-rising stock markets) may be coming. If consumers are aware and discouraged... a Republican election rout throughout government... and whatever emotional shock waves follow that.

But beyond all that... what of the 2008 elections? Consumption fell off big time in the weeks proceeding the Democratic sweep of November 2008.

Consumption way down before the 2008 Democratic sweep... Consumption way up before a prospective 2010 Republican sweep. Are consumers Republicans? Am I misjudging something here? Or is the ever-emotional consumer voting out of emotion rather than conviction (or worse, out of emotion rather than knowledge)? Or... is the dog simply following it's tail!

-Robry825

Sunday Night Economic Assessment

2010-10-11T01:46:00.001-07:00

The US Industrial economy pushed ahead last week (if pipeline scheduling is correct), while the ongoing recent surge in consumer-spending slipped back slightly.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for its second week-in-a-row, rising to 115.7 (from last weeks 114.5). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week soft but gained as the week progressed.

The paperboard-based Consumption Index conversely declined (breaking its streak of three up weeks in a row), dipping to 139.9 (from last weeks 140.9). In its dailies the measure started the week strong and tailed off only slightly through Friday. Preliminary weekend scheduling (For Saturday and Sunday) looks very strong... if it holds up... and the Consumption Index maintains its huge gap to the Production Index.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy looks to continue to be strongly supported by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

It does, however, appear likely to remain a jobless recovery (given the large comparative weakness of the production index to the consumption index, and the implied inventory declines... and the negative sentiment that implies within the business and investment communities). Negativism is unlikely to chase down new employees to chase after new-business when old-business is in doubt. Perhaps November will change all that. Perhaps not.

Sooner or later though, that negativism (if not reversed) is going to bite deep and hard. The US standard of living is supported by massive imports, which are in turn supported by massive foreign demand for dollars (Think about it... why would foreign parties "dump" goods into the US at a loss, if it weren't for the desire for dollars. The loss on "dumping" is the "commission" on the dollar transaction!). Like all things that vacillate, sooner or later that foreigner-driven dollar-bullishness will abate, as will the desire to "dump"... and the imports will end. When those massive imports do end, either US industry (and investment) will have to rapidly expand to pick up the slack, or the US standard of living contract sharply.

-Robry825

Sunday Night Economic Assessment

2010-10-04T04:59:00.000-07:00

The US Industrial advanced last week (if pipeline scheduling is correct), while consumer-spending added to its recent surge.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) finally broke its string of four down-weeks in a row, and inched higher to 114.5 (from last weeks 114.2). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week a bit on the firm side, then sharpened nicely through Thursday (to close out the month of October) before softening on Friday.

The paperboard-based Consumption Index also inched ahead (third up week in a row), rising to 140.9 (from last weeks 139.5). In its dailies the measure started the week flat to slightly firm but accelerated nicely through to the end of the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy looks to continue to be firmly underpinned by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

Continuing concerns continue to be the dismal mood of the business/Investment side of the US citizenry (and its whithering effect on capitol/formation and new business starts), massive monetary outflows from the US (believed driven by demand from foreign sources for US dollars), and poor US monetary, fiscal, and political posturing.

-Robry825

Sunday Night Economic Assessment

2010-09-27T07:10:00.000-07:00

The US Industrial economy eased again last week (if pipeline scheduling is correct), while consumer-spending inched ahead a little more.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined again (its 4rd down week in a row), dropping to 114.2 (from last weeks 115.2). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week soft, then firmed just a bit late-week. September (vs its seasonals) continues to look soft, especially in contrast to the month of August.

The steel sector looked quite strong last week (in spite of flat automotive scheduling). Steel lead both the recession and recovery over the past couple years, and climbing steel scheduling is quite a welcome sign for the possibility of a stronger November.

The paperboard-based Consumption Index gained a little more ground (second up weeks in a row), rising to 139.5 (from last weeks 139.2). In its dailies the measure started the week very strong through Tuesday, then declined sharply through Saturday before turning up somewhat Sunday (as if something spooked the public Tuesday night?).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy (in spite of the last 3 weeks) looks to continue to be firmly underpinned by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

Continuing concerns continue to be the dismal mood of the business/Investment side of the US citizenry (and its whithering effect on capitol/formation and new business starts), massive monetary outflows from the US (believed driven by demand from foreign sources for US dollars), and poor US monetary, fiscal, and political posturing.

-Robry825

Sunday Night Economic Assessment

2010-09-20T03:21:00.000-07:00

The US Industrial economy gave back a little more ground last week (if pipeline scheduling is correct), while consumer-spending rose aggressively.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) backtracked (its 3rd down week in a row), dropping to 115.2 (from last weeks 116.2). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week firm, then softened a bit late-week. September (vs its seasonals) continues to look soft, especially in contrast to the month of August.

The paperboard-based Consumption Index conversely turned around and gained ground (breaking a string of three down weeks in a row), rising to 139.2 (from last weeks 134.0). In its dailies the measure looked strong.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy (in spite of the last 3 weeks) looks to continue to be firmly underpinned by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

Continuing concerns continue to be the dismal mood of the business/Investment side of the US citizenry (and its whithering effect on capitol/formation and new business starts), massive monetary outflows from the US (believed driven by demand from foreign sources for US dollars), and poor US monetary, fiscal, and political posturing.

-Robry825

Sunday Night Economic Assessment

2010-09-13T05:40:00.000-07:00

The US Industrial economy backtracked slightly again last week (if pipeline scheduling is correct), as both industrial production and consumer-spending eased.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its 2nd week in a row, dropping to 116.2 (from last weeks 116.7). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index started the week soft, then firmed midweek. In spite of the firming in the dailies, we are starting the month of September on the weak side, especially in contrast to August.

The paperboard-based Consumption Index also gave a little more ground (its 3rd down- week in a row), settling to 134.0 (from last weeks 134.2). In its dailies the measure looked strong (maintaining the prior weeks surge), though the "official" 28-day average (shown in the chart) could not reflect the strength as an equally strong week rolled off the back end of it's 4-week moving average.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy looks to continue to be underpinned by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

Continuing concerns continue to be the dismal mood of the business/Investment side of the US citizenry (and its whithering effect on capitol/formation and new business starts), massive monetary outflows from the US (believed driven by demand from foreign sources for US dollars), and poor US monetary, fiscal, and political posturing.

-Robry825

Sunday Night Economic Assessment

2010-09-07T03:22:00.000-07:00

The US Industrial economy retreated last week (if pipeline scheduling is correct), as both industrial production edged down while earlier-reinvigorated consumer-spending is taking a two-week summer vacation

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its short string of 2 up weeks in a row and slipped back a notch to 116.7 (from last weeks 116.8). In its dailies (See the "Part 7" posts on the InvestorVillage site) the index opened the week strongly and maintained its firmness through midweek... then stair-stepped down on September 1st, presumably on factory adjustments to production scheduling.

There is a propensity for the Production Index to stair-step up or down on the day a calender-month changes, and we saw a real good example of that last week. Industrial gas deliveries were modeled at 26.40, 26.31, 26.02, and 26.40 for the first four days of the week (which were also the last days of August). Then, for the last three days of the week (the first three days of September) Industrial gas deliveries were modeled at 25.19, 25.39, and 25.42. That works out to about a 4% drop in natural-gas inputs, which would imply a 4% cut in planned manufacturing of goods at these industrial facilities.

Now there is a wrinkle to all this... there could be distortions in the pipeline data itself (Holidays can produce such distortions, as can sudden fluctuations in climate (as we are having now as the natural-gas industry is just now leaving its summer-demand season and entering its fall shoulder-season). But September (at least in its first few days) looks weak.

Now seasonally, we tend to like to get a bump-up at the start of September (once seasonal-distortions surrounding Labor-day are factored out) so we should be going the other way. Even in 2008 (when the bottom fell out of industrial natgas deliveries) we got a bump up in early September (though things absolutely fell apart a few weeks later when the Economy rolled over). So we will hope the early September weakness is either a pipeline-distortion or something funny (unseasonal) regarding Labor-Day-Weekend scheduling.

Getting to the paperboard-based Consumption Index, it also backtracked (its 2nd down- week in a row), settling to 134.2 (from last weeks 135.0). In its dailies, however, the measure (though beginning the week soft) surged strongly as the week progressed, seemingly climbing with the stock market and suggesting the good press of the last week or so is encouraging consumers.

The Consumption Index is much more volatile than the Production Index, and has appeared in the past to reflect much more highly upon emotion as it tends to surge or crash in reflection to the "goodness" (or "badness") in the news of each day. Thus, as the highly-emotional Consumption Index tends to lead the more subdued Industrial Index, and the news of the day tends to lead consumption, the "mood" of the media can be the prime driver of an economy at times (probably one reason why authoritarian countries tend to try and control it). The past few weeks it seems we have had a manic-depressive media... speaking in the tone it believes its readers/watchers/listeners want to hear... back and forth between good and bad. Makes for a lousy economy.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Overall, the US industrial economy looks to continue to be underpinned by an excess of consumption over production, a recent surge in consumption, and the ever-declining Inventories measure.

Continuing concerns continue to be the dismal mood of the business/Investment side of the US citizenry (and its whithering effect on capitol/formation and new business starts), massive monetary outflows from the US (believed driven by demand from foreign sources for US dollars), and poor US monetary, fiscal, and political posturing.

-Robry825

Sunday Night Economic Assessment

2010-08-30T05:00:00.000-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as recently-strengthening consumer spending took a break.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its second week in a row, climbing to 116.8 (from last weeks 116.0). In its dailies the index opened the week strongly and maintained its firmness through to the weeks close.

The paperboard-based Consumption Index, conversely, broke a string of 3 up weeks in a row, settling to 135.0 (from last weeks 135.7). In its dailies the measure began the week soft but strengthened just a tad as the week progressed, holding slightly above-trend to the ramping production index... a credit to the consumer in a tenacious couple-week period where (until late week) it seemed a strongly-negative slew of news-media reports begged to stall consumption.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

I am going to forgo the usual comment section this week, as an interesting news article found its way to my email last Thursday. The article contrasted quite nicely with remarks I made a week ago in last Sundays economic assessment, and I want to explore that further. Rather than comment on the economy, I want to explore this whole experiment of a gas-flow-derived economic model...

Consider (from the Production Index Paragraph) from last weeks "Sunday Night Economic Assessment" (Sunday, August 22nd) ...
............"The Production Index (In terms of its 28-day moving average
............ of gas-flow scheduling into US industrial facilities) broke a string
............ of four down-weeks and rose to 116.0 (from last weeks 115.0)."

And contrast it with the lead from last weeks AP-reported unemployment piece...
............"New jobless claims drop for first time in 4 weeks
............
............ AP
............ WASHINGTON – New requests for unemployment benefits fell
............ sharply last week, the first decline in a month and a hopeful sign
............ after a raft of negative economic reports.")
............
............(http://www.google.com/hostednews/ap/article/ALeqM5gNiyJ905Ho0Ur96V2TQhsBX19lGwD9HR7PR80)

On the whole, not a bad performance!

Now this is not to say that the model is perfect- it has had a bit of "noise" in it from time to time, but overall I do believe the modeling captured the beginnings of the recession in the fall of 2008, reflected its bottom in May of 2009, its recovery in late 2009 through Q1 of 2010, and the recent weakness through early August.

The theory behind the model is that by measuring the quantity of natural-gas that is fed into an industrial facility (that uses natural gas in its manufacturing processes), one can estimate (quite closely) the production of that facility based upon its natural-gas usage. If natgas usage goes up 10%, facility production goes up 10%. If natgas usage goes up 100%, facility production doubles. If natgas usage stops, the facility is idle.

Collect lots of data for lots of factories all across the US, and you get US production... daily... in real time, with no waiting for monthly surveys, quarterly adjustments, etc. No delays means no surprises, which means you can react immediately (not long, long after the fact).

The potential for this type of analysis is enormous for a country. It can give companies time to react to slowdowns to cut inventories (and costs) to prevent being blind-sided by a slowdown no-one sees coming, and it can give governments time to react to impending recessions to save economies, save industries, save jobs, and save families which otherwise could be impacted by layoffs, business-failures, and other financial hardships.

And enough data is out there (about eight percent of US industry) to get enough of a sampling to do a fairly decent daily model.

Now 10 years ago, this was not so. All this came about fairly recently, opened up by the wisdom of the US Federal Energy Regulatory Commission (FERC), which accurately foresaw the benefits of opening up tightly-controlled pipeline information to the public. In a slow process, all of the nations interstate pipelines were gradually required to make more and more of their detailed flow information public.

The FERC's push was not without controversy... some resisted to the disclosure of "Customer-specific" corporate information on the grounds of privacy, and in the early days long lists of vaguely-worded locations made them difficult to decipher. But little by little clarity came out and to this day, about 8 percent of US industrial gas usage (as measured by government EIA data) is available daily from the "Informational Postings" of US interstate pipelines.

All that is about to change.

In November-2008, the FERC issued a major rule-making order (FERC Order 720), in which (by way of then-recent congressional legislation) it saw its authority opened up to intra-state pipelines (pipelines that do not cross borders) as well. After revisions and clarifications (FERC rules 720A and 720B) a host of local intrastate pipelines (and local distribution companies) are now just beginning to be required to post detailed information, which should (if this process can unfold) greatly increase the quantity and quality of data to the public.

At this early stage (as it was in the early stages for the interstate pipelines) the data is vague, and a currently high threshold (15,000 MMBtu/day to be reportable) and allowances for vaguely-named point-descriptions seem to be limiting the data's usefulness. However, if the FERC can progress (as it did for the interstate pipelines) the quality and quantity of this new data could greatly improve.

If these "Sunday Night Economic Assessment"s have value to you, if they are a help, please consider the following. You can add to this process, and the quality of these reports, by supporting the FERC in all its efforts, by just a simple email.

If you would, sometime this fall, go into the FERC's website, and drop off an email to them in thanks for their efforts, and to encourage them to expand upon "FERC Order 720" in the years to come with "Final-Cycle" or "Actual-Flow" data for all industrial natural gas transactions... to increase transparency for the benefits of the markets, and the benefit of the nation as a whole.

-Robry825

Sunday Night Economic Assessment

2010-08-23T02:10:00.000-07:00

The US Industrial economy turned around and advanced last week (if pipeline scheduling is correct) as both industrial production and consumer spending gained, on the heals of last-weeks announced resumption of quantitative easing (purchasing of treasury debt) by the Federal Reserve.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke a string of four down-weeks and rose to 116.0 (from last weeks 115.0). In its dailies the index showed a pronnounced change early to mid-week, starting flat to the previous week but strengthening sharply as the week progressed and ended.

The paperboard-based Consumption Index added to the previous weeks surge (its 3rd up week in a row), rising to 135.7 (from last weeks 135.5), its highest level since March 10th. In its dailies the measure was red-hot at the very beginning of the week (on Saturday) but softened thereafter.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) is continuing its pattern of re-accelerating decline.

Last week appeared to be a good week for the economy, presumably as factories respond to increased consumer activity, accommodating it by increasing production scheduling. Last weeks fade in the consumption index is a concern and needs to push back up. On balance, the US economy looks to be underpinned by a thick cushion of excess of consumption over industrial production, and by recent gains in consumption. Deep divisions of optimism between the consumptive and productive ends of US society also remain evident in the disconnect between the gaining consumption index vs the declining production index, not to mention the ever-dwindling inventories measure.

It is very important that the Federal Reserve continue its newly-announced resumption of quantitative easing (it announced two weeks that it would resume quantitative easing... a move that, though very much late, was necessary to keep us out of depression). I have very deep concerns of the rationality of past Federal Reserve & Governmental monetary policies, and have deep concerns of the practicality of its monetary-measurement-systems. I see the US as a country pulled into a sewer of debt by continuing patterns of monetary outflows resulting in a situation where the US "Money Supply" is a gigantic short position (private sector plus public sector) covered by ridiculous methods of accounting (where dollar-assets are counted without deducting dollar-liabilities).

The future of the US economy remains with the consumer (as always), as US industrial production appears to remain very responsive to patterns in fluctuations of consumption. In its own way, this fact is a testament to the underlying (now-hidden) power of the US economic system. Many nations are constrained at the productive ends of their economies, not at the level of consumption. The US is abundant it wisdom and eagerness to produce. All that is needed is for its government to allow it to do so.

-Robry825

Sunday Night Economic Assessment

2010-08-16T04:47:00.000-07:00

The US Industrial economy eased off again last week (if pipeline scheduling is correct) as industrial production slipped, while consumer spending surged on the heals of an announced resumption of quantitative easing (purchasing of treasury debt) by the Federal Reserve.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its fourth straight week, declining to 115.0 (from last weeks 115.5), It's lowest level since May 5th. In its dailies the index started soft but ended the week with daily activity roughly in line with the prior week.

The paperboard-based Consumption Index surged robustly within the week (2nd up week in a row), soaring to 135.5 (from last weeks 128.0), its highest level since March 10th. In its dailies the measure started firm at the beginning of the week then built upon that momentum throughout the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its pattern of re-accelerating decline.

On balance, the US economy looks to be underpinned by a thick cushion of excess of consumption over industrial production, and by recent gains in consumption. Deep divisions of optimism between the consumptive and productive ends of US society also remain evident in the disconnect between the gaining consumption index vs the declining production index, not to mention the ever-dwindling inventories measure.

If the implied surge in consumer spending can hold, it should argue for the resumption of US economic growth as factories respond to increased consumer activity, accommodating it by increased production scheduling.

The Federal Reserve announced last week that it would resume quantitative easing, a move that (though very much late) is necessary to keep us out of depression. I have very deep concerns of the rationality of past Federal Reserve & Governmental monetary policies, and have deep concerns of the practicality of its monetary-measurement-systems. I see the US as a country pulled into a sewer of debt by continuing patterns of monetary outflows resulting in a situation where the US "Money Supply" is a gigantic short position (private sector plus public sector) covered by ridiculous methods of accounting (we count dollar-assets without deducting dollar-liabilities).

If businesses were allowed to value themselves the same way the Feds count money supply, the big banks that failed the last couple of years, and GM and Chrysler, would have been shown to be worth a fortune... right before the days that they all went bankrupt! No wonder they never audit the Federal Reserve!

-Robry825

Sunday Night Economic Assessment

2010-08-09T04:49:00.000-07:00

The US Industrial economy retreated again last week (if pipeline scheduling is correct) as industrial production backtracked, while consumer spending turned and worked higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its third straight week, declining to 115.5 (from last weeks 116.8). In its dailies the index was soft throughout the week. Automotive-related flows re-weakened last week (strongly bucking seasonals), an indication that the automotive sector is out in front of the recent industrial weakness. Also weak are the Chemical/Fertilize/Steel and Cement groups. I am also suspicious that commercial real estate construction is getting killed this month, judging by divergences in steel, automotive, cement, brick, and asphault groups.

California, however, appears to be rebounding (perhaps thanks to a weakening dollar).

The paperboard-based Consumption Index bucked its 1-week downtrend and advanced to 128.0 (from last weeks 126.8), its highest level since May 22nd. In its dailies the measure started flat then firmed midweek...

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its pattern of re-accelerating decline.

On balance, the US economy looks to be underpinned (for the moment) by a cushion excess of consumption over industrial production, and by recent gains in consumption. Deep divisions of optimism between the consumptive and productive ends of US society also remain evident in the disconnect between the gaining consumption index vs the declining production index.

But what of that seemingly never-ending decline in the inventories measure? (We are now into the speculative part of this weeks post). Three theories come to mind... 1) the models could be in error, possibly under-estimating urban industrial declines and/or over-estimating rural paperboard advances... 2) the models are reflecting extreme business-owner pessimism, keeping businesses afraid to hire on the chance a hostile government hands their heads to them in the months and years ahead... or more frighteningly... 3) the models are reflecting attrition, as investors are too afraid to start new businesses (and therefore acquire startup inventories) even while tens of thousands of older businesses close (and liquidate inventories) due to retirement of owners or bankruptcy.

Of those three possibilities, the first is a real stretch (though the inventories measure is the weakest of the three statistically) given the sharpness, steadiness and persistence of its decline.

The remaining two would be supported by the resistance of the unemployment rate to go down in the stiff gains of the industrial production index, and gains in profitability of existing industry and businesses (more consumer dollars into less hands = higher margins.

The last (attrition) would be supported by the presently-climbing high mall vacancy rates and declining commercial real-estate values, as well as the indications of extreme weakness in commercial construction (as noted above).

All-in-all, number three (attrition) followed by number two (pessimism) are the more likely and reasonable, but on the weight of the evidences, attrition seems the best logical fit, and (assuming I am right) makes employment gains very likely if at all possible, and (given the declines of the production index) I suspect unemployment will start ti surprise and tick higher in coming weeks should these present trends not reverse quickly.

As noted previously, we had a very close call on the economy three weeks ago as consumption had fallen (at that time) very close to production, risking a crossing which would have opened the door to a disastrous resumption of recession. That door appears thankfully to have re-closed in the short-term, thanks to the recent slight gains in implied consumption, but that door (in this present environment) must not, at all costs, be allowed to reopen. I suspect if it does, we go immediately into depression, not recession.

Politically, the gas-flow near-debacle three weeks ago seemed very closely aligned (in the gas-flows) with a Republican attempt to block unemployment extension (scaring the heck out of consumers- employed and unemployed alike), causing consumers to momentarily cut back "just in case", risking a collapse that would certainly fed upon itself and been nearly unstoppable. If Republicans had succeeded, we likely would be collapsing into depression right now.

Not to worry, though, as the Democrats are firmly in control of this blunder-bus of a government that continues to drunkenly weave its way down the road. Perhaps we need a new Coffee Party to go along with our new Tea Party so we can rid ourselves of our old Chardonnay and Beer parties!

-Robry825

Sunday Night Economic Assessment

2010-08-02T02:21:00.000-07:00

The US Industrial economy backtracked last week (if pipeline scheduling is correct) as industrial production declined, while consumer spending also eased off a bit.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its second straight week, dropping to 116.8 (from last weeks 117.8). In its dailies the index showed some resilience... firming last weekend and holding above prior-week levels through Friday. Automotive-related gas-flow scheduling also finally began to ramp up, reflecting a likely end to the July retooling period (exhibited in years past as a pronounced slow-down the first two weeks of July)..

The paperboard-based Consumption Index backed off a tad from its previous weeks surge, easing to 126.8 (from last weeks 126.7). In its dailies the measure started firm then flattened vs the prior week..

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its pattern of decline, though starting to re-accelerate in its decline.

As noted previously, we had a very close call on the economy a couple weeks back as consumption had fallen (at that time) very close to production, risking a crossing which would have opened the door to a possible resumption of recession. That door appears thankfully to have re-closed in the short-term, thanks to the recent slight gains in implied consumption.

That near miss, however, betrays the fragility of the economy, as the productive end of the US economy appears to remain entrenched in defensiveness (understandable given a government strongly-perceived by it as anti-business/investor government these days), while the consumptive segment of the US economy wavers in its perceptions and confidences in the maintenance of its perceived pro-consumer government.

On balance, the US economy looks to be underpinned (for the moment) by a cushion excess of consumption over industrial production. We will see how that cushion holds as we progress into the fall congressional elections.

-Robry825

Sunday Night Economic Assessment

2010-07-26T01:28:00.000-07:00

The US Industrial economy took a breather last week (if pipeline scheduling is correct) as industrial production declined, while consumer spending thankfully went the other way and surged higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke a string of three up-weeks in a row, falling to 117.8 (from last weeks 118.7). In its dailies the week was very week throughout, and appeared as if still in an extension of the July retooling period (which in years past has exhibited an end mid-month) as automotive natgas scheduling has yet to turn up. California, interestingly, had a very strong looking week.

The paperboard-based Consumption Index conversely surged to 126.7 (from last weeks 123.4). In its dailies the measure was firm throughout and especially into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its pattern of decelerating decline.

As noted in last Sundays economic assessment, this past week was an important week as consumption (at that time) was falling very close to production, risking a crossing which would have opened the door to a possibility of resumption of recession. We needed very badly to see a turn in the Consumption Index (and we got it).

We also got another close call on the economy (by way of the threatened curtailment of extended unemployment benefits) which was narrowly avoided Thursday when a bill finally cleared a congressional log-jam and was signed into law by the President. The move to cut unemployment threatened to push consumer spending below production, setting off a chain reaction of reduced spending... leading to production cuts... leading to layoffs... leading to reduced income... leading to reduced spending... and on and on and on.

On balance, the US economy looks to be more firmly underpinned than last week as its cushion (the ongoing excess of consumption over industrial production) got pumped by this weeks surge in (gas-flow) implied consumer spending.

-Robry825

Sunday Night Economic Assessment

2010-07-19T00:01:00.000-07:00

The US Industrial economy inched ahead last week (if pipeline scheduling is correct) as industrial production advanced slightly, while consumer spending meandered higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for its third week in a row, advancing slightly to 118.7 (from last weeks 118.5). In its dailies the week was soft throughout, though not out of line with seasonal expectations (we are at the end of the traditional July retooling period).

The paperboard-based Consumption Index broke a string of three down-weeks in a row and decided to turn higher, gaining to 123.4 (from last weeks 122.8). In its dailies the measure started week but firmed late into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its pattern of decelerating decline.

On balance, the economic advance (from the perspective of gas flows) looks to be meekly continuing, though its cushion (the ongoing excess of consumption over industrial production) remains thin and well off of the healthy look it had in previous months.

Next week is an important one for watching, as we should be getting a spurt Monday-on from the exit of the Seasonal retooling period. We really need for this to hit, and especially to hit consumer spending (to pump up the cushion between consumption and industrial production).

-Robry825

Sunday Night Economic Assessment

2010-07-12T01:42:00.000-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct) as industrial production pushed higher, while consumer spending shook off its Pre-July-4th spurt and continued to soften.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for the second week in a row, climbing to 118.5 (from last weeks 117.7). In its dailies the week started strong (especially given the July 4th holiday) but weakened as the week progressed into the seasonal July retooling period.

The paperboard-based Consumption Index slipped for its third week in a row, dropping to 122.8 (from last weeks 123.9). In its dailies the measure started very strong but quickly weakened as the week unfolded.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again declined, though the momentum within its decline continues to slow.

There are mixed signals behind July's strength... The weakness in implied consumer spending casts worry, yet the Food Sector (see "Part 8" post on the Investor Village CWEI Board) is bullishly continuing its decent from its April 2010 peak (The Food-Sector sampling has been a good contra-indicator throughout the recession... and is suggestive of continued improvements in consumer self-confidence).

On balance, the economic advance (from the perspective of gas flows) looks to be meekly continuing though its cushion (the ongoing excess of consumption over industrial production) is being eaten away.

-Robry825

Sunday Night Economic Assessment

2010-07-05T01:24:00.000-07:00

Finally an up week for the US Industrial economy (if pipeline scheduling is correct), as industrial production turned and worked higher, while consumer spending (though declining for the week) showed signs of a rebound late.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four down weeks and advanced to 117.7 (from last weeks 117.4). In its dailies the week started modestly then strengthened as the week progressed.

The paperboard-based Consumption Index dipped for its second week in a row, dropping to 123.9 (from last weeks 124.1). In its dailies the measure started soft but firmed throughout the week, and looked very strong in this weekends preliminary scheduling (should that scheduling hold).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) once again declined, though the momentum within its decline has definately slowed.

Last week was a very important week and was to be watched closely as it marked both the beginning of a new month and the beginning of a new quarter. Big changes within the gas flows tend to like to happen at such transitory points between months or quarters, as factories & retailers adjust to changing trends in orders and inventories in their scheduling of production and purchases for the upcoming new month or quarter.

Last week did not disappoint, as good things seemed to occur within the dailies of both the Consumption Index and Production Index. We will hope it is not some aberration related to the July 4th holiday weekend as the support underpinning the recovery (the indicated excess of consumption over production) has deteriorated sharply in recent weeks... threatening recovery.

With high levels of stress within the business & investing sector of US society (implied by the ongoing lag of production to consumption and the decline of the inventories measure) the burden of recovery continues to be laid fully (as always) on the consumer.

-Robry825

Sunday Night Economic Assessment

2010-06-28T03:33:00.000-07:00

The US Industrial economy continued its recent pace of slow back-tracking last week (if pipeline scheduling is correct), as both industrial production and consumer spending both eased again.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for its fourth week in a row, slipping to 117.4 (from last weeks 117.8). In its dailies the week started firm but softened as the week progressed.

The paperboard-based Consumption Index also slipped, dropping to 123.9 (from last weeks 124.1). In its dailies the measure looked soft all week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to show signs of slowing the momentum of its long-term decline.

The economy still retains its appearance of being narrowly supported by consumer spending (with the deficit of the Production Index to the Consumption Index), though that support continues to be chipped away at the level of consumption. Stress within the investor/business sector of US society continues to be suggested in the ongoing lag of production to consumption and the decline of the inventories measure.

This upcoming week will be one to watch for changes as Tuesday marks both the beginning of a new month and the beginning of a new quarter. Gas flows tend to like to change around such days, as factories & retailers adjust to changing trends in orders and inventories in their scheduling of production and purchases for the upcomming new month or quarter.

-Robry825

Sunday Night Economic Assessment

2010-06-20T23:54:00.000-07:00

The US Industrial economy (after a very good month of May) appeared to continue its June softness (if pipeline scheduling is correct), as industrial production and consumer spending both backtracked.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for its third week in a row, slipping to 117.8 (from last weeks 118.8). In its dailies the week started soft but firmed up as the week progressed.

The paperboard-based Consumption Index also slipped, dropping to 124.1 (from last weeks 127.5). In its dailies the measure looked soft all week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to show signs of slowing the momentum of its long-term decline.

The economy still retains its appearance of being supported by consumer spending (with the deficit of the Production Index to the Consumption Index), though that support continues to be chipped away at the level of consumption. Stress within the investor/business sector of US society continues to be suggested in the ongoing lag of production to consumption and the decline of the inventories measure.

I continue to worry that strong foreign demand for dollars right now that is draining money out of the US (not to mention the ongoing trade deficits draining money out of the US) is a grave risk to the US economy. I suspect the Federal Reserve would do very well with another round of quantitative easing (purchasing of treasury debt). US dollar looks too strong for the good of the US economy.

Absent that, should the markets not find a way to reverse the dollar, and consumption decides to undercut production, we could see a catch-22 style contraction (as we had last fall) should businesses choose not to let inventory build and start laying off instead... scaring consumers to spend less... scaring businesses to scale back and lay off... scaring consumers to spend less... scaring businesses to scale back and lay off... and on and on into a deflationary spiral.

-Robry825

Sunday Night Economic Assessment

2010-06-14T03:52:00.000-07:00

The US Industrial economy appears to have taken a vacation (along with Robry) over the past two weeks (if pipeline scheduling is correct), as industrial production eased slightly while consumer spending hang supportively above.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its prior string of four record highs in a row, dipping to 118.8 (from last weeks 119.7 and the prior weeks 120.2). In its dailies it had its third of three consecutive soft week in a row.

The paperboard-based Consumption Index meandered to 127.5 (from last weeks 127.0 and the prior weeks 127.1).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to show signs of slowing the momentum of its long-term decline.

The economy appears to remain somewhat supported by consumer spending with the deficit of the Production Index to the Consumption Index. Stress within the investor/business sector of US society continues to be suggested in the ongoing lag of production to consumption and the decline of the inventories measure.

I continue to worry that strong foreign demand for dollars right now that is draining money out of the US (not to mention the ongoing trade deficits draining money out of the US) is a grave risk to the US economy.

-Robry825

Sunday Night Economic Assessment

2010-05-30T23:34:00.000-07:00

The US Industrial economy continued to advance last week (if pipeline scheduling is correct), closing in a bit more on consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) racked up its fourth record high in as many weeks, rising to 120.2 from the prior weeks 119.2. In its dailies the week started firm but faded (as per seasonal expectations) early on in approach to the Memorial-Day holiday weekend. The Month of May continues to look especially impressive with its surge given that May tends to be the weakest month of the year.

The paperboard-based Consumption Index however bucked the trend (breaking a string of five up weeks in a row), falling to 127.1 (from the previous weeks 131.7).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its long-term decline, though the decline looks to be slowing in momentum the past few weeks.

For the time being, the economy appears to remain supported by consumer spending (consumer spending is the leash that leads the dog of the economy), with the deficit of the Production Index to the Consumption Index, and the continuing decline of the Inventories Measure continuing to affirm the economic recovery.

However, with the Production Index now starting to get closer to the Consumption Index, we are approaching a point where the impetus of the expansion (week as it is employment-wise) could get challenged. While we are not there quite yet (the indexes would have to cross) we could loose momentum quickly if they do cross and double-dip, given the shallowness of the recovery at the investment/business end of the economy.

Now this is speculative on my part... but from looking at the flows, the strength of the US dollar, and the news from Europe... I get a sense that there is strong foreign demand for dollars right now that Is draining money out of the US (not to mention the ongoing trade deficits draining money out of the US)... and wonder if another round of strong quantitative easing by the FED is in order.

ROBRY VACATION NOTE... There will likely be no Sunday night post next weekend as my family and I are headed off on vacation for a week (anticipate returning on Monday, June 7th. Depending on how well the computer automation performs, I hope to do a midweek economic post probably Tuesday or Wednesday night.

-Robry825

Sunday Night Economic Assessment

2010-05-24T03:12:00.000-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct), chasing strengthening consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) racked up its third record high in as many weeks, rising to 119.2 from the prior weeks 117.3. In its dailies the week appeared robust from start to finish. Mays surge continues to look especially good given that May tends to be the weakest month of the year.

The paperboard-based Consumption Index also continued higher (its fifth up-week in a row), rising to 131.7 (from the previous weeks 129.6).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its long-term decline, though the decline looks to be slowing in momentum the past few weeks.

It is strange watching the disconnect the past few weeks between the economically-indicative gas flows vs the markets, with the sharp contrast between the implied surge in the economy vs the pessimism in the markets. One has to wonder if the markets are reflecting April gas-flow weaknesses (as being recognized now?), reflecting European concerns (bear trap to set up a summer rally?), or perhaps looking ahead to discount fall mid-term elections (discounting the loss of unilateral Democratic rule as a depressant to Democratic consumers?) or other troubles.

For the time being, the economy appears to remain well supported by consumer spending (consumer spending is the leash that leads the dog of the economy), with the deficit of the Production Index to the Consumption Index, and the continuing decline of the Inventories Measure continuing to affirm the economic recovery.

However, it still appears to continue as a jobless-recovery, as the lag in the Production Index (vs the Consumption Index) and the softness in the Inventories Measure continues to imply a shallowness in the productive end of the US economy... which suggests a continuing defensiveness in industry toward aggressively hiring to chase market share or pursue new ventures.

-Robry825

Sunday Night Economic Assessment

2010-05-17T03:11:00.000-07:00

Forget all the gloom in the markets these past few days, the US economy is surging! (according to pipeline scheduling) as Industrial production continues to chase consumer spending higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) achieved its second record high in as many weeks (rising to 117.3 from the prior weeks record 115.4). In its dailies the week started moderately (in weekend scheduling) but firmed as the week progressed. The week looked especially good against seasonals as May tends to be the weakest month of the year.

The paperboard-based Consumption Index also worked higher (its fourth up-week in a row), rising to 129.6 (from the previous weeks 128.3).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its long-term decline, though the decline looks to be slowing in momentum the past few weeks.

It has been a fascinating flip from implied April-weakness to May-strength, both in terms of industrial production and consumption, and the flip is very noticeable in the "Part 8" sector breakdowns (on the Investor-Village CWEI Board). For instance the Metals/Steel groups were pressured in April but strong in May (Aluminum is surging this month so far).

The Food Group is also very suggestive on this... April was the highest (52.5 mmcf/day) in fourteen months (Food is a contra indicator... tends to rise when consumers are stressed), while May is looking much better at a lower 47.5 mmcf/day.

Why the April-May Flip? I haven't a clue! Would greatly appreciate anyone else's views as to possible reasons but I am in the dark in my thinking as to possible catalysts.

Overall, the economy appears to remain well supported by consumer spending (consumer spending is the leash that leads the dog of the economy), with the deficit of the Production Index to the Consumption Index, and the continuing decline of the Inventories Measure continuing to affirm the economic recovery.

However, it still appears to continue as a jobless-recovery, as the lag in the Production Index (vs the Consumption Index) and the softness in the Inventories Measure continues to imply a shallowness in the productive end of the US economy... which suggests a continuing defensiveness in industry toward aggressively hiring to chase market share or pursue new ventures.

-Robry825

Sunday Night Economic Assessment

2010-05-10T03:58:00.000-07:00

The US Industrial economy turned and advanced sharply last week (if pipeline scheduling is correct), while consumer spending gained.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) after four straight weeks of decline surged to a record high of 115.4 (from the prior weeks 113.8). In its dailies the week was firm throughout. The week held up especially well against seasonals, where May tends to be the weakest month of the year.

The paperboard-based Consumption Index also gained (for its third week in a row), rising to 128.3 (from the previous weeks 127.9).

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its seemingly never-ending decline.

The economy (at least for now) appears to remain supported by consumer spending (consumer spending is the leash that leads the dog of the economy), with the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continuing to affirm the economic recovery.

A lingering concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-05-03T02:39:00.000-07:00

The US Industrial economy gave back a little more ground last week (if pipeline scheduling is correct), while consumer spending held its ground.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) worked lower for the fourth straight week, settling at 113.8 (from the prior weeks 114.1). In its dailies the week started strong early then moderated back to the trend of the last few weeks.

The paperboard-based Consumption Index gained for its second week in a row, rising to 127.9 (from the previous weeks 125.6), In its dailies the week was choppy to soft.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its seemingly never-ending descent.

In spite of the softness of the past four weeks, the economy (at least for now) appears to remain supported by consumer spending (consumer spending is the leash that leads the dog of the economy), with the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continuing to affirm the economic recovery.

A lingering concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-04-26T01:34:00.000-07:00

The US Industrial economy backtracked a little bit more last week (if pipeline scheduling is correct), while consumer spending turned modestly higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for the third straight week, settling at 114.1 (from the prior weeks 114.5). In its dailies the week started soft, firmed midweek, and ended the week strong.

The paperboard-based Consumption Index reversed itself again (it has been waffling back-and-forth lately), gaining to 125.6 (from the previous weeks 125.0), In its dailies the week was soft early, firmed briefly mid-to-late-week, then softened again late into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its continual descent.

In spite of the softness of the past three weeks, the economy (at least for now) appears firmly underpinned by consumer spending, with the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continuing to lend credence to the economic recovery.

Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-04-19T02:59:00.000-07:00

The US Industrial economy gave something back last week (if pipeline scheduling is correct), as did consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) slipped for the second straight week, dipping to 114.5 (from the prior weeks 115.0), In its dailies the week defied seasonal patterns and appeared steady & little changed from the prior holiday week.

The paperboard-based Consumption Index reversed its gains from the prior week and edged back to 125.0 (from the previous weeks 127.1), In its dailies the week was soft early, firmed briefly mid-to-late-week, then softened again Friday into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) for the gazillianth week-in-a-row continued its descent.

Overall, gas-flows suggest the recovery remains intact for the moment, though signs of stain are increasing... leading one to wonder if the recovery could loose its initiative.

One area of increasing concern are imputs to food processing facilities (See the "Food" group on the IV-CWEI "Part-8 Sector Demand" posts). Scheduled gas flows into food plants have been steadily increasing as of late, but this is not a healthy sign for the economy as food tends to be a contra-indicator (probably because as America becomes more nervous, it heads to the fridge).

(Now in the sarcastic corner of my mind, I have been weighing a consumer confidence index derived from Food-Plant imputs... which are predominantly comfort food (junk food produced from dozens of facilities) such as snack-cakes, cookies, chips, pop bottling plants, cattle-feeders, fried chicken plants, etc... I could call it the "Refrigerator index"... Then you all would know that I had lost my mind!)

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-04-12T01:50:00.000-07:00

The US Industrial economy took a break last week (if pipeline scheduling is correct) while consumer spending turned up.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for the first time in eight weeks, slipping slightly to 115.0 (from the prior weeks 115.1), In its dailies the week appeared close to seasonal trends of the Easter/Spring Break holiday.

The paperboard-based Consumption Index conversely turned up (for the first time in five weeks), rising to 127.1 (from the previous weeks 125.7), In its dailies the week was soft early, firmed briefly midweek, then softened late.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its seemingly never-ending descent.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-04-05T02:25:00.000-07:00

The US Industrial economy again pushed ahead last week (if pipeline scheduling is correct) while consumer spending eased slightly.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) scored its seventh rise in as many weeks, gaining to 115.1 (from the prior weeks 114.4), and achieved its fourth record high in a row. In its dailies the week followed seasonal trends showing firmness early before settling down into the start of the easter holiday.

For the fourth week in a row the paperboard-based Consumption Index again bucked the trend and dropped to 125.7 (from the previous weeks 126.2), In its dailies the week was soft and choppy.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to slow its decline.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. The ongoing drop-off in the consumption index remains the largest concern, and could stunt the forward-momentum of the recovery should it not soon reverse (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer).

Also remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-03-29T03:34:00.001-07:00

The US Industrial economy continued to forge ahead last week (if pipeline scheduling is correct) while consumer spending eased slightly in the wake of last Sundays landmark health-care congressional agreement.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) extended its recent push for the sixth week in a row, rising to 114.4 (from the prior weeks 113.7), and achieved its third record high in as many weeks. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started firm over the weekend, softened ever so slightly on the congressional deal for a couple days, then restrengthened dramatically late-week (in line with pre-Easter seasonals).

For the fourth week in a row the paperboard-based Consumption Index again bucked the trend and dropped to 126.2 (from the previous weeks 128.4), In its dailies the seek started soft over the weekend, firmed modestly for a couple days on the congressional deal, then softened at the close of the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to fall, although at a slower pace than in recent weeks.

It seemed there was very little impact within the gas-flows to last Sundays announced health-care deal, with the overriding multi-week trends of rising production continuing to close the gap to slowly declining consumption. Perhaps Sundays announcement was expected. Perhaps it was not believed. Or perhaps it was ignored.

My own long-term view of the health-care bill is that it will (if it survives procedural and legal challenges) eventually prove to be a cash-flow transfer away from the consumer (health-insurance payer) to the investor/producer (doctors, lawyers, drug companies, etc) that will have to be accommodated somehow by either the Federal Reserve or further government stimulus... to prevent consumer-dollars from being diverted into health care (to cover 31+- million new US citizens) from elsewhere in the economy.

Chief of concerns continues to be the ongoing slow drop-off in the consumption index dailies, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index (which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation).

-Robry825

Sunday Night Economic Assessment

2010-03-22T02:16:00.000-07:00

The US Industrial economy advanced again last week (if pipeline scheduling is correct) and consumer spending eased ahead of congressional passage Sunday of a landmark (and highly controversial) Democratic health-care bill.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) forged ahead for the fifth week in a row, rising to 113.7 from the prior weeks 113.0, and scored its second record high in as many weeks. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was stronger throughout vs the prior week.

For the third week in a row, the paperboard-based Consumption Index went the other way and dropped to 128.4 from the previous weeks 134.8. In its dailies the week was extremely soft, continuing to 24 days the pronounced midweek easing of four weeks ago.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to fall for the gazillianth week in a row.

Interesting enough, the dailies of the Consumption Index approached the dailies of the Production Index last week, suggesting at a neutralized economy that (at least for the time being) is at risk of stalling. The recent drop-off in the consumption index dailies is a big concern, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

As of tonight, we appear to have a health-care bill that will be making the news and echoing back and forth in the minds of both consumers and producers Monday. That bill is portrayed as pro-consumer by Democrats and anti-consumer by Republicans.

My own long-term view of the health-care bill is that it will (if it survives procedural challenges in congress and legal challenges in the courts) eventually prove to be a cash-flow transfer away from the consumer (health-insurance payer) to the investor/producer (doctors, lawyers, drug companies, etc) that will have to be accommodated somehow by either the Federal Reserve or further government stimulus... to prevent consumer-dollars from being diverted into health care (to cover 31+- million new US citizens) from elsewhere in the economy.

In the short-term however, the emotional-aspects of the health-care bill should outweigh its practical aspects (given this emotion-driven economy and emotional-driven markets). If consumers see it the Democrats way (pro-consumer) it might just give a quick boost to consumer confidence (and consumer spending). Of course if consumers see it the Republican way than the economy will be at risk, given the very recent softening implied by the gas-flows in consumer spending.

It will be real interesting to watch the gas-flows this week to see which way it actually goes.

-Robry825

Sunday Night Economic Assessment

2010-03-15T02:08:00.000-07:00

The US Industrial economy again gained ground last week (if pipeline scheduling is correct), while already-robust consumer spending continued to slowly ease.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) pushed ahead for the fourth week in a row, rising to 113.0 (from the prior weeks 112.4), taking out its Feb-1st high (112.5). In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was softer throughout from the prior week.

The paperboard-based Consumption Index went the other way, dropping to 134.8 from the previous weeks 137.9 (second down-week in a row). In its dailies the week was very soft, continuing to 17 days the pronounced midweek easing of three weeks ago.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued its never-ending chant of down-down-down.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economy. The sudden drop-off in the consumption index dailies is a big concern, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-03-08T03:48:00.000-08:00

The US Industrial economy advanced last week (if pipeline scheduling is correct), while robust consumer spending eased.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the third week in a row, rising to 112.4 from the prior weeks 111.7, and nearing its Feb-1st high (112.5). In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was firm throughout.

Conversely, the paperboard-based Consumption Index broke its string of four gains in a row, dropping to 137.9 from the previous weeks 140.7. In its dailies the week was very soft, continuing to 10 days the pronounced midweek easing of two weeks ago.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again declined.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economy. The sudden drop-off in the consumption index dailies is a big concern, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-03-01T00:23:00.000-08:00

The US Industrial economy pushed ahead last week (if pipeline scheduling is correct), while already-robust consumer spending inched higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for the second week in a row, rising to 111.7 from the prior weeks 111.3. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started somewhat firm and strengthened through Friday.

The paperboard-based Consumption Index also gained (for its fourth week-in-a-row), rising to 140.7 from the previous weeks 140.4. In its dailies the week was volatile, starting strong but falling off sharply midweek.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued it's decline.

Overall, maintained firmness in consumer spending, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure... all continue to underpin the economy, though flows still exhibit a stagnant-look which is worrisome. The continuing lag in the Production vs Consumption Index continues to hint to a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-02-22T02:20:00.000-08:00

The US Industrial economy strengthened last week (if pipeline scheduling is correct), consumer spending surged higher, and gas-flows surprised late-week and exhibited a very pronounced positive reaction to the Federal Reserves announced discount rate hike.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke a string of two down weeks in a row, rising to 111.3 from the prior weeks 110.8. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started somewhat firm, softened mid week, then firmed on Friday.

The paperboard-based Consumption Index also rose (for its third week-in-a-row), rising to 140.4 from the previous weeks 132.5. In its dailies the week started soft early, firmed somewhat midweek, then took off on Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued it's never-ending story of down, down, down.

Overall, maintained firmness in consumer spending, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure... all continue to underpin the economy, though flows still exhibit a stagnant-look which is worrisome. The continuing lag in the Production vs Consumption Index continues to hint to a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

A big surprise was the Federal Reserves Thursday-night discount rate hike. With unemployment hovering near 10% my own initial reaction was they had to be crazy, but in looking at the gas-flows I was wrong. It appeared as if the rate-hike challenged some of the economic bearishness, perhaps catching some off-guard on the notion that the Fed was doing a reversal and they were leaning the wrong way.

Now the gas-flows have long hinted (at least ever since I started studying their economic side) that recessions and recoveries are highly emotional beasts- rising and falling on heard-like behaviors of consumers, growing and receding on risk-appetites of industrial producers.

Question is (with unemployment near 10%) was the Fed's move a gambit on just that... a calculated, risky end-run around emotion? Or was the Fed simply being the Fed... starting the tightening process early on the perceived risks of over-expansion of money supply?

Another angle to the Fed's move is the gap between consumption and industrial production, and the void in the political leadership that seeks to represent and balance them. A lot of folks see the political climate in the US as outright hostile toward business and investment, and the gas flows strongly suggest that sector of society to be deeply entrenched and dug in against a liquidity-sapping onslaught... avoiding risk-taking activities such as new-hiring, expansion, etc. Could the Fed be looking at starting to counter imbalance by raising rates to redirect stimulus away from interest-payers (consumers) to interest-receivers (investors)?

Government would do well to address that void of political leadership. One good place to start would be the Presidents upcoming "Summit" on the dying health-care reform moves in congress (I know I keep harping on the health-care bill, but it has become the poster-child of political ineptness lately, and seeing friends and church-members in this wretched state of mine (Michigan) who are in miserable circumstances because `neither they nor their employers can afford $15,000 a year health insurance... it is high on my list).

I would love to see our President, in the midst of that health-care summit, take copies of those two house/senate bills, and rip them up in the presence of the congressional leadership! Tell them to start over, leave the power-brokers, lobbyists, and handlers out of negotiations... turn their backs on their mega-contributors, PAC's and special interests... turn their loyalties back to their voters... and produce a plan that is actually intelligent- containing the best ideas of both parties, and devoid of the self-seeking interests that have more-and-more come to dominate both parties.

Wouldn't it be nice to see a president who actually presides, for a change?

-Robry825

Sunday Night Economic Assessment

2010-02-15T00:12:00.001-08:00

The US Industrial economy dipped again last week (if pipeline scheduling is correct), while brisk consumer spending perked up a bit in the midst of a storm-tossed week (weather-wise).

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) edged lower vs the previous week (second down week-in-a-row), falling to 110.8 from the prior weeks 111.8. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was somewhat soft throughout.

On a sector-by-sector basis... Paperboard, LNG, Auto, and Metals (including the Copper & Steel subgroups) all started January strong... while refining, Minerals & Mining, and Lumber started a bit weak to December

The paperboard-based Consumption Index conversely rose for its second week-in-a-row, rising to 132.5 from the previous weeks 131.0. In its dailies the week was somewhat soft, though the index itself (in terms of its 28-day moving average) benefited slightly as a softer week dropped off the other end.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued it's seemingly never-ending decline, remaining well-below pre-recessionary levels.

The weather added to the general malaise of the week, as blizzard-conditions appeared to hamper some markets in the industrial northeast.

Overall, maintained firmness in consumer spending, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure... all continue to underpin the economy, though flows still exhibit a stagnant-look which is worrisome. The continuing lag in the Production vs Consumption Index continues to hint to a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

-Robry825

Sunday Night Economic Assessment

2010-02-08T03:23:00.000-08:00

The US Industrial economy meandered lower last week (if pipeline scheduling is correct), while brisk consumer spending slightly ticked up.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased off of the previous week, fading to 111.8 from the prior weeks all-time high of 112.3. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started off sharply but eased as the week progressed.

On a sector-by-sector basis... Paperboard, LNG, Auto, and Metals (including the Copper & Steel subgroups) all started January strong... while refining, Minerals & Mining, and Lumber started a bit weak to December

The paperboard-based Consumption Index broke a string of four soft weeks (as a nervous US public coped with a decline in equities), rising to 131.0 from the previous weeks 129.5. In its dailies the week was somewhat stronger early then moderated a bit.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued it's "ever-lower" habits, remaining well-below pre-recessionary levels.

Overall (at least short-term), the gas-flows are starting to exhibit a slowing, stalling, meandering look... (no doubt reflecting at least in part the malaise in the markets, the malaise in government, and the malaise in employment), leaving one to wonder what comes next.

As recoveries (and recessions) feed upon themselves, a loss of momentum opens the door to unpredictability... where a single news story... a single political gaff... a single down-day in the markets... even a single meteorological event (such as a crippling snowstorm) can impact consumers in such a way as to get a ball rolling that will quickly become difficult to stop.

The danger is not so much on the Industrial/Business side of the economy (though businesses will and do react, compounding problems) but on the consumption side of the economy... where consumers (at a single bad news story) will cut back spending... "just in case".

In my own opinion... every recession starts out by "just in case".

Now in theory, I am convicted to the theory that if one person wants to provide and sell goods & services to a second person, and if that second person wants to buy those goods & services, then a transaction should occur. A government (for the good of all) should provide a benevolent economic climate that by its nature would accommodate that transaction. It should be the right of all citizens to conduct business and make transactions.

A central bank (such as the US federal reserve) should not be playing games with its money supply to either restrict liquidity to the point where people don't have the cash to buy (thereby killing the economy). And it shouldn't flood consumers with money to the point where it empties store shelves then degrades the value of money (thereby killing savings, retirement funds, college funds, etc). A central bank should act rationally, in the best interests of a nations economy, and not necessarily in the best interests of private banks and lenders (which might selfishly prefer that money be tight so that consumers are encouraged to borrow and not have the liquidity to repay).

The same call for rationality goes to government. It should neither tax away the means to purchase goods (killing consumption), nor tax away the means to produce goods (killing production). It should neither favor consumption at the expense of production, nor favor production at the expense of consumption. It rather should lean towards a vibrant economy in the best interests of both consumer and producer.

I have a problem! I am a stock trader. I neither make products that consumers can use, nor do I sell services by which consumers can benefit. If not careful, I could (like a leach) suck out profits from trades through cleverness... and consume that to which I do not contribute.

I do not trade futures for that reason... futures are a two-sided contract where for every winner, there is an equal but opposite looser. That looser would most likely be either commercial buy-side (passing the loss on to "grandma" when she gets her monthly utility bill), or commercial sell-side (taking money away from next years drilling budget... leading to slightly lower supply... leading to slightly higher prices for "grandma" when she gets her monthly utility bill).

Rather, I try to limit my trading to more medium-term equities that would encourage (in the long-haul) more equity to companies which would (hopefully) in a modest sense encourage just a bit more energy production into the economy.

I also try to "give back" through these posts which I very much hope will be at least an encouragement (if not help) to others who invest more into the economy than I (both financially and through expertise).

Having said that (with my own weaknesses in mind) there are other occupations (besides trading) which have the potential to drain from (not add to) the collective productivity of a nation.

On to health care. As a kid, I can remember my father taking me to a doctor in a very modest, small office... no receptionist... no nurse... no records manager... no fancy lobby... and paying for EVERYTHING with a $5 dollar bill. With my kids today... can't get in the door for less that $200.

Our last insurance payment (Michigan Blue Cross)... $1,205.84... For one month! For my family, we can afford this. But for many, it is not going to happen. Either they do not have the insurance, they will have to drop it, their employers will have to drop it, or the government will have to "socialistically" force money into the economy to pay for it. And Blue Cross tells us its going up another 30% shortly!

As mentioned before, I believe that if one person (or hundreds of thousands of health professionals) wants to provide and sell goods & services to a second person (or hundreds of millions of citizens), and if that second person (or hundreds of millions of citizens) wants to buy those goods & services, then all those transactions should occur. A government (for the good of all) should provide a benevolent economic climate that by its nature would accommodate all those transactions. It should be the right of all citizens to conduct business and make such transactions.

Now a problem might be that too many hands (outside of health care) are getting their hands into the pot, driving up costs. Insurance salesmen, trail lawyers, defense-attorneys, loss-prevention specialists, and the like certainly neither add to health care nor reduce its costs. Their costs, their facilities costs, court costs, along with lottery-sized awards, extra spending done to fight off those awards (extra tests, fancier offices and lobbies to "look" more competent, fancier records management to "look" less incompetent, and more-extravagant buildings to "look" more professional) might all add much more costs to the pot. Perhaps Democrats need to give on tort-reform to encourage Republicans to give on insurance-reform.

But beside that point, People need health care. If their kid gets sick they will take their kid to the doctor. They will mortgage their house if they have to. They will sell their car if they have to. They will cut back and cut back if they have to, and kill the economy in the process. Somewhere the government is going to have to accommodate for (or bring into control) all of this in some form. If they don't, the markets (and the economy) will, and it will be brutal.

-Robry825