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Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

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Friday, October 12, 2012

Do you want to come up to my room, bouncy bouncy?

Earlier this year I talked about "payback" -- about how unseasonably warm conditions in the US in the first few months of the year brought forward spending and investment, which had to be "paid for" with slower growth in the second and third quarters.  Growth duly slowed, but then the question became whether the slowdown was the prelude to yet another dip.

It seems now that growth has re accelerated in the US:


  • The ISM data showed a rebound in September;
  • The unemployment rate declined sharply.  And no, that wasn't because Obama was manipulating the figures;
  • Payrolls re-accelerated, and even more significant, the two previous months' data were revised up;
  • Housing data continue to strengthen (starts, prices, sales) and the 30 year mortgage rate continues to slide.
  • Now (yesterday's release), initial unemployment insurance claims have fallen sharply and unexpectedly.  Could be dodgy seasonal adjustment (it's notoriously difficult to seasonally adjust weekly data); it could be just random wobbles.  We'll see next week.  There'll be a rebound, surely.  The key will be how much.

[chart courtesy Econoday]



1 comment:

  1. Initial claims rebounded this week -- that sharp fall and rise was because claims usually rise in California in the *first* week of the new quarter but rose instead in the *second* week.

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