The dollar is still in a downtrend, oil is still high and the Federal Reserve is looking like they are behind the curve. Housing is still a huge problem, corporate earnings are not good, and confidence is low
Here are some charts to demonstrate those points:
The dollar has been dropping for almost two years. With the Fed loosening monetary policy I wouldn't expect this trend to change.
Oil's been rising for about three years. The Fed mentioned the effect of high oil prices in their statement yesterday.
Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.
While I didn't mentioned food prices, they've been rising as well.
That's three years of price increases.
Do I really need to go into housing? OK -- how about home prices?
'Nuff said.
Corporate profits are dropping
Here are some confidence charts.
The above is a chart of CFO confidence.
There is no silver lining in any of these data points; they are each negative in their own right. Combined they paint a very disturbing picture.
2 comments:
bonddad,
I'm curious about the chart of corporate profits and year over year change.
While the year over year change is certainly trending downward, the amount of profits seems to have soared since Q1, 2002.
To what is that attributed to? And, secondly, if profits dropped 50 percent (from 1359 billion to say 700 billion, that would still be considerably higher than profit during the late 90's bull run. Therefore, the question is how did profits skyrocket so fast from 2002 to 2007 and how would a drop to late 90's levels affect the economy?
The U.S. deficit in global goods and services trade in October grew 1.2 percent from the previous month to $57.82 billion, up for the first time in five months, the Commerce Department said Wednesday.
The politically sensitive deficit in goods and services trade with China grew 9.1 percent to a record-high $25.93 billion and that with Japan was up sharply by 28.6 percent to $7.96 billion, the department said in a preliminary report.
Not a good sign either.
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