Thursday, July 29, 2010

Initial unemployment claims were roughly inline and the four week moving average dipped a bit, but if you take a step back to see the forest for the trees you realize that job losses remain at a very elevated level and are not signalling any meaningful improvement in the job market at this time. However, Hal9000 only cares that this number was slightly better than expectations so the markets are UP, UP and AWAY (however, they seem to be pulling back a bit at the moment).

There was a fairly interesting consumer survey that was published today that seems to point to June as a turning point for the consumer.

"One of three respondents in a recent survey said they would spend less on consumer goods over the next 90 days than they said they would in June. The drop was 6 percentage points to 32%. Those who said they planned to spend more in the next 90 days declined to 30% to 38%, an especially sharp fall-off in such a short time.

Vacation, consumer electronics, restaurants, and durable goods will all be effected, a sign of how broad-based the pullback is. Plans to shop Best Buy in the next 90 days dropped to a 17-month low. Intentions to shop Amazon.com (NASDAQ: AMZN) also fell sharply."

These surveys can be flawed but the degree of the pullback is worth noting. If these trends gain steam into the Fall it could make things very challenging for incumbents: Do we authorize another stimulus to prop up the economy and risk voter backlash at spending money we don't have OR do we let the economy waffle back and forth on life support and hope that voters recognize our new tight fisted budgeting?

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I don't want to open up a can of worms with the Climate Change Denier crowd but consider this stat from NASA.

"2010 is on course to be the planet’s hottest year since records started in 1880. The current top 10, in descending order, are: 2005, 2007, 2009, 1998, 2002, 2003, 2006, 2004, 2001 and 2008."

The key point there is that we are talking about GLOBAL temperatures. We are often caught up in US weather patterns but places like India, Australia, Russia, China have been stuck in major heatwaves for the better part of the past decade. I think you can debate the causes of this change in temperature - man made or natural phenomena - but you can't deny the data that shows the past 10 years have been the hottest on the planet in the past 130 (I'm the first to admit 130 years is a ridiculously short time period when we're talking about historical temperatures, but it's all we have to work with).

However, given the inability of anyone to predict the temperature at my house with any degree of accuracy maybe we should take all of this data with a grain of salt (yesterday's OPPRESSIVE heat that was supposed to reach almost 90? Yeah, I never hit 79 degrees on my properly shaded thermometer).

But remember, it snowed twice in NYC last year so clearly the planet is not warming :)

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Great. Here's another reason that I'll never be able to move the family to Costa Rica. FLYING MANTA'S....



Apparently the photographer caught them breaking the surface and soon they were jumping out of the water up to 9 feet in the air!


Cheers!

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