Economic Commentary - July 30, 2006 - John Serrapere

[FRED]

Economic Commentary - July 30, 2006 - John Serrapere

by John R. Serrapere

(Past results may not be indicative of future results.)

Profit margins, on balance, showed the least improvement in three years. Respondents to the NABE Industry Survey who said their firms’ profits rose in the second quarter outnumbered those who reported falling profit margins by only 9 percentage points. In contrast, the NRI was 27 two quarters ago and 17 in the April survey. The NRI turned negative (more firms reporting decreasing than increasing profits) in the goods-producing and finance sectors but improved modestly from the first to the second quarter for the services and TUC sectors.

This graph from the NABE Industry Survey released July 14, 2006:

http://www.itulip.com/images/NABEsurveyJuly2006.png


The last time the goods producing sectors were NRI negative was in 1982. The S&P’s reported earnings will follow. Here is more evidence that it is the time for defense.

This report was originally written to internally advise private funds for a qualified investor. The posting of this report for public viewing is intended to demonstrate applied research without an intent of business solicitation.

John Serrapere - Investment Analyst & Strategist - Foster Holdings, Inc.
Mr. Serrapere has been advising investors since 1986. He currently is the Investment Analyst & Portfolio Strategist for Foster Holdings, Inc., a large Pittsburgh, PA based family office. His firm also consults other investors seeking alternative investment options. Mr. Serrapere was formerly a principal of Rydex Leveraged Hedges, LLC in Rockville, MD where he designed registered and non-registered products.

Mr. Serrapere has published in The Journal of Indexes (http://www.journalofindexes.com/), Global Financial Data (http://www.globalfinancialdata.com/), Corporate Finance Review (Warren Gorham & Lamont, NY, NY), The Retirement Planning Journal (Commerce Clearing House, Chicago, IL) and has presented for Information Management Network (NY, NY).

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[MLM]

A quick check of the NABE's web site says they've been in existence since 1959. Where does industry survey data going back to 1900 come from, or am I misinterpretting something?

[bart]

A quick check of the NABE's web site says they've been in existence since 1959. Where does industry survey data going back to 1900 come from, or am I misinterpretting something?

My $.02 worth - the data probably comes from someplace like NBER ( http://www.nber.org/ ). They have data series that go back as far as the 1700s.

[MLM]

With all due respect, I'll bet they don't have industry survey data split between goods producing and finance sectors going back to the 1700's. John, are you out there? What's the story on the data behind the graph?

[bart]

With all due respect, I'll bet they don't have industry survey data split between goods producing and finance sectors going back to the 1700's. John, are you out there? What's the story on the data behind the graph?

With all due respect to you too - of course the NBER doesn't have that kind of data going back into the 1700s. That graph only goes back about 100 years and it was just a $.02 worth anyhow. :rolleyes:

If you or anyone else has never explored the free NBER site, it does have some unusual and useful data series and is quite handy for longer term data than what is available from the Fed's FRED and other places.