Results 1 to 15 of 15

Thread: FRED on FRED® Nov. 6, 2008

Threaded View

  1. #1
    Join Date
    Jun 2006
    Location
    US, Europe and Asia
    Posts
    4,585

    Default FRED on FRED® Nov. 6, 2008

    FRED on FRED® Nov. 6, 2008

    An occasional column where I drop a few charts on you derived from the latest data provided by my namesake FRED® with my take on what they mean.

    What year is it? 1983!

    At least that's the case if you are in the business of selling light trucks. The data out of the Fed today shows unit volumes not seen since Donna Summer sang "She Works Hard For The Money" three years into the recessions that followed Fed Funds rate hikes to 19% under the Paul Volcker Fed. The rate of change is stunning. (See The Myth of the Slow Crash: Just because it's big, doesn't mean it can't go down fast. In a debt deflation, the extreme rate of change even fools central bankers 8/29/07)


    What country are we in? Japan?

    Even though it's 1983 in light truck sales, it's not 1983 in Fed Funds ammo. The US is not struggling with a recession induced by a hawkish Fed but a recession on the way to depression after the Fed fired its last bullet and the Effective Fed Funds Rate at 0.23% plumbs the very bottom of the rate scale.


    What's next? Bankruptcies!

    As the recession deepens, companies go out of business left and right, defaulting on their bonds as they do. Fed flaccidity in the face of financial foundering is bound to show up in the corporate bond market as falling prices and rising yields as default risk rises.


    Sea level returns to normal

    At least the CD market has finally calmed down as government guarantees of liquidity calm the money markets.


    Stimulate this!

    Can the federal government bail everyone out? It can if it's willing to spend as many percent of GDP as after WWII. How big will New New Deal spending get? 5% of GDP? 10% or more?




    iTulip Select: The Investment Thesis for the Next Cycle™
    __________________________________________________

    To receive the iTulip Newsletter or iTulip Alerts, Join our FREE Email Mailing List

    Copyright © iTulip, Inc. 1998 - 2007 All Rights Reserved

    All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer
    Last edited by FRED; 11-06-08 at 04:36 PM.
    Ed.

Similar Threads

  1. Replies: 11
    Last Post: 11-23-06, 11:21 AM

Bookmarks

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Opinions expressed herein are those of the posters, not those of iTulip, Inc., its owners, or management. All material posted on this board becomes the intellectual property of the poster and iTulip, Inc., and may not be reposted in full on another website without the express written permission of iTulip, Inc. By exception, the original registered iTulip member who authored a post may repost his or her own material on other sites. Permission is hereby granted to repost brief excerpts of material from this forum on other websites provided that attribution and a link to the source is included with the reposted material.

Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. We reserve the right to make changes, including change in price, content, description, terms, etc. at any time without notice. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions. Read full legal disclaimer.

Journalists are not permitted to contact iTulip members through this forum's email and personal messaging services without written permission from iTulip, Inc. Requests for permission may be made via Contact Us.

Objectionable posts may be reported to the board administrators via Contact Us.

-->