May Publication Schedule

The Lehmann Letter © Here’s the publication schedule for some of May 2009’s most important economic indicators. PUBLICATION SCHEDULE May 2009 Source (* below)…………Series Description…………Day & Date Quarterly Data BLS……………………Productivity………………………..Thu, 7th BEA…………………………GDP……………………………Fri, 29th Monthly Data ISM………………….Purchasing managers’ index……….Fri, 1st Fed……………………..Consumer credit….(Approximate).Thu, 7thBLS………………………….Employment………………… Fri, 8thCensus………………………Balance of trade………………Tue, 12thCensus………………………Retail trade…………………….Wed, 13thCensus………………………Inventories……………………..Wed, 13thBLS………………………….Producer prices……………….Thu, 14thFed…………………………..Industrial production………….Fri, 15thFed………………………….Capacity utilization…………….Fri, 15thBLS………………………….Consumer prices………………Fri, 15thCensus……………………..Housing starts………………….Tue, 19thConf Bd…………………….Leading indicators…………….Thu, 21st Conf Bd…………………….Consumer confidence…………Tue, 26th NAR…………………………Existing-home sales…….…….Wed, 27th Census……………………..New-home sales……………….Thu, 28thCensus…………………….Capital goods……………….…..Thu, 28th BEA……….….Personal Income & Consumption……….Mon, June 1 * BEA = Bureau of Economic Analysis of the U.S. Department of Commerce* BLS = Bureau of Labor Statistics Continue reading

No Cramdowns

The Lehmann Letter © Today, by a 45 – 51 vote, the U.S. Senate refused to enact legislation permitting bankruptcy judges to reduce mortgage debtors’ outstanding loan balances. This is a defeat for President Obama, who had counted on judicial authority to motivate mortgage lenders to modify mortgage contracts. The thinking: If judges have the authority to cram down loan balances, lenders are more likely to modify mortgages in the borrower’s favor. Outcome: Fewer foreclosures and a quicker end to the mortgage crisis. Naturally the banking industry lobbied hard against the legislation. The banks, no doubt, viewed it as confiscatory. Continue reading

Rebound Vs. Trough

The Lehmann Letter © Rebound Vs. Trough Today the National Association of Realtors announced that March existing-home sales fell slightly to 4.57 million: http://www.realtor.org/rmodaily.nsf/pages/News2009042301 . The big picture helps interpret this number, and the chart below serves as illustration. Existing-Home Sales (Click on chart to enlarge) (Recessions shaded) It appears that home sales have plateaued at slightly under 5 million, where they’ve fluctuated over the past several months. Homes sales may not fall further, but there is no evidence (yet) of rebound. The same is true for other recently-released economic data. Descent may have ceased, but that is not to Continue reading

What Good Is Economics?

The Lehmann Letter © The April 27 issue of BusinessWeek carries a story with the provocative title, What Good Are Economists Anyway? http://www.businessweek.com/magazine/content/09_17/b4128026997269.htm?chan=top+news_top+news+index+-+temp_dialogue+with+readers It’s written in BusinessWeek’s folksy style and, perhaps, should have had the title: What Good Is Economics Anyway? But there it is, nonetheless, a devastating critique of the profession’s inability to deal with current events. Worse yet, it is also a devastating critique of the profession’s inability to put current events in a meaningful historical context. Because of that economists don’t even have the right tools to make their analysis, let alone the ability to conduct the Continue reading

Housing Starts

The Lehmann Letter ® The Census Bureau published March housing starts figures today: http://www.census.gov/const/newresconst.pdf . The data were worse than February and a little better than January. Here’s what’s happening: Single-family starts are stuck at about 350,000 and apartment-house construction wobbles at around 150,000, adding up to a miserable half-million total. Look at the chart and you’ll see that’s lower than any other post-WWII recession. Can housing escape this rut? Housing Starts (Click on chart to enlarge) (Recessions shaded) It’s hard to see how until the foreclosure-crisis abates. As long as foreclosures continue to overwhelm the industry, prices will continue Continue reading

The Foreclosure Crisis

The Lehmann Letter © Today’s Wall Street Journal carried a grim story by Ruth Simon: http://online.wsj.com/article/SB123975395670518941.html#mod=todays_us_page_one . “Banks Ramp Up Foreclosures “Some of the nation’s largest mortgage companies are stepping up foreclosures on delinquent homeowners. That will likely lead to more Americans losing their homes just as the Obama administration’s housing-rescue plan gets into gear….. “Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put Continue reading

Will The Ball Bounce?

The Lehmann Letter © Today President Obama, Fed Chairman Bernanke and Christina Romer, Chair of the President’s Council of Economic Advisors, all expressed hope that the economy may be bottoming out. A few days ago Laurence Summers, Chair of the President’s National Economic Council, said that the economy no longer looked like a ball that had rolled off the edge of the table. The Big Question: Will the ball land with a thud, like a baseball, or bounce like a tennis ball? There has been some good news and the stock market has perked up, but a number of important Continue reading

Consumer Credit & The Fed’s Forecast

The Lehmann Letter © The Federal Reserve released two sobering items this week. On April 7 the Fed reported (http://www.federalreserve.gov/releases/g19/Current/) that consumer credit fell at an $88.8 billion annual rate in February. Household’s consumer debt has barely budged since mid 2008. The chart shows that consumer credit had been growing at about $100 billion annually for the past 15 years. Now, you can see, it’s dipped sharply downward. Households are repaying their debts rather than initiating new borrowing. When consumers feel good, they borrow and spend. When they don’t, they don’t. And that’s bad for the economy. We need all Continue reading

Have We Hit Bottom?

The Lehmann Letter © The March employment numbers were terrible: 663,000 jobs lost and the unemployment rate up to 8.5%. In addition, the workweek and overtime continue to contract. We will be very fortunate if the unemployment rate remains below 10%. But other economic indicators tantalized us this week. For instance: The Purchasing Managers’ Index rose to 36.3 in March from 35.8 in February, and both those numbers were better than December’s 32.9. Yet we should keep in mind that any number below 50 signals contraction. So the slight improvement indicates that manufacturing is shrinking at a steady pace rather Continue reading