June Publication Schedule

The Lehmann Letter (SM) Here’s the publication schedule for some of June 2010’s most important economic indicators, together with some thoughts to accompany the data. Go to http://www.beyourowneconomist.com/ and click on Seminars, then click on Economic Indicators to navigate the sites that provide the data and click on Charts for a visual presentation that you can update. • Everyone knows that housing led us into the recent recession. But what will lead us out? Home sales and construction have only just begun to recover. Recent reports of large jumps in activity failed to disclose that we remain far below pre–recession Continue reading

No Meltdown

The Lehmann Letter (SM) The stock market rose sharply today, providing hope that we will avoid a repeat of 2008’s financial meltdown. No meltdown: No recession. Let’s hope that we are putting fear to rest. Here’s how the fear works. Greece defaults on its bonds. Western European banks have Greek bonds in their portfolios. Greece’s default casts suspicion upon Portuguese, Irish, Italian and Spanish bonds. A flight from sovereign (the government) debt ensues and Portuguese, Irish, Italian and Spanish bonds’ values collapse. This leads to a general collapse in the value of government bonds around the globe. Some bonds suffer Continue reading

Mid-Month Review

The Lehmann Letter (SM) Three leading indicators illustrate the difficulty of this recovery. If you go to the Bureau of Economic Analysis website at http://www.bea.gov/national/index.htm#gdp and scroll down to “Underlying Detail Tables” and then look at “Motor vehicles,” you will find an Excel table. Click on tab number six to see new-vehicle sales. You will notice that new-vehicle sales have been fluctuating in a narrow range around 11 million at a seasonally-adjusted rate for the first four months of this year. Now take a look at the chart below to put these numbers in historical perspective. New-Vehicle Sales (Click on Continue reading

Europe Revisited

The Lehmann Letter (SM) The stock market rebounded sharply today in response to the European rescue package. The European Union pledged $750 billion to defend the euro against the prospects of sovereign-debt default. The stronger economies of Europe will bail out the weaker. The weaker nations, in turn, will have to reduce the likelihood of default by enhancing their tax revenues and reducing expenditures. We will see if this is enough to alleviate concern. And once again there is the impression of “muddling through.” But, seen in historical context, there is another point of view. World War I and World Continue reading


The Lehmann Letter (SM) Today’s employment report was terrific: http://stats.bls.gov/news.release/empsit.nr0.htm Nonfarm payroll employment grew by 290,000 with gains across almost all sectors of the economy. The unemployment rate rose to 9.9% from 9.7% as more people reentered the labor force. (The rate will rise if the labor force grows faster than employment.) The stock market may be down, but news of strong job growth is a great way to end the week. © 2010 Michael B. Lehmann


The Lehmann Letter (SM) The stock market fell sharply today, and most commentators attributed the drop to events in Europe. Pessimists fear that Greece’s debt problems are an omen of what will befall Europe as Portugal, Spain and perhaps other nations threaten default on their debts. Sovereign debt defaults would imperil the banks that hold those debts and might plunge the world economy into another financial crisis and recession. But it’s difficult to believe that the European Union will let that happen. While it is true that Germany has expressed reluctance to bail out Greece, not coming to Greece’s rescue Continue reading