where the promised hitch in the economy's getalong is supposed to occur this year?
The market hit another high today. Oil prices look like they could crack down through $50 at any time (the OPEC liars club doesn't want to talk about further production cuts). According to the BLS, employment is up, unemployment is steady (or down), real wages are up, inflation is within the target range. Tax receipts continue to surpass projections (cutting the deficit). The only negative to flat spot in the economy is permit applications for new homes and that's been "priced in" for eighteen months now.
I'm betting that the Democrat press organs are going to start printing very positive stories beginning about April 1 - attributing all the "good news" to the "changes in Congressional leadership", of course. The slow fade in "bad news" stories began the week after the election and reporting has been relatively neutral since mid-December. So very predictable.
8 comments:
That would suggest a dramatic rise in productivity.
Rick,
Your idea sounds like a good piece in the American Thinker. It might be nice to have something somewhat more elaborated "on the record" now. Then, when the time comes, YARGB can point to the piece again.
Also, are the Saudis interested in getting the price of oil lower in the near term in order to screw with Iran? (via reader at Instapundit) If they drag Hugo down too, it would be a nice two-fer.
Barry,
Buddy probably has a better grip on the probabilities surrounding the Saudi game. I know they cut a deal with China promising to make good any shortfall due to Iran getting hit with sanctions. I've read that the ayatollahs are worse than the Russians in oil field maintenance and necessary investment for production improvement. The current Iranian budget is running a 20% deficit (about $12B annual) and the cut from $60 per barrel to $50 would cost them about $9B per year.
The problem is that the Saduis are running a 38% deficit (about $54B annual) and the same cut would cost them about $35B per year. The Saudis are noted throat cutters, just not when it's their own throats.
The Persian/Arab War has more angles than a tetrahedron and I can't figure this one at all. Except that the Saudis are ready and willing to pick up some slack if sanctions are imposed on Iran.
Rick,
Any idea whether OPEC members are cheating on their quotas? More than usual, that is?
Morgan,
I don't have a clue as to how to determine that. OPEC has always been a liars club where cheating has no consequence. I suppose some evidence might show up in charter pricing - if you knock three sailings a day out of a fixed fleet it should show up in rates but I don't know where to find that particular info.
I always felt that there was a lot of specualtion driving the oil market. It could be that folks are realizing that there have been no actual shortages anywhere in spite of war and an increase in demand and so they are easing off the panic.
As for the economy, who knows? I don't know what people expect to tell you the truth.
I hear that most people are not happy with the way the Republicans are handling the economy and I wonder what that means. Do they mean gas prices? Health care costs? Do people really believe that if the Democrats win we will see people making $25 an hour to do factory work?
What is interesting is that if people are asked how they personally are doing, most are optimistic. When asked how things are in general they say they suck..now what does that tell us?
Do people really believe that if the Democrats win we will see people making $25 an hour to do factory work?
Yes, as well as a low inflation rate too. Only wages will be inflated and those costs will not pass on to anyone that we know.
Thanks, Skook. I agree concerning "too many variables". I think the Liars Club is pretty careful about not accusing each other of what they all do.
It occured to me this morning that the interest rate inversion is probably the most important single factor generating concern - it has been a reasonably reliable indicator of recession in the past. I usually don't buy into "this time it's different" arguments, so I won't make one.
I wonder what the explanation will be if it stays inverted for another year and no recession occurs?
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