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weekly wrap

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statistics, observations and thinly veiled references to politicians and unabashed 1st amendment protected opinions.

weekly wrap by adrian muller

the fed can’t track its own books.  dow jones reported that the federal reserve issued a correction on the balance sheet it reported thursday 8-18(?!).

a revised version of the fed's weekly balance sheet report (aka - h.4.1), was posted on the fed's public website.

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the central bank said:

1. its original report understated the average value of u.s. government securities held in custody on behalf of foreign official
accounts during the past week,

2. its original report understated the average amount of u.s. treasury
securities and federal agency securities held in custody for that week.

is this worrisome?

signs of a double dip recession

* the european summit between france and germany was unsuccessful, if you factor in the ecu equity market reaction.   european stocks responded by getting crushed – again.
* jobless claims jumped by 9,000 to 408,000 in the most recent week. is there any reasonable expectation of improvement?  many fear employment will get worse before it gets better – and for good reasons.
philadelphia fed manufacturing crashed to minus-30.7 in august from +3.2 in july. it’s the worst shift going all the way back to the depths of the 2009 recession!
*existing home sales fell 3.5% in july versus expectations for a 2.7% rise. theoretically low interest rates aren’t helping.  sidelined lending capital is scared or unwilling to bite.

* consumer prices surged 0.5% last month – more than twice as much as economists forecast (wrong again…). this number implies the annual inflation rate at 3.6%, far above the 2%-or-less rate the federal reserve typically likes to see.  worse, bernanke has painted himself (and the economy) in a corner with the attempted “bernanke put” – announcing rate policy until 2013.  completely unprecedented…

another round of qe with these kinds of inflation readings gives no political cover for another stimulus / spending attempt. moreover, two regional fed bank presidents yesterday said explicitly that they don’t want to be seen as bailing out stock investors!

philadelphia fed president charles plosser said the fed’s recent pledge to keep rates low through 2013 was “inappropriate policy at an inappropriate time.” dallas fed president richard fisher added “my long-standing belief is that the federal reserve should never enact such asymmetric policies to protect stock market traders and investors.” he went on to decry the perception that the fed has thrown a “bernanke put” to the market.

with all that said…  good luck in the markets.  we hope volatility will be your friend.  call or email with your comments.

adrian muller

p.s.  next week we’ll do a special meeting on the debt.  it will be scary and oddly hilarious at the same time.  please let me know if you want to attend or receive access to a link afterwards.

Read 10139 times Last modified on Thursday, 01 August 2013 10:58

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  • adrian muller has conducted seminars for the chicago board of trade, including a key series in 1999 which cautioned about a top in the equity markets (see his article “top experts and statistics on the dow”). adrian muller has appeared on cable tv financial programs with analysis on the futures markets and equity market directional forecasts. he has been quoted in barron's, the wall street journal, and futures magazine.

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