So at current prices Saudis aren’t making much progress towards their goal of higher sales:

First a move up on the inventory thing, followed by a move down on the inventory thing.

And looks to me like there’s a lot more downside coming from that inventory thing, etc.:

Pretty lame bounce so far from an index that zig zags so much:

Nice headline, but charts looking like it’s just a ‘volatility’ in a down trend:

Durable Goods Orders

Highlights
The factory sector bounced back strongly in January, indicated first by last week’s industrial production report and now by durable goods orders which are up a very strong 4.9 percent. Aircraft did add to the gain but when excluding transportation equipment, durable orders still rose 1.8 percent. And core capital goods orders, which had been weakening, bounced back strongly with a 3.9 percent gain.

Machinery posted big gains in the month especially for new orders as did computers and fabricated metals. Motor vehicles showed strength in both orders and shipments.

Total shipments jumped 1.9 percent in the month, though shipments of core capital goods, held down by prior weakness in orders, fell 0.4 percent to open the first quarter on a down note. But a positive in the report is a 0.1 percent dip in inventories which, together with the rise in shipments, pulls down the inventory-to-shipments ratio to a leaner 1.64 from 1.67. And unfilled orders, after contracting sharply in December, inched 0.1 percent ahead in January.

This report is healthy but January’s strength may prove to be a one-hit wonder for a sector that is getting hurt by weak exports and perhaps by slowing domestic demand. Early indications on February’s factory conditions have been uniformly disappointing including Monday’s manufacturing PMI and Tuesday’s report from the Richmond Fed.

First, they aren’t even back to 2008 levels yet.

Second, the latest move up doesn’t even reverse the last move down.

Third, still looks to be trending down to me:

Again, absolute levels of orders for consumer goods remain depressed, even with the lower oil prices:

Not good:


Bad and worse than expected:

Kansas City Fed Manufacturing Index

Mortgage Growth Has Stalled And Homeowners Are To Blame

By John Carney

Feb 23 (WSJ) — Why isn’t mortgage debt growing? Lots of people would like to blame the banks for holding lending standards too tight. The banks often blame the regulators–for making them hold standards too tight. But it turns out that it may just be the fault of homeowners. They’re just paying down their mortgages far more than in the past. The latest report on household debt from the New York Fed shows that mortgage debt–the largest category of household debt– has been more or less flat since 2012. This is all the more surprising because home prices have been recovering at a brisk pace in recent years.

So it seems IMF (and Fed) forecasting hasn’t been so good…

The article above refers to Whiting Petroleum Corp whose shares are below $4 after exceeding $90 in the summer of 2014. The market cheered the firm’s decision to preserve capital rather than pump at a loss. Shares jumped 7% after hours.

Another worse than expected and details deteriorating as well:

Richmond Fed Manufacturing Index

A bit better than expected but not the price data, and as the chart shows it’s not going anywhere:

Existing Home Sales

Highlights
Existing home sales, up 0.4 percent in January to a 5.47 million annualized rate, held on to the bulk of December’s surge. Year-on-year sales growth is in the double digits, at 11.0 percent. In a sign of underlying household strength, the single-family component rose 1.0 percent to 4.86 million for a year-on-year 11.2 percent. Condos, which had been stronger of the two components, are now slowing, at 610,000 and down 4.7 percent for a year-on-year 8.9 percent.

Price data are soft which points to discounting. The median price fell 4.2 percent to $213,800 with the year-on-year rate at plus 8.2 percent. But supply, which has been very low and holding back sales, is coming into the market, up 3.4 percent in the month to 1.82 million. Supply relative to sales moved slightly higher, to 4.0 months which, however, is well below 4.5 months in January last year.

The housing market is sloping upward but not in bumpy away. Today’s report is moderate but constructive. Watch for new home sales on tomorrow’s calendar which are expected to fall back from prior strength.

Big drop here, which reflects consumer spending plans:

Consumer Confidence

So I’ve been told senior Tsy staffers have read my book. Hoping for the best!

US to push for greater fiscal spending at G20 -Treasury official

Feb 23 (Reuters) — The United States will call on G20 countries this week to use fiscal policy in order to boost global demand, a senior U.S. Treasury official said on Monday. “We will urge greater use of policy space, including fiscal space, to bolster global demand. That would lead to strengthened confidence and I would expect reduce volatility,” the Treasury official said in a preview call with reporters ahead of a G20 meeting later this week.

Two more signs a recession could be coming

By Jeff Cox

Feb 22 (CNBC) — The withholdings data show taxes taken out of worker paychecks and are considered by some economists to be a strong indicator of overall economic growth. Released daily by the Treasury Department, the count is a simple nonadjusted measure of how much wages are growing.

The latest numbers showed a 0.2 percent annualized decline over the past four weeks, compared to growth rates of 2 percent in December and 3 percent in January, according to market research firm TrimTabs.

The data show “the U.S. economy is already stalling out,” TrimTabs CEO David Santschi said.

Moving up:

This is volatile so best to go by the 3 mo moving average, as shown on the chart:

Chicago Fed National Activity Index

Highlights
Doubts over the outlook may be building but January was a solid month for the economy as the national activity index rose to plus 0.28 from a revised minus 0.34 in December. The gain lifts the 3-month average to minus 0.15 from minus 0.30. It was a jump in industrial production that led January’s charge, lifting the production component which contributed 0.27 to the headline after pulling it down by 0.38 in December. Gains in vehicle production were a highlight of the industrial production report which also got a boost from a weather-related swing higher for utility output. Employment also added to January’s headline but less so from December’s outstanding strength, to plus 0.12 from plus 0.16. Sales/orders/inventories were little changed at minus 0.03 with personal consumption & housing unchanged at minus 0.08. The readings in this report, though in general favorable, are mixed with the current month pointing to above-trend historical growth but not the 3-month average which points to below average growth.

So it reads like euro based portfolios have been shifting assets to other currencies etc. as previously discussed, even as their liabilities remain in euro:

Startups can be a meaningful source of ‘borrowing to spend’ which offsets ‘savings desires’ however most recently it’s going the wrong way:

Black Knight Financial Services’ First Look at January Mortgage Data: Delinquencies Up Sharply; Prepayment Rate Drops

– Delinquency rate up 6.6 percent in January; back above 5 percent nationally for the first time in 11 months

– Prepayment rate (historically a good indicator of refinance activity) dropped 29 percent to its lowest level since February 2014

– Foreclosure sales (completions) up nearly 16 percent following holiday moratoriums

– Active foreclosure inventory continues to decline; down 26 percent from last year

According to Black Knight’s First Look report for January, the percent of loans delinquent increased 6.6% in January compared to December, and declined 7.1% year-over-year.

Worse than expected again. And this is the one that’s be overstating things:

PMI Manufacturing Index Flash

It’s all going the wrong way now, with fewer proactively spending more than their incomes to ‘offset’ those desiring to spend less than their incomes. That is, as previously discussed, the private sector tends to be highly pro cyclical:

Online lenders see cash crunch

By Jon Marino

Feb 19 (CNBC) — A cash crunch is impeding the online lending industry’s growth as the cost of borrowing grows, funds become increasingly scarce and ratings agencies maintain a cautious outlook toward the space.

Next, start-ups that have grown into unicorns originating billions of dollars’ worth of loans may find themselves doing less lending or, conversely, putting more of their loans onto their own books.

The asset-backed securities market is slowing and issued a meager $40 billion in January — the lowest total since at least 2012, according to Dealogic data — and generated a paltry $10 billion in ABS loans in February. In terms of deal volume, ABS deals in 2016 have also dropped to lows the market has not seen for years.

States not doing so well?



This is only through July:

It’s not wrong to think of expenditures as the source of income, as this chart seem to indicate: