The Running Economist

Economic Indicators and Market Forcast

2009-10-20T16:11:00.000-07:00

Ben Bernanke, the Chairman of the Fed, spoke at the Federal Reserve Bank of San Francisco’s Conference on Asia and the Global Financial Crisis yesterday, bringing up some valid points on the recovery in Asia, as well as the linkages with the US. Although a large portion of his speech was dedicated to showing how the Asian markets were affected by the Global Financial Crisis, the more important portion was where he explained how many Asian nations were able to have such a rapid recovery. He put a great deal of emphasis on their solid macroeconomic foundations, as well as their rapid response, as one of the main reasons for their recovery. Most of the nations took a huge hit in the late 90's, during the Asian Financial Crisis, and learned from that time. They started running larger Current Account Surpluses and holding more foreign exchange reserves, essentially protecting them from major crises despite their increasing dependence on exports.

Of course, the problem with their method for dealing with is not quite built to last. The US current account deficit shrank from 5% of GDP in 2008 to 3% of GDP in 2009. Western Citizens are saving more, due to decreases in wealth and the credit crunch, which means that global merchandise exports are going down. With aggregate spending in the West decreasing, the Asian markets will have to seek a way to be less dependent on an export driven economy.

Today also signaled the release of some economic indicators from the Bureau of Labor Statistics and some other fine fellows within the government. PPI decreased for the 7th time this year, which wasn't wholly unexpected as the decrease in prices to energy and food are starting to effect other areas of the economy. Housing starts and permits also decreased slightly, which shows that there is still a bit of a glut in the housing market, as it has been hovering between 575k and 590k pretty consistently for the past 8 months.

Beyond these two statistics are two heavily interrelated stats: Initial Claims and Continuing Claims. Initial Claims represents new unemployed individuals gaining access to unemployment programs. Continuing Claims represents the number of individuals still claiming benefits. Initial Claims unexpectedly jumped in September and was 11k over the previous; that's bad. BUT Continuing Claims dropped by 42k and was 40k under the forecast amount; that's good. Although some people are still losing their jobs, jobs are being created. It's still pretty negative out there, but that's a small sign of hope. September is usually the beginning of hiring season for stores; high school and college kids are busy and the holidays are coming up. You could probably attribute the decline in continuing claims to just this, but I'd have to say it looks like the start of something more.

Taking all this into account and looking at the way the market performed today (S&P down .62%), I'd have to be rather bullish on the market for the next few weeks. Although their have been several positive earnings reports the past week or so (caterpillar comes to mind simply from today) I'm not sure that the typical Autumnal upswing has started yet. Until next time folks.

Laziness in Posting

2009-10-18T22:13:00.000-07:00

Obviously, I have been either unconscious, incapacitated, or dead the past three months. I started off on a fairly good run, and then just forgot about this blog altogether. Perhaps now is a good time to start up again. First off, my goals for this blog:
1. Continue to form my own personal economic beliefs through commentary, research, and analysis.
2. Expand that commentary and analysis to include and focus on the markets. This will develop into more of a "well the market should do this" and "Company X will go down" sort of blog.

Starting this week I will post once a week what my general conclusions about the market are, what the upcoming data to be released by the government and/or private entities shows us, and what stocks I think are a good pick. We'll keep a running tally on the stock picks for the year, using a mock portfolio on www.bloomberg.com to keep track of the gains and losses. So, check in every Tuesday for a general market report and outlook and every Thursday for general stock picks!

Recent College Grads: Grad School or Work Force?

2009-07-16T20:40:00.000-07:00

Well, I'm already moving outside of the realm that I dedicated this blog to. Oh well, this is actually something moderately pressing. According to ABC news, only 19.7% of graduates who applied for jobs actually had one by the time commencement rolled around. Wow. Simply wow. Now, I know all about this. I just graduated. It's rough, I can't get a job. No one can. In fact, I can only think of one person I know that has a REAL job and not just a summer internship. So what on earth do we do?

Good question. I don't know how many times I've been rejected simply because I don't have quite enough experience. I get the "close but no cigar" rejection quite a bit these days. Now, I've had internships. I have a decent GPA. I'm no John Adams, but I'm a decent applicant for most jobs. What tends to set me apart? Well, it is probably my connections inside the companies, but I'd love to think I write fairly impressive cover letters. Who knows. I'm simply an economics major with no job.

Here is that ABC article I mentioned. Actually quite interesting to look at how the economy is actually effecting my generation, simply over the past two years. I'm really starting to get mad at myself for not graduating a year early.

The Barefoot Runner: An Anomaly or the Future?

2009-07-15T18:41:00.000-07:00

Barefoot running is a tentative issue within the running community. Supporters of barefoot running often cite specific studies, claiming that running shoes actually create more injuries than they prevent. However, the running shoe industry is a billion dollar industry, and after seeing Nike produce the free, what is the RIGHT belief?

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Mental Preparation: A bigger deal than most think

2009-07-15T17:38:00.001-07:00

Michael Johnson, the world record holder for the 400m, once said that every night he would do nothing but visualize himself in the final portion of his races. Quite simply stated, the mental aspect of preparation is a heavily neglected area these days in coaching. Most coaches completely neglect it, never quite building up that aspect of their athletes. Those coaches that do touch upon it, such as Terrence Mahon, Coach Vigil, and Alberto Salazar, are among the most successful in the industry.

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2009-07-15T17:29:00.001-07:00