Economics Update

I think that we have some promising news here, though, eternal bear that I am, believe it to be a pause rather than the start of a turn around.

That being said, first time jobless claims fell, as did the less noisy 4 week moving average (see pic), which makes 4 weeks for the 4 week moving average, though continuing claims rose 56K to 6.351 million, indicating that this might more that businesses are running out of people to lay off than people are being rehired.

That being said, the fact that the April retail sales numbers beat expectations is just generally good news.

I'm not sure, however, how they managed to beat expectations, what with consumer credit dropping a record $11.1 billion in March, which indicates that the consumer is retrenching.

My guess is that this is an artifact of tax refunds.

In Europe, we have the Bank of England holding rates steady and the ECB cutting rates by 250 basis points (¼%), and both have expanded their programs of "quantitative easing" (printing money).

These actions were not particularly aggressive, which meant that the dollar Euro, because they are simply less likely to debase the currency as much as Uncle Ben (Bernanke).

The concerns about the US money supply are also finding their way into the US Treasuries market, with interest rates on the latest bond sales exceeding expectations, because investors are worried about monetarily driven inflation.

Still, reading the tea leaves on real estate, things are not going well, with delinquencies on dues to homeowners associations, which tend to foreshadow mortgage defaults, growing rapidly from 2.8% last June to 5.3% today.

Additionally, you have condo and apartment sales in Manhattan declining precipitously, with sales falling 48% year over year. (!)

The fact that mortgage rates are trending higher is not a help here.

In the world outside of real estate, the transportation based indicators are not showing any sign of recovery either, with Suez Canal April revenues falling 22.7% YoY.

Still, oil traders are betting on increased demand for oil, which translates into increased economic activity, and so crude rose today.