A Look Back; Data; QE: Best of Kass
May 26, 2013 | 02:02 PM EDT
Parsing the Data
Originally published on Friday, May 24 at 9:42 a.m. EDT. Let's parse through today's economic data. Today's data confirm a moderately growing domestic economy and don't change my view that there is a widening disconnect between current and guidance for corporate sales and profits, current and prospective real GDP and the stock market. As highlighted in Wednesday's opener, the Citigroup Surprise Economic Index and other measures (e.g., the Chicago Fed National Economic Activity Index) have been signaling slowing growth, while the S&P 500 has risen by nearly 100 points in the last two months.
Headline March durable goods were +3.3% compared to expectations of +1.5% and a large drop in the prior month (-5.9%). This series is a volatile one, dependent on commercial aircraft orders. If we take out transportation orders, the number was +1.3% (consensus was +0.5%) and vs. a decline of -1.7% in March. April nondefense orders, which closely follows capital spending, was +1.2%% compared to expectations of +0.5% and +0.9% in March (revised from a +0.2% gain). A good number, the best in three months, and the year-over-year change is +4.6%. Another metric, however, core capital goods shipments, which takes out defense and aircraft, was weaker, down by -1.5% compared to expectations of only a -0.5% decline and a +0.5% increase in March. This signals that the first-quarter soft patch in capital spending has continued into the current quarter.
Quantitative Easing Widens the Wealth Gap
Originally published on Wednesday, May 22 at 11:25 a.m. EDT. QE is failing at having the trickle-down impact to the middle class in America, and the savings class is getting robbed. The congresswoman now talking with Bernanke is talking my book. The schism between haves and have-nots widens with every QE.
Policy is failing at having the trickle-down impact to the middle class in America. Moreover, the savings class is getting robbed. Or as famous Wall Street trader Joe Gruss once told me: "The rich get richer, and the poor go to prison."
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