Mosler Economics

Bad: Highlights Mortgage rates began to move down in December but it wasn’t soon enough to help the month’s resales. Existing home sales fell a sharper-than-expected 6.4 percent to a 4.990 million annualized rate that is the lowest in more than three years and barely makes Econoday’s consensus range. Weakness across the board is a fair description of the results with single-family sales down 5.5 percent to a 4.450 million rate and condo sales down 12.9 percent to 540,000....

Trade issues taking their toll: This too has gone flat: Nice mentions for Stephanie and a also bit for me here, as MMT is now on a roll: https://ftalphaville.ft.com/2019/01/16/1547640616000/America-has-never-worried-about-financing-its-priorities/

December 2018 CBO Monthly Budget Review: Total Receipts Up by 1% And Spending Up 9% in the First Quarter of Fiscal Year 2019 The federal budget deficit was $317 billion for the first quarter of fiscal year 2019, CBO estimates, $92 billion more than the deficit recorded during the same period last year. Revenues were about the same and outlays were $93 billion (9 percent) higher than during the first quarter of 2018. Asian airfreight traffic drops for first time in 2.5...

Agent Orange, the self proclaimed tariff man, taking the EU: US decelerating: I would have expected Chile to be affected most by global warming… It’s becoming more clear to me that lending shifted from banks to other investment entities via the leveraged loan process, and the growth in that credit channel is what supported GDP growth as other channels faded. Most recently, however, leveraged loan growth has faded, and the weakening economic indicators tell me this time...

Corporate Profit Crunch Looms as Stocks Slide (WSJ) In December, analysts cut their earnings forecasts for 2019 on more than half the companies in the S&P 500, according to FactSet, the first time that had happened in two years. They expect earnings for S&P 500 companies to grow 7.8% in 2019, down from their forecast of 10.1% at the end of September, according to FactSet. That is a big climb down from the estimated 22% earnings growth rate in 2018. The last earnings...

Not good: California Home Sales Slowest For An October In Seven Years (Econintersect) California home sales fell year over year for the third consecutive month, hitting a seven-year low for an October, as affordability constraints and a more cautious stance by many would-be buyers continued to weigh on the market. Interesting. Wonder if Agent Orange knows about this? US grants nearly 1,000 exemptions from China tariffs (Nikkei) The Trump administration has granted nearly...

Bad: Highlights Existing home sales have been leveling but the signal from pending home sales points to a new downturn. The pending home sales index for November fell 0.7 percent to 101.4 which is under Econoday’s consensus range and compared to expectations for a 1.5 percent gain. Year-on-year this index is down 7.7 percent vs a 7.0 percent decline in final sales of existing homes. Pending sales in November posted low single-digit contraction in both the South and Midwest...

Rail Week Ending 15 December 2018: Economically Intuitive Sectors Continue In Contraction Written by Steven Hansen Week 50 of 2018 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors were in contraction this week. Weak: Highlights A swing higher for the always volatile aircraft group gave an outsized lift to durable goods orders in November, rising...

So for every agent that spent less than its income, another must have spent more than its income, or the output would not have been sold. It’s an ex poste identity for any currency. That means that as bank lending decelerated, assuming ‘savings desires’ are generally constant, either some other means of borrowing to spend was accelerating, or else GDP would not havebeen growing. Leveraged loans may be part of how the economy has been supported the last few years? As...

Up some but the chart not looking so good: Highlights Mostly goods news finally greets the housing sector as both starts and permits are showing an uplift in November results that top Econoday’s consensus range. Starts jumped to a 1.256 million annualized rate for a 4-month high with permits at a 1.328 million rate and an 8-month high. But not all the news is good. Strength in both starts and permits is concentrated in multi-family units, not single-family units where...