Well it's been a week since the last update and little has changed. The 10 year T-Bill is at a new low today (1.53%) and it seems the economy isn’t doing all that well. For every good piece of information, there’s one or two not so good. Locally, mortgage rates are down, house sales locally are doing very well, we just need inventory and we’re supposed to have temperatures below 90 this weekend. So it's mostly good around here.
In economic news, the ISM manufacturing index came out Tuesday with very weak numbers. The index went negative (contracting) for the first time since April 2009. The consensus range was 51.0-53.4. Instead we came in at 49.7. The economic weakness in Europe and China is starting to be reflected in our exports.
Jobless claims came in below the consensus range of 375-395,000 at 374,000. That’s the first positive on the jobless numbers in a while, BUT (and there always seems to be a but) last week's already dismal report was revised to the worse, again. The markets had little response to the improved claims number, signally that they are somewhat skeptical of its accuracy. If next week is positive, it will be time to take some notice.
On the job creation front, today’s report showed that the economy generated 80,000 new jobs. That a modestly positive number, not what the administration was hoping for I’m sure. It’s hard to really measure it against consensus numbers. The consensus was 90,000 BUT (there’s that but again) the consensus range was 35,000 – 167,000. I mean REALLY?! That group of experts really stuck their heads out on that one. I’m not sure when we’ve ever seen as low as 35,000 or as high as 167,000.
All this leaves unemployment at 8.2% - at least according to the government. Unofficial estimates are that we are more likely around 12.4%.
A month or so back, we talked about Chase and their 2 or 3 billion dollar mistake through lack of supervision. Then we updated that, saying Chase reported it might get a little bigger. Well Chase’s quarterly update is saying it might get even “a little” bigger……it's now estimated at $9 BILLION DOLLARS. That’s 3 times the original upper end of the estimate! And bankers are supposed to be good with numbers? That’s a LITTLE BIGGER? Do you have any money with Chase…?
Have a great weekend.
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