Nearly 28% of all income received in the U.S. comes in one form or another from the U.S. government. As of April 2010, government wages combined with government transfer payments total 27.8% of total income in the US. Breaking it down further, government wages plus transfers equals nearly 67% of total private sector wages. These […]
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Food stamp usage has climbed to new highs in the U.S. with over 40mn subscribers–roughly 15% of the total population–as of this morning’s release for March. The rise in volumes coincided with an explosion in costs for the program to $5.4bn/month from $3.6bn/month at the start of 2009. Surging food stamp use or what is referred […]
A precipitous decline in money supply could be choking the U.S.’s economic recovery, while supporting deflationary fears. While the Fed no longer tracks M3, one of the broadest measures of the U.S. money supply, professional forecasters estimate the index has fallen 9.6% on an annualized basis from February through April; matching what was last seen […]
NOAA announced its 2010 Hurricane forecast today catching markets off-guard with an expectation of 8 to 14 Hurricanes during this year’s season–much higher than average. The forecast caused natural gas futures to close higher after falling earlier in the day due to inventory data. While the implication of this forecast can’t be ignored, NOAA has […]
Not since June 2008 has the housing sector been completely devoid of some form of tax incentive to help bolster sales, until now that is and it shows. MBA purchase applications have taken a precipitous drop over the past two weeks falling to levels not seen since the end of 1997. The government’s approach of […]
Rumors have been spreading across trading floors that the Fed may lower the penalty for using its dollar liquidity swap line to reduce stress in the interbank market. As I mentioned in a previous note, a 100bp ‘penalty’ over the overnight indexed swap (OIS) rate for the Fed’s dollar liquidity swap line is preventing the […]
After stabilizing from 5/20 to 5/24 AUDJPY’s decline has returned with a vengeance falling to 72.88 from 74.63 a day prior. The currency pairs stability over the last few days led some to believe the market could be approaching a bottom. Other notable risk indicators moving this morning include the TED spread, now up to […]
One year inflation expectations, as tracked by the breakeven rate for U.S. Treasury Inflated Protected Securities (TIPS), have fallen to almost 0%, while the more often quoted two year rate plummeted to 0.7% (see chart). While longer-term inflation expectations have diminished, albeit at a much smaller magnitude, the spread between 2Y and 5Y rates has […]
Global markets may be converging on a new ‘volatile’ norm as investors revalue risk, as governments begin the painful process of deleveraging to more sustainable debt levels. Thus far fears of sovereign defaults have remained contained to the usual suspects—fundamentally weak nations—leading investors to flock to the safe-havens of the U.S., Japan, and Germany. Risk […]
Political risk, typically a relative constant in trading, has investors running for the doors this morning as concerns grow around Germany’s real intentions behind its short-selling ban, along with what regulations might come next. Uncertainty is being compounded by the financial overhaul debate taking place currently in DC. One comment that especially caught traders’ attentions […]