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ShelladyOptions
Senior Contributor

OptionEye Macro Outlook Sept 29th

Good morning.

 

I want ot hear again how 'great' the US economy is doing. If it was so great, how come after 7 years of 0% interest rates we can't stoke any inflation? How come after expanding the US balance sheet by $4.5T and QE1, QE2 and QE3 we can only muster roughly 2.20% growth? Simply put, the answer is that the economic engine is broken. Period.

 

Overnight US equity futures have rebounded after yesterday's big sell off. This morning the S & P future is up 10.00 and the Dow future is up 66.

 

Oil is a little higher by .51 cents to $44.94. Gold still can't really catch a bid and sits at $1126.86 down $5.11.

 

The 10 year yield is at 2.09% reflecting yesterday's warranted worries.

 

Overnight grains were quiet with corn and beans steady to slightly easier and wheat down 3. Nothing really surprising in yesterday afternoon's numbers.

 

The dollar is quiet as well and sits at 96.01 down  .02.

 

Things are eerily quiet.

 

Today we get S&P/Case Shiller home info and the Consumer Confidence Index.

 

 

 

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13 Replies
giolucas
Veteran Advisor

Re: OptionEye Macro Outlook Sept 29th

, "Even a STOPPED clock is right twice a day"

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jennys_mn
Veteran Advisor

Re: OptionEye Macro Outlook Sept 29th

It's always nice to wake up to another day of doom and gloom.

 

I think so many people are trying to relate today's economy to what it was before the housing crash.  Things were booming....yeah, well, that ended with a huge BOOM that we are all still paying for.  Maybe 2% growth is the new "Good".  It's time to stop comparing today with the lies that led us to where we are.

 

Things have improved dramatically from where they were.  Houses are suddenly in short supply again - I see building projects that were dead beating with new life - not just coming to life.  

 

Talking with contractors - they are busy, and have been for the last 2 years.

 

Many of us "Boomers" have stopped spending, that is true.  But, at least in my case, I don't need anything else.  Or want anything else for that matter.  We are making some improvements on our house exterior (because it  needed it), but other than that, we're not spending much.  Everything is so expensive.  There's no inflation, but it cost over $7.00 at Dairy Queen last night for a Peanut Buster Parfait and a medium Sundae.  People aren't willing to spend, when everything is so expensive.

 

And up here at Mall of America, they seem to think that clothing stores are where it's at.  You know, I have probably enough clothes to last me quite a while.  I did some shopping while in OKC when I was working - but now - I'm good for a long time.  We don't need a mall with 80% of the stores clothing.

 

We've had the Nissan Leaf for a couple of months now - still love the car.  We'll see how it does when it gets colder.  Nice to drive something that only costs a few cents per mile to drive.

 

Harvest here is going to make big progress this week.  I heard a farmer down by Mankato that was talking about the bean yields - one of his 120 acre fields when 76+ bushels per acre.  The previous best on that piece of land was 62.  I told you the crops here were going to be great - they were the best I had seen anywhere.  Looking at the unharvested bean fields here, you can see the huge crop out there.

 

It has been a beautiful summer here.  Our garden produced more than it ever has.  Our freezers are full, so I don't know where I'll put the bread and milk for this years "winter crazed zombies" attack Smiley Wink

 

Anyway, just some thoughts this morning.  Be safe out there....

 

Jen

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docharing
Veteran Contributor

Re: OptionEye Macro Outlook Sept 29th

Jen,

You are too comfortable looking out your back window. Things in the eastern cornbelt are not as good. Crops are average to below, housing developments are still dead in their tracks. Land prices are falling, many no sales at auction. Lots of land trying to sell without buyers. The only good spot is new cars are selling. The national fleet is 13 yrs old and needs replaced. I think we can attain decent growth in our economy with the right leadership. Whoever takes charge in the 2016 may give us the answer one way or another.

 

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lsc76cat
Senior Advisor

Re: OptionEye Macro Outlook Sept 29th

Anybody that believes there is no inflation is living in la-la land. 

Believing government numbers can be hazardous to intelligence sometimes.

They certainly haven't gone to the parts counter!!

 

Saw a number of combines in the field around here (SCMN) yesterday trying to make a go of it.

Leaving quite a few ruts in the fields.  Things don't dry out as fast this time of the year.

Could see several fields where they tried and gave up.

Plenty of folks hoping for a freeze to kill the weeds.  Good growing year for them too.

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BA Deere
Honored Advisor

Re: OptionEye Macro Outlook Sept 29th

To the fed, the only inflation that they are concerned about is "wage inflation", and there isn`t much of that.  Jobs done cheaper overseas are moved the..."The Earth is Flat" ya know.   The QE printed money found it`s way into the stock market, on pure economics the Dow should be 1,130 this morning, not coincidentally the price of one ounce of gold...anything higher the Dow is overpriced.

 

You look at the sawtooth action of the Dow, there is no doubt that the fed plunge protection team is going all out to protect a 16,000 Dow...if it gets a little over that and it gets light headed and dizzy reality sets in, falling below 16K then the plunge protection team comes in with their $4 Trillion balance sheet or JP Morgan or fairy dust and runs it up.  I`m afraid without them filling the seepage with QE money, the whole dike would break and 16K Dow is the line of scrimmage.

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illinifarmer
Advisor

Re: OptionEye Macro Outlook Sept 29th

Just following the grains lower lower every year glad everyone else is starting to feel it
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hardnox
Advisor

Re: OptionEye Macro Outlook Sept 29th

http://bpp.mit.edu/

 

I'd venture that the BPP is a lot more robust than CPI and it aso indicates very little inflationary pressure.

 

I wouldn't confuse monopolistic pricing behavior (fert, genetics, machinery) with inflation. Or in the case of the odd commodity that remains high by historical standards like beef, I wouldn't go all ZeroHedge and start jumping up and down about inflation either. Just a single market with its own story which is, btw, ending, apparently.

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sw363535
Honored Advisor

Re: OptionEye Macro Outlook Sept 29th

I Understand nox, but I don't see much pricing behavior other than "monopolistic pricing behavior".  After 40 years of mergers and acquisitions nearly every segment of the economy is in a near monopoly position and we all hate the "villian corporations".........  We are in a sad state...

 

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k-289
Senior Advisor

Re: OptionEye Macro Outlook Sept 29th

SW  - Consolidation of what ever kind of business puts out a totally different set of action or paramiters - example of the R R industry or equipment retail offerings and those being a great example of take it or leave it the past 7 years although the tide might be changing ---  I have even heard mention the experssion it was the RR fault the grain prices are in retreat from my beltway rep.---As for  sad state deals a 15% approval rating for Congress doesn't seem to enter in to the beltway conversation---