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Is GDP “Rigged”?

Fri, 28 Oct 2016 14:23:54 +0000
Donald L. Luskin
Friday, October 28, 2016
“Advance” estimates ahead of presidential elections tend to be evised sharply lower.
Strategic view: 

Q3 GDP growth at 2.9% beat expectations. “Advance” estimates like this morning’s, immediately preceding a presidential election, have been subject to revision five times greater than average, and all the revisions have been downward. These downward revisions to “advance” estimates have been greater in Democratic administrations than in Republican administrations. If growth reported this morning were revised down by the average during Democratic administrations, it would be only 0.7%.


US GDP - 2016-10-27

Fri, 28 Oct 2016 12:41:46 +0000

Friday, October 28, 2016

Let’s Talk About Something Other than the Election

Thu, 27 Oct 2016 14:25:18 +0000 L. LuskinThursday, October 27, 2016Sure. How about: if the election doesn’t cause a recession, will there still be one in 2017? Strategic view: We’re hearing recession-fears in client conversations. The election could induce turbulence, but abstracting from that, the data we most respect are pointing in a very constructive direction. We had a near-recession in Q4-15 and Q1-16. It leaves an inventory overhang behind, but still serves as a mid-cycle refresh. Too-low oil prices caused that near-recession, but oil has bottomed and will move higher. Forward EPS and sales have broken to new all-time highs. Bond yields and long-term inflation expectations are sharply higher from their post-Brexit lows, but only back to the low levels where they started, and we see no reason for them to move much higher. A December Fed rate hike will be a mistake, but with credit conditions having eased considerably, it shouldn’t trigger a recession. We don’t understand the recent quarter’s USD strength, but given the Fed’s gradualism and oil’s rally, we don’t expect it to strengthen further. Market(s): US MacroUS StocksUS BondsFederal ReserveOilFXAsia Macro Section: TrendMacro[...]

Favorite Things - 2016-10-26

Thu, 27 Oct 2016 12:35:19 +0000

Thursday, October 27, 2016

Compilation of most recent - 2016-10-27

Tue, 25 Oct 2016 15:47:56 +0000

Friday, October 28, 2016

Federal Reserve - 2016-10-25

Tue, 25 Oct 2016 14:13:27 +0000

Elections Have Consequences

Thu, 20 Oct 2016 13:57:29 +0000
Donald L. Luskin
Thursday, October 20, 2016
Maybe not “rigged,” but brutal and corrupt. It will erode confidence and create instability.
Strategic view: 

The last debate is over. While Trump could still pull a Brexit-like upset, it looks like Clinton will win. Clinton’s policies are all growth-negative, and her attempts to carry them out will be in a poisoned atmosphere of thwarted hunger for change, resentment after a brutal election and downright corruption – all of which will erode economic confidence. The GOP will very likely hold the House, and possibly the Senate too, which will brake the worst of the policy mistakes. But the House will likely be radicalized, leading to debt ceiling crises and government shutdowns. We’re not pulling any triggers until we see the election outcome, but we are very cautious here.

Is Deutsche Bank the next Lehman moment?

Thu, 20 Oct 2016 03:06:39 +0000

"Whatever happens with Deutsche Bank, this is not — I repeat, not — a Lehman moment," says Don Luskin, chief investment officer at investment firm TrendMacro. "We are not looking at globally interconnected fragility like we were in 2008. And if anything goes wrong at all, after the 2008 experience, the central banks of the world know precisely what to do to put the fire out."

"When push comes to shove, Merkel will bail out Deutsche Bank," says Luskin of TrendMacro.

Sunday, October 2, 2016
USA Today

Euro Area Recovery Monitor - 2016-10-19

Thu, 20 Oct 2016 01:15:48 +0000

Thursday, October 20, 2016

US Unconventional CPI - 2016-10-17

Tue, 18 Oct 2016 16:05:02 +0000

Tuesday, October 18, 2016