Odds of winning the Mega Millions lottery is 1 in 176,000,000.
"So, what you're saying is I have a chance." ~ Dumb and Dumber
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Just kidding about the Greece thing.
Consumer spending in the U.S. rose in February by the most in seven months, showing the biggest part of the economy is strengthening.
Purchases climbed 0.8 percent, the largest gain since July, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.6 percent increase. Incomes advanced less than projected, sending the saving rate to a more than two-year low.
So, out growth in spending is greater than our growth in income.
Laissez les bon temps rouler!!!
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Street Address:
445 North Blvd, 7th Floor
Baton Rouge, LA 70802
Mailing Address:
P.O. Box 44154 Capitol Station
Baton Rouge, LA 70804-4154
Physical Location:
One City Plaza, 7th Floor
Corner of North Blvd & 4th Street
Exit 1B I-110 Convention Street,
Turn Left to get to North Blvd,
Turn Right on North Blvd
Okay, depending on how you count, or when you count, Jobless claims went down. Also, GDP is growing at a steady, if somewhat subdued, rate. Things ain’t bad!
The number of people on unemployment benefit rolls dropped to the lowest level since August 2008, while those getting extended benefits also decreased.
GDP was steady, while corporate profits climbed at the slowest pace in three years, making the market nervous over the prospect that business investment and hiring will cool.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
GDP QoQ Annualized | 4Q T | 3.0% | 3.0% | 3.0% | |
Personal Consumption | 4Q T | 2.1% | 2.1% | 2.1% | |
GDP Price Index | 4Q T | 0.9% | 0.9% | 0.9% | |
Core PCE QoQ | 4Q T | 1.3% | 1.3% | 1.3% | |
Initial Jobless Claims | MAR 24 | 350K | 359K | 348K | 364K |
Continuing Jobless Claims | MAR 17 | 3350K | 3340K | 3352K | 3381K |
JOBLESS CLAIMS
Wire: BLOOMBERG News (BN) Date: Mar 29 2012 7:46:03
Jobless Claims in U.S. Decline to Lowest Since April 2008 (1)
March 29 (Bloomberg) -- The number of Americans seeking
unemployment benefits dropped last week to the lowest level in
almost four years, adding to evidence of an improving U.S. labor
market.
Initial jobless claims fell 5,000 in the week ended March
24 to 359,000, the lowest since April 2008, the Labor Department
reported today in Washington. The median forecast of economists
in a Bloomberg News survey called for 350,000 claims. With the
report, the government data also contain revisions dating back
to 2007.
GDO
Wire: BLOOMBERG News (BN) Date: Mar 29 2012 7:50:33
Economy in U.S. Grew at 3% Annual Rate in Fourth Quarter (2)
March 29 (Bloomberg) -- The economy in the U.S. grew at a 3
percent annual rate in the last three months of 2011, the same
as previously estimated, while corporate profits climbed at the
slowest pace in three years, raising the risk that business
investment and hiring will cool.
The increase in gross domestic product was the biggest in
more than a year and followed a 1.8 percent gain in the prior
period, revised figures from the Commerce Department showed
today in Washington. Company earnings were up 0.9 percent from
the third quarter, the smallest advance since the last three
months of 2008.
While the report showed business spending on new equipment
and software climbed more the previously estimated, figures this
month indicate outlays are slowing following the expiration of a
government tax credit. Consumers may be poised to take a leading
role in the expansion as the biggest increase in employment
since 2006 gives households the confidence and means to spend.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Okay, any way you look at these numbers, no matter how you spin the numbers, they got better than the prior period’s numbers.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
MBA Mortgage Applications | MAR 23 | - | -2.70% | -7.40% | |
Durable Goods Orders | FEB | 3.0% | 2.2% | -4.0% | -3.6% |
Durables Ex Transportation | FEB | 1.7% | 1.6% | -3.2% | -3.0% |
Cap Goods Orders Nondef Ex Air | FEB | 1.5% | 1.2% | -4.5% | -3.7% |
Cap Goods Shipped Nondef Ex Air | FEB | 0.9% | 1.4% | -3.1% | -3.0% |
Orders for Durable Goods in U.S. Increased 2.2% spurred by demand for cars, computers and capital equipment.
Bookings for goods meant to last at least three years advanced 2.2 percent, less than projected, but a whole lot better than the revised 3.6 percent DECLINE the prior month.
Corporate equipment upgrades and consumer purchases of new cars are bolstering production, prompting factories to hire and keeping the industry a source of strength for the expansion.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
This morning Federal Reserve Chairman Ben Bernanke spoke to the National Association for Business Economics.
First an Economist joke: Three econometricians went out hunting, and came across a large deer. The first econometrician fired, but missed, by a meter to the left. The second econometrician fired, but also missed, by a meter to the right. The third econometrician didn't fire, but shouted in triumph, "We got it! We got it!"
Now here are the Highlights:
He’s encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress.
The decline in unemployment may reflect “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” Bernanke said.
Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses.
Bernanke said “A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed,” “Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force.”
Bernanke gave this warning, “We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” Adding that he was particularly concerned about the number people out of work for six months or longer. “While cyclical and structural forces have doubtless contributed to the increase in long-term unemployment, the continued weakness in aggregate demand is likely the predominant factor,” he said.
-------------------------
NATURAL RATE OF UNEMPLOYMENT
Newlan's Truism: An "acceptable" level of unemployment is that which is acceptable to the government economist that still has a job.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
“At a yield of 2.25%, the 10-year U.S. Treasury is a sure loser. Stocks are a safer choice.” ~ Burton Malkiel, The Wall Street Journal, Opinion Page, Page A15, Friday, March 23, 2012
Burton Malkiel is the Chemical Bank Chairman’s professor of economics at Princeton University, and is a two-time chairman of the economics department there. He served as a member of the Council of Economic Advisers (1975–1977), president of the American Finance Association (1978), and dean of the Yale School of Management (1981–1988). He also spent 28 years as a director of the Vanguard Group. Malkiel is most famous for his classic finance book A Random Walk Down Wall Street (now in its 10th edition, 2011). He is a leading proponent of the efficient market hypothesis, which contends that prices of publicly traded assets reflect all publicly available information, although he has also pointed out that some markets are evidently inefficient, exhibiting signs of non-random walk.
----------------------
"I own stocks. Why? Because I don't trust treasury bonds.” ~ Nassim Taleb, CNBC, Tuesday, March 13, 2012
Nassim Nicholas Taleb postulated the black swan theory refering only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers before their occurance, collectively play vastly larger roles than regular occurrences. Black swan events were introduced by Taleb in his 2004 book Fooled By Randomness, which concerned financial events.
----------------------
“Given current valuations, we think it’s time to say a ‘long good bye’ to bonds, and embrace the ’long good buy’ for equities as we expect them to embark on an upward trend over the next few years.” The prospects for returns in equities versus bonds “are as good as they have been in a generation.” ~ Peter Oppenheimer, Goldman Sachs, Wednesday, March 21, 2012.
Peter Oppenheimer is the Chief Global Equity Strategist for Goldman Sachs International in London.
----------------------
“Rates in the U.S. on bond yields peaked in 1981, and hit their low in September/October last year.” Chris Watling, CNBC, Tuesday, March 20, 2012.
Chris Watling it the Chief Executive of Longview Economics.
----------------------
Bond Market Moving Into “Bear Phase”. ~ Paul Donaovan, Bloomberg Television’s Asia Edge, Thursday, March 22, 2012.
Paul Donovan is the deputy head of global economics for UBS AG.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
The index of U.S. leading indicators rose in February by the most in 11 months, signaling the world’s largest economy will strengthen. Now THAT’s a good thing!
The Conference Board’s gauge of the outlook for the next three to six months increased 0.7 percent after a revised 0.2 percent gain in January that was less than initially reported,
the New York-based group said today. The median forecast of economists surveyed by Bloomberg News called for a 0.6 percent rise.
More hiring and a jobless rate that held at a three-year low last month may encourage Americans to boost their spending, which accounts for about 70 percent of the economy.
Strengthening demand may also drive production gains at factories, helping to sustain the expansion and allowing the U.S. to withstand higher oil costs.
Eight of the 10 indicators in the leading index contributed to the increase, led by fewer Americans filing first-time claims for unemployment benefits and by a surge in stock prices.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
Bloomberg Consumer Comfort | MAR 18 | - | -34.9 | -33.7 | |
Bloomberg Econ. Expectations | MAR | - | 1.0 | -7.0 | |
House Price Index (MoM) | JAN | 0.3% | 0.0% | 0.7% | 0.1% |
Leading Indicators | FEB | 0.6% | 0.7% | 0.4% | 0.2% |
So, taking into consideration the inexact nature of the initial release of Jobless numbers, the Jobless numbers continue a good trend. The numbers are continuing in a downward trend, continuing to improve, though gradually.
Initial Jobless Claims in the U.S. declined to lowest level in four years, reinforcing signs the U.S. labor market is picking up. Jobless claims decreased by 5,000 to 348,000 in the week
ended March 17, the fewest since February 2008, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 350,000. The number of people on unemployment benefit rolls and those getting extended payments also fell.
Dismissals have been waning and reports show companies are becoming more willing to expand workforces amid evidence sales are improving. Employment growth will help spur consumer spending, which accounts for about 70 percent of the economy.
The number of people continuing to receive jobless benefits fell by 9,000 in the week ended March 10 to 3.35 million. The continuing claims figure does not include the number of
Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 16,000 to 3.31 million in the week ended March 3.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, dropped to 2.6 percent, the lowest level since September 2008
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
Initial Jobless Claims | MAR17 | 350K | 348K | 351K | 353K |
Continuing Jobless Claims | MAR 10 | 3380K | 3352K | 3343K | 3361K |
And of course, as is the usual routine, they revised the prior periods Jobless numbers upward. Not exactly an exact survey.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
So, taking into consideration the inexact nature of the initial release of Jobless numbers, the Jobless numbers continue a good trend. The numbers are continuing in a downward trend, continuing to improve, though gradually.
Initial Jobless Claims in the U.S. declined to lowest level in four years, reinforcing signs the U.S. labor market is picking up. Jobless claims decreased by 5,000 to 348,000 in the week
ended March 17, the fewest since February 2008, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 350,000. The number of people on unemployment benefit rolls and those getting extended payments also fell.
Dismissals have been waning and reports show companies are becoming more willing to expand workforces amid evidence sales are improving. Employment growth will help spur consumer spending, which accounts for about 70 percent of the economy.
The number of people continuing to receive jobless benefits fell by 9,000 in the week ended March 10 to 3.35 million. The continuing claims figure does not include the number of
Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 16,000 to 3.31 million in the week ended March 3.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, dropped to 2.6 percent, the lowest level since September 2008
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
Initial Jobless Claims | MAR17 | 350K | 348K | 351K | 353K |
Continuing Jobless Claims | MAR 10 | 3380K | 3352K | 3343K | 3361K |
And of course, as is the usual routine, they revised the prior periods Jobless numbers upward. Not exactly an exact survey.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Bridgewater Associates is an investment management firm founded by Ray Dalio. The firm serves institutional clients including pension funds, endowments, foundations, foreign governments and central banks. It utilizes a global macro investing style based on economic trends, such as inflation, currency exchange rates, and U.S. gross domestic product, and many more. It’s quantitative approach is augmented by an ‘open dialogue’ (it ain’t a polite conversation) approach in its investment research meetings. The firm's history includes the pioneering of industry strategies such as: currency overlay, the separation of alpha and beta strategies, the creation of absolute return products, and risk parity. Its assets under management have increased by 25% each year during the last decade. The company’s Daily Observations research is reportedly read by leaders of central banks and managers of pension funds around the world. I sure as hell do.
Love them or hate them, Bridgewater is one of the foremost ‘hedge’ funds in the world. Depending on whose numbers you believe, they are the world’s largest. Their Daily Observations is a must read for anyone in asset management. You might not agree with everything they say, but I wouldn’t bet the house against them.
Their view of the economy and the timing of a change in interest rates by the Fed should be taken seriously.
------------------------------------
From Bridgewater Daily Observations on March 21, 2012:
The US economy is currently passing through the cyclical sweet spot where strong growth rates can persist without prompting tightening. The US economy is growing faster than capacity and continues to use up the excess capacity created by the financial crisis. Capacity in production has tightened more than capacity in the labor markets. This cyclical improvement has contributed to a normalization of core inflation rates and inflation expectations. As discussed previously, effective monetary policy during a deleveraging should be easy enough to allow nominal growth that gradually eases the deleveraging, but tight enough to prevent either an unacceptable rise in inflation or the reflation of the debt bubble. Cyclical conditions may now be on a path where tightening may be needed in about a year, which is significantly faster than currently discounted.
-----------------------------------
In other words, the economy is growing, its picking up momentum, and the Fed will probably have to begin raising rates in about a year.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Kiss, Buffett, and Black Keys to play free concerts in N.O. for Final Four
The lineup for a series of free shows in concert with the NCAA Men's Final Four events in New Orleans later this month reads like the headliner list for the New Orleans Jazz & Heritage Festival or Voodoo Experience. Free concerts by Kiss, Jimmy Buffett and the Black Keys will all take place in Woldenberg Park along the Mississippi River, The Times-Picayune reports. The concerts are part of a full slate of festivities throughout the college men's basketball championship weekend. Veteran rockers Kiss will kick off "The Big Dance Concert Series" on Friday, March 30. The band last performed in New Orleans during the 2009 Voodoo Experience. The Black Keys, performing on Saturday, March 31, are a natural choice: The NCAA is using the band's "Gold on the Ceiling" as the theme music for the March Madness television promotional campaign. Buffett, who has mostly limited his Louisiana performances to Jazz Fest in recent years, will close out the concert series with a set on Sunday, April 1. More details on show times and other logistics are expected to be announced soon.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
Ph: 225-342-0013
Fx: 225-342-9721
Email: jbroussard@treasusry.state.la.us
Street Address:
445 North Blvd, 7th Floor
Baton Rouge, LA 70802
Mailing Address:
P.O. Box 44154 Capitol Station
Baton Rouge, LA 70804-4154
Physical Location:
One City Plaza, 7th Floor
Corner of North Blvd & 4th Street
Exit 1B I-110 Convention Street,
Turn Left to get to North Blvd,
Turn Right on North Blvd
