In the first article in this series we looked at a basic technique for identifying outliers – extreme data points – in a time series. The tool of choice: slicing the numbers into quartiles and using the interquartile range (IQR) to define “normal.” It’s a useful starting point, but it may not always suffice. Fortunately, there are alternative methodologies that can be run for additional perspective. For comparison, let’s focus on one and review how outlier risk stacks up using Z-scores.

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* St. Louis Fed President James Bullard predicts two rate hikes in 2022
* General Electric announces it will split into three companies
* American households are carrying record amounts of debt
* China’s producer-price inflation surged to a 26-year high in October
* Economic advisers to the German government cut growth forecast
* Fed Gov Brainard interviewed at White House as possible replacement for Powell
* 30-year US Treasury yield falls to 1.79%, lowest since July
* US small business sentiment fell in October, lowest since March
* US producer-price inflation held steady at 8.6% y-o-y, highest since 2010:

Anyone looking for a convincing signs that inflation’s peaking via tomorrow’s CPI report for October (Nov. 10) looks set to be disappointed.

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* China’s real estate ills may affect US financial system, Fed warns
* US inflation is expected to run higher before peaking, Goldman Sachs predicts
* Negative real interest rates prevail across developed economies
* Migrant crisis escalates on Poland/European Union border
* Surging heating costs threaten a winter run of inflation
* Global holdings of Chinese stocks and bonds rise despite regulatory crackdown
* Tesla’s bull run creates benchmark risk for fund managers who missed the rally
* Bitcoin and ether reach new peaks
* The Covid recession was strange — really strange
* 30-year Treasury yield near 4-month low ahead of tomorrow’s inflation report:

American shares topped rallies for nearly every slice of the major asset classes for the trading week through Friday, Nov. 5, based on a set of US-listed ETFs. The only loser last week: commodities.

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* $1 trillion infrastructure bill awaits Biden’s signature
* The rise of Big Tech shows no sign of slowing
* Tensions in Iraq increase after failed attempt to assassinate prime minister
* Are Pfizer and Merck’s anti-viral pills to treat Covid-19 game changers?
* China’s economic growth will continue to slow despite record trade surplus
* China’s tech crackdown drives SoftBank’s $3.5 billion quarterly loss
* US set to lift a nearly 20-month international travel ban
* UK’s trade deal with the EU at risk of collapse over Northern Ireland
* US payrolls rose more than expected in October–strongest gain in 3 months:

● The Drift: Stopping America’s Slide to Socialism
Kevin A. Hassett
Q&A with author via The Washington Post
Q: Let’s start with the premise of your book, that America’s on a path to socialism. I’d like you to just give us what you see as the evidence of that. From what I read, we still have what sure looks like the most dynamic capitalist economy in the world. Our growth has been above 6 percent recently. Interest rates are low. Investment seems to be picking up. That looks like a pretty resilient capitalist economy to me. But you’re obviously concerned. Explain why.
A: Yeah, that’s right. And you know, we certainly aren’t all the way there yet. But I think that the key observation is that, you know, Joseph Schumpeter back at the 20s, looked forward to America he was writing about it in the 70s or 80s, where he basically saw an America in the future that would be very prosperous but that would sow the seeds of its own–the destruction of its capitalist system. And if you look at–and I go to this quite a bit in the book–if you look at Schumpeter’s idea of what the world would look like, you know, it very, very much looks like the world of today…basically, what he said was, as we get richer and richer, that Americans are going to send their kids to colleges and universities much more, and colleges and universities are going to be hotbeds of socialism.

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The US economy downshifted sharply in the third quarter, based on last week’s initial estimate of gross domestic product (GDP). Is that a warning sign for Q4? No, at least not yet. The early estimates for Q4 suggest a rebound may be brewing.

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* House vote expected today on infrastructure bills
* Global food prices rise to 10-year high, UN says
* OPEC rejects US request for more oil output; sticks to modest production plan
* Will transition away from carbon-intensive energy derail economic recovery?
* US trade deficit reaches a new record in September, driven by slumping exports
* US productivity fell to a 40-year low in Q3–probably due to temporary factors
* US jobless claims continue to ease, falling to new pandemic low:

Total return expectations for the Global Market Index (GMI) continue to hold at 4%-plus, or roughly half the level of the index’s 10-year performance.

Today’s update of new total return forecasts for GMI through October show the benchmark’s ex ante performance ticked up to a 4.4% total return for the long term, slightly above the 4.3% estimate in last month’s outlook.

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