US crude oil imports fall to 12-year low
Financial Times | Mar 1
US crude imports have fallen to their lowest level for a decade as a result of weak demand and growth in domestic production, making the economy more resilient to oil price rises. The US imported 8.91m barrels a day of crude oil last year, according to the US Energy Information Administration, the lowest amount since 1999.
Category Archives: Uncategorized
ISM Index: Manufacturing Activity Cools A Bit In February
The modest retreat in the ISM manufacturing index for February may be nothing more than monthly noise, although a fall in this benchmark certainly won’t help sentiment after this morning’s disappointing news for personal income and spending in January. The Institute for Supply Management’s factory index slipped to 52.4 last month, down from January’s 54.1 reading. That’s hardly fatal, but it’s definitely not helpful, particularly today. In any case, it’s something of a surprise: Economists were expecting a rise, according to Bloomberg.
Slowing Income & Spending Levels Cloud Economic Outlook
Consumer income and spending eked out gains last month, although the increases aren’t enough to dispel doubts about the strength and staying power of economic growth. But initial jobless claims are still holding at the lowest levels in four years and so there’s still hope that the cyclical demons can be held off. The critical variable remains the labor market, and the ability of job growth to keep wages growing, which in turn will help keep the pace of income and spending from falling further. The good news is that wage growth rolls on, and so the case for optimism is far from hopeless. But energy prices rising and fears of a fresh round of Middle East turmoil, there’s precious little room for disappointment in the economic reports in the weeks ahead.
Major Asset Classes | Feb 29, 2012 | Performance Update
February was a mixed bag of returns for the major asset classes, but that didn’t stop the Global Market Index (GMI) from rising again. Thanks to another strong month of gains in the global equity markets, the passive, unmanaged GMI, which holds all the major asset classes in market-value weights, posted a healthy 2.8% rise in February—it’s third monthly increase in a row.
The Beta Investment Report | US Equity Funds (Broad) | 2.29.12
The world is awash in ETF and mutual fund research, newsletters, and commentary from every conceivable angle. But the world needs one analytical effort in this corner, albeit with a specific focus. What’s been missing is a regular update of low-cost, index fund proxies of the major asset classes. For strategic-minded investors looking to build and manage multi-asset class portfolios, the choices are overwhelming. Yes, there are many, many possibilities for combing through the list. But for those of us who want a short list that cuts to the chase, the menu of options is limited for finding good choices fast. With that in mind, today I’m launching a semi-regular series of updates on the short list of products within a given asset class, beginning with broad-minded U.S. equity funds.
Strategic Briefing | 2.29.12 | Politics & Economic Stimulus
Stimulus Is Maligned, but Options Were Few
The New York Times | Feb 29
Britain — which has its own currency and enjoys low interest rates — offers perhaps the best parallel to the United States. In 2010 the coalition government of David Cameron came into office promising to undo the stimulus policies of its predecessor. It cut spending across the board, asking government departments to slash budgets by 25 to 40 percent. And it shot Britain’s incipient economic recovery in the foot. By the end of last year the British economy was still 4 percent smaller than it was before the recession started four years earlier. And it is expected to contract a little more this year. Even after budget cuts, the government’s debt is bigger, compared with the size of the economy, than when Mr. Cameron took office. By comparison, despite criticism of its size and composition by both the right and the left, the stimulus by the Obama administration did add to jobs and growth. The nonpartisan Congressional Budget Office estimates it will have contributed at least 1.6 million jobs and perhaps as many as 8.4 million by 2013.
Durable Goods Orders Dropped Sharply Last Month
New orders for durable goods tumbled in January, falling 4.0%, the U.S. Census Bureau reports. That’s the biggest monthly decline in three years and it’s sure to spark a new round of heated debate about what happens next for the economy. Nonetheless, it’s premature to use today’s numbers to argue that the economy’s destined for the skids. Indeed, the annual trend for new orders is still solidly in the black as is the year-over-year pace for business investment (non-defense capital goods ex-aircraft orders).
Four Regional Fed Banks Report Economic Growth In February
Early clues about February’s economic activity via several regional Federal Reserve banks suggest that growth prevails. Month to date, four regional banks have released manufacturing activity updates for February and in all four cases the numbers show improvement. That suggests that the rest of this week’s economic news on manufacturing will bring more statistical encouragement. Later today, the Richmond Fed will release its update of manufacturing activity and the January summary of durable goods orders for the U.S. arrives. Tomorrow we’ll learn the latest for the ISM-Chicago Business Barometer and on Thursday the ISM Manufacturing Index for February hits the streets, offering the first broad look at the U.S. activity for the month. Meantime, the four regional Fed surveys available at the moment suggest that February overall is shaping up to be another month for expansion. Here’s a brief look at each of the four regional Fed reports released so far based on the accompanying press releases:
In Search Of Smoking Guns
Lakshman Achuthan of the Economic Cycle Research Institute reaffirmed his recession forecast from last September, telling CNBC that “our call stands.” He emphasized that “when you look at the hard data that is used to officially date business cycle recessions, it has been getting worse, not better, despite what the consensus view of an improving economy has been.”
Book Bits For Saturday: 2.25.2012
● The Oil Curse: How Petroleum Wealth Shapes the Development of Nations
By Michael L. Ross
Summary via publisher, Princeton University Press
Countries that are rich in petroleum have less democracy, less economic stability, and more frequent civil wars than countries without oil. What explains this oil curse? And can it be fixed? In this groundbreaking analysis, Michael L. Ross looks at how developing nations are shaped by their mineral wealth–and how they can turn oil from a curse into a blessing. Ross traces the oil curse to the upheaval of the 1970s, when oil prices soared and governments across the developing world seized control of their countries’ oil industries. Before nationalization, the oil-rich countries looked much like the rest of the world; today, they are 50 percent more likely to be ruled by autocrats–and twice as likely to descend into civil war–than countries without oil. The Oil Curse shows why oil wealth typically creates less economic growth than it should; why it produces jobs for men but not women; and why it creates more problems in poor states than in rich ones. It also warns that the global thirst for petroleum is causing companies to drill in increasingly poor nations, which could further spread the oil curse.
