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Durable Goods Orders MoM (Jun)

Survey -0.3%
Actual 0.8%
Prior 0.0%
Revised 0.1%

Better than expected, partially because fiscal and government is kicking in harder than expected.

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Durable Goods Orders YoY (Jun)

Survey n/a
Actual -1.3%
Prior -2.7%
Revised n/a

Still has turned up in a meaningful way, but moving away from recession levels.

When car sales normalize we’ll see a further boost.

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Durables Ex Transportation (Jun)

Survey -0.2%
Actual 2.0%
Prior -0.8%
Revised -0.5%

Headline numbers being held down by car sales.

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Durable Goods Orders ALLX (Jun)

Durables better than expected, likely due to companies taking advantage of new accelerated depreciation allowance

6 Responses

  1. Have you read Bill Gross’s latest?

    Seems the Fannie and Freddie portion of the new housing bill will allow the treasury to leverage up on MBS bringing mortgage rates down closer to treasury rates.

    If rates mortgage rates fall below 5%, the housing downturn could stabilize and even reverse saving the banking system. If the Saudis are ‘content’ with $130 oil and a large expansion of the deficit, they can buy treasuries while the treasury buys MBS, perhaps the dollar will stabilize. Inflation could moderate.

    Japan’s path toward the zero bound asset deflation accompanied by goods and services inflation.

  2. Have you read Bill Gross’s latest?

    Seems the Fannie and Freddie portion of the new housing bill will allow the treasury to leverage up on MBS bringing mortgage rates down closer to treasury rates.

    If rates mortgage rates fall below 5%, the housing downturn could stabilize and even reverse saving the banking system.

    IT CAN STABILIZE AND REVERSE EVEN AT HIGHER RATES

    If the Saudis are ‘content’ with $130 oil and a large expansion of the deficit, they can buy treasuries

    DOESN’T MATTER IF THEY BUY TSY’S OR NOT

    while the treasury buys MBS,

    THAT WOULD HELP MBS SPREADS

    perhaps the dollar will stabilize.

    ONLY IF THE NON RESIDENT DESIRE TO ACCUMULATE THEM IS HIGH ENOUGH

    Inflation could moderate.

    LONG SHOT. INFLATION WAS 3+% FOR THE 20 YEARS OIL WAS RELATIVELY FLAT AT ABOUT $15. WHY SHOULD IT GO LOWER WITH OIL AT 120+?

  3. If rates mortgage rates fall below 5%, the housing downturn could stabilize and even reverse saving the banking system.

    IT CAN STABILIZE AND REVERSE EVEN AT HIGHER RATES

    *I agree if deficit spending on items other than MBS increased sufficiently to support the higher rates but what type of deficit spending would more directly target housing? Housing prices are at late 2003-2004 levels and are gradually falling towards late 2001 prices, which in my estimation would be where home prices at current deficit spending ($500 billion) and current rates of interest (6.75%) would stabilize. 5% interest rates could stabilize prices at 2003 levels. 4% rates, housing prices would likely go back to late 2004 levels.

    Inflation could moderate.

    LONG SHOT. INFLATION WAS 3+% FOR THE 20 YEARS OIL WAS RELATIVELY FLAT AT ABOUT $15. WHY SHOULD IT GO LOWER WITH OIL AT 120+?

    *I agree its a long shot, but if the oil price returns to being ‘relatively flat’ that would moderate future inflation.

  4. Housing starts can ‘recover’ to 1.5 million annually and still be very low historically.

    oil went flat for several years in the mid 70’s and inflation kept going up.

  5. oil went flat for several years in the mid 70’s and inflation kept going up.

    *Accompanied by wage increases.

  6. Yes, wages played catch up then as they probably will now.

    But there are numerous international examples of sustained CPI increases without matching wage increases, as lower income groups get crushed. Much like what’s happening in the US today.

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