House: Lumber Prices Declining As US Treasury 10Y Yield Rises 60 BPS Since Jan 1

It is March and the homebuilding season has begun (except in the northeast and midwest, of course). But we should see rising lumber futures prices in expectations of a thriving homebuilding season, right?

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Unfortunately, lumber futures prices have been since the beginning of October of 2014.

And the 10 year Treasury yield rising since 60 basis points since January 30 isn’t helping matters.

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Maybe this will spawn another sequel to the House movie franchise?

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Hey Bartender II: Labor Force Shrinks By 178K EVEN AFTER 295K Jobs Added (473k Job Swing)

Earlier today, the Bureau of Labored Statistics released the monthly jobs report.

Funny, no one in the media is discussing that the Labor Force shrunk by 178,000 jobs even after adding 295,ooo jobs.

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That is a 473,000 job swing implying that without 295,000 jobs added, the decline in the labor force was 473,000. In other words, the USA is losing the war on jobs.

And then most jobs added were bartenders and food service.

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So, will The Fed be prompted to raise rates (even after a 473k decline in the labor force without the additions)? Arthur Cutten at Jesse’s Cafe Americain has an answer!!!

Nyuk, nyuk, nyuk!

Janet Yellen

Hey Bartender! Leisure And Hospitality Dominates Jobs Added As YoY Wage Growth Drops To 2.0 Percent (92.9 Million NOT In Labor Force)

The government jobs report is out this morning and it had some good news and some not-so-good news.

  • NOT in labor force rose to 92.9 million
  • The labor force fell by 178,000,
  • The labor force participation rate fell by 0.1 percent,
  • Average weekly hours was flat, and
  • Average hourly earnings rose at an annualized rate of 1.5 percent

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The reaction in the bond market? US Treasury 10Y yields jumped 13 basis points on the 295,000 jobs addition.

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The stock market plunged on worries that The Fed will start raising interest rates.

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One of the more dismal pieces of news is the average hourly earnings (YoY) FELL to 2.0 percent and lingers in Death Valley along with mortgage purchase applications.

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Helping fuel the decline in average hourly earnings is food services and drinking places added 59,000 jobs.

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People NOT in the labor force climbed to 92.9 million, a new record!!!!

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U6 underemployment is down to 11 percent!! Bear in mind that it is still higher than pre-recession levels since 1994.

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Nonfarm payroll jobs rose by 295,000, but according to the ADP numbers, it rose by a less rosy 212,000.

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So, it’s another “Hey Bartender!” jobs report.

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BTW, I have never seen a bartender who looks like this person. So, here is a bartender that I usually see:

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Because I go to Washington DC area bars where Bernanke (right) and Yellen (left) hang out.

“I shink dis is a good time to start raishing rates, Janet.”

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That’s Deflation! Value of Manufacturers’ New Orders For Consumer Goods Goes Negative (Along With CPI YoY)

To paraphase Dean Martin, ‘When the value of manufacturers orders go negative, that’s deflation.”

The Value of Manufacturers’ New Orders for Consumer Goods Industries has gone negative YoY.

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Has The Fed’s QE policies helped the American consumer as soon media talking heads have opined? In the words of Germany’s Angela Merkel, “Nein!”

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And the Value of Manufacturer’s New Orders for All Manufacturing Industries seems to be on a downhill trajectory,

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And the Consumer Price Index YoY is deflating as well.

cpiyoyThat’s deflation.

deani

 

Release The Hounds! ECB Ready To Buy Bonds (And Unleash Fury On Pensioners And Savers)

ECB’s Mario Draghi:”Release the hounds!” On pensioners and savers.

(Bloomberg) — Mario Draghi primed investors for an initial bond-buying salvo on Monday as he signaled European Central Bank officials are convinced they will succeed in choking off the threat of deflation.

Six years after the U.S. Federal Reserve began quantitative easing, the ECB’s Governing Council committed to its first asset purchases next week in a program amounting to 60 billion euros ($66 billion) a month.

The ECB president also unveiled forecasts showing higher economic growth with an inflation outlook that puts officials on track to reach a goal of just below 2 percent.

“Our monetary policy decisions have worked, and it is with a certain degree of satisfaction that the Governing Council has acknowledged this,” he said at a press conference in the Cypriot capital of Nicosia on Thursday. “We see objectives are gradually being obtained.”

Yesterday, we saw the Polish National Bank lower their reference rate to 1.50 percent and their bank deposit rate to 0.50 percent.

polandratecbThe ECB didn’t change their primary interest rate today, but … look out!

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The ECB deposit rate is now in negative territory. (The deposit rate is the interest rate paid on the surplus liquidity that credit institutions may deposit overnight in an account with a national central bank that is part of the Eurosystem.)

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ECB bond purchases may widen pension deficits by up to 18 percent. Thanks a heap, Mario!

 

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We already have 90 percent of industrialized countries with near zero or below target rates. How many more eggs do the Central Banks have to break to make their omelet?

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Of course, savers and small businesses are under siege by Central Banks. As Arthur Cutten of Jesse’s Cafe Americain reminds us ..

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I was considering Shakespeare’s “Cry havoc and let slip the dogs of war!”, but the thought of Draghi and IMF’s Lagarde on an Italian tank doesn’t inspire much fear.

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Grim FINdango: Q1 GDP Forecast QFalls To 1.2 Percent On Collapsing Construction

The Atlanta Federal Reserve disturbed quite a few folks where it announced that Q1 Real GDP growth is forecast to be an abysmal 1.2 percent.

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The Atlanta Fed provided a spreadsheet of the breakdown (or evolution) of the Q1 GDP forecast: GDPTrackingModelDataAndForecasts

What sticks out like a sore thumb is Fixed Investments: Structures.

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It is indeed a Grim FINdango for the commercial real estate market.

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Kielbasa Krisis: Poland Central Bank Cuts Key Rate To 1.50 Percent To Combat Deflationary Spiral an (Follows The Central Bank Pack)

Poland is experiencing a deflationary spiral and is cutting their Central Bank reference rate to combat it. Or as Bruce Willis said in Die Hard, “Welcome to the party pal!”

(Bloomberg) — Polish central bank cuts benchmark 7-day rate to record-low 1.5%.

The Polish Central Bank is joining the Bank of England, The Federal Reserve, the Swiss National Bank and the ECB in rate slashing that would make Freddie Krueger jealous.

polandratecbWhy? It appears that Poland is caught in a deflationary spiral.

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The poor Poles. They have Angela “Jigsaw” Merkel on one side and Vlad “The Impaler” Putin with troops in Ukraine on the other.

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It is indeed a Kielbasa Krisis.

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