Velocity Of Money – Charts Updated Through October 30, 2014

Here are two charts from the St. Louis Fed depicting the velocity of money in terms of the M1 and M2 money supply measures.

All charts reflect quarterly data through the 3rd quarter of 2014, and were last updated as of October 30, 2014.

Velocity of M1 Money Stock, current value = 6.178:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 30, 2014:

http://research.stlouisfed.org/fred2/series/M1V

-

Velocity of M2 Money Stock, current value = 1.532 :

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 30, 2014:

http://research.stlouisfed.org/fred2/series/M2V

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2013.09 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – October 31, 2014 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reiterated the view that the U.S. economy is currently in a recession, seen most recently in these twelve publicly available sources :

• ECRI, May 9, 2014, “Q&A:  Where Are We In Economic Cycle“
• FOX Business video, January 22, 2014, “Secular Stagnation“
• BNN video, January 15, 2014, “Cyclical & Secular Outlook“
• CNBC interview, January 14, 2014, “Cyclical Outlook“
• BNN video, November 14, 2013, “Fed Policy & the Business Cycle“
• Bloomberg video, November 4, 2013, “Major Central Bank Actions in Line with ECRI“
• Bloomberg video, July 30, 2013, “U.S. Recession Began in 2012, ECRI’s Achuthan Says“
• ECRI, July 30, 2013, “Becoming Japan“
• ECRI, May 31, 2013, “What Wealth Effect?“
• ECRI, April 26, 2013, “Nominal GDP Growth Falls Again“
• ECRI, April 7, 2013, “Interview on Jobs & Recession” video
• ECRI, March 8, 2013, Interview Summary (provides links to 3 video interviews)
• ECRI, March 5, 2013, “Recession in the Yo-Yo Years“ (provides a link to a 17-page ECRI report dated March 2013 titled “The U.S. Business Cycle in the Context of the Yo-Yo Years”)

Other past notable year 2012 reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order) on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

• Bloomberg video, May 9, 2012:  ”Lakshman Achuthan on Renewed U.S. Recession Call: Video“
• ECRI, May 9, 2012:  ”Revoking Recession:  48th Time’s The Charm?”
• Wall Street Journal video, May 9, 2012:  “Free Market Economies Have Business Cycles”
• ECRI, May 11, 2012:  “Rising GDP Doesn’t Rule Out Recession”

Also, subsequent to May 2012:

• Bloomberg video, July 10, 2012:  “Recession Here”
• ECRI, September 7, 2012:  “Recession Evidence Obscured in Real Time”
• ECRI, September 13, 2012:  “The 2012 Recession:  Are We There Yet?”
• Bloomberg video, September 13, 2012:  “Recession Update.”
• CNN video, November 29, 2012:  “Official Recession Indicators“
• CNN video, November 29, 2012:  “ECRI Recession Update“
• Yahoo video, November 29, 2012: “Ignore GDP and the Fiscal Cliff, U.S. Is Already in Recession“
• Bloomberg video, November 29, 2012:  “Recession Underway“
• CNBC video, December 7, 2012:  “Definitional Recession Indicators“
• ECRI, December 7, 2012:  “The Tell-Tale Chart” including this excerpt:  “Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012.”

__

Below are three long-term charts, from Doug Short’s blog post of October 31, 2014 titled “ECRI Recession Watch:  Weekly Update.”  These charts are on a weekly basis through the October 31 release, indicating data through October 24, 2014.

Here is the ECRI WLI (defined at ECRI’s glossary):

–

This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

–

This last chart depicts, on a long-term basis, the WLI, Gr.:

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2014.57 as this post is written

Consumer Confidence Surveys – As Of October 31, 2014

Doug Short had a blog post of October 31, 2014 (“Michigan Consumer Sentiment at a Seven-Year High“) in which he presents the latest Conference Board Consumer Confidence and Thomson/Reuters University of Michigan Consumer Sentiment Index charts.  They are presented below:

(click on charts to enlarge images)

–

–

There are a few aspects of the above charts that I find highly noteworthy.  Of course, the continuing subdued absolute levels of these two surveys is disconcerting.

Also, I find the “behavior” of these readings to be quite disparate as compared to the other post-recession periods, as shown in the charts between the gray shaded areas (the gray areas denote recessions as defined by the NBER.)

While I don’t believe that confidence surveys should be overemphasized, I find these readings to be very problematical, especially in light of a variety of other highly disconcerting measures highlighted throughout this blog.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2011.82 as this post is written

Real GDP Since 1960 With Trendline – 3rd Quarter 2014

For reference purposes, below is a chart from Doug Short depicting Real GDP, with a trendline, as depicted (the Gross Domestic Product Q3 2014 Advance Estimate of October 30, 2014):

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1994.65 as this post is written

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the October 23, 2014 update (reflecting data through October 17) is -.827.

Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.

Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).

Here are summary descriptions of each, as seen in FRED:

The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.

The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.

For further information, please visit the Federal Reserve Bank of Chicago’s web site:

http://www.chicagofed.org/webpages/publications/nfci/index.cfm

Below are the most recently updated charts of the NFCI and ANFCI, respectively.

The NFCI chart below was last updated on October 29, incorporating data from January 5,1973 to October 24, 2014, on a weekly basis.  The October 24, 2014 value is -.75:

(click on chart to enlarge image)

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 29, 2014:

http://research.stlouisfed.org/fred2/series/NFCI

–

The ANFCI chart below was last updated on October 29, incorporating data from January 5,1973 to October 24, 2014, on a weekly basis.  The October 24, 2014 value is -.40:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 29, 2014:

http://research.stlouisfed.org/fred2/series/ANFCI

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1984.74 as this post is written

Money Supply Charts Through September 2014

For reference purposes, below are four charts depicting growth in the money supply.

The first shows the MZM (Money Zero Maturity), defined in FRED as the following:

M2 less small-denomination time deposits plus institutional money funds.  Money Zero Maturity is calculated by the Federal Reserve Bank of St. Louis.

Here is the “MZM Money Stock” (seasonally adjusted) chart, last updated on 10-24-14, depicting data through September 2014, with value $12,691.8 Billion:

Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 29, 2014:

https://research.stlouisfed.org/fred2/series/MZMSL

The two charts below show M2, defined in FRED as the following:

M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

Here is the “M2 Money Stock” (seasonally adjusted) chart, last updated on 10-16-14, depicting data through September 2014, with value $11,474.1 Billion:

Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 29, 2014:

https://research.stlouisfed.org/fred2/series/M2SL

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1985.10 as this post is written

Durable Goods New Orders – Long-Term Charts Through September 2014

Many people place emphasis on Durable Goods New Orders as a prominent economic indicator and/or leading economic indicator.

For reference, below are charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through September, last updated on October 28, 2014.  This value is 241,633 ($ Millions) :

(click on charts to enlarge images)

–

Here is the chart depicting this measure on a “Percentage Change from a Year Ago” basis:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Manufacturers’ New Orders:  Durable Goods [DGORDER]; U.S. Department of Commerce: Census Bureau; accessed October 28, 2014;

http://research.stlouisfed.org/fred2/series/DGORDER

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1977.24 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – October 24, 2014 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reiterated the view that the U.S. economy is currently in a recession, seen most recently in these twelve publicly available sources :

• ECRI, May 9, 2014, “Q&A:  Where Are We In Economic Cycle“
• FOX Business video, January 22, 2014, “Secular Stagnation“
• BNN video, January 15, 2014, “Cyclical & Secular Outlook“
• CNBC interview, January 14, 2014, “Cyclical Outlook“
• BNN video, November 14, 2013, “Fed Policy & the Business Cycle“
• Bloomberg video, November 4, 2013, “Major Central Bank Actions in Line with ECRI“
• Bloomberg video, July 30, 2013, “U.S. Recession Began in 2012, ECRI’s Achuthan Says“
• ECRI, July 30, 2013, “Becoming Japan“
• ECRI, May 31, 2013, “What Wealth Effect?“
• ECRI, April 26, 2013, “Nominal GDP Growth Falls Again“
• ECRI, April 7, 2013, “Interview on Jobs & Recession” video
• ECRI, March 8, 2013, Interview Summary (provides links to 3 video interviews)
• ECRI, March 5, 2013, “Recession in the Yo-Yo Years“ (provides a link to a 17-page ECRI report dated March 2013 titled “The U.S. Business Cycle in the Context of the Yo-Yo Years”)

Other past notable year 2012 reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order) on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

• Bloomberg video, May 9, 2012:  ”Lakshman Achuthan on Renewed U.S. Recession Call: Video“
• ECRI, May 9, 2012:  ”Revoking Recession:  48th Time’s The Charm?”
• Wall Street Journal video, May 9, 2012:  “Free Market Economies Have Business Cycles”
• ECRI, May 11, 2012:  “Rising GDP Doesn’t Rule Out Recession”

Also, subsequent to May 2012:

• Bloomberg video, July 10, 2012:  “Recession Here”
• ECRI, September 7, 2012:  “Recession Evidence Obscured in Real Time”
• ECRI, September 13, 2012:  “The 2012 Recession:  Are We There Yet?”
• Bloomberg video, September 13, 2012:  “Recession Update.”
• CNN video, November 29, 2012:  “Official Recession Indicators“
• CNN video, November 29, 2012:  “ECRI Recession Update“
• Yahoo video, November 29, 2012: “Ignore GDP and the Fiscal Cliff, U.S. Is Already in Recession“
• Bloomberg video, November 29, 2012:  “Recession Underway“
• CNBC video, December 7, 2012:  “Definitional Recession Indicators“
• ECRI, December 7, 2012:  “The Tell-Tale Chart” including this excerpt:  “Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012.”

__

Below are three long-term charts, from Doug Short’s blog post of October 24, 2014 titled “ECRI Recession Watch:  Weekly Update.”  These charts are on a weekly basis through the October 24 release, indicating data through October 17, 2014.

Here is the ECRI WLI (defined at ECRI’s glossary):

–

This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

–

This last chart depicts, on a long-term basis, the WLI, Gr.:

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1961.93 as this post is written

The U.S. Economic Situation

Perhaps the main reason that I write of our economic situation is that I continue to believe, based upon various analyses, that our economic situation is in many ways misunderstood.  While no one likes to contemplate a future rife with economic adversity, current and future economic problems must be properly recognized and rectified if high-quality, sustainable long-term economic vitality is to be realized.

There are an array of indications and other “warning signs” – many readily apparent – that current economic activity and financial market performance is accompanied by exceedingly perilous dynamics.

I have written extensively about this peril, including in the following:

“Building Financial Danger” (ongoing updates)

“A Special Note On Our Economic Situation”

"Forewarning Pronounced Economic Weakness"

“Thoughts Concerning The Next Financial Crisis”

“Was A Depression Successfully Avoided?”

“Has the Financial System Strengthened Since the Financial Crisis?”

“The Next Crash And Its Significance”

My analyses continues to indicate that the growing level of financial danger will lead to the next stock market crash that will also involve (as seen in 2008) various other markets as well. Key attributes of this next crash is its outsized magnitude (when viewed from an ultra-long term historical perspective) and the resulting economic impact.  This next financial crash is of tremendous concern, as my analyses indicate it will lead to a Super Depression – i.e. an economy characterized by deeply embedded, highly complex, and difficult-to-solve problems.

For long-term reference purposes, here is a chart of the Dow Jones Industrial Average since 1900, depicted on a monthly basis using a LOG scale (updated through October 17, 2014, with a last value of 16380.41):

(click on chart to enlarge image)(chart courtesy of StockCharts.com)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1956.11 as this post is written

Updates Of Economic Indicators October 2014

Here is an update of various indicators that are supposed to predict and/or depict economic activity. These indicators have been discussed in previous blog posts:

The October 2014 Chicago Fed National Activity Index (CFNAI)(pdf) updated as of October 23, 2014:

–

The ECRI WLI (Weekly Leading Index):

As of October 17, 2014 (incorporating data through October 10, 2014) the WLI was at 134.4 and the WLI, Gr. was at 1.0%.

A chart of the WLI,Gr., from Doug Short's post of October 17, 2014, titled "ECRI Recession Watch:  Update":

–

The Aruoba-Diebold-Scotti Business Conditions (ADS) Index:

Here is the latest chart, depicting the ADS Index from December 31, 2007 through October 18, 2014:

–

The Conference Board Leading (LEI) and Coincident (CEI) Economic Indexes:

As per the October 23, 2014 press release, titled "The Conference Board Leading Economic Index (LEI) for the U.S. Increased in September," the LEI was at 104.4 and the CEI was at 110.2 in September.

An excerpt from the October 23 release:

“The LEI picked up in September, after no change in August, and the strengths among its components have been very widespread over the past six months,” said Ataman Ozyildirim, Economist at The Conference Board. “The outlook for improving employment and further income growth are expected to support the moderate expansion in the U.S economy for the remainder of the year.”

Here is a chart of the LEI from Doug Short’s blog post of October 23 titled “Conference Board Leading Economic Index Increased in September“ :

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1950.28 as this post is written

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the October 16, 2014 update (reflecting data through October 10) is -1.065.

Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.

Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).

Here are summary descriptions of each, as seen in FRED:

The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.

The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.

For further information, please visit the Federal Reserve Bank of Chicago’s web site:

http://www.chicagofed.org/webpages/publications/nfci/index.cfm

Below are the most recently updated charts of the NFCI and ANFCI, respectively.

The NFCI chart below was last updated on October 22, incorporating data from January 5,1973 to October 17, 2014, on a weekly basis.  The October 17, 2014 value is -.72:

(click on chart to enlarge image)

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 22, 2014:

http://research.stlouisfed.org/fred2/series/NFCI

–

The ANFCI chart below was last updated on October 22, incorporating data from January 5,1973 to October 17, 2014, on a weekly basis.  The October 17, 2014 value is -.48:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed October 22, 2014:

http://research.stlouisfed.org/fred2/series/ANFCI

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1927.11 as this post is written