By B.P.T., on January 5th, 2011
The Mortgage Bankers’ Association purchase index was released at 7:00 AM EST, and there was a week to week decrease of 0.8% in the Purchase Index and a week to week increase of 3.9% in the Refinance Index.
The Challenger Job-Cut Report will be released at 7:30 AM EST, providing an estimate of the number of layoffs in December.
At 8:15 AM EST, the ADP Employment Report will be released. Investors will be watching this number to get advance notice on the state of the job market in advance of the government’s report on Friday.
At 10:00 AM EST, the ISM non-manufacturing index for December will be released. The consensus estimate is that it increased 1 point last month to a value of 56.0, and will continue to signal economic growth as it remains above the mid-point of 50.
At 10:30 AM EST, the weekly Energy Information Administration Petroleum Status Report will be released, giving investors an update on oil inventories in the United States.
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By Winton Bates, on January 4th, 2011
Some readers may think this question is like asking whether the Pope is a Catholic. The question is worth considering, however, because it raises some fairly common misconceptions about the industrial revolution (some of which I held until recently).
My main reason for reading about the industrial revolution has to do with my interest in human flourishing. The industrial revolution led to a massive, unprecedented and ongoing improvement in living standards, beginning in Britain and then spreading to other parts of the world. From that perspective, the industrial revolution tends to be associated with the advent of sustained economic growth.
 However, Joel Mokyr suggests that the best available estimates indicate that growth in per capita income in Britain did not accelerate until the decades after 1830 – well after the beginning of the industrial revolution (‘The Enlightened Economy’, p 256). That makes sense if we define the industrial revolution in terms of the technological innovations which brought about a transformation in the way goods and services were produced in the British economy between 1760 and 1830. One reason why these innovations were not immediately reflected in higher per capita income growth was the rapid growth of population – the English population increased from 6.1 million to 13.1 million between 1760 and 1830 (p.257). Another reason was the initial concentration of major innovations in a relatively small, though rapidly growing, part of the British economy (p. 82).
Information from a table presented by Deirdre McCloskey is graphed below in order to provide some perspective on the contribution of different industries to productivity growth in Britain over the period from 1780 to 1860 (‘Bourgeois Dignity’, p.219).
Figure 1 shows the relatively rapid growth of productivity in some manufacturing industries as well as canals and railways.
Figure 2 shows that despite the more modest productivity growth rate in agriculture, the relatively large size of this sector means that over the period considered its contribution to overall productivity growth was comparable to that of the manufacturing industries with more rapid productivity growth.
So, was the industrial revolution mainly about the growth of manufacturing industry? Perhaps, if we define the industrial revolution so narrowly that it has to refer to the growth of manufacturing industry. If we do that, however, we need another term to describe the processes leading to the advent of economic growth in Britain. Joel Mokyr’s term, the industrial enlightenment, aptly describes the broader processes through which a social climate favourable to innovation was made possible by growing recognition that material progress could be achieved through advances in science and technology.
Mokyr puts the various phases of the industrial revolution in context as follows:
‘The Industrial Revolution was above all a beginning. It cannot be judged on its own grounds without considering what it led to. What is truly significant is not the wave of great inventions made in the years between 1765 and 1800, but the fact that this process did not subsequently fizzle out. Some societies, in Europe and Asia, had witnessed previous clusters of macroinventions, leading to substantial economic changes. … The “classical” Industrial Revolution in the eighteenth was not an altogether novel phenomenon. In contrast, the second and third waves in the nineteenth century, which made continuous technological progress the centrepiece of sustainable economic growth, were something never before witnessed and that constituted a sea change in economic history like few other phenomena ever had’ (p. 83-4).
By Christopher Briem, on January 4th, 2011
By B.P.T., on January 4th, 2011
The figures for motor vehicle sales in December will be released today. The consensus estimate is that 9.2 million domestic autos were sold last month, which would be an increase of 100,000 from November.
At 7:45 AM EST, the weekly ICSC-Goldman Store Sales report will be released, giving an update on the health of the consumer through this analysis of retail sales.
At 8:55 AM EST, the weekly Redbook report will be released, giving us more information about consumer spending.
At 10:00 AM EST, the Factory Orders report for November will be released. The consensus is that there was no change in orders.
At 2:15 PM EST, the FOMC Meeting Minutes will be released, which will provide insight into how the Federal Reserve board governors and bank presidents view the economy.
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By Christopher Briem, on January 3rd, 2011
Really really wanted to end the year on a positive, maybe we will start the new year with something less negative. Anyway.. Trib follows up on the story of the Detroit pension system’s losing bet on our casino: Casino’s Struggles Felt in Detroit.
Here is the thing. the story that came from sounds horrible. Risky bets cost Detroit pension funds $480 million. Yet the Detoit pension system, which is made up of two big pension systems I presume for uniformed and nonuniformed employees were funded at 100% and 106% in their latest audits. Granted those are from last year, but that is at least as current as our information here.
Go read the numbers yourself: See page 23 (per the pdf) of their General Retirement System audit, or the similar document for their Police and Fire Retirement system (page 25 per the pdf numbering). I’d point you out to read the comparable documents for the pension system here… but, you know.
So even after its $480mil dollar loss (a big chunk of which coming from our casino) Detroit’s pension system is three times as well funded as Pittsburgh’s pension systems combined. Maybe 4-5+ times as well funded as the Police pension fund (the worst-funded of our 3 pension funds) is here. Detroit!? Paragon of sound fiscal governance and transparency.
Might be intersting to look at an end of year news piece out of Detroit today. For them, their pension issues have truly become all consuming:
Another federal grand jury is probing potential problems with the city’s two pension funds. Subpoenas were issued to a top pension official and to the pensions themselves seeking records about investments, including a residential real estate development in Florida.
They’re mad that their pension fund is at or above 100% funding? While we are so happy with how things are going here that we are doing anything conceivable (and the inconceivable) to make sure nothing changes here?
Still an interesting tale of how Detroit got caught up in it all. Below is the ownership schematic and financing behind the reoarganization of the River Casino operation as of when Bluhm took it over from Barden. I would suggest that whenever you are a bank and have dotted lineds connecting you in a diagram like this, you have things to worry about. The multiple colors just for the Detroit pension folks is probably a red flag in itself. I’m just guessing Bluhm is a financial genius that is befitting a billionaire. If the Detroit pension system, and I am presuming Key Bank along the way as well took such big hits in this… then I bet his controlling interest in the casino didn’t really cost him all that much in comparison.
 fyi this must be all before the debt/equity was restructured. Anyone have a similar diagram of the current, post reorg ownership structure of the Rivers Casino? Must have a bigger like to the Detroit pension system I figure. I wonder if one of their pension board folks gets expense paid trips to the casino here?
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By Eldon Mast, on January 3rd, 2011
Facebook, the popular social networking site, has raised $500 million from Goldman Sachs and a Russian investor in a deal that values the company at $50 billion.
China’s manufacturing activity eased slightly in December, although it remained in expansion mode, according to a survey of the country’s purchasing managers.
In response, Asian stock markets were higher on the first trading day of 2011, with investor confidence boosted by signs that China’s efforts at keeping a lid on inflation may be working.
Singapore’s economy returned to growth in the fourth-quarter as strength in manufacturing helped offset weakness in the construction sector.
The dollar began the New Year on a stronger note against other major currencies in Asia Monday as investors bought the greenback to position for an expected strong reading in US economic data due later in the day.
Loan refinance rates are declining again with Citibank, Chase and Bank of America all lowering their mortgage rates.
And on Monday, we are likely to see a moderately healthy headline number for the ISM Manufacturing Index for December as the new orders index remains on a recent rebound, posting at 56.6 in November, indicating solid month-to-month growth and a sector that continues to lead a recovery that is now 20 months old.
Feel free to repost this story on your favorite social network…
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By B.P.T., on January 3rd, 2011
At 10:00 AM EST, the Construction Spending report for November will be released, and the consensus is that there will an increase of 0.1% in spending compared to the previous month.
Also at 10:00 AM EST, the ISM manufacturing index for December will be released. The consensus estimate is that it increased 0.6 points last month to a value of 57.2, and will continue to signal economic growth as it remains above the mid-point of 50.
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