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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. July 18 @ 2:00 pm ET ~ Beige Book Report
* Wed. Aug. 1 @ 2:00 pm ET ~ FOMC Announcement
* Fri. Aug. 3 @ 8:30 am ET ~ Employment Data
* Fri. Aug. 10 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Aug. 22 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Mon. Sept. 3 ~ U.S. markets closed for Labour Day Holiday
* Wed. Sept. 26 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

IMPORTANT BLOG POST UPDATES...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Tuesday, May 07, 2013

Tuesday's Decline in Consumer Habits and Optimism -- (Would the Fed ever back-stop consumer loan defaults?)

Data released today (Tuesday) shows a drop in Week-to-week and Year-to-year Store Sales, as shown below...we'll see if this weakness persists in the weeks ahead.


Further data today also showed a drop in Consumer Economic Optimism and in Consumer Credit, as shown on the graphs below.

It's interesting to note that consumers have been borrowing at a higher value level in 2012 and 2013 than they were in the years leading up to the financial crisis. Any increase in loan rates from the banks could lead to defaults and pose a problem for those institutions. If the amount of loans continues to decrease, we may see banks raise rates to compensate for any losses that may be incurred in revenues...that could then spawn such defaults.

Not that the markets are paying attention to weak economic data anyway...but am mentioning this nonetheless.



***UPDATE May 9, 2013: Data released today shows a rise in Mortgage Delinquencies, as shown on the graph below...evidence that banks are already struggling with consumer defaults...if the above scenario were to play out, the banks would have added stress.

The Fed certainly has its hands full with its current Mortgage-Backed Securities Purchase Program. No doubt, if the Fed weren't backing the banks on this matter, we wouldn't see house prices rising. The question then becomes, would the Fed begin to back consumer loan defaults if that became a problem? Where does it all end?


Furthermore, data released today shows that Wholesale Inventories rose, as shown on the graph below...confirming the above consumer data.