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Wednesday, July 01, 2009


caution warranted on the second derivative

i noted john hempton's concern over an increase in the negative rate of change in freddie mac's mortgage portfolio as an example of some second derivative disappointment arriving just about the time that the market seems to be pricing in a positive contribution from the first derivatives.

some early june data is pushing a few other examples forward. calculated risk notes GM car sales:

From MarketWatch: General Motors U.S. June sales decline 33.6%

This is worse the the 29% drop in May.

and clusterstock observes unexpected backsliding in the restaurant survey.

some of this goes hand-in-hand with pragmatic capitalist's observations on weekly retail data as it accumulated throughout june. to be sure, the news on second derivatives isn't all bad. but there isn't much in the way of a real economic recovery to talk about here.

UPDATE: ed harrison dissects the june ISM manufacturing report and finds troubling signs of a nascent re-intensification of the decline in new orders.

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