Beige v. Colors of the Geo Score, State Employment and Detroit’s Pension “Fix”

April 21, 2014

First off, I hope everyone had a great holiday be it Passover or Easter.  This week I take a look at some data around growth and trends in the economy using the Geo Score as a proxy – this was spurred by the Fed’s April Beige Book.  I then take a quick look at State level Employment data for March and conclude with some thoughts (probably better categorized as my opinion) around a proposal by Detroit’s unions to help offset the pension shortfall and impact on their members.    

Beige v. Colors of the Geo Score

Last week, the Fed’s April Beige Book (a look at economic conditions across the 12 central Fed bank districts) reported, what was categorized as, “modest to moderate” expansion in eight of the twelve districts (Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco) while Chicago reported economic growth accelerated with New York and Philadelphia reporting that business activity had rebounded from “weather-related slowdowns” earlier in the year. The Cleveland and St. Louis Districts both reported a decline in economic activity.  The map below is simply to provide you a visual depiction of the 12 Federal Reserve Bank districts.  

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How You Stack Up Against the Indices and Sobering Employment Data

April 14, 2014

I am not sure what drove the market gyrations last week other than the Fed seems to not be all that sure of what it is trying to communicate.  Tighten – not; Unemployment is the Target – not; Perhaps Inflation – maybe.  While the objective is transparency, perhaps the old approach – you figure it out yourself – is just as good!   The data last week was limited and, depending which newspaper or broadcaster you listen to was in line with the Fed’s messaging (that is “confounding”).  This is exemplified by the employment-related data points highlighted below.  From there, I move on to offering a different approach to measuring your performance against the indices.  I welcome your thoughts on this part (I actually welcome your thoughts overall).

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Exports Impact on State GDP, the Fed Speaks and Musings About the First Friday Report

April 7, 2014

This weekly commentary has tried to bring you fresh insights, different perspectives and, occasionally, an opinion or two.  The objective has been and continues to be to offer the reader perspective based on current economic and demographic data as opposed to waiting for stale financial data – or as a recent client noted, “I don’t drive my car looking in the rearview mirror, why would I do my credit work looking at financials that are more than six months old when released.”  I couldn’t have said it better myself.  In this vein, I spend this week offering perspective regarding State Exports, the Philly Fed and a quick look at the First Friday Report.   

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“Shaken Not Stirred”, Employment Observations and Taxes

March 31, 2014

This week I span far and wide looking at everything from Earthquake data to the more commonly referenced Employment Data.  I also take a look at State level Tax Receipts for the end of 2013 and reference you to a blog post (at the end of the commentary) regarding the availability of financial data in the muni space.  I start this week with a look to, what I consider, the absurd – the decision to allow Northwestern University football players the right to unionize.  

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Crimea’s Impact on the US Municipal Market, Job and Wage Growth and More

I go pretty far and wide this week. Everything from global affairs to employment and income data to why one sells assets. As a result, this week’s commentary may print/read a bit longer than usual.

How will what has and is occurring in Crimea impact the municipal market? Remember the old diddy “the knee bone’s connected to the shin bone …”? Let’s start with the premise that Mr. Putin is a pretty smart man. While the world is watching his Olympics and wows the world with spectacular opening and closing ceremonies (recall the tribute to the great history of the USSR, hmm), he is quietly preparing his troops to protect Russians living in Crimea. As he and his foreign minister tell us “we will not invade,” less than two weeks later Crimea votes to secede from Ukraine and become part of Russia. The US and our allies impose sanctions and, after being mocked by some of those against whom those sanctions were imposed, the US and its allies impose more sanctions only to have Mr. Putin slap back with sanctions of his own.

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Detroit, Flint, Puerto Rico & Others – What Can Distinguish These Places?

March 17, 2014

Last week proved to be very interesting as Puerto Rico came to market with a $3 billion deal that ended up over-subscribed. In a sign of the level of sophistication needed to understand the risk, the bonds were issued with a minimum denomination of $100,000 and we saw firms such as Wells not allow for the bonds to be purchased for retail (we heard rumors of other firms not providing for allocations to retail as well). Perhaps prudent when you consider, a few weeks back, a certain daily publication quoted financial advisors saying they would buy pretty much anything yielding over 5% for their clients (this was part of a story around, none other than Puerto Rico and arbitration claims).

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Pensions and Unionization and Did You Notice That Change by the BLS?

March 10, 2014

I was inspired to delve into a potentially touchy subject by an article I read last week around California mayors opposing legislation that would allow them to make changes to public sector employee pension plans.  This occupies a portion of this week’s commentary.  Please do not read this thinking I have a political ax to grind – my objective is to continue to promote discussion around the highly important area of the unfunded status of public sector pension plans.  I then go on to look at the latest employment data at the State level and alert you to some adjustments the BLS has made to prior months and years data.  You may want to see if your data source captures the revised data for you.  

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