Archive for June, 2008

Donald Kohn’s “Less Alarmist” View

Originally published November 28, 2007

Fed vice-chair Donald Kohn spoke at the Council on Foreign Relations in New York this morning, in a session moderated by Laurence Meyer. Kohn’s prepared remarks are on the Fed’s website at:

Unsurprisingly, the text reads mostly like a standard one the one hand/on the other analysis of the sort that caused Harry Truman to demand a one-handed economist. Though Kohn would never win any public speaking awards, there were some subtleties in the delivery that might be meaningful. For example, he drew out the reading of this sentence, as if for emphasis: "Some broader repricing of risk is not surprising or unwelcome in the wake of unusually thin rewards for risk taking in several types of credit over recent years." And he emphasized the starred words in the following passage: "Consequently, we might expect a **moderate** adjustment in the availability of credit to these key spending sectors….  Heightened concerns about larger losses at financial institutions now reflected in various markets have depressed equity prices and **could** induce more intermediaries to adopt a more defensive posture in granting credit, not only for house purchases, but for other uses a well." These emphases suggest that Kohn – who emphasized he was speaking for himself only and not his colleagues – holds a less alarmist view of things than do many market participants.

by Philippa Dunne· · 0 comments · Fed Focus

Sample Reports

Our work speaks for itself, and here we’ve selected reports that cover a broad range of what we do. If you’d like to see how we did during stretches not included here, please contact us.


Jobs look solid: spiders spin an uneven tale

Arachnophobes beware.
Download TLR 01 08 2015


Wages strive to close the gaps

A look at real wages around the country since the trough. It helps, a lot, if you are sitting on valuable mineral resources. Maps included.
Download TLR 12 10 14


Fiscal drag; oil boost

Our oil call, and what it likely means.
Download TLR 10 14 2014


Work martyrs who can’t buy a house

Surprise: Housing boom/bust mostly about price. Afraid to take a vacation?
Download TLR 9 14 2014


Big freeze in sales tax receipts

“Really, when you look at this graph, you have to wonder how retail sales recovered from their recessionary depths.”<
Download TLR 3 12 2014


Sustainable improvement?

State revenue officials are encouraged by recent receipts. Is confusion giving way to, maybe, some confidence?
Download TLR 12 11 2013


Waiting for the Jackson Hole research deluge

In 2012 the Jackson Hole meetings produced a slew of critical papers (see below). This year, researchers at the SF Fed cite weakness in wages of recent college grads, the “marginal workers” of the highly skilled, as evidence of continuing weakness in the job market.
Download TLR 07 31 2013


Incomes (& Fed policies?) take a beating

Research from former Fed officials and related academics sounds the alarm: QE can’t make a dent in the unemployment rate, and the FOMC has fewer options than members suggest.
Download TLR 09 13 2012


The debtless recovery

Deleveraging continues, household balance sheets remain ragged, and corporate America: flush, tightfisted, eyes overseas.
Download TLR 09 20 2011


Crawling back to 2006, or 2004?

Animal dis-spirits: there isn’t a lot of new business formation out there. And please ignore those rumors about a big upward benchmark revision to payrolls. (Rumor? +500K; Reality? -378K.)
Download TLR 04 12 2011


Sales tax receipts miss lowered forecasts, again

Things do not look good in revenue world. MEW goes negative, and Prof. Curtin, who heads up the UMich Consumer Confidence series, outlines the 5 degrees of discontent. Can’t we just keep it at 4?
Download TLR 01 13 2009


The news will keep getting worse

Carmen Reinhart and Kenneth Rogoff’s now classic, then new, study of international financial crises was not yet on the national radar screen, but it was on ours. We lay out their findings, and what we believed lay ahead for us, unfortunately we were right on the money.
Download TLR 01 08 2009


Tough love, Swedish style

News that the Fed is studying how Nordic countries handled their early-1990s banking crises cheered the markets, but the enthusiastic bidders must not
have been paying attention to the details. Sweden took a successful and painful stand, which included raising overnight rates 500% to defend the krona.
Can you imagine the Feds raising rates a relatively modest 10% in the current environment?
Download TLR_04_03_08


Can you say, “Housing, gas, and food prices?”

Or, stagflation hits the hotdog.
Download TLR 03 12 2008


Dimmed lights and a giant Grinch

A holiday season only Dr. Seuss’s infamous character could love: electricity prices keeping Christmas lights in storage, mall vacancies at 11-year highs, phones
disconnected over unpaid bills, our recession index moving into full alarm mode, and a giant inflatable Grinch replacing the usual riot of Christmas lights in rural
New York.
Download TLR_01_14_08


Can exports save us from a recession?

We’ve been hearing a lot of talk about how we can  export our way out of this mess, but a look at historical trends doesn’t support that view. State revenue estimators “take the ax” to their forecasts. Oh, and, December
saw a nasty spike in our recession index.
Download TLR_01_03_08


The Italians are coming…to buy Prada!

This is one mighty unusual weak-dollar environment. It’s all about tourists coming here to flex their currencies, which means our manufacturers aren’t getting
much of a boost, and, perhaps oddest of all, challenged Upstate New York is once again BJ’s strongest sales region.  But all that shopping isn’t enough to offset
domestic weakness; use this link to read what out tax contacts are saying about sagging sales tax receipts.
Download TLR_12_12_07


Could it be a recession?

Famous last words! With sales tax receipts plunging, we outline evidence that we are at the edge of a recession.<
Download TLR 10 11 2007


Sittin’ on the dock:

We wrote this report cataloguing the burgeoning costs of our fraying infrastructure, including both the crumbling rocks and gravel and the rusting research edge,
on the Fourth of July as a patriotic plea. Click here to find out why research in "emergent phenomena" is crucial to our maintaining a leading role in the world scientific community.
Download TLR_07_05_07


Edgy debtors and a history book

Although Yale Economist Robert Schiller didn’t utter the words "irrational exuberance," they did summarize his message to the then Fed chair on the day before the latter coined the phrase.  We wrote this report to make sure our readers knew what Dr. Schiller had dug up recently on real estate prices: There’s no real uptrend in housing prices over the last century, and the then-current boom was a real anomaly.
Download TLR051006

by Philippa Dunne· · Comments are Disabled · Uncategorized

Our Track Record

We’re the ones who track monthly withholding and sales tax receipts in
the 25 largest states, and are known by traders around the world for
the accurate forecasts of the BLS’s Employment Report (the
“non-farm payroll,” or NFP), and the
Census’s Advance Retail Sales print that we build on the
results of these surveys.Our Withholding Diffusion Index (WDI), the share of states at or above
forecasted collections, has a .74 correlation with the monthly changes
in national employment:


and our Sales Diffusion Index (SDI) a .75 correlation with the Advance
Retail Sales print:


This is just the raw data.  Of course we fine tune our
forecasts based on the comments we hear from our tax contacts, and
other economic intelligence we have collected.  The markets
work on shocks to expectations: when our tax contacts are shocked, we
know a successful trader can put that information to good use.

Back in 2001 we were the first to warn of a corporate profit squeeze in
a report that received widespread attention, and throughout 2002 we
argued that hidden weakness in the labor market was bound to show up
soon. And show up it did: against widespread speculation that the 2003
non-farm benchmarks would be positive and huge, we cautioned, based, as
always, on the conversations with our tax contacts and the details in
the data, that there was no evidence for this, in fact the risk was
quite the opposite. The benchmark? Negative. This is the kind of work
that has earned us the reputation of being the best in the business on
national employment trends.

In spring 2006, our report, Edgy Debtors and a History Book,
highlighted research showing that the current housing boom was an
anomaly in US history, and that housing prices have indeed fallen in
real terms, preparing our subscribers for what was to come. More
recently we have raised a number of red flags: a steep decline in truck
sales that was definitely not the result of the then-popular
“environmental regulation” explanation; a sudden
reversal of remittances to Mexico that we believed told the real story
of construction employment; and ample evidence that recent spikes in
federal withholding receipts had little to do with actual employment
levels and were likely to reverse, as they always do, as calendar
factors fall back into balance.

by Philippa Dunne· · Comments are Disabled · Uncategorized



by Philippa Dunne· · Comments are Disabled · Uncategorized