Tuesday, November 04, 2008

Money Market Signals, ISM, Car Sales, Freight

There are a few useful indicators in the money markets. Calculated Risk has been tracking them.

In general, things are getting better.

LIBOR now 2.86, lowest since Lehmann went into the toilet.

90-day T-bills: 0.44%

TED spread: 2.39, improving. The high was 4.63 mid-October.

A2P2 spread: 4.58, improving from 4.72.

That's the good news. The bad news?

The ISM (the old Purchasing Managers') Index did a cliff-dive last month, and shows manufacturing activity at 38.9 for October. This is the worst reading since 1982, when Paul Volcker threw the economy into reverse to stop inflation.

(The ISM Index measures relative growth or contraction in the US manufacturing sector. Readings under 50 indicate contraction. Over the last 10 years, the ISM index has rarely (if ever) been above 60, or below 40.)

Auto sales dived, and third-party auto financing is almost at a full stop.

Seagoing-freight shipping costs have dropped like a rock, as have flatbed-trailer loadings in the USA--all within the last 45 days.

It's beginning to look like 9/11 all over again.

1 comment:

Disgruntled Car Salesman said...

Third party auto lending is NOT in the tank in the import market.

I can personally attest to it.

However, our domestic store didn't even hit double digits in new car sales last month.