Results 301–350 of 634 found.
Brexit Is Freedom
Earlier this year, NHL hockey fans were asked to vote for the captains of the four teams to face off in this year's new All-Star tourney. Three of the picks were players you'd expect: Jaromir Jagr from the Florida Panthers, Alex Ovechkin from the Washington Capitals, and Patrick Kane from the Chicago Blackhawks: True Gods of the Rink, who have scored hundreds of points.
Forget About Macy's
Two simple questions: How many times have you bought something at Macy's in the past month? How many times have you bought something through Amazon over the same timeframe? We're guessing the answer to the first questions is once...maybe, while the answer to the second question is so many times you can't keep track.
Job Report Overreaction
The more we look at Friday?s jobs report the more we?re wondering what so many other analysts are so worked up about. It was like the pessimists won the Kentucky Derby and the Preakness at once. Trumpets, roses, and scare stories rocked many less informed investors. When so many stories are written that miss the most important points of economic reports and tilt toward a gloomy spin it?s hard to hear the truth through the noise.
Apple vs The Fed
Honest question: How much time does the Apple Inc. Board of Directors spend debating whether the Federal Reserve will hike rates once or twice more in 2016? We don’t really know the answer, but we would guess the best answer is zero.
Fed Nudges Toward a June Rate Hike
As we said back in March, mark your calendars for a rate hike on June 15. Today’s statement from the Federal Reserve signals that it intends to raise rates by 25 basis points at the next meeting, consistent with the projections it made in March that it would raise rates twice in 2016.
OPEC and the Ash Heap of History
Almost twenty-five years ago, President Reagan went to the British House of Commons and said “freedom and democracy will leave Marxism and Leninism on the ash heap of history.” Reagan chose his words carefully, using a phrase – the ash heap of history – very similar to the one used by the Russian Communist revolutionary Leon Trotsky against his political enemies. Within a decade, the Berlin Wall was no more and neither was the Soviet Union.
The Q1 Curse Strikes Again
Remember the recession of 2011, or 2014, or 2015? Each of those years started out with either a contraction or anemic first quarter economic growth. But despite these slowdowns, the US economy didn’t fall into recession. Instead, it was just more Plow Horse growth.
The Bears Get Excited Again
Since March 9, 2009, stock market bears have used every negative piece of economic data to argue their case. Last week they were hyperventilating over first quarter real GDP growth estimates. After recent inventory data, the Atlanta Fed GDPNow Model said annualized growth will be just 0.1% in Q1. It could be zero, or even negative.
Don't Short the Participation Rate!
Last Friday was an interesting day. For years now, the US has consistently added jobs and the unemployment rate has steadily fallen. But, the Pouting Pundits of Pessimism keep arguing that a falling unemployment rate is only because of weak growth in the labor force.
US Needs Sensible Debt Financing
Instead of imposing strict fiduciary rules on Wall Street, banks, investment houses, and financial advisors, the government should apply similar rules to the managers of the federal debt. This is particularly true because unlike the private sector – which faces tough market competition every day – the debt managers at the Treasury Department have a monopoly.
1 – The Panic of 2008 was not caused by tight monetary policy. 2 – Zero percent interest rate policy (ZIRP) and Quantitative Easing (QE) did not save the US or global economies. 3 – Monetary policy in the US is getting looser as the Fed hikes rates, and, 4 – negative interest rates in Japan and Europe are not working.
Rates Hikes on the Way
Mark your calendars for a rate hike on June 15. Although the Federal Reserve cut its estimate of the most likely path for interest rates this year, it still projected two rate hikes for later this year, which suggests one hike in June and then one at the end of the year after the election.
Don't Fear Consumer Debt
For decades, the issue of debt has often dominated discussions of economics. It’s especially true these days with a $19 trillion federal debt and the fact that home loans were at the heart of the Panic of 2008. Lately, some analysts have fretted about student loans and many think economic growth in this recovery has been driven by borrowing.
TARP Was a Mistake, Not a Success
Today marks the seventh anniversary of the market bottom in 2009. Government claims that the Troubled Asset Relief Program, TARP for short, has been a massive success, saving the economy and generating $65 billion in government profits in the process.
Beware Trade-Recession Scare Story
Friday’s robust report on job growth ought to put the nail in the coffin on recent fears about a recession. Payrolls rose 242,000 and civilian employment, an alternative measure of jobs that includes small business start-ups, increased 530,000. In the past year, these two measures are both up approximately 2.7 million. Obviously, we’re not in a recession.
The Healthcare Dichotomy
The issue of runaway healthcare costs has been at the forefront of American politics for over a decade. We have all heard horror stories from the insured and uninsured alike: $1000 visits to the emergency room, $3000 MRIs, even trips to the pediatrician can give us sticker shock these days. To make matters worse, the accelerating retirement of the baby boomers promises to continue, if not exacerbate, this trend.
With both the European Central Bank (ECB) and the Bank of Japan moving to a Negative Interest Rate Policy (NIRP), conventional wisdom says the US dollar will continue to strengthen. After all, the Fed is tightening while everyone else seems to be working overtime to ease policy.
No Sign of Recession in the Data
So far this year, the S&P 500 is down around 9% and has been down as much as 10.5%, a garden variety correction. But some pessimistic pundits, analysts, and investors are treating the correction as a harbinger of the recession they’ve predicted multiple times before, ever since the economy started to recover in mid-2009.
This is a Correction, Not a Recession
With the S&P 500 down 10.5% through February 11th, questions about the health of the economy seem to intensify daily. The concerns typically go something like this: If the financial markets are a predictor of where the economy is headed, has the plow horse finally lost traction? Is a recession looming?
Want Faster Growth? Put the Jockey on a Diet!
The number one reason the US has a Plow Horse economy rather than a Race Horse economy is the growth in the size and scope of the federal government, which sits like a grossly overweight jockey atop an otherwise healthy thoroughbred.
Fed Not Going Away
Close your eyes (well, not literally). Imagine a huge manufacturing economy, in Asia, growing very rapidly. It became the second largest economy in the world, from ruin, in just a few short decades and produced 14% of global output. Now imagine it collapses.
Fed Waiting for More Information
After starting liftoff in December, no one really expected much out of today’s Fed meeting. And the Fed delivered exactly that, voting unanimously to do…nothing. But despite no action, their wording will get plenty of scrutiny.
Fear is Overbought
The stock market is not the economy, and the economy is not the stock market. Nonetheless, many are convinced that the market correction of the past few weeks is a certain sign of impending recession. Never mind that China just reported 6.9% real GDP growth. Never mind that a barrel of oil costs less than $30, which means consumers are saving hundreds of billions of dollars per year on top of what the drop in natural gas prices has saved them.
To paraphrase the late Jude Wanniski – the history of man is a battle between the creation of wealth and the redistribution of wealth. Jude was a Supply-Sider, which means an economist who believes that entrepreneurship and supply (not demand) drives economic growth.
We Remain Positive About 2016
The Arab Spring is turning into an Islamic Winter, with some added cold wind, reminiscent of the Cold War – as Russia and Iran are seemingly aligned against a US-backed Saudi Arabia and Turkey. The intricacies of the religious, political, military, and historical events taking place are enough to give any normal person a headache. “Outrageously unstable,” is an understatement. Millions of refugees are voting with their feet.
Let?s Try Again: S&P 2,375
The future exists to keep forecasters humble. And our 2,375 forecast for the S&P 500 at year-end 2015 has done just that. We are humbled, but we do tip our hat to Jim Paulsen at Wells Fargo Asset Management who said that 2015 would be a tough year for US stocks.
Greedy Innkeeper or Generous Capitalist?
The Bible story of the virgin birth is at the center of much of the holiday cheer this time of year. The book of Luke tells us that Mary and Joseph traveled to Bethlehem because Caesar Augustus decreed a census should be taken. Mary gave birth after arriving in Bethlehem and placed baby Jesus in a manger because there was “no room for them in the inn.”
The Fed Launches Rate Hikes
One small step for the Fed, one giant leap for the US economy. At long last, after seven years of near zero percent short-term interest rates, the Federal Reserve unanimously decided to raise rates by 0.25 percentage points, the first rate hike since 2006. The new range for the federal funds rate is 0.25% to 0.5%, 25 basis points above the prior range.
Panic, Punts and Reality
The biggest single college football play of 2015 happened in Ann Arbor, MI, on October 17th. The ball was at mid-field, it was fourth down with two yards to go and there were only 10 seconds left in the game. The Michigan Wolverines were beating the Michigan State Spartans, 23-21.
Respect the Auto Sales Surge
Cars and light trucks – SUVs, minivans, and pick-ups – have been a key bright spot in the economy the past few years, particularly with tepid growth in overall manufacturing caused by weak foreign economies and a stronger dollar. The pace seen in September, October, and November marks the first time in history that auto sales have exceeded an 18 million annual rate in three consecutive months.
Expect Strong Christmas Spending
We are watching Christmas season sales data very carefully, but we also warn investors that the early data are not very useful. No matter what initial readings show, the underlying fundamentals look relatively strong.
If the US were in the middle of an economic boom, like in the mid-1980s or late-1990s, it would be very easy to be thankful in the week ahead. Instead, a cornucopia of complaints seems to accompany what has been a plodding economic recovery, what we call the Plow Horse Economy.
The Worst Recovery Ever? For Part-Time Jobs
Mark Twain has been attributed with saying “If you don't read the newspaper, you're uninformed. If you read the newspaper, you're misinformed.” And given the media’s portrayal of the job market recovery over the past six-and-a-half years, we can see where he was coming from.
It's the Domestic Spending; Stupid
Washington DC is out of control. In Orwellian Newspeak, we hear liberals say tax cuts, “cost too much,” but deficit spending is an “investment.” If GOP politicians reduce spending growth from already inflated forecasts, they call it a “‘conservative’ spending cut.” And, politicians from both sides of the aisle pat themselves on the back for “working so hard” to reduce the deficit when it’s really the US taxpayer that provided the muscle. Surging tax receipts have lowered deficits in recent years, not fiscal discipline.
Higher Rates, Higher Stocks
What’s happened over the past few weeks is not supposed to happen, at least if you use traditional academic-style discount models to assess the stock market. Whether you prefer a dividend discount model or an earnings discount model, both say higher interest rates should reduce the value of equities.
Light This Candle
The US stock market reminds us of Alan Shepard in 1961. Exasperated by the long wait in his Mercury Spacecraft “Freedom 7” while NASA engineers fiddled, he said, “Why don’t you fix your little problem and light this candle?” They finally did and he became the first American to go into space.
Fed Sets Stage For December Rate Hike
Today’s statement from the Federal Reserve sets the stage for a December rate hike. The key issue is whether the next two reports on the labor market, the one coming out late next week and the one released in early December, show a reacceleration in jobs gains or continued drops in the unemployment rate. At present, we expect both, which suggests the Fed will start a long-awaited series of rate hikes in December.
The Labor Market Mystery
The most important economic report of the next couple of weeks is not the GDP report on Thursday, which, as we said last week, is likely to show mediocre real growth of 1.5%. Strip out inventories, trade, and government and “core” real GDP growth should be around 3.5%.
The Bull Market Still Lives
Stock market corrections (usually defined as 10% pullbacks) are hard to understand. Often they happen in the midst of long-term bull markets. But why? Is it like getting the flu? Is it just emotion? Or, are corrections a necessary cleansing out of excess optimism? Our answer: we don't really know.
How TARP Created Trump
Back in 2008, rather than fix mark-to-market accounting, Treasury Secretary Hank Paulsen, Federal Reserve Board Chair Ben Bernanke, and other members of the financial market crisis team, chose to use a government-funded bazooka. A $700 billion bank bailout named The Troubled Asset Relief Program, or TARP.
Government Taxi Bubble Causes Credit Union Failure
Since the financial crisis, we have been inundated with the idea that the private sector is to blame for the misery that has befallen the American public. Countless politicians have appeared on TV or hit the campaign trail and the message is always the same; greed caused the great recession and the only solution is to trust the government more. Very seldom do we hear that government might have helped cause the housing bubble and the bank failures that resulted.
The Uber-Dove vs Black Swans
You couldn’t have missed it. Only stages full of GOP presidential candidates or the Super Bowl have ever had more media attention. Yes, we are talking about the Federal Reserve’s thundering announcement on Thursday – of nothing. The Fed decided to keep interest rates at zero, for at least the next few months, after holding them near zero for over six years.
It is long past time for the Federal Reserve to start raising short-term rates. The unemployment rate is already very close to the Fed’s (new, lower) long-term projection of 4.9% and set to fall further in the next year, even if the Fed had already started lifting rates. Nominal GDP growth – real GDP growth plus inflation – is up at a 4.1% annual rate in the past two years, slightly exceeding the Fed’s long-run projection of 4% growth.
The Fed: More Noise Than Meaning
Get on with it already! Don’t get us wrong, we know this is the “Super Bowl” for business journalism (anyone have tix to the ESPN party?), but raising rates from 1/8th to 3/8ths of 1%, after six years of economic recovery should be a no-brainer. Our suggestion: spend the week analyzing companies and investment products. Don’t get sucked into the idea that there is some genius trading strategy for how to deal with this. That’s right; ignore it. Don’t read the statement and don’t watch the press conference.
Results 301–350 of 634 found.