Archive for March 2011
Potential Gov’t Shutdown
We are in a very different political environment in 2 key respects than during the shutdown of ’96. 1st in ’96 there was no Internet, blogosphere or Fox News and talk radio was in it infancy. Thus the liberal inclined media were able to frame the issue. 2nd in the mid ’90s the economy was…
Read MoreAggressive Fed, Tough Sell
We know the Bernanke lead Fed is willing to be extremely aggressive. But as we saw in 2010 the hurdle is high for more Quantitative Easing. We need evidence of A) a double-dip B) a stock market correction of at least 15 or 20% and C) the real prospect of deflation. But if headline inflation…
Read MoreInflation Trumps Prospects
The good: Consumer spending rose in Feb for an 8th consecutive month, spending rose 0.7% in February after a 0.3% increase in January. The Bad: Adjusted for inflation, consumer spending was up just 0.3% last month after being flat in Jan. The Ugly: inflation accelerated at its fastest rate since June ‘09 and the data…
Read MoreMyth Busting 101
Oil companies produce less gas in the spring to make it more costly. NOT! Prices do rise in spring, but is because there is less cheap butane in it. Butane boils at low teperatures. In winter that is not a problem but in summer it evaporates polluting the air and leaving us with less fuel.…
Read MoreLackluster Predictions
Sales for US durable goods fell 0.9% in Feb. Economists were looking for a rise of 1.5%. Oh well! Orders have declined in 4 of the past 5 months. Core capital goods (excludes volatile defense and transportation) declined 1.3% on the heels of a 6% decline in Jan. I am going out on a limb…
Read MoreFalling Income
In Feb there was no rise in average weekly wages, but there was a 0.5% inflation in consumer prices meaning that real incomes fell by 0.5%. They have now fallen in 5 of the last 6 months during with time it has shrunk by 2.3%. Thus, the anemic job growth we are experiencing is barely…
Read MoreLousy Job Market
Latest job data for Jan showed job openings dropped 161K after a 45K decline in Dec and are at lowest level since 7/09. New hires also fell 193K and are down in 6 of last 7 months. The fact layoffs fell 158K in Jan offers little consolation but explains why jobless claims have been trending…
Read MoreMarketing Risk
Can markets correctly price outsized risk? Given 9/11, Katrina, the financial collapse of ’08, the BP oil spill, the turmoil in the Arab world and the quake, tsunami and nuclear disaster in Japan, there are huge threats to stability. Unfortunately, markets have precious little experience dealing with such monumentally huge threats. But, in our interconnected…
Read MoreWatch Your Minutes!
AT&T to buy T-mobile USA for $39bn from Deutsche Telekom creating the 2nd largest wireless carrier with 120m subscribers. These giant mergers occur in mature industries as the only way to get new customers is to buy them & the only easy way to save money is to eliminate back office operations, redundant towers etc……
Read MoreMeasuring Happiness
There is a growing body of economic research being devoted to measuring happiness. And, to briefly summarize, what researchers have found is that money isn’t the key. What really gives people meaning and happiness is a combination of 4 things: Control over what they’re doing, progress in what they’re pursuing, being connected with others, and…
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