Archive for August 2015

While US consumer spending, job growth and Q2 GDP are strong, European inflation is stuck at 0.2%/year, Japanese GDP fell 0.4% in Q2/15, Indian growth was a disappointing 7% in Q2/15 and China continues slowing. This means central banks in Asia’s three largest economies and in Europe will all be easing monetary policy further. Against…

The Friday File: The highest paid actress between 6/1/14-6/1/15 was Jennifer Lawrence, earning $52 million, followed by Scarlett Johansson at $35.5 million. 10th on the list, Kristen Stewart at $12 million. The top man, Robert Downey, Jr. at $80 million, and #10 Mark Wahlberg at $32 million. Why do men make more? My guess, men…

Today’s revised estimate of Q2 GDP to 3.7% puts it into the top fifth of all quarters since 2006. Most of the increase was due to improved June data, suggesting the economy strengthened as the quarter progressed. Consumer spending, the main driver of GDP, was revised up slightly, while business investment was revised up dramatically!…

Of the 101 nations considered “developing” in 1960, only eight, Hong Kong, Ireland, Israel, Japan, Singapore, South Korea, Spain and Taiwan, are currently classified “developed”. Greece and Portugal are on the cusp. While going from undeveloped to developing is hard, most nations fail to advance further. To succeed, nations must go beyond exporting labor-intensive, low-cost…

Economic activity in the US remains solid, albeit unspectacular. Today consumer confidence came in at 101.5, near its best level since 2007, and annualized July new homes sales rose 5%! Moreover, the Congressional Budget Office estimates that the FY2015 budget deficit shrank by $60 billion since March and will be $426 billion or 2.4% of…

What is perhaps most remarkable is that the recent financial market turmoil is not emanating from Greek, Japanese, European or US economic weakness, but rather from slowing growth in the developing world. Exacerbating this is a total lack of confidence in the ability of financial policy makers and central bankers in those nations and the…

The Friday File: Contrary to popular belief, commercials featuring sex and violence or neutral ads that appear during violent or sexual programs are, at best, no more effective than ads with neutral themes that appear during neutral settings. Apparently, viewers focus on the sex and violence at the expense of the brand details with the…

Renewed oil and commodity price declines, along with deflationary pressures from a slowing China and its currency devaluation, has sown fear that developing nations will slow further, leading to capital outflows which will weaken their currencies and lead to even slower global growth. This has led to safe-haven investing in US government bonds, which pushed…

While many central banks have reduced the value of their currencies by lowering interest rates, the recently undertaken Chinese devaluation is different. When interest rates are lowered, it boosts the local economy by stimulating investment. The better performing economy then boosts demand for imports while the simultaneously weaker currency hurts imports. What China did simply…

Through July, housing starts are up 11.3% YTD, an increase of 65,900 units. Single-family activity is up 11.2% or 42,200 units, while multifamily starts are up 11.6% or 23,600 units. As for permits, while up 14.2% YTD or 85,800 units, single-family permits are up just 8.8% or 33,200 units, less than the rise in SF…