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Despite a huge downward revision of Q1 GDP growth from 2.4% to 1.8%, data for Q2 look decent. Durable goods orders look OK, home sales are good and despite sequestration and the payroll tax increase, consumer spending is holding up…
By giving the Muslim Brotherhood Government of President Muhammad Morsi a 48 hour deadline to compromise with the opposition or else face an Army-imposed solution, the Army is forcing Morsi out. As a result, the opposition now has no incentive…
The Friday File: In 2012, the three most popular girls’ names in descending order were Sophia, Emma and Isabella. For boys, it was Jacob, Mason and Ethan. In 2012, the girl’s name most rapidly rising in popularity was Arya; for…
One reason the economy has been growing slowly is due to large productivity increases. GDP is 3% higher than before the bust, yet employment is down by 1.6%. Similarly, industrial production is 2% shy of its all-time high, yet capacity…
Despite Case-Shiller showing a 12.1% rise in home prices for the year ending 4/13, it’s probably the end of big price increases. The recent jump in mortgage rates (which reduces demand) and the first sustained month-over-month increase in housing inventories…
As the Fed flooded the US economy with cash, some of it ended up in emerging markets where risks and returns are higher than here. With US rates now rising, financial markets in those countries are being badly hit. Simultaneously…
While rising long-term interest rates will hurt banks by reducing the value of their bond portfolios, that will be a one-time hit and banks are exceptionally well capitalized and will easily withstand the losses. Conversely, a widening spread between short-term…
The Friday File: Retailers expect Britons to spend $100 million toasting the arrival the Duke and Duchess of Cambridge’s first child in July. Another $40 million will be spent on party food, $207 million on commemorative memorabilia and books and…
On days like today when stocks, bonds, precious metals, commodities and emerging markets all fall, portfolio diversification, doesn’t help. Remember that. Separately, financial markets have wiped out all of May and June’s gains not because QE3 will end, but because…
With the Fed (and everyone else) forecasting improved economic conditions in the second half of ’13, it’s not surprising that the Fed again reiterated that it MAY start tapering QE3 later this year. Interestingly, the Fed has been consistently over-optimistic…