Operation Twist – What the Fed May Announce Today and the Implications
The Federal Reserve is likely to announce additional easing measures at the conclusion of the two-day Fed meeting today. Additional easing is anticipated by the market but there are a number of uncertainties related to the scope of what the Fed will implement. The most focused on initiative is called “Operation Twist” which is jargon…
Read MoreWhy A European Sovereign Debt Crisis Can Be Avoided
The European sovereign debt crisis has dominated financial news and been the primary driver of markets for the past month. I would argue that we are in an actual crisis in Europe and this is no longer about fears of a crisis. When banks can’t finance independently through the market and when large countries can’t…
Read MoreFlow of Funds Household Net Worth – US Making Progress
On Friday, the Federal Reserve Board released the quarterly Flow of Funds data which measure the US household sector’s assets, liabilities, and net worth. The data are released with a lag as we just received Q2 measurements, two and a half months after the calendar quarter came to a close. While the level of net…
Read MoreThe Johnny Cash Project – Google Now A Global Marketing Titan
Google recently ramped up spending to pursue initiatives described by the company as the next billion dollar opportunities. During the first quarter of this year, Google had plenty of detractors as the growth rate in expenses far outpaced the growth rate in sales. In Q2, there was a slightly different tune as Google achieved a…
Read MoreTarget – Missoni is a Home Run!
A number of news reports have been out regarding the new exclusive apparel and home line designed by Missoni for Target (TGT). The Italian designer is very well regarded in the fashion world and Target getting an exclusive launch of this magnitude speaks to the credibility of the merchandising team and the power of the…
Read MoreEurope Starts to Come Back Together – Bullish Sign for Depressed Markets
Yesterday, German Chancellor Merkel and French President Sarkozy proclaimed they are convinced that Greece will remain in the Eurozone. While the announcement was short on details, the spirit of it was enough to lift markets. Why news such as this can have an impact is because the markets have started to invest with “crisis” as…
Read MoreWhy the Market Will Bottom Higher than 2009 – An Analysis of S&P 500 Free Cash Flows
The market is in the midst of a crisis. The US sovereign credit rating has been downgraded. Developed market economies are demonstrating an inability to create jobs. Greece is about to default on its sovereign debt which will lead to contagion through the financial system in Europe. French and other European financials will be downgraded…
Read MoreChitaly Starts to Mambo Italiano – China in Talks To Buy Italian Sovereign Debt?
I mentioned this possibility over a month ago on August 5th, in the story “Chitaly – China to Purchase Italian Sovereign Debt?” Headlines just hit that Italy is in talks with China to directly buy Italian bonds according to the FT. This headline caused an immediate lift to depressed markets which is quickly getting faded. I believe this may…
Read MoreFrench Banking Crisis – Steps Needed to Stabilize the System
George Soros recently made an excellent point in an interview with Spiegel that the origin of the euro crisis was when Angela Merkel stated bailout support would be granted from each EU member state individually, and not by the European Union. He goes on to highlight that this approach shattered a vision of an EU that…
Read MoreGoogle Acquires Zagat & Early Signs of a Strong Q3
Google announced on its Google Blog, that they have finalized a deal to acquire restaurant reviewing company Zagat. The company was founded in 1979, and grew over time as more cities and restaurants have been added to the network. Zagat has also been adding venues such as hotels, bars, shopping centers and others in recent…
Read MoreObama’s American Jobs Act Speech – Implications for Markets
The S&P 500 futures were about unchanged heading into his speech and at last glance they were down 3 points – but this may be due to the 9/11 anniversary terror threat announcement more so than anything said in the speech. I come away moderately encouraged by Obama’s speech tonight. He stated at the outset…
Read MoreCharles Evans Dual Mandate Responsibilities Speech – Goes Too Far
Yesterday, Charles Evans who is the ninth president of the Federal Reserve Bank of Chicago and a voting member on the FOMC, gave a speech at the European Economics and Financial Center in London. This speech goes too far with starting to push the Fed towards more stimulus as the returns from additional stimulus diminish.…
Read MoreInvesting In Europe – Now the Risk/Reward Is Attractive
Yesterday, I reviewed the reasons why the Eurozone as a monetary union is a flawed construct and why the implications for a breakup are disastrous. I believe this is so much the case, that the odds of a Eurozone unwind are actually quite low. The breakup option is really the self-immolation option as all parties…
Read MoreEurozone Breakup – Implications for Financial Markets are Disastrous
Over Labor Day weekend we saw an unfortunate breakdown in Europe’s approach, strategy, and near-term ability to avoid a financial crisis. In the Mecklenburg Western Pomerian state (along the coast of the Baltic Sea), Germans voted against the Christian Democratic Union which is a repudiation of Angela Merkel’s support and commitment to the Eurozone. I’ll…
Read MoreChanel, Gaspard Ulliel, Scorsese, and The Rolling Stones: The Awesome Power of Global Brands
One theme I have been highlighting is the value that exists in the developed European corporate sector which of course gets ignored as fears of a crisis escalate. Chanel having the ability to get Martin Scorsese to direct an advertisement with French actor, Gaspard Ulliel, with vintage Rolling Stones (“She Said Yeah – December’s Children…
Read MoreWhy Can’t We Create Jobs?
I’ve been holding a constructive view on the economy and markets for a number of reasons. The economy isn’t as soft as has been presented and market valuations are extremely low for a non-recessionary environment (if that is indeed the environment we are in). Today’s Employment Report was downright ugly. Being constructive, I could search…
Read MoreRetail Chain Sales Very Strong – No Recession
It was particularly impressive that sales in August were not only strong for retailers that sell lots of food and consumer products (which benefited from the buying panic pre-Irene) but that they were broadly strong. While the food and broadline retailers should have benefited from some buying “pull-forward” before the storm, other retailers such as…
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