dove

The Fed minutes released today at 2:00pm didn’t provide anything that was too much of a surprise. The general impression I felt after reading the 12 pages was that the Fed remains exceptionally dovish. Economic growth, while not rolling-over, remains disappointing, so the Fed is looking to remain accommodative. Inflation was discussed in dovish terms.…

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falling

Recessions are typically caused by some sort of an excess. Real economic activity stretches too far and the subsequent unwind causes a retrenchment via a sudden and abrupt change in business and household behavior. There have been a number of excesses that have built up in the global economy over the past couple of decades.…

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piggy bank2

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…

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one euro

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…

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help wanted

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…

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shoppers

There has been considerable airplay relating to the “near recessionary” levels of many economic indicators in August. Readings for consumer confidence, economic optimism, and Fed Surveys from Philadelphia, New York, and Richmond have all contracted. These items have led many economists and forecasters to predict a sharp downturn in ISM (released Thursday), and have led…

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Moody’s came out today and downgraded Japan’s Sovereign Credit Rating from Aa2 to Aa3 based on the size of its deficit and large buildup of government debt. As a result of this downgrade, a number of Japanese banks and insurance companies will be downgraded by Moody’s as well. This news will make much less of…

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chicago

This morning, the Chicago Fed National Activity Index came out “better than expected” for the month of July. This measure is released with a bit of a lag and is one of the last July data points to be released. The measure is comprehensive and incorporates national activity relating to inflation, employment, consumption, and housing. So…

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don

How is 2011 different than 2008? As the financial press quotes “investment professionals” each and every morning on the front page of the WSJ or the TOP bloomberg story with mention of how dire the market and economic situation is, and how there are many similarities to the feel of 2008 – I thought it…

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What is the Philadelphia Fed Index? Why has it exacerbated the market’s sharp declines from the morning? (see previous post) In short, the measure is an activity-based survey. It isn’t an actual measurement of anything, other than how people feel or sentiments on a given day. The survey-based results are indicating we are currently in…

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