Oct. 17 (Bloomberg) -- Carl Weinberg, founder and chief economist at High Frequency Economics, talks about German spokesman Steffen Seibert's remarks that the European debt crisis won't be fixed at an Oct. 23 summit and is likely to extend "well into next year." Weinberg speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg) … [Read more...]
Archives for October 2011
What We’re Reading 10-14-11
How to Be a Better Investor, Bob Frick, Kiplinger's Personal Finance Time to Adapt to a World Without QE, Tim Bond, Financial Times First Aid is Not a Cure, Martin Wolf, Financial Times Stimulus Lite, The Wall Street Journal Fed Pays Lip Service to Beef to Skirt Ridicule, Caroline Salas Gage, Bloomberg … [Read more...]
Disturbing Jobs Data
Weekly jobless claims, a leading indicator of both the labor market and the U.S. economy were released this morning. Claims came in at 404,000, a drop of 1,000 from last week, but still above the crucial 400,000 mark that signals trouble. The four week moving average, which smoothes out the weekly volatility, came in at 408,000. Over the last 20 years, average weekly jobless claims of 408,000 have been consistent with monthly payroll employment growth of about 5,000. Just to prevent the 9.1% unemployment rate from rising, the U.S. must create at least 100,000 net new jobs per month. Without a … [Read more...]
Steve Jobs: How to live before you die
Twisted Risk to Savers, Pensions, and Annuities
The Federal Reserve has left savers, pensions, and annuities twisting in the wind. Buying long-term Treasuries has resulted in the 10-year bond yielding less than 2%.If we take into account inflation, especially of items needed for survival like food and energy, investors are essentially paying to lend the government money. The Fed is pushing investors into riskier assets. Higher yields don’t make the downward volatility any easier on the heart. Savers live with the pain day to day. But for pensions and annuities, the pain may not become evident for months. For some investors, it will be too … [Read more...]
Coping with Manic Markets
The S&P 500 leapt higher by 3.4% today on yet another plan-to-make-a-plan out of Europe and on news that the Chinese government will boost its stake in the nation’s largest banks. The benchmark index closed above its 50-day moving average for the first time since July. In the span of only five trading days, stocks have gained more than 11%. The sharp end of day bounce off of the 1,074 level last Tuesday, and the follow-through rally, have some technical analysts convinced stocks are poised for an upside breakout—see here. In only one week, the prevailing sentiment on the Street has shifted … [Read more...]
What We’re Reading 10-7-11
The Fed's 'Twist' Turns into a Problem for Pensions, Insurers and Households, PIMCO Policy Uncertainty Is Choking Recovery, Scott Baker, Nicholas Bloom and Steven Davis, Bloomberg More Parents Finance Their Kids' Mortgages, Sandra Block, USA Today Stimulus Has Been a Washington Job Killer, John F. Cogan and John B. Taylor, The Wall Street Journal Nearly Half of U.S. Lives in Household Receiving Government Benefit, Sara Murray, The Wall Street Journal … [Read more...]
Diverging Performance
The S&P 500 hit a cyclical bull market high on April 29 of this year. During a volatile session on Tuesday, the index dipped into official bear market territory (a drop of more than 20% from a recent high), but a stunning final hour rally of more than 4% helped the index narrowly escape the official bear market label. Should you care if the S&P 500 enters an official bear market? Unless your entire portfolio is invested in an index fund, the S&P 500’s performance is likely to differ, sometimes widely, from the performance of your own portfolio. For example, if your portfolio … [Read more...]
China Growth to Slow to 0-3% in 2012
Welcome to the Bear Market
On a closing basis, the S&P 500 hasn’t dropped the necessary 20% to be considered an official bear market, but for all intents and purposes U.S. stocks are in a bear market. If you measure the index on an intra-day basis, the peak to trough decline was 21.58% at today’s low. And if not for a curiously timed and still unsubstantiated rumor from the Financial Times about a European bank recapitalization plan, the S&P 500 was set to close down more than 20% from its April high. Instead, the index ripped more than 4% higher in the last 40 minutes of trading. This is the FT’s second … [Read more...]