Fenway Sports Group is the parent company that holds John Henry’s ownership interests in the Boston Red Sox and the Liverpool Football Club. Last week, his money management firm, John W. Henry & Co., announced that it is closing. In its worst-performing programs, it has lost as much as 21% YTD and 32% over the past year. You can never afford to lose money, but it’s even more important not to lose it when you’re in retirement. What if you don’t own a baseball team or a soccer team to help you get through the tough times? I am sure there are a lot of people who used to be wealthy who … [Read more...]
Markets in the Age of Big Government
The economic data released post-election have not promised an easy return to office for President Obama. Jobless claims numbers (Chart 1) released today showed a spike in layoffs. True, some of these were Sandy related, but bigger losses came from Pennsylvania and Ohio where auto and manufacturing workers were laid off in large numbers. So much for that GM bailout. Trouble has also been showing up in the equity markets. Since the president was reelected, $650 billion dollars of wealth has disappeared from the value of S&P 500 companies (Chart 2). That’s in only six trading days. And … [Read more...]
Dr. Copper’s Diagnosis
The red metal is often called Dr. Copper, because it has a Ph.D. in economics. Copper seemingly knows before anyone else that the economy is headed into a recession. If that’s true, copper isn’t signaling a rosy forecast today. Take a look at our chart of the price of copper. Futures for the 1-month contract have been declining since a peak in February of 2011. The price has oscillated, but its peaks keep getting lower. Investors have been content to put a bottom on the price near $3.30/lb., but now prices are edging down once again. A drop below $3.30 could signal a coming recession. … [Read more...]
Golub Sees Another Recession Under Current Policies
Nov. 5 (Bloomberg) -- Harvey Golub, chairman of Miller Buckfire & Co., talks about the U.S. economy and the outlook for the presidential election. He speaks with Erik Schatzker, Stephanie Ruhle and Michael McKee on Bloomberg Television's "Market Makers." (Source: Bloomberg) … [Read more...]
What We’re Reading 11-2-12
Economists' Goal: A Measure for All Seasons, Carl Bialik, Wall Street Journal And The Number One Country In The World For Investment Is..., Kenneth Rapoza, Forbes Consumption and the Myths of Inequality, Hassett and Mathur, Wall Street Journal U.S. could surpass Saudi oil output by 2020, USA Today Manufacturing Activity Pulled Back in October; Optimism Wanes, Federal Reserve Bank of Richmond … [Read more...]
A Savings Fueled Bump
In the last four months, growth in Americans’ disposable incomes has been nonexistent on an inflation adjusted (real) basis. But Americans’ real personal expenditures have increased considerably. As you can see in the chart below, after the recession (shaded area) Americans have kept their personal consumption growth steady as they replace their worn out possessions. But without growth in incomes, how can Americans afford to increase their personal consumption expenditures? They are withdrawing it from their savings. Over the last three months Americans have withdrawn 1.1 percentage … [Read more...]
David Einhorn on the Federal Reserve
The Buttonwood Gathering 2012 - David Einhorn on the actions of the Federal Reserve … [Read more...]
Government Boosts Economy Just Before Election
Less than two weeks before Americans head to the polls, the BEA has announced a 2% increase in real GDP growth. Of those two percent, government spending accounted for .71 percentage points. That’s the largest contribution to GDP since the 2009 stimulus funds were spent. If you didn’t believe in election year stimulus before, perhaps a look at the chart below will put your doubts to rest. You can see the 2009 stimulus funds fading out on the left hand side of the chart, and then federal spending pulls back, becoming a drag on GDP, until the third quarter of 2012, just before the election. … [Read more...]
Investing in a Global Recession
World trade volumes declined for the third month in a row according to the CPB World Trade Monitor Index released today. The index grew only 0.29% on a year over year basis (Chart 1). Every time the index has grown so slowly, the United States was already in recession. The report, put together by the Netherlands Bureau for Economic Policy Analysis, also indicated that world industrial production has also decreased, with the bulk of the decreases coming from the U.S., Japan, and Central and Eastern Europe. Evidence of the trade contraction is showing up on U.S. shores as declines in … [Read more...]
VIDEO: Greenspan- Quite Concerned About Fiscal Cliff
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