The chart below illustrates quite well how a Federal Reserve policy of easy money meant to “bring down unemployment” is hurting most those it intends to help. The black line is the average retail price of gasoline in the United States. As you can see, the price is hovering around $4.00/gallon. The blue line represents the percentage of consumer spending used to buy gasoline and other energy goods. This percentage has increased dramatically since bottoming out in December of 2008. What this means, is that Americans, with high unemployment and real wages that are shrinking, are spending a … [Read more...]
Stimulus Fading, New Orders Falling
The trend of slowing annual growth in new orders was completed this month with a sharp decline in for the first time since November of 2009. You can see on the chart the declining growth rates before each recession (shaded in gray). The current trend looks even worse than the two recessions earlier this decade. The effects of liberally employed monetary and fiscal stimulus seem to be fading fast as the market once again attempts to complete the recession it began in 2008. Look for a possible burst of activity at the end of the year when companies will pull forward future purchases to take … [Read more...]
VIDEO: Sam Zell- What We Need Now Is a Politician
VIDEO: Fed QE3 Induces Market `Irrationality,’ Brown Says
Fed Looks to Ramp up QE-Infinity
Jon Hilsenrath, the Fed mouthpiece at the Wall Street Journal is out with a piece this morning describing how Mr. Bernanke built a consensus on the FOMC to start another round of money printing. Hilsenrath is Bernanke’s go to man when he wants to pass information to investors between policy meetings. What was the purpose of this piece? Looks like Dr. B. might not be happy with the stock market response to his QE-Infinity program. As of this morning, the S&P 500 is only a few basis points above its level before the Fed unveiled the program. So Mr. Bernanke is back to jawboning to prop up … [Read more...]
What We’re Reading 9-28-12
Euro Zone Misery to Last for Decade: Ernst & Young, Catherine Boyle, CNBC QE3 will not fix America's problems, warns Paul Volcker, Helia Ebrahimi, The Telegraph A Capital Gains Primer, Review & Outlook, Wall Street Journal ETFs Funds Total Reaches $1.215 Trillion in August, ICI … [Read more...]
VIDEO: Re-Made in America – 5M Manufacturing Jobs Are Coming Back, Report Says
While the U.S. unemployment rate hangs high above 8%, manufacturing is one sector of the American economy that has seen substantial jobs growth over the last few years. Source: Yahoo Finance … [Read more...]
What We’re Reading 9-21-12
Beware the costs and psychology of QE3, Gillian Tett, Financial Times Suitcase packed: France’s richest man applies to become a Belgian, Bernard Arnault, The Economist Can Trade Links Transmit a European Crisis?, Auerbach and Peralta-Alva, Federal Reserve Bank of St. Louis Sweden 22-U.S. 35, Review & Outlook, Wall Street Journal … [Read more...]
VIDEO: Fed’s Fisher- Fed Policy Costs More Than Benefits
Sept. 19 (Bloomberg) -- Federal Reserve Bank of Dallas President Richard Fisher talks about Fed monetary policy and the possible impact on the U.S. economy. Fisher also discusses his opposition to the central bank's third round of quantitative easing and partisanship in Washington. He speaks with Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg) … [Read more...]
Empire State and Wall Street Disagree
As we outlined last week, economic fundamentals are not in-step with market movements. While the prices of stocks have been moving skyward in reaction to worldwide monetary and fiscal stimulus measures, the real economy takes on an ever bleaker look. By way of evidence, we point to the Empire State Manufacturing Survey released this morning. For the second consecutive month the index has marched deeper into negative territory. The September survey indicated that the General Business Conditions index fell to -10.4, an indication of a worsening business environment for manufacturers in the … [Read more...]
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