Negative interest rates and talk of helicopter money from the world's central banks has been bullish for gold. … [Read more...]
Mortgage Applications Point Up
Mortgage applications for home purchases point toward continued recovery in the housing market. … [Read more...]
GDP Growth in the Tank
The Atlanta Fed's GDPNow indicator, a forecast of GDP growth using the available economic data, shows that growth likely ground to a screeching halt in the first quarter. Whether this is the same type of statistical bias that has dragged down first quarter growth over recent years or a bona fide slowdown is not yet clear. … [Read more...]
Stocks and Oil in Lockstep
Stock prices and oil prices continue to move in lockstep. … [Read more...]
No End in Sight for Industrial Recession
Industrial production contracted again last month. That makes 10 out of the last 12 months down. The industrial economy is now solidly in recession territory. … [Read more...]
What’s Driving Equity Markets?
In case you needed more evidence that the Fed is playing an outsize role in equity markets, I present to you the following chart. This shows the relative performance of banks and utilities versus an interest rate expectations proxy (bottom pane). When rate expectations go up, utilities fall, and banks rise. When rate expectations go down, utilities soar, and banks fall. … [Read more...]
Is Housing in Another Bubble?
Housing prices relative to income are moving back toward bubble highs. In the case of new homes, the ratio exceeds its prior peak. Existing home sales are not there yet, but fast approaching. Easy money, as always, the fuel feeding the fire. … [Read more...]
S&P 500 Now and Then
With S&P operating earnings up about 10% from their June 2007 levels and prices up more than 35%, investors are either A.) counting on a powerful profits recovery or B.) betting on many more years of ultra-low interest rates to justify today's prices. … [Read more...]
Do Business Cycles Die of Old Age?
At a forum yesterday, former Fed Chair Bernanke said, "There is no sense in which expansions die of old age." That might be true in Dr. Bernanke's model of the economy, but the historical record suggests otherwise. … [Read more...]
As Good as Gold
Spot gold up 16.9% YTD. … [Read more...]