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Category Archives: QE

Short Economic Stories January 28 2012

In the US: •The Fed announced it plans to leave short term interest rates in the current 0 – 0.25% range until late in 2014. And an explicit 2% inflation target was set. •Bond markets are interpreting the news something along these lines: the economy is sufficiently weak and likely to remain that way for several years. So the Fed is going to commit […] Read the rest of this entry »

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Short Economic Stories Jan 21 2012

Big Picture: Warning: The mini greedometer (tactical risk indicator) is displaying readings previously only seen when the S&P500 was within 5% of a secular (long term) top. The greedometer (strategic risk indicator) is approaching dangerous risk levels as well. There is very little upside and a great deal of downside to risk assets (stocks, junk bonds, commodities, REITs) at this time. A much more […] Read the rest of this entry »

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Weekly Short Economic Stories

The stupidest thing I’ve read in a while:  Barney Frank intends to remove the voting rights of regional Federal Reserve Presidents on the rate-setting FOMC board and hand their voting privileges to White House appointees. For decades, the Fed has done a masterful job at stopping the US economy from feeling the economic pain both warranted and necessary from unwise and myopic fiscal policy.  […] Read the rest of this entry »

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Weekly Short Economic Stories

Every country in the G7 (except Canada) has an economy that is smaller now than it was in 2008 (before the last recession).  Because of how the NBER defines recessions, it says we had one in 2008-2009, and have since come out of it.  I suggest the definition include a comparison of the current economy size to that before the recession began. If the […] Read the rest of this entry »

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Weekly Short Economic Stories

Yesterday saw the August consumer confidence report from The Conference Board.  Ouch!  It dropped to the lowest level since April 2009. Unless there’s a massive disconnect, we’re likely to see a very weak ISM (US manufacturing) report on Thursday, and an equally bad August employment report on Friday.  All else being equal, this will put downward pressure on stocks, and upward pressure on high […] Read the rest of this entry »

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To QE3 or not QE3

Two things…. thing 1:  This morning we got the 2nd read on 2Q GDP from the BEA.  I expected it to drop from +1.3% to +1.0% — and that’s what it did.  The US economy continues to slide towards recession.  As you know, there will be one more estimate on 2Q GDP at the end of next month. I doubt it will change much […] Read the rest of this entry »

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Weekly Short Economic Stories

Wall St economists and analysts are busily lowering GDP estimates for the 2nd half of this year, and for 2012. They’re slowly approaching the economic forecast I made last December, but are not there yet — and it is now late August –  well done Wall St!  How quickly that 4% 2011 GDP forecast evaporates. They’re still not close to admitting there’s a big […] Read the rest of this entry »

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Weekly Short Economic Stories

There’s an old joke:   If you can keep your head while those about you are losing theirs, you clearly don’t understand the situation. Last week was one of the most volatile weeks in the history of stock, bond, currency, and commodity markets. We kept a cool head and had an outstanding week until Thursday.  France announced a short selling ban, and Sarkozy announced yet […] Read the rest of this entry »

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Weekly Short Economic Stories

It finally happened. The US lost its AAA credit rating (from S&P at least) on Friday evening. It should have long since happened, but here we finally are.  What happened in the US Treasury bond market on Monday ?  Treasury prices rose.   Then on Monday, S&P extended the favor and lowered Fanny & Freddy’s rating. Rightfully so. Last week was a brutal week for […] Read the rest of this entry »

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Weekly Short Economic Stories

The US debt ceiling talks continued -more or less. It comes as no surprise that Congress and the White House are taking until the Treasury imposed deadline.  The $4T deficit reduction deal is apparently off the table, and we’re stuck with trying to get a $2T reduction done. Doubtless even that would have most of the cutting 5-10 years out.  Pathetic.  If $2T is […] Read the rest of this entry »

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