Tag Archives: economy

Sometimes economics can be complicated, such as why the labor market has slowed in such lingering fashion since early 2015. Sometimes economics can be easy, such as why there is so much less to the economy this year than thought. The easy part relates to the hard part. The labor market slowed and so did national income. Though so much of official focus is on debt supplementation, it’s always, always about income. US...

World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia’s independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red – as they have been every day this week before levitating to record highs – ahead of hurricane-distorted nonfarm payrolls data (full preview here)....

The economic reports of the last two weeks were generally of a more positive tone. The majority of reports were better than expected although it must be noted that many of those reports were of the sentiment variety, reflecting optimism about the future that may or may not prove warranted. Markets have certainly responded to the dreams of tax reform dancing in investors’ heads with US stock markets providing a steady...

Something else ‘Murica is no longer #1 in… A recently released World Economic Forum report has found that the global economy is recovering well nearly a decade on from the start of the global financial crisis with GDP growth hitting 3.5 percent in 2017. The eurozone in particular is regaining traction with 1.9 percent growth expected this year. As Statista’s Niall McCarthy points out, the improvement in...

There is a difference between reflation and recovery.  The terms are similar and relate to the same things, but in many ways the latter requires first the former.  To get to recovery, the economy must reflate if in contraction it was beaten down in money as well as cyclical forces. In the Great Crash of 1929 and after, reflation was required because of the wholesale devastation of the money supply.  By pumping up new...

It has now been 318 trading days since the S&P 500 suffered a 5% drawdown – the 4th-longest streak since 1928… So everything is awesome… [embedded content] BUT…US ‘hard’ economic data has not been this weak (and seen the biggest drop) since Feb 2009… US Data Surprise Index, 2006 - 2017 - Click to enlarge Q3 Was a Roller-Coaster… Q3 was the 8th straight quarterly gain in a row for The Dow – the longest streak...

Time is the soul of money, the long-view – its immortality. Hard assets are forever, even when destroyed by the cataclysms of history. It is the outlook that perpetuated the most competent and powerful aristocracies in continental Europe, well up through World War I and, in certain prominent cases, beyond; it is the mindset that has sustained the most fiscally serious democratic republic in the Western world, that of...

Today we’ll continue to size up the bull market in governmental promises. As we do so, keep an old trader’s slogan in mind: “That which cannot go on forever, won’t.” Or we could say it differently: An unsustainable trend must eventually stop. Lately I have focused on the trend in US public pension funds, many of which are woefully underfunded and will never be able to pay workers the promised benefits, at least without...

The erosion of social order in any historical or geographic context is gradual; until it isn’t. Germany has always followed a keen sense of this process, having experienced it to every possible extreme between the World Wars. Hyperinflationary collapse doesn’t happen overnight; it took three years for the Weimar mark to disintegrate, and then Weimar Germany. Even Nazism wasn’t all it once. What was required was...

In ancient times, like as far back as the 1990s, housing prices grew roughly inline with inflation rates because they were generally set by supply and demand forces determined by a market where buyers mostly just bought houses so they could live in them. Back in those ancient days, a more practical group of world citizens saw their homes as a place to raise a family rather that just another asset class that should be...