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The Fed Continues To Argue With Itself On GDP Seasonality

June 9, 2015

<Click on graphic for larger image> Liberty Street Economics – The Myth of First-Quarter Residual Seasonality Recent studies by economists at the Federal Reserve Bank of San Francisco as well as a number of private sector research firms (as summarized by the Wall Street Journal) suggest that there are problems with the seasonal adjustment of GDP… Continue reading The Fed Continues To Argue With Itself On GDP Seasonality

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Which Earnings Matter?

June 9, 2015

<Click on chart for larger image> The Associated Press – AP analysis: More ‘phony numbers’ in reports as stocks rise Those record profits that companies are reporting may not be all they’re cracked up to be. As the stock market climbs ever higher, professional investors are warning that companies are presenting misleading versions of their… Continue reading Which Earnings Matter?

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The FOMC Votes That Matter Most

June 9, 2015

<Click on chart for larger image> The Wall Street Journal – Benn Steil: Misreading the Fed on a Rate Increase Ignore the Federal Open Market Committee. The smaller, more dovish Board of Governors will decide. On June 17 the Federal Reserve will release its new “Dot Plot,” which will show, anonymously, what each Federal Reserve… Continue reading The FOMC Votes That Matter Most

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Merger Activity As A Contrarian Indicator

June 9, 2015

<Click on chart for larger image> DealB%k (NYT Blog) – Andrew Ross Sorkin: Mergers Might Not Signal Optimism But in contrast to previous merger booms, this recent spate of deals shouldn’t necessarily be considered a barometer of a healthy economy. If anything, it might be an indicator of the troubles that lie beneath an overheated… Continue reading Merger Activity As A Contrarian Indicator

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Wage Pressure?

June 9, 2015

<Click on chart for larger image> Bloomberg.com – Wages Seen Growing at Small Businesses in U.S., NFIB Reports Small companies in the U.S. see wages continuing to grow in coming months after a net 25 percent said they recently boosted worker compensation. A net 14 percent of managers said in May that they will increase… Continue reading Wage Pressure?

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The Unstoppable Chinese Stock Market Rally

June 9, 2015

<Click on chart for larger image> Bloomberg.com – The $6.5 Trillion China Rally That’s Making Stock-Market History The figure, $6.5 trillion, sums up the value created in just 12 months of trading on Chinese stock exchanges — and why some see a rally that’s gone too far. As China’s boom surpasses the headiest days of… Continue reading The Unstoppable Chinese Stock Market Rally

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Newsclips

Revisiting The Taper Tantrum

June 9, 2015

The Wall Street Journal – MEMORIES OF 2013 ‘TAPER TANTRUM’ RETURN Back in 2013, a fundamental problem was that the market misread the Fed’s plans for its bond purchases. Fed officials were eying an exit from the program at a time when some investors were talking about “QE-infinity,” the idea that bond buying might go… Continue reading Revisiting The Taper Tantrum

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Is The Cheap Oil Story Over?

June 9, 2015

Federal Reserve Bank of New York – Is Cheaper Oil Good News or Bad News for U.S. Economy? Oil prices have declined substantially since the summer of 2014. If these price declines reflect demand shocks, then this would suggest a slowdown in global economic activity. Alternatively, if the declines are driven by supply shocks, then… Continue reading Is The Cheap Oil Story Over?

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Greece: Extend & Pretend

June 9, 2015

The Wall Street Journal – Greece, Creditors Consider Extending Eurozone Bailout Until March Greece’s international creditors have suggested extending the country’s bailout program until the end of March 2016, but disagreements over the conditions attached to the continued support and what would happen afterward risk undermining that plan, three people familiar with the negotiations said… Continue reading Greece: Extend & Pretend

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Volcker Is Worried (Again)

June 9, 2015

The Financial Times – Paul Volcker warns on health of US state finances Paul Volcker, former chairman of the Federal Reserve, has warned that US states rely on faulty practices to balance their budgets, masking the true nature of their finances and leading to poor policy making. While states have returned to better health after… Continue reading Volcker Is Worried (Again)

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Cartoons

June 9, 2015

Newsclips

Timing The First Rate Hike, Do Market Expectations Matter?

June 8, 2015

<Click on chart for larger image> The Wall Street Journal – Jon Hilsenrath and Michael S. Derby: Fed on Track for Rate Rise The strong May jobs report bolsters the view of many investors that the central bank will move in September The strong May employment report likely keeps the Federal Reserve on track to… Continue reading Timing The First Rate Hike, Do Market Expectations Matter?