Bloomberg.com – Noah Smith: That We Know About Recessions Might Be Wrong What are business cycles? Many people think that booms naturally lead to busts — that excesses built up during good times lead inevitably to a crash. Today’s economists don’t see it that way. Modern macroeconomists think that recessions and booms are random fluctuations… Continue reading Rethinking Friedman
The Wall Street Journal – As Oil Price Drops, Texas Lenders Watch for Fallout Small Banks Brace for Hit to Local Businesses of Any Cutback in Crude Production The drilling boom that lasted most of the past decade was financed largely by private-equity firms and bond deals—not the local and regional banks that typically provided… Continue reading The Effect Of Falling Oil Prices
Charts of the Week Topics Covered This Week Include: Earnings Still Not That Good Earnings Still Not That Good – 2 Revenues Are Also Poor – 1 Revenues Are Also Poor – 2 Divergence Between The U.S. And The Rest Of The World The Fed’s Dual Mandate & Timing The First Rate Hike The President’s… Continue reading Charts of the Week
Comment Yesterday Jim was on Bloomberg TV discussing interest rates, Fed policy and earnings. To view the interview, click on the image above. To view any of our recent interviews, click here. In the interview Jim stressed that current earnings and the outlook for future earnings were not that good. This was detailed here and… Continue reading Estimating Q4 Earnings Growth
<Click on chart for larger image> Bank of America – Why Bank Of America Is Stumped: Despite “Lower Gas Prices” US Consumer Spending Has Plunged All signs point to a robust consumer: job growth has accelerated, with an average of 336,000 jobs created a month over the prior three months, gasoline prices have plunged and… Continue reading Consumer Confidence vs. Retail Sales
The Financial Times – ECB breathes sigh of relief over quantitative easing On the eve of its historic decision to launch a quantitative easing programme last month, the European Central Bank faced a toxic mix of anxiety and disillusionment. Eurozone economic conditions had been deteriorating, with inflation and some measures of inflation expectations falling below… Continue reading ECB QE
Euro Insight – EU Sources: EU-Greek Relations Soured by Leaks; Sides Further Apart Brussels officials ‘infuriated’ by ‘wildly misleading’ Greek claims that Juncker and U.S. Treasury are backing Syriza plan to alleviate debt; EU official says Greeks are ‘digging their own graves;’ Lazard criticized by EU side The carefully orchestrated dance between the new Greek… Continue reading Negotiations With Greece Tenuous
<Click on chart for larger image> The Wall Street Journal – Apple: $710 Billion and Counting CEO Cook Cites iPhone Maker’s Ability to Sell Pricey Products in China On the day Apple Inc. became the first U.S. company to close with a market capitalization above $700 billion, Chief Executive Tim Cook credited its success to… Continue reading Apple Tops $700 Billion
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<Click on chart for larger image> The Financial Times – Global tug of war is focus for investors Markets are already responding to divergence between US and rest of world There is an economic and policy tug of war going on between the US and most of the rest of the world. Data releases, official… Continue reading Divergence Between The U.S. And The Rest Of The World
The Financial Times – US investors primed for midyear rate rise US investors are preparing themselves for the first tightening of interest rate policy this summer as strengthening employment conditions in the world’s largest economy counter worries over slowing global activity. It is a shift in sentiment for investors, who had expected the first rate… Continue reading Timing The First Rate Hike