The Wall Street Journal – When Average Is Good Enough Last week, 39% of respondents to a long-running weekly survey from the American Association of Individual Investors said they were bullish about stocks. That is well above readings of just over 27% in both February and April, when violence in Ukraine weighed on sentiment. But… Continue reading Stock Market Sentiment Not Overdone Yet
The Wall Street Journal – David Malpass: Now Is the Time to Raise Interest Rates Rising assets and falling gold prices are good news for the economy but inconsistent with the Fed’s zero bound. The ebullience in financial markets raises concerns that investors have become complacent about risk and will leverage assets beyond their earning… Continue reading Raising Interest Rates
The Wall Street Journal – Japan’s Population Problem in Five Charts Japan had 238,632 more deaths than births in 2013, a record. Taking immigration into account, the total population in 2013 declined by 217,000 people compared to the previous year. Assuming the average woman has 1.35 children—a bit below the current level—Japan’s population is predicted… Continue reading A Look At Japanese Demographics & Their Economy
Pension Partners – Charlie Bilello: The Nifty Fifty Market There is a massive divergence going on between the haves and have-nots, or the largest capitalization stocks and the rest of the equity market. As the table below indicates, the 50 largest stocks in the Russell 3000 are up 4.1% in 2014 while the average return… Continue reading The Divergence Between Large Caps & Small Caps
The Wall Street Journal – U.S. Debt Holds Broad Appeal Investors across the globe are scooping up Treasurys, an asset whose main selling point until recently was safety. Overseas buyers, led by China, are buying U.S. debt to gather dollars and help weaken their currencies as a way to boost exports. Financial institutions are stocking… Continue reading U.S. Debt
The Wall Street Journal – Sex, Drugs and GDP: the Challenge of Measuring the Shadow Economy Some Questioning the Value, Accuracy of European Nations’ Move to Tally Illicit Doings New methods of measuring economies sometimes raise eyebrows. Even more so when they involve prostitutes and mounds of cocaine. The U.K., Ireland and Italy are among… Continue reading The Things We Do To Make Our Economy Appear Healthy
Bloomberg.com – Putting Bank Fines in Context This morning we discussed the danger that arises from merely fining banks instead of prosecuting them for violating laws. Since the news cycle is focusing on the potential multibillion-dollar fines for BNP Paribas SA and Bank of America Corp., let’s have a look at the amount of those… Continue reading Some Perspective On Bank Fines
The Financial Times – Can the Great Recession ever be repaired? The US employment report on Friday was notable because it showed that the number of jobs in the American economy now exceeds the high point reached in January 2008 for the first time since the Great Recession. Another important signal that the economy is… Continue reading Economic Growth In The Wake Of The Great Recession
<Click on chart for larger image> The Financial Times – Russian companies prepare to pay for trade in renminbi Russian companies are preparing to switch contracts to renminbi and other Asian currencies amid fears that western sanctions may freeze them out of the US dollar market, according to two top bankers. “Over the last few… Continue reading Russian Sanctions & The Yuan
The Wall Street Journal – China’s Central Bank Prevails in Policy Battles Over Economic Future China’s central bank is turning into a policy heavyweight in a battle among the country’s top economic authorities over how to fuel growth without piling on excessive debt. The government has sought to portray a united front on its “mini-stimulus”… Continue reading The People’s Bank Of China
<Click on chart for larger image> The Wall Street Journal – Wall Street’s ‘fear gauge’ hits 7-year low Wall Street’s “fear gauge” has fallen to a seven-year low, helping propel US stocks to a record peak but suggesting investor complacency reigns over financial markets. The CBOE Vix equity volatility index, a barometer of investor sentiment,… Continue reading Volatility
The Financial Times – Wolfgang Münchau: Europe’s drifters wait but inflation never comes Not one of the new measures addresses the problem of low inflation directly. The ECB’s latest forecast says that headline inflation will remain below its 2 per cent inflation target until late 2016. The trouble is that, once low inflation sets in… Continue reading European Inflation