The Wall Street Journal – Stock-Market Tail Wags Economic Dog Historically, the stock market has acted as an early warning system—albeit, an imperfect one—for the economy, often picking up on changes in the environment earlier than many other indicators. But while the line of causality mostly runs from the economy to stocks, there is also… Continue reading Stocks’ Feedback Loop
Comment On February 6, 2014 at 9 AM CT (10:00 AM ET, 7:00 AM PT, and 15:00 GMT), Bianco Research, in conjunction with Arbor Research & Trading, will be hosting a webcast/teleconference moderated by Jim Bianco. As the markets traded sideways throughout the first half of January, many considered the taper to be a non-event.… Continue reading Deciphering The Taper’s Effect On The Markets
Reuters – Fed’s Lacker says tough to see pause in tapering ahead The U.S. Federal Reserve will probably keep reducing monthly asset purchases at its current pace and it would be hard to make the case for a pause in the tapering process, a senior Fed official said on Tuesday. Richmond Federal Reserve President Jeffrey… Continue reading Tapering The Taper
<Click on chart for larger image> MoneyBeat (WSJ Blog) – Correction Bound? “Now I remember what a correction feels like.” That’s how Ron Florance, deputy chief investment officer at Wells Fargo Private Bank, titled his note to clients on Tuesday, which seems to sum up what a lot of investors are feeling after the tumultuous… Continue reading Some Perspective On Stocks’ Slide In 2014
<Click on chart for larger image> Real Time Economics (WSJ Blog) – Only About One-Third of Labor Force Dropouts Will Return Millions of people have dropped out of the labor force since the start of the recession in late 2007, and only about a third of them will come back in the years ahead when… Continue reading The Participation Rate
The Financial Times – Mohamed El-Erian: The shrinking significance of the US jobs report For some time, the monthly release of the US unemployment rate has been seen as much more than a snapshot of conditions in the real economy. It has also provided important insights on the likely actions of the Federal Reserve, America’s… Continue reading The Jobs Report
Comment Lately we have come across many analog or overlay charts. The chart below, overlaying the 1929 stock market with today’s stock market, is getting a lot of attention. We have issues with this chart and will use charts from our friend Ron Griess of The Chart Store to illustrate our concerns. Ron believes analog… Continue reading How Useful Are Analog Charts?
<Click on chart for larger image> Fox Business – CBO Forecasts $514 Billion Budget Deficit in Fiscal 2014 The Congressional Budget Office on Tuesday reduced its estimate of the U.S. budget deficit for the current fiscal year but said sluggish economic growth and stubbornly high unemployment will cause the improvement to be short-lived. The CBO… Continue reading The Deficit
The Financial Times – US data and debt ceiling concerns rattle markets Fiscal tensions have fallen sharply along with the declining deficit, but even after agreeing on a budget, Congress still risks default if it does not authorise new borrowing soon. The timetable for raising the debt ceiling is tight this month because it is… Continue reading The Debt Ceiling
Economics One – John B. Taylor: Monetary Policy During Ben Bernanke’s Time at the Fed Like many monetary economists, I’ve recently been approached by reporters and commentators to say a few words about monetary policy during Ben Bernanke’s time at the Fed. Back in December the Washington Bureau of the Wall Street Journal asked me and… Continue reading John Taylor On Bernanke
The Financial Times – The Fed’s bad manners risk offending foreigners Some argue that the Fed should not worry about the effects its actions have on emerging economies. Its mandate is to promote maximum employment, stable prices and moderate long-term interest rates. The Federal Reserve Act does not specifically add: “ … in the USA”.… Continue reading The Federal Reserve & Emerging Markets