As I often write, in Japan it is far more difficult to hide the failure of “stimulus.” There are varying degrees of visibility in that regard around the QE world, but they all share negative redistribution as the base alloy. That’s why Janet Yellen may be merely uncomfortable and Mario Draghi increasingly brooding, but Haruhiko Kuroda was just pushed to [...]
It was back in 2009 that Bill Gross coined the term New Normal to describe the post-crisis US economy. That economy is marked by a reduced willingness to take risk in the private sector for a variety of reasons. No interest rate is low enough to induce corporate spending in an environment where aggregate demand continues to disappoint. In a [...]
The latest noises out of both Fannie and Freddie are for increasing intrusion into housing, which is a sharp departure from where this was all heading (and where it should). The previous GSE administration (Ed DeMarco left in January, replaced by Mel Watts) had left the impression of winding down the troubled firms that have been in conservatorship since the [...]
March household spending in Japan surged by 7.2% Y/Y, the highest spending growth rate since 1975. That level even beat out March 1997, the month before the previous and similar tax hike. Extrapolating from that one number, there is now more hope that the Japanese economy may be able to withstand April’s tax intrusion without an economic disaster like that [...]
The US stock market, now joined by most of the rest of the world, continues its one way march higher. Those who focus on fundamentals, economic or stock market, have been scratching their heads all year for an explanation, but the reality is that there is no fundamental reason for the 20%+ run this year. Earnings growth has been lackluster [...]
"If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness. It will eviscerate job-creating investments in education and energy and medical research. It won’t consider whether we’re cutting some bloated program that has outlived its usefulness or a vital service that Americans depend on every single day.” President Obama on the sequester The President gave [...]
Once upon a time in a commentary long, long ago I said that we'd know the US economy was on the right track when we saw three conditions simultaneously: rising stocks, a rising dollar and a falling gold price. Those three conditions - sustained - would indicate that the market is anticipating better growth and lower inflation. In case you've [...]
I was on the road last week and between meetings I spent more time than usual watching CNBC. I no longer wonder why their ratings are down. They have a lot of hours to fill obviously and right now they are concentrating, seemingly exclusively, on the fiscal cliff negotiations. Last Tuesday, they interviewed a stock broker from Charlotte, NC who [...]
There’s important potential for the economy to strengthen significantly if there’s a greater level of security and confidence about where we’re going. A plan for resolving the nation’s longer-term budgetary issues without harming the recovery could help make the new year a very good one for the American economy. Ben Bernanke in a speech last week to the Economic Club [...]
John Templeton, one of the greatest investors of all time, said that investors should buy at the point of maximum pessimism. Nothing illustrates the adage of something being easy to say and hard to do more than that statement. It is of course at the point of maximum pessimism that our natural psychological barrier to executing that strategy is greatest. [...]
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