Secular Trends – Keynesian Policies
Economies travel in cycles. Some factors contributing to economic cycles are the following: Periods of great innovation and capital formation Fluctuations in fiscal policies Credit/Money creation War, disease, natural disaster At Alhambra, we often refer to Keynesian theory v Classical theory in reference to responses to the cyclical nature of an economy. The reality, economies .. read more
Weekly Economic & Market Review
The cover of Barron’s this week says, Outlook: Mostly Sunny. Their Big Money poll shows 55% of the professional money managers they surveyed are bullish on the stock market. If that makes you feel similarly optimistic about the near term outlook for shares, it might interest you to know that 59% of these perennially pollyannish souls .. read more
A Closer Look: Market Cap/Style
The S&P 500 cap-weighted index is at a crossroads right now. The index currently sits atop its 50-day Moving Average, with momentum pointing slightly bearish after Friday’s close at the lows of the session. The index has returned 12.61% so far this year. The S&P 500 equal-weighted index ((RSP)) is set up so that every .. read more
Bernanke’s Flexibility Is Constraint For You and Me
Federal Reserve Chairman Ben Bernanke’s recent publicity tour included a lecture on the gold standard. Not surprisingly, Chairman Bernanke was very critical of the monetary gold standard, especially its limitations on central banks to effect policies that might alleviate economic imbalances. Primary among these imbalances, especially from the perspective of a central banker, are recession-induced .. read more
Are Stocks Fairly Priced? Efficient Markets and Inefficient Politics
Thinking Things Over April 15, 2012 Volume II, Number 15: Are Stocks Fairly Priced? Efficient Markets and Inefficient Politics By John L. Chapman, Ph.D. Canton, Ohio. Investors are living through an era of extraordinary uncertainty, as evinced by the incredibly wide range of professional opinion available at the moment from amongst the economic and financial commentariat. In the .. read more
Weekly Economic & Market Review
What a strange week: North Korea’s new leader, Kim Jong Un, tried to emulate his ancestors by firing off a rocket but it disintegrated minutes after take off. Following that Un-success the young Mr. Kim threatened to conduct a nuclear test so that his country could end “the days of enemies threatening and blackmailing us .. read more
A Closer Look: Commodities
The GSCI Commodity Index ((GSG)) consists primarily of Energy (71%), but also contains Agriculture (14%), Industrial Metals (7%), Livestock (4%), and Precious Metals (4%). The index fell below the 50-day moving average, falling to the 34.40 support level. With the dollar likely to strengthen further, contingent on the government not pursuing another round of quantitative .. read more
The Financial Age of Free Trade
On September 22, 1985, government officials from five nations, the United States, France, the United Kingdom, West Germany and Japan, met in the Plaza Hotel in New York City to sign a definitive agreement to work toward U.S. dollar devaluation. Over the next two years central banks used a “massive” $10 billion to force the .. read more
