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Yellen Confirms, This Is It

By |2016-12-15T19:11:49-05:00December 15th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Wages and slack have been at the center of the economic discussion for almost three years now. The massive shedding of employees that took place during the Great “Recession” left behind a huge pool of potential labor for the economy to work through as it was expected to recover. That never happened. So instead, economists have been working backward to [...]

Maladies Of Unemployment And Its Rate

By |2016-12-02T12:41:06-05:00December 2nd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The headline writers for this morning’s payroll reports can’t really help themselves. In a clickbait world, any kind of record or new high or low is bound to make its way into every article title. The unemployment rate fell to 4.6% in November, the lowest since 2007, therefore it isn’t surprising to see reporting on the labor statistics to have [...]

All Kinds Of Stock Market Irregularities

By |2016-10-13T18:03:44-04:00October 13th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A great many asset classes have been moving almost perfectly sideways for months now. That is unusual by any standard, but more so given the circumstances of late 2016. This might be indicative of doubts, some of which are being reinforced by weakness that might be characterized as “unexpected” but really no longer is. Today’s data on Chinese exports is [...]

Earnings And Valuations Update; Still Nowhere Near Good

By |2016-09-20T17:32:21-04:00September 20th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

At the end of July with a majority of the 500 companies included in the S&P 500 index having reported their earnings, the tabulated EPS (as reported) was figured around $24.09. That was already down sharply from just a month earlier when compared to analysts’ expectations from just before Q2 earnings season started. In late June, the EPS outlook suggested [...]

The Feel Of Recession

By |2016-09-16T13:07:05-04:00September 16th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the fifteenth consecutive month dating back to November 2014, the US CPI remained less than 1.5%. While this was supposed to be the year where “transitory” effects of oil prices as well as “other” factors dissipated, only in January has the full CPI been above 1.1%. Much like the PCE Deflator, the Fed’s preferred inflation gauge, there is no [...]

Slowing And Even Contracting: Hours & Earnings

By |2016-09-02T16:28:56-04:00September 2nd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The primary symptom of the economic malaise or depression that has developed since the Great Recession (which wasn’t a recession) is an economy that works less and thus earns less. Such a condition would suggest a shrunken system or at least vastly diminished potential. That much is well-established even in the orthodox literature though it isn’t ever talked about publicly. [...]

Incongruent Logic To Balance Risks Leads To Incongruent Markets With Nothing But Risk

By |2016-08-17T18:03:40-04:00August 17th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In February 2013, Federal Reserve Board Governor Jeremy Stein gave a speech at a research symposium produced by the St. Louis branch of the Federal Reserve that shocked quite a lot of people. QE3 and QE4 were still quite new, but here was a Board member talking just months after their start of “reach for yield.” His assessment of risks [...]

S&P 500 EPS Drops $2 In The Past Month; Index At New High

By |2016-08-01T16:20:08-04:00August 1st, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

Earlier in April, analysts were projecting $26.69 in as-reported second quarter earnings for the S&P 500. By the week of June 22, just prior to the start of Q2 earnings season, that estimate had only declined slightly to $26.38. For the week of July 21, just a month later, with about one-third of companies reporting the earnings figure sank to [...]

Bring Back the ‘Fed Model’ For Stocks? Nope

By |2016-07-20T19:19:57-04:00July 20th, 2016|Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

A few days ago I examined the relationship between the stock market PE and CPI inflation. The reason was the sudden renewed emphasis on low inflation in the context of trying to justify increasingly outlying earnings multiples in stocks. Earnings fell sharply in 2015, but prices really didn’t; there was, at most, only more volatility spread across sideways trading (even [...]

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