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government spending

Weekly Market Pulse: Surprises

By |2024-01-29T07:30:39-05:00January 28th, 2024|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Newsletter, Real Estate, Stocks, Taxes/Fiscal Policy|

We got the latest report on economic growth last week and it surprised most everyone. Real GDP expanded by an annualized 3.3% in the fourth quarter, well above the consensus estimate of 2%. Nominal GDP expanded an annualized 4.8% quarter to quarter and 5.8% year-over-year. The annualized quarter-to-quarter change is exactly the average annual change since 1990. Real GDP grew [...]

Macro: GDP Q3 — Inflationary BOOM!

By |2023-12-21T19:22:58-05:00December 21st, 2023|Economy|

Outside of the pandemic defined as 2020 and 2021, this past quarter was the 5th best quarter for nominal GDP in the last 25 years. It was the best real growth quarter since Q2 and Q3 of 2014. The last 12 months has been  mostly about services, here are the biggest contributors to YoY GDP: Consumption of Services Consumption of [...]

Weekly Market Pulse: Politicians Acting Badly

By |2023-05-22T08:42:25-04:00May 22nd, 2023|Alhambra Portfolios, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

Should investors be worried about the impending breach of the US debt ceiling? A default would be catastrophic according to numerous news articles I've read recently. Well, to be honest, I didn't read past the first few paragraphs of most of those articles because if you've read one of them, you've read them all. Obviously, a default would be bad [...]

Uncle Sam Was Back Having Consumers’ Backs

By |2021-02-17T17:41:07-05:00February 17th, 2021|Currencies, Economy, Markets|

American consumers were back in action in January 2021. The “unemployment cliff” along with the slowdown and contraction in the labor market during the last quarter of 2020 had left retail sales falling backward with employment. Seasonally-adjusted, total retail spending had declined for three straight months to end last year.The latest updated estimates from the Census Bureau, released today, show [...]

The Austerity Path

By |2018-02-05T13:00:58-05:00February 5th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What happened to the recovery? It’s a complex question with a surprisingly simple answer. The density of the topic, particularly entangled as it was in close proximity to the calamity of the Great “Recession”, clouded the diagnosis. If you ask ten different academic economists you might get ten different answers, though I suspect seven or eight of them would be [...]

The Anti-Reflation Story Is The One That Mattered, And The Treasury Market Isn’t The Only One Telling It

By |2018-01-03T12:38:39-05:00January 3rd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury market isn’t the only place where the idea of “globally synchronized growth” is proving a tough sell. The collapse of the yield curve suggests, in fact, it isn’t being bought one bit. Apart from bonds, US companies aren’t warming to the economic warming, either. The labor market apart from the unemployment rate remains suspiciously subdued. According to the [...]

Fiscal ‘Stimulus’ Will Be Starting From Less Than Zero

By |2017-03-02T17:09:55-05:00March 2nd, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For a “reflation” regime predicated as much on government spending, it was an inauspicious start. Construction spending fell sharply in January, as lackluster growth in the private sector could not offset sharp declines in government activity. At the state and local level, construction spending fell nearly 5% from December (seasonally-adjusted), while at the federal level spending dropped more than 7%. [...]

The Third Order of Unraveling ‘Bank Shots’

By |2016-10-03T16:53:24-04:00October 3rd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In economics, there is a great deal of thought and debate surrounding first and second order effects. In short, a first order effect is something that is directly caused by some change, while a second order effect is caused by the first order effect. In many instances it is the second order effects that countermand any of the first, rendering [...]

Beneath The Noise

By |2014-10-30T12:34:48-04:00October 30th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Most of what accounts for GDP is nothing but noise, leaving only a few major indications about what the economy is doing (or not doing). Prior to 2008, that wasn’t much of a problem as GDP by and large seemed to correlate well with other estimations of economic progress, and even our own intuitive perceptions. If you go back historically, [...]

The Missing Party of the Debt Discussions

By |2013-10-04T15:44:38-04:00October 4th, 2013|Markets|

It is easy to simply narrow the paradigm of the government showdown into party politics, thus pitting Democrats squarely against only Republicans. But that is only helpful in gauging political implications, should there actually be any (were there after 2011?). Rather than order the spectrum in terms of politics, it is more useful, for our purposes here, to align them [...]

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