Whoops! Either the Fed or the European Central Bank is wrong
The U.S, Federal Reserve and the European Central Bank are pursuing increasingly divergent economic policies. The policies are so divergent that it’s almost guaranteed that one or the other of these central banks is wrong. But the biggest worry is that the interaction...The unemployment rate is doing exactly what it's supposed to do before an upturn in hiring
The unemployment rate continues to climb, and at a faster rate than expected. The official unemployment rate hit 10.2% in October, according to the Bureau of Labor Statistics. That’s up from 9.8% in September and ahead of the 9.9% rate that economists had expected. At...Three very cautious cheers for the GDP numbers
U.S. GDP grew by 3.5% in the third quarter of 2009. That was a bigger increase from the third quarter of 2008 than the 3.2% that the majority of economists had been expecting. This marks the first time that the economy has grown after four straight quarters of...Banks still aren't lending in Europe. So don't look for a quick recovery in those economies
Bank lending fell in the euro economies in September. The year-to-year decline was just an annual rate of 0.3%. But that’s the first year-to-year decline since the European Union stated to compile these figures in 1992. (The euro itself dates back to 1999.) The...Dollar up and stocks down–don't expect that to continue
I can’t tell you where stocks are headed in the short term but it does look like the days of the dollar rally are numbered. Why do I think that? The central bank of India tells me so. And if the recent relationship between the U.S. dollar and global equities...Will the U.S. recession end on Thursday?
Thursday October 29 is the day when the U.S. Bureau of Economic Analysis is expected to report that the U.S. economy grew by 3.2% in the third quarter. That will put an end to a string of four straight quarters of economic contraction. The U.S. economy has gotten...Consumer borrowing continued to plunge in August
At 3 p.m. on October 7 the Federal Reserve reported that, as expected, consumer credit fell for the seventh consecutive month in August.. The drop of $12 billion was even worse than the consensus prediction going into the report of a $10 billion drop. If you’re...Listen to the sound of one-pizza baking: The new frugality is still picking up speed
Call it the pizza indicator. And it says that as of the end of the third quarter, at least, consumers were continuing to cut back on spending. That’s not good news if you’re hoping that the economic recovery will get here soon. Here’s what the...Wall Street's numbers on earnings and revenue for 2010 don't add up
Good number crunching in the “Ahead of the Tape” column in yesterday’s Wall Street Journal by Mark Gongloff. Conclusion: It’s hard to see how U.S. companies are going to deliver the earnings growth Wall Street now projects for 2010. Here are...Bah, humbug! Holiday sales projected to drop 1% this year
It could be worse, of course. On Monday October 5 the National Retail Federation projected that retail sales in the United States will fall 1% in the crucial November-December holiday shopping window. That will take total retail sales back to where they were in 2005....Banks are going to have to raise a lot more capital, says HSBC CEO
HSBC (HBC) CEO MichaelGeoghegan told the Financial Times that he expects international regulators will eventually require banks to have Tier One capital ratios of about 10%. That’s significantly higher than the 8% target now going the rounds in conversations...After the recovery (whenever it arrives), what will be the new "normal"?
What’s the new “normal”? That’s the big debate on Wall Street right now. And the answer is of key importance to your portfolio. One on side, there are what I’ll call the “growth bears” who believe that once we’re recovered from the global financial and economic crisis...Nothing but bad news in this morning's unemployment numbers
The only good news in the September unemployment numbers was that the market had sold off 203 points the day before on worries over these figures. So the drop Friday morning hasn’t been very steep so far. But the numbers were bad, no doubt about it. How bad? Let...Where's the money? Despite the Fed, the money supply is falling
We’ve got a little problem in the economy. Tiny really. Nothing to worry about. Just that money supply is falling and that could endanger the entire economic recovery. The Federal government and the Federal Reserve are pumping money into the economy as fast as they...Those individual investors who left the stock market in 2008 aren't back yet–which will make any near-term dip short and shallow
The Standard & Poor’s 500 stock index is up close to 60% from the March 2009 bottom. Most investors, according to data on mutual fund money flows, have stayed the course so while they were pummeled by dropping prices in 2008, they’ve also profited from...Second quarter GDP better than expected on third revision
Third time is the charm, apparently. U.S, real GDP fell at an annualized rate of 0.7% in the second quarter, according to this morning’s data release from the Commerce Department. The figure was the regular third revision of quarterly data. And it surprised...We have nothing to fear but a replay of 1937 itself
The specter of 1937 hangs over the economy and the stock market. That’s the year that over confidence that the Roosevelt administration had whipped the Great Depression and that it was time to balance the federal budget led to another deep recession that wiped out...Is this the end of the housing recovery? Even talking about an end to government subsidies sends the market into a tizzy
The program that gives first time home buyers an $8,000 tax credit is due to expire at the end of November. The Federal Reserve will talk about winding down its buying of mortgage-backed securities in its two-day meeting this week. Will that be the end to the rally...We're in a hole–how about trying to grow our way out?
The economy is taking its first shaky steps toward recovery. Now what should we do? Pass a second national stimulus package scheduled to take effect in 2011, when the effects of the first stimulus have largely worn off? Move to reduce the deficit because the biggest...It's better to be an investor than a worker right now
Household wealth in the United States grew by $2 trillion in the second quarter, according to the Federal Reserve. That’s the first gain in household wealth since the third quarter of 2007 at the start of this recession and stock market slide, and brings to an...At last real job creation–in Brazil
More evidence from Brazil that the global recession is over–in that economy. Figures released on September 17, 2009, show that the Brazilian economy created a net 242,126 formal jobs in August. Net formal job creation for the year stands at 680,034. Add that to...Steel, a leading indicator on the economy, could be turning negative
Steel goes into buildings, appliances, and cars. That makes demand for steel a leading indicator for the economy since companies order steel in antipication of rising sales of their own products. This summer global demand moved up and so did prices. In August a...We'd gladly go into debt to save the economy but those bad banks won't let us
U.S. consumers cut back on borrowing by a record $21.6 billion in July. According to the Federal Reserve, consumer credit fell at an annual rate of 10% in the month. That’s about five times faster than the contraction that economists were expecting. That’s great news...Jim’s Daily Email Alerts:
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