After Jackson Hole – 4Q 2011 Market Outlook

The financial world eagerly awaited Ben Bernanke’s annual speech from Jackson Hole, Wyoming on Friday morning August 26th, 2011. Market analysts and economists focused on trying to predict what panacea the Federal Reserve Chairman would offer to an ailing economy struggling to grow with unusually decade-high unemployment, low consumer demand, and depressed prices. Of the … Continue reading

QE2 Explained

We’ve been perusing intensely the past 24 hours trying to get an idea on what investors are saying about the Fed’s second round of stimulus, QE2.  And we admit, we’ve been caught quite off guard by the slew of pessimism.  Though, in reality, we are secretly grinning to be in the fortunate seat of Contrarians.  … Continue reading

InvestorJabber: Swonk talks rationale behind QE2

Swonk’s analysis uncannily mirrors our view of QE2 – the Fed has no choice, but to inject massive stimulus into the market as a way to fulfill its dual mandate of combating high unemployment and moderating inflation. The new possibility that QE2 could include a total $1.5 trillion illuminates the drastic nature of anemic growth. … Continue reading

Here’s Why You Should Be Scared Of Deflation

Here’s Why You Should Be Scared Of Deflation US Economics Editor of The Economist, Greg Ip, provides a solid analysis of the risks of deflation and the effectiveness of monetary policy in today’s current economic environment. In short, monetary policy becomes ineffective in times of deflation as the cost of borrowing becomes positive again despite … Continue reading

InvestorJabber: Whitney on the Banks + Double-dip

Banks need new capital to withstand renewed housing dip Whitney said the economy is reacting from “chronic structural problems” including high unemployment that are unlikely to be addressed through monetary policy. “There’s nothing more important to the economy than unemployment,” said Whitney, who started her firm after predicting Citigroup Inc.’s dividend cut in 2007. “You … Continue reading

A cauldron of poisonous forecasts…

What to make of today’s data, reports, and financial news?  Seems market sentiment has turned on a dime from bullish to down-right grim.  Prospects of “double-dip” have increased, organic growth remains invisible, and the “new normal” has consumers changing their spending habits even in the cases of those who don’t need to.  Gold prices, a … Continue reading

El-Erian hangs onto Uncertainty

“The minute someone puts out a green light, and earnings constituted a green light, you’ll see people rushing back into risk markets,” El-Erian said. “The indicators that we look at suggest that the economy continues to lose momentum. The key is going to be ultimately is the economy creating enough jobs to make people comfortable, to allow companies to invest?”

Growth Probably Cooled as Spending Slowed: U.S. Economy Preview

A lack of jobs, a loss of household wealth stemming from the slumps in stocks and housing, tight credit and the need to reduce debt and rebuild savings are among reasons economists forecast spending will be slow to recover. Purchases will increase at a 2.6 percent pace on average in the second half of the year, according to the median estimate of economists surveyed earlier this month.

Company payrolls rose by 83,000 in June, while overall the economy lost 125,000 jobs, the Labor Department reported July 2. The unemployment rate fell to 9.5 percent as discouraged workers dropped out of the labor force.

A widening trade gap and a slower pace of inventory restocking also depressed growth last quarter, economists said. Stockpiles climbed 0.1 percent in May, the smallest gain this year, according to Commerce Department data.

Markets Pricing In Global ‘Paradigm Change': El-Erian – CNBC

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