Bonds and Stocks
Note on U.S. Inflation
April 20, 2009
One of the conceptual tools that economists use to analyze inflation is the output gap, which compares the long-run trend of economic growth, also known as potential GDP growth, to the actual trend in output. When potential lies below actual, inflation tends to accelerate, but when actual as now is below potential, the opposite occurs. […] More
Revered Financial Analysts
April 6, 2009
Herd behavior is intrinsic to financial market behavior, and every herd needs trustworthy shepherds. The top analyst reputations tend to be built from contrarian forecasts that come true. So while investors find comfort in following the crowd, the savvy analyst looks for opportunities when the crowd seems mistaken. The analyst must choose the right moment. […] More
March and First-Quarter Markets in Figures
April 1, 2009
10-Yr Yield 03/31/09 Chg vs End-Feb Chg vs End-2008 U.S. 2.68% -35 Basis Points +56 Basis Points Germany 2.99% -12 +4 Japan 1.35% +7 +17 U.K. 3.17% -45 +15 Canada 2.78% -38 +9 3-month euros U.S. 1.19% -7 Basis Points -24 Basis Points Euroland 1.51% -32 -38 Japan 0.60 -4 -23 U.K. […] More
Big Stock Market Rallies in a Bear Market
March 10, 2009
At mid-day in New York, the Dow Jones Industrial Average shows a gain of 5% since the open. We are possibly on our way to the tenth daily increase of at least 4% since a record closing high of 14165 in October 2007. Daily moves of as much as 4% are usually very uncommon. There […] More
Are Stock Markets Irrationally Apprehensive?
March 6, 2009
The DJIA avoided re-crossing Greenspan’s irrational exuberance flash-point of 6437 today, but it seems only a matter of short time before that happens. Many would argue that investors are as irrational now as then, but consider this. From August 12, 1982, the start of a bull mark when the DJIA was at 777, to 6437 […] More
Eroding Confidence in Equities
March 3, 2009
Shifting rates of decline in share prices play a role as both cause and effect in the financially-inspired economic crisis. Equity market behavior provides a barometer of confidence in the policy response to the crisis, expectations about how soon stability might return, and fears that capitalism will never be practiced the same way again. Talk […] More
Will The Global Economy Emerge Stronger?
February 25, 2009
It’s been another tough session for U.S. stocks, and the DOW as on Monday is testing 7197, which prior to this week had been its lowest previous intra-day level of the current decade, touched in October 2002. Before then, the DJIA had not been below 7197 since May 16, 1997. Much is being made of […] More
Monday Monday, Can't Trust That Day
February 23, 2009
The DOW fell 3.4% today and on the first calendar week session in ten of the last eleven weeks. The index is 0.5% away from exceeding a cumulative drop of 50% from the October record closing high of 14165. The market has lost 20.8% since Warren Buffett in mid-October pronounced that it was then a […] More
Bank Rescue Scheme Elicits Thumbs Down Reaction
February 10, 2009
Things are not going well on this critical day in the financial and economic crisis. U.S. stocks and the dollar are trading lower in instant reaction to revamped details of Washington’s bank rescue plan. Investors and analysts are complaining about the scheme’s ambiguity, complexity, and significant difference from previously leaked information to the press. The […] More
January Markets in Figures
January 31, 2009
10-Yr Yield 12/31/08 01/30/09 Chg in Bps U.S. 2.12% 1.18% -94 Germany 2.95% 2.09% -86 Japan 1.18% 1.30% +12 U.K. 3.02% 3.70% +68 Canada 1.43% 1.62% -99 3-mos euros U.S. 1.43% 1.18% -25 Euroland 2.89% 2.09% -80 Japan 0.83% 0.67% -16 U.K. 2.77% 2.17% -60 Canada 2.18% 1.62% -56 Swiss 0.66% 0.43% […] More
