Global Market Commentary, Analysis and Investments
Why don’t people borrow?
Because it’s not a liquidity problem. It’s a debt problem. A solvency problem. And it won’t go away by making more cash and credit available. Instead, all those bad decisions, bad loans, and bad investments have to be cleaned up. And that takes time. And while the economy is de-leveraging, people are becoming more cautious…more risk-averse…more modest in their expectations.
[Read more...]The market giveth and the market taketh away.
Last Friday, the Dow Jones industrial Average gaveth 165 points. Yesterday, the Dow tooketh 141 points away. What should we investors learneth from this occurrence?
Should we trust that the economy is recovering, as the politicians pretend to believe? Or should we distrust that the economy is recovering, as most of the rest of us believe?
[Read more...]Bad day for stocks, yesterday. A bad day. Not a terrible day. Not a crash day. Just a bad day.
The Dow fell 140 points. This was baaaad…because it shows that the stock market does not really buy Bernanke’s storyline.
You’ll recall that when we left off last week, Ben Bernanke assured the world that while the recovery was not exactly what he had hoped for, he nevertheless had the situation in hand. He said he had the tools necessary to fix the problem and would do whatever was required.
[Read more...]Let’s see, what happened this summer? Easy question. The recovery went missing.
Ben Bernanke said so last week…or almost. He noted that the economy wasn’t quite as spiffy as he had hoped and that the Fed stands ready, willing, and able to provide more help.
The stock market liked the news. After falling for many days, it rallied 164 points on Friday. Gold was flat.
[Read more...]America has an economy that produces about $13 trillion of activity each year. America also has a Federal Reserve Chairman that produces about 13 trillion raised eyebrows each year.
Last week, in Jackson Hole, Wyoming, Bernanke raised a few more eyebrows by asserting that the Federal Reserve remains in control – more or less – of economic conditions here in the United States.
[Read more...]GDP growth revised downward to an “anemicâ€� 1.6%…
Jobless claims rise more than forecast…
Home sales fall off a cliff…worse than economists expected…
Faced with a slew of deteriorating economic data points, Fed Chairman Ben Bernanke delivered a speech on Friday designed to assure investors that he has the fate of the nation’s economy under control.
[Read more...]We went to our last summer soiree last night. It took place at a neighbor’s chateau, where a large, ancient stone barn had been transformed into a dining room for 100 people.
“We’re screwed…so are you…â€� said a friend.
First, an update from Wall Street: the Dow was unable to sustain a bounce yesterday. It fell 74 points. Gold dropped $3.
[Read more...]Want to know what is really going on?
Investors are waking up. They are wiping the sleep from their eyes. Behold! No recovery.
Analysts and the commentariat are struggling to make sense of it. With record low mortgage rates, and after eight programs designed to boost up housing, for example, sales are still plummeting. July saw the biggest monthly drop in existing house sales since the Johnson Administration.
[Read more...]Too bad Thomas Friedman has stopped writing about the economy. We could use a good laugh this morning. Chilly winds are blowing across this part of France. The children have all gone. The sun is low and cool. It’s quiet here, and a bit sad.
But Friedman has moved on to giving bad advice on other subjects.
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Why Stock Market Rallies Aren’t Worth the Hype
First, the good news: Stocks staged a mammoth rally yesterday. The Dow managed a 2.5% run, while the broader S&P 500 scooted ahead 3%.
What a wondrous achievement this must have seemed like…to anyone who spent the previous month on the golf course, far away from their computer screen.
[Read more...]Click for detailed story