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The Recession Has Arrived, & with a Vengeance

For some time, I have outlined the growing softness in the U.S. and world economies.  Most of the recent data is pre-virus, and are generally meaningless.  The numbers we will get for March will be awful, but the worst is yet to come.  An example of March’s data is from the Philly Fed.  The print of their Manufacturing Index was -12.7 for March, down a record amount from the +36.7 …Read More

Economic Review – Q1/16

At quarter’s end, the equity market had recovered all that it had lost between 12/31 and 2/11, plus about 1%.  Apparently, this was the swiftest recovery in any quarter since 1933.  While we were fairly certain that the downdraft was just a much needed correction, like you, we don’t care too much for the uncertainty that such markets bring, especially when the business media was practically cheerleading for a recession.  …Read More

The imagined recession disappears

And POOF, just like that, the imagined recession disappeared! The equity market rallied from its Feb. 11 low (S&P 500 1829.08, down 10.5 percent for the year) to 1893.40 (March 3) and rising as I write. Amazingly, the markets are now only down about 2.0 percent for the year. This bounce is a relief. And with positive economic data of late (242,000 new jobs in February), the odds of that …Read More

The logic behind Wall Street’s recession fears

To the logical investor, and to most economists, Wall Street’s fear of a U.S. recession appears irrational. Is it? While there is no current evidence that the U.S. has entered a recession, or even that one is approaching, there have been two instances in modern history where the financial markets have precipitated a recession; 1929 and 2001. The negative feedback loop Summed up, the logic is that a bear market …Read More

OPEC’s lunacy behind market’s volatility

Market volatility was present throughout January with no calming so far in February. We saw a 565-point intraday slide on the Dow on Jan. 20; then a few days later, the market closed up nearly 400 points! As February began, the Dow gave back most of that 400-point gain only to regain nearly half of it last Wednesday after another rollercoaster ride (376 intraday points). On Friday, the jobs report …Read More