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The Economy Slows; The Real “New Normal”

The virus’ resurgence has caused more business disruptions, raising the specter of a renewed economic slowdown.  Spending and income numbers have mainly been negative in Q4, and the much hoped for stimulus relief package is now stuck on the president’s desk. The Economy “Drop in Spending, Higher Claims Cloud Outlook for Growth,” WSJ, 12/24/20, A1. Restaurants: -3.7% November (M/M); -0.6% October Hotels/Motels: -8.7% November (M/M); -4.4% October Movie Theaters: -17.2% …Read More

Priced For More Than Perfection, Markets Have Dismissed Economic Reality

The holidays are upon us, and we wish our clients and friends health, peace and happiness. Recent income, output, and employment data have turned sour. We’ll see what that does to holiday shopping. The financial markets, especially equities, have looked past the valley (abyss), and the vaccine news has enhanced the view that “normal,” or at least a “new normal” is just maybe a quarter or so away. The DOW set an …Read More

Bonds Got It Way Wrong, Economy Is Accelerating

First published at Seekingalpha.com http://seekingalpha.com/instablog/27843163-robertbarone/2967823-bonds-got-it-way-wrong-economy-is-accelerating In the financial marketplace, the bond market usually signals first and reflects the magnitude of a changing economic environment. The equity market, on the other hand, is often late, or at least later than the bond market in recognizing oncoming changes in economic conditions. So, the worries now rampant on Wall Street and reflected in a pessimistic media over equity valuations are understandable given that …Read More