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“Normal,” It’s Not What You Think!

Most readers remember the pre-recession days of 4% GDP growth, interest rates at levels where savers had return choices worth pursuing (e.g., the 10 year T-Note at 4%), and workers could count on annual real wage growth.  Today, many refer to this as “normal,” and there is a desire, if not a movement, to return the economy back to such a state. You can see this in the political arena.  …Read More

When policies are anti-growth, sell the rallies and buy the dips

The equity markets are generally forward-looking. That’s why you have price movements that seem incompatible with the latest economic (backward-looking) data. The equity market today, as seen through the eyes of the S&P 500, has been flirting with all-time highs while the economic data indicate that the economy continues on feeble legs. So, just as the “forward-looking” market has predicted 25 of the last 8 recessions, so too, it can …Read More

This Market Needs Some Xanax

Xanax is a medication used to treat anxiety and panic disorders.  Markets have been ugly since year’s end. On Wednesday, volatility was high, as the Dow Jones was down -565 points before rallying back to close down -249. Thursday’s action was a relief (+116), but markets are likely to be volatile near term.  Xanax sure would help. There are lots of worries: That economies, worldwide, are decelerating; That China will …Read More

Economic predictions for 2016

As the year ends, it is customary to write a column that attempts to forecast the major economic trends of the new year. Looking back, five of my six predictions last December were spot on (only missed the continuing weakness in manufacturing). I hope the forecasts that follow do as well. Jobs, jobs, jobs Jobs and the consumer have been the bright spots in the U.S. economy and it appears …Read More

Putting the Economic Issues in Perspective

Clients have asked whether they should continue to be bullish on the U.S. economy and equities when the media continues to emphasize a plethora of troubling issues including a flat lining manufacturing sector, an energy sector that is still contracting, and a new host of government taxes and regulations (from federal, state, and local authorities) that make it difficult for small businesses to remain viable. The purpose here is to …Read More

Should you invest with confidence?

Originally published on RGJ.com’s website http://www.rgj.com/story/money/business/2014/11/30/robert-barone-invest-confidence/19655523/ If an economist from the 1970s, ’80s or ’90s were to have time traveled forward to today, and that economist were to look at the macroeconomic environment, he/she would conclude that, despite the negativity of the media, the U.S. economy is actually doing well. • Third quarter real GDP growth was 3.9 percent with second quarter at 4.6 percent. This would be considered about …Read More