The “Avoidance” Reaction
Preamble I received an email from my travel agent last Monday (March 2) informing me that, because Italy had been raised to a Travel Level 3 by the CDC (strongly advised not to travel there), our vacation to Italy (March 12-22) had to be postponed, else we risked being quarantined upon our return. In addition, […]
Q4: A Look at the Post-Hurricane Economy
As Q3 ended, the economy continued on its tepid growth path. Unknown is the value of the economic carnage of two hurricanes that hit the mainland and a third that completely devastated Puerto Rico. The bond and foreign exchange (FX) markets have a sense that all is not well, but, the equity indexes haven’t yet […]
Waiting for Market Rationality
Equity markets have yet to recognize the fragility and softness of the underlying economy, although they do appear to be somewhat sensitive to geopolitical issues (North Korea). The incoming data continue to confirm: that the consumer has little spending capacity remaining; that inflation’s roar is nowhere to be found (except, perhaps, in hot dogs); that […]
Economic Growth: Its Importance and the Potential Impact of its Demise
Conceptually, economic growth is a function of two factors: the growth of jobs, and the productivity of those employed. In a world where the labor force of industrialized nations is stagnating, or, worse, shrinking, one might reasonably ask: “Why is economic growth, as measured by the increase in real GDP, so important to the economy?” […]
“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 […]
Is Optimism a Key Ingredient in Economic Growth?
Most of the sentiment measuring surveys posted dramatically higher results after the election on optimism over what a Trump Administration might do for the economy. But, there is a big difference between hope and reality. Beginning in mid-December, the U.S. equity markets shifted into neutral, and have slowly drifted lower, perhaps waiting for the political […]