Inflation War
The Inflation War Has Been Won Time to Start Fighting the Recession Several weeks ago, we described the effectiveness of monetary policy on the economy if it acted with a 12 month lag. The San Francisco Regional Federal Reserve Bank recently published research showing the lag to be 11 months. The Fed has also indicated […]
Soft Employment, Inflation, Retail – Economic Implications
The employment reports last week (week ending September 1) had to dishearten the “soft-landing” crowd, as all the employment data showed emerging softness. It began with the JOLTS (Job Openings and Labor Turnover Survey) on Tuesday (August 29). That survey showed job openings shrinking to 8.83 million in July. While that still appears to be […]
Why the Equity Markets Are Out of Touch
Low Date of Low 12/31/22 6/30/23 Chg fr Low to 12/31 Chg fr Low to 6/30 Chg fr 12/31 to 6/30 S&P 500 3,577.03 10/12/22 3,839.50 4,450.38 +7.34% +24.41% +15.91% Nasdaq 10,321.39 10/14/22 10,466.48 13,787.92 +1.41% +33.59% +31.73% DJIA 28,725.51 9/30/22 33,147.25 34,407.60 +15.39% +19.78% +3.80% Russell 2000 1,655.88 9/26/22 1,761.25 […]
The Recession Will Bring Deflation
If there ever was a competition for a company that most reflected the state of the economy, FedEx would be in the final four. In Q1, its revenues fell -10%, and earnings were off -28%. On top of that, they guided even lower than the already reduced market estimates. Nevertheless, the media and Wall Street […]
The Data Says Recession — Equities Continue to Climb
(Something Has to Give!) The S&P closed on Friday (June 9) at the highest level since May 2022; this is despite clear evidence that the economy is entering, if not already in, Recession. Q1 corporate earnings have fallen particularly in the all-important Retail sector, which is a proxy for consumer strength. Don’t forget, consumption represents […]
Policy Lags are Real – Inflation’s Days are Numbered
There are several measures of the money supply, the most looked at being M2 (cash + demand deposits + time deposits + retail money market funds). That official series goes back to 1959, although estimates are going back even further. But just looking at this 64-year history, we find that the two growth rate extremes […]