A Full-Employment Recession: Post-WWII Growth Model Flawed
There were three big interrelated economic events at the end of October. We had the first pass at Q3 GDP, followed by the Fed meeting (another reduction in the Fed Funds Rate), and the week ended with a much stronger than anticipated jobs report. The data continue to imply that the traditionally accepted post-WWII growth model […]
Look For The Preponderance Of The Evidence, Don’t Rely On One Factor
The headline on my LinkedIn page on Friday (October 4th) read: “Jobless rate reaches half-century low, HP plans to cut up to 9,000 jobs…” Is this good news about jobs, or bad? I’ve learned many times over the years to rely on the preponderance of the evidence, and not on any single indicator. The jobs numbers, themselves […]
Fed Likely to Put Economy at Risk
Market volatility finally showed up in the popular indexes (DJIA, S&P 500, NASDAQ). These were down two weeks in a row as of November 17 on rising volume (never a good sign when markets are falling), and they are no higher than they were a month earlier (October 20). The VIX, a measure of market […]
The Fed and the Phillips Curve
Deflation is the Order of the Day The Fed was established in December, 1913 after the Panic of 1907 (the latest in a series of financial panics dating back to the middle of the 19th century) put the economy into a severe recession via bank runs and subsequent bank failures. The Fed’s original purpose was […]