A very important topic that unfortunately is not getting enough attention by the public… below some insightful commentary from the CFA Institute into the Volcker Rule and its importance to the long-term health of our financial system: “It is not hard to see the delicate balance this rule-making situation requires. Too strict a rule and important players in the provision of market stability and liquidity are impaired, to the detriment…
Are we looking at a U.S. economic recovery? Quite possibly. How long could this recovery last? It depends. What does it depend on? It depends on the following: * Housing * Unemployment * Europe * China * Iran Lets start with Housing: its been a long-slog for the housing and residential construction market. However, it looks like we are turning a corner. In the first few months of this year…
This is an absolutely FANTASTIC op-ed penned by an executive who resigned from Goldman Sachs today. Hopefully this piece strikes a nerve with every client of Goldman’s. I do believe it may be too late to strike a nerve of the many Goldman board members and managing directors: (Click here to read NYTimes op-ed)
Gross on the net affect of the Greece debt restructuring. It is now more expensive for any government to borrow money, bond investors will demand higher yields for the increased probability governments will be forced into restructuring. (Click here to read Bloomberg.com article)
Why are we seeing this rally today? Well, aside from some of the positive economic news regarding higher then expected sales of US existing homes, as well as new job hires there was a significant policy move by five central banks, including the Fed, Europe Central Bank, Bank of Japan, Bank of England and Swiss National Bank to help financial institutions obtain liquidity in times of crisis. Essentially, a country’s…
The primary drag on economic recovery is the sheer size of US household debt. It will take many years to bring the averages down. The following excerpt tells us a lot: “From 1952 to 1979, the average ratio of household debt to gross disposable income was 57%, but over the past three decades the averages steadily, and then dramatically, climbed higher. In the 1980s, it averaged 69%; in the 1990s…
Despite the negative economic outlook by the Fed on US and global growth, as well as the concerns in Europe regarding sovereign defaults, US leading economic indicators actually rose last month. The primary reason is due to an increase in the money supply, because consumers are reserving their cash, keeping it in bank accounts. This is a long-term positive, because it will lead to more money to lend in the…
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A budget deal and an increase in the debt limit. Both need to happen. The question is what is the time-frame and is it credible? The longer the country waits for a solution, the more volatile US treasuries and the equity markets become. The one thing the markets do not like more then anything else, is uncertainty. (Click here to read Bloomberg.com article)
In emerging markets, a deficit greater then 4% of GDP is high. While a developed economy has more consistent revenues and a more diversified economy, a deficit to GDP ratio of 10% is detrimental to growth. MAJOR deficit reduction initiatives must be enacted to meet this short-fall. If last week’s budget battle was an indication, its going to be rough-riding for all. (Click here to read Bloomberg.com article)
