Bear Mountain Capital Inc.

Bill Gross on Greek Debt

| March 9, 2012

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)  

Read more

Why the rally today?

| November 30, 2011

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…

Read more

Household Debt – How Bad Is It?

| September 27, 2011

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…

Read more

Growing Pains

| September 22, 2011

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…

Read more

Budget Deals and Debt Limits

| April 18, 2011

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)

Read more

Deficit to GDP

| April 12, 2011

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)

Read more

The Federal Reserve Discount Window

| April 6, 2011

The level of global financial market integration is truly underestimated by most investors: “Overseas banks accounted for about 70 percent of discount window loans when borrowing reached its peak of $113.7 billion in October 2008, according to the Fed’s data. The discount window, established in 1914, is known as the lender of last resort.” (Click here to read Bloomberg.com article)

Read more

Unemployment drops to 8.8%

| April 1, 2011

The unemployment rate dropping to 8.8% is a milestone.  Combine this data with the continued strength in manufacturing and you have an optimistic outlook for continued growth in employment.  Despite the ugly real estate outlook, the economy continues to expand and employment is growing.  Biggest hurdle left is the deficit and what moves can be made to lower it, without slowing economic progress. (Click here to read article)

Read more

US Economy Back to Precrisis Levels – Perspective

| March 23, 2011

This is good perspective on how the US recovery is shaping up, relative to our European counterparts. The focus is on an expansive fiscal and monetary policy approach verses austerity measures or less expansive fiscal and monetary policy approach. (Click here to read Fidelity article)

Read more

Unemployment Rate Drops

| February 4, 2011

The drop in the unemployment, despite the slow growth in farm payrolls, is a good sign for the economy. I think it is likely we’ll see this number drop to close to 8% by year-end, but given the structural unemployment issues, extended unemployment benefits and older generations not retiring, these issues create a lot of upward pressure on that number and will take time to drop below 8%. (Click here…

Read more