Financial Sense Blog

We see the Talking Heads of the Main Stream Media waxing Poetic about the Ostensible Ongoing “Recovery”, while the highest government officials blather on about how more ‘Stimulus Spending via More Debt is’ essential to Recovery.

Bureaucratic complexity leads to a death-spiral collapse; self-orhanizing complexity retains the assets of complexity and the adaptability of organic networks.

Fed Chairman Bernanke says inflation is still benign and not a concern. He’s wrong! And he’s behind the curve, dangerously so!

The USD/JPY was one of the strongest trending pairs of 2010 as it dropped from its 2010 HI of 95.00 in March to its 2010 LO of 80 by October. The pair tends to move in a much less volatile manner than other pairs such as EUR/USD and GBP/USD, so the run down in USD/JPY was smooth and clean.

The market has performed well so far this year as economic data continues to inspire optimism among businesses and investors.

US equity markets have continued to make higher weekly closing highs, climbing relentlessly in defiance of calls for a pullback or a resumption of the bear market. Treasuries broke down from a month long consolidation and resumed their downtrend as capital continued to exit the perceived safety of fixed income for risk assets.

Predicting the stock market is tough, but following the trend is not. In this article, I show how we can identify bull or bear markets with two simple trend-following measures and how, currently, the outlook for the market is still positive.

The minutes of the January FOMC meeting show the Fed more optimistic about economic growth in 2011. The Fed raised the central tendency for real GDP growth in 2011 to 3.4% - 3.9% from the November forecast of 3.0% to 3.6% (see Table 1). The revisions to projections of economic growth in 2012 and 2013 were small compared with the revision of estimates for 2011. Consistent with the upward revision of real GDP, the unemployment rate was lowered from the November prediction.

One of the disturbing things about trying to understand the US economy is the sense that official statistics don’t match personal experience. They seem to be lying to us, in other words, and more blatantly all the time; hence the popularity of honest analysts like John Williams at ShadowStats.com.

To counter the increasing demands that government reduce its micromanagement of the economy, last week the Obama Administration offered a fig leaf in the form of a white paper entitled "Reforming America's Housing Finance Market." In addition to marking the official end of the Bush era "ownership society," where increasing the level of home ownership was a national priority, the document contains a recommended regulatory overhaul of the Federal Housing Authority (FHA) as well as Fannie Mae and Freddie Mac (together known as Government Sponsored Enterprises "GSE's"), that intends to bring the share of government owned home loans from the current 95% to 40% over the next 5-7 years.