We have clearly been in a recent run of higher interest rates, with a looming "threat" that there might be less quantitative easing before the end of the year. It would appear now that Bernanke wants to leave his successor to implement what everyone knows must be coming at some point...
The world is struggling to rebalance its great savings imbalances and is not advancing much. In Europe, and as I discussed in my very long May 11 blog entry, it seems that Germany is still unable to force though the adjustments needed in internal demand and is hoping to foist its imbalances onto the rest of the world now that the rest of Europe is too sick to absorb them.
These are not signs of an economy ready to collapse, nor one about to spiral into hyperinflation. Rather, they confirm what the PTI and Dow Theory have been telling us all along: It’s a bull market, and the US is doing a better job than most other countries in recovering from the Great Recession.
In Potential Mistakes (Wonkish), Paul Krugman wrote "It is important to have an idea of how much the economy could and should be producing, and also of how low unemployment could and should go."
You may have noticed that recently released NYSE margin debt data showed us a month over month decline. Taken as a singular data point, pretty darn meaningless. But set against the context of QE III and the current 2009 equity market cycle to date, its worthy of at least recognition and discussion.
To me, “Rosebud” represents the emblem of hope, security, and innocence that Charles Kane lost when he was torn away from his family as a child. Similarly, the equity markets have begun to “feel” like they have lost their hope and security over the past few weeks.
The gold price ticked higher in London trade Monday morning, rising from its lowest weekly close in three years as Asian stock markets fell but Eurozone shares jumped over 2% higher.
The notion that the preference function of market participants may change over time has been around for a long time, particularly in the study of commodity markets.
The early reaction from the stock market doesn’t seem to be negative, but that could very well be a response to the announcement from Mario Draghi on Thursday, where he committed to keep loose monetary policy for an extended period.
The dollar price of gold dropped $20 per ounce lunchtime Friday in London, briefly dropping through $1220 per ounce after the release of June's US non-farm payrolls data.