A handful of readers wrote yesterday: “Corporate profits are rolling over!”, “Cris, it’s time to get the word out.” It appears the source of all the alarm was an article that recently appeared at Business Insider, “Wall Street Declares the Great Profit Margin Boom Is Finally Over.”
Given the prior inflationary move seen earlier in the year, it is likely we should expect a moderation in economic momentum that has been building since Q1 of this year. Should growth moderate we are likely to see more economic releases surprise to the downside.
Financial stress rose significantly as the market peaked during the tech and housing bubbles. One popular measure of financial stress, the TED spread, however may no longer "work" at identifying market tops. For that, we must look at others. What are they saying?
Shadow banking is back in the news. First there are ongoing problems in China where bad loans outside of the traditional banking system are causing increasing financial strain. Then, here in the U.S., regulators are also becoming more concerned about the rising use of leveraged loans by non-bank intermediaries or things like peer-to-peer lending, where the largest such company in this space, Lending Club, just filed for an IPO.
This Great Graphic was posted by Christopher Ingraham on the Washington Post's Wonkblog. It shows the results of a survey conducted by PayScale. It shows the percentage of people by undergraduate majors that identified themselves as underemployed.
The upcoming bottom of the 60-year cycle will drastically alter the U.S. economic landscape. The ending of the long-term disinflationary/deflationary undercurrent will soon give way to a new long-term cycle of re-inflation/inflation...
Looking at growth and debt beyond developed countries, Moody’s forecasts that GDP growth for 2014 across the 20 largest emerging markets, excluding China, will only amount to 2.1%. Data from Thomson Reuters shows that 2014 is turning into a record year for issuing...