Tag Archives | US Federal Reserve

Fears of Austerity rise again, as Stimulus proves ineffective

Austerity is in the news again, as the Greek/Eurozone debt negotiations continue.  So it seems interesting to see how financial market sentiment has been moving with regard to the issues of austerity and stimulus.  The above chart is therefore modeled on the familiar IeC Boom/Gloom Index It shows the ratio of sentiment for Austerity versus […]

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Fed’s loss of credibility risks causing investor stampede

Credibility is hard to gain.  And once gone, it is very hard to regain.  That is the challenge facing the US Federal Reserve today.  The New York Times is just one of the mainstream media now starting to highlight the issue, as last week’s Fed meeting led to a further deferral of the promised rise […]

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US margin debt hits record highs, whilst interest rates jump

Everyone knows that the US Federal Reserve will “never” let stock markets fall.  So it makes perfect sense for investors to borrow as much as they can, in order to chase the market higher.  It therefore is no surprise to see that borrowing to fund purchases on the New York Stock Exchange has reached a […]

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Policymakers’ out-of-date economic models fail to create growth, again

Since 2010, May/June has seen the US Federal Reserve start to realise it would have to revise its optimistic New Year forecast that economic recovery was inevitable. As its deputy chairman, Stanley Fischer, noted last August “Year after year we have had to explain from mid-year on why the global growth rate has been lower than […]

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US jobs growth fails to keep pace with population growth

The US population reached 320m this year, an 11.35m increase versus 2010, according to the US Census Bureau: “The U.S. is expected to experience a birth every 8 seconds and one death every 12 seconds, whilst net international migration is expected to add one person to the U.S. population every 33 seconds.  All these factors […]

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“Sell in May and go away?” as US/German bond yields jump

A strange thing happened to German 10-year interest rates last week – they rose quite sharply, by a further 0.2%. That may not sound a lot, but it is when the starting point is so low.  On 20 April, they were at 0.07%, and on Friday they closed at 0.37% – for a total rise […]

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US GDP Apr15

US GDP disappoints again as aging Boomers slow the economy

“Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back.” That was the comment, last August, from the new deputy chairman of the US Federal Reserve, Stanley Fischer.  This year, he won’t have to wait until mid-year to start the […]

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Market volatility jumps as Great Unwinding continues

As I have feared, major volatility is developing in financial and chemical markets, as the Great Unwinding of policymaker stimulus continues.  The chart above shows the dramatic increase in the benchmark portfolio since the Unwinding began in mid-August: There was very little volatility from January until August, with prices generally remaining within +/- 10% Volatility then […]

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Volatility rises as central bank policies prove wishful thinking

Q1 was very difficult for many companies and investors.  They had wanted to believe since 2009 that central banks could somehow control the global economy: The oil price would always be $100/bbl The US $ would always remain weak Central banks would always be able to stimulate growth in the economy Stock markets would always go up in the […]

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Atlanta Fed Q1 GDP indicator at 0.2%, as US housing, auto sales remain below previous trends

US housing starts are slowing so far this year, with February’s starts just below the million level again on an annualised basis.  This follows the steadily declining rate of home ownership, which is now back at 1995′s level of 64%.  And yesterday’s Case-Shiller report on home prices suggests the 10-City Index may well have peaked back in […]

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