August 3, 2009
The president’s weekly address from August 1 contained the following statement:
“Now, I realize that none of this is much comfort for Americans who are still out of work or struggling to make ends meet. And when we receive our monthly job report next week, it is likely to show that we are continuing to lose far too many jobs in this country. As far as I’m concerned, we will not have a recovery as long as we keep losing jobs. And I won’t rest until every American who wants a job can find one.”
Apparently, the president is aiming for 0% unemployment. This absurdly unrealistic goal can be attributed to ignorance of economics, demagoguery or delusions of grandeur. Whichever it is, the president’s economic advisors must have cringed. Read the rest of this entry »
April 11, 2009
With all the ranting going on everywhere these days, I feel entitled to indulge in a rant of my own. My beef is with people who are unwilling to take responsibility for their actions. I will use as an example Jon Stewart’s public flogging of Jim Cramer about a month ago. Stewart is in the habit of engaging in serious discussions while hiding behind the cover of being a comedian. It would be just as ineffective if someone serious, such as Larry Summers or Alan Greenspan, were doing stand-up comedy while regularly reminding the audience that he is an economist and should therefore not be expected to be funny. Read the rest of this entry »
January 27, 2009
One of the many unusual things in the financial markets these days is the relationship between the growth in the money supply and inflation expectations. At the same time, as unprecedented growth in the balance sheet of the Federal Reserve is taking place, inflation expectations, as witnessed by the narrow yield spreads between inflation indexed treasuries and regular treasuries, are extremely low.
Low inflation expectations
Inflation expectation for the coming 12 months, as measured by a University of Michigan survey of consumers, have been coming down rapidly, from 5.1% last July to 1.7% in December. Given the current weakness in the economy and falling commodity prices, it is perhaps not surprising that people are expecting low inflation in the near term (although deflation fears seem to have diminished recently). Read the rest of this entry »
March 20, 2008
Yikes! Where did all the money go? Recent events have left many Icelandic investors feeling like victims of a robbery. While most of the world’s markets have been hard hit in recent months, few have been crushed in the way the Icelandic market has.
For those less familiar with the Icelandic economy and stock market, I will start with a little background information. The country has been on a tear since 2002. That is not due to any amazing increase in exports, but rather by an explosion in the availability and use of credit and the ability to participate in global financial markets. An ability Icelanders were long deprived of and have now embraced enthusiastically. This led to a surge in equity and real estate prices. Read the rest of this entry »
January 9, 2008
Now that 2007 has come to an end, I would like to sum up how my stock recommendations from the year fared. There is no denying that my buy recommendations proved to be poor in that period. The following table summarizes my picks.
While none of the stocks has performed particularly well, with Tsakos Energy Navigation Ltd. (TNP) being the only one to outperform the market since the date of recommendation, Syneron Medical Ltd. (ELOS) has suffered a particularly steep drop since my September 20 recommendation.
Read the rest of this entry »
November 29, 2007
The media’s rationalization for yesterday’s (November 28, 2007) stock market rally was that the Federal Reserve vice chairman, Donald Kohn, made remarks before the Council on Foreign Relations about the state of the economy and hinted about future actions of the Federal Reserve. Mr. Kohn’s comments, widely credited in the media for a 2.8% surge in the S&P 500, were not particularly upbeat. Read the rest of this entry »