20 Apr 2007

Posted at 14:53h in The Friday Brief by
Equal Parts Capital, Free Trade, Information, Oil, and a Dose of Cooperation to Hold It All Together What is the greatest threat to the world economy? Is it a slowing US economy, inflation, protectionism ,China’s explosive and unchecked growth, a financial or liquidity crisis, global warming, terrorism, or energy? While any one of these and certainly any combination could cripple the unprecedented economic advances we enjoy today, the great barometers, the stock and bond markets remain relatively unfazed. 

30 Mar 2007

Posted at 15:04h in The Friday Brief by
The mood on Wall Street has been anything but spring-like. For the week, the S&P 500 and Dow Jones Industrials have dropped 1% and the Nasdaq Composite is down 1.3%. Today is the last trading day of the first quarter which will end relatively flat for the major indices. It was shaping up to be a pretty good one until investors got spooked The S&P 500 is up 0.3%, the Nasdaq is up 0.1%, while the Dow is down 0.9%. Thanks to diversification, our returns have fared better.

23 Mar 2007

Posted at 15:11h in The Friday Brief by
The big investment news this week is that the Federal Reserve may be transitioning toward lower rates. They dropped the terminology that “additional firming” may be necessary from their policy announcement on Wednesday. However, they maintained that inflation was still their top concern. It means that, in their view, the immediate threat of inflation is low enough that additional interest rate increases are not required. Further, the Philadelphia Fed's survey of professional forecasters found that the expected inflation rate for the coming decade has dropped to 2.35% today from 4% in 1991.

16 Mar 2007

Posted at 15:16h in The Friday Brief by
During the past couple of weeks, Mr. Greenspan and others have publicly weighed in with their own views on the economy and possible recession. While Greenspan says he puts the chances of recession at 1 in 3, most economists, including Fed Chair Ben Bernanke, think the economy is in pretty good shape. They think that the chances for recession are generally more remote. While they recognize that weaker mortgage borrowers could have a significant effect on lenders in those markets, most think that the problem will not drag the entire economy into recession.