24 Jun 2011

Posted at 14:27h in The Friday Brief by
The US economy grew at 1.8% in the first quarter according to the Commerce Department’s second and unrevised estimate. Following their monthly meeting, the Federal Reserve said they still expected the economy to recover, but reduced their 2011 GDP growth estimates from 3.3% - 3.7% to 2.7% - 2.9%. They forecasted growth of 3.5% - 4.2% in 2013. Forward looking stock investors have taken the S&P 500 down 5.9% from its April 29th high, but the index remains up 3% for the year. Bonds on the other hand have done well as the economy slumps. The Barclay’s 7-10-year Treasury index is up 5.5%. 

17 Jun 2011

Posted at 14:30h in The Friday Brief by
Rising incomes and asset prices cover a lot of sins. For decades, consumers, businesses, and most notably our government, enabled by a steadily expanding standard of living, have adopted excess as an entitlement. The overwhelming impact of years of excessive spending and over-borrowing is becoming increasingly acute as none of the usual remedies is working. Wasteful government stimulus (with a few possible exceptions from T.A.R.P), Fed-controlled interest rates at near zero for years, and quantitative easings 1 & 2 (Fed buying US debt) have all fallen well short of their usual potency. We seem to have hit the wall; our excesses have finally caught up to us. 

10 Jun 2011

Posted at 14:32h in The Friday Brief by
George Bernard Shaw once said “if all economists were laid end to end, they would not reach a conclusion.” Someone later added that laying them end to end would not necessarily be a bad thing. At any rate, Bloomberg news reports that 67 of them recently polled, called for economic growth to resume in the second half of this year. The median estimate is for 3.2% growth following a disappointing 2.3% this latest quarter. They say that “rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events like poor weather and the disaster in Japan.” They also expect that the Fed will wait even longer to raise interest rates next year.

03 Jun 2011

Posted at 14:34h in The Friday Brief by
A basic tenant in negotiating is to start with an extreme position from which you allow your opponent to gain ground against, but only to a point that is better than or at your original objective. Have we as a ‘civilization’ gotten so accomplished to negotiating/posturing our own objectives that we completely lose sight of the greater good? You name the arena and it seems that leaders on both or more sides are so entrenched in their own beliefs and positions that no middle ground exists. Seemingly unsolvable conflicts abound, in the NFL, state houses, Washington, Pakistan v. India, Pakistan v. US, even Israel v. the US: The sense of urgency or the bigger picture are held hostage by ideology or greed. It’s the story of mankind, but it just seems louder and more prevalent lately.