02 Dec 2005

Posted at 16:03h in The Friday Brief by
The economy continues to expand, in spite of hurricanes, high energy costs, and Fed Funds rate increases.  The weeks’s crowded raft of economic reports was kicked off by housing.  The reports were mixed, but generally point to a slight cooling.  The National Association of Realtors reported Monday that sales of existing homes fell 2.7% in October to a seasonally adjusted annual rate of 7.09 million.  Houses stay on the market longer as the inventory of homes on the market rose to a 4.9 months' supply in October, from September's 4.6 months' supply.  Meanwhile, housing affordability dropped as the median sales price rose 16.6% on an annual basis to $218,000.  That was the biggest jump in 26 years. 

18 Nov 2005

Posted at 16:06h in The Friday Brief by
There’s a great deal of talk these days about a lack of trends and market leadership.  Most recently, homebuilding and real estate have driven the market, along with energy.  With interest rates rising and energy prices declining, the likelihood of these industries continuing their out-performance near-term is doubtful.  Additional leadership has come from investment banks and brokers as their earnings have increased on the rise of mergers and acquisitions.  But this activity is a bi-product of excessive capital and compelling market values.  Better allocation of capital and increased productivity will improve profits to a degree, but it will not significantly drive GDP.  Where’s the next big wave of real growth coming from?

11 Nov 2005

Posted at 16:18h in The Friday Brief by
November 11, is the anniversary of the Armistice which was signed in theForest of Compiegne, in Île-de-France by the Allies and the Germans in 1918, ending the four-year conflict of World War I.  The War officially ended on June 28, 1919, with the signing of the Treaty of Versailles, but the actual fighting between the Allies and the Germans ended seven months earlier with an armistice, which went into effect on the eleventh hour of the eleventh day of the eleventh month in 1918.  In November of 1919, President Woodrow Wilson issued his Armistice Day proclamation. 

04 Nov 2005

Posted at 16:20h in The Friday Brief by
Indications are that a slowdown is in the cards for this quarter and for the first quarter of next year, but that does not mean recession must follow, as some more pessimistic economists suggest.  Indeed there are many reasons to expect a significant pickup.  Productivity, the driver of this powerful economy remains alive and well.  Productivity not only keeps our economy growing without inflation, it is vital for the U.S.to remain competitive in an increasingly competitive global economy.  Yesterday, the government reported that Non-farm Productivity was up a whopping 4.1% for the third quarter and well ahead of last quarter’s 2.1%.  The increase more than offset the 3.6% increase in hourly compensation, so unit labor costs fell 0.5% during the quarter.