12 Aug 2005

Posted at 14:52h in The Friday Brief by
Based on comments from the Federal Reserve earlier this week and their actions in the previous weeks, it appears rates are headed considerably higher.  They say they believe higher short term rates and the possibility of an inverted yield curve will not create a recession.  We and other investors are not so sure.  While much remains to be seen in the coming months, we see little to move the broad markets ahead.  But if the broad markets will be sideways to down there remain some select opportunities that still look promising.  In light of a weakening economy we have taken and will continue to take some profits among our more economically sensitive issues. 

05 Aug 2005

Posted at 14:55h in The Friday Brief by
Tremendous growth in productivity of the last few years continues to strengthen our economy.  The latest evidence comes as the government reports that employers paid the biggest wage increases in a year, rising .4% last month, twice economists’ expectations.  Employers also created more jobs as payrolls grew by 207,000 last month, the biggest increase in three months.  Still, theU.S.unemployment rate held steady at 5% as more workers entered the labor force in search of jobs.  The civilian labor force increased by 450,000 in July, the Labor Department said. Of those, 438,000 found jobs.

29 Jul 2005

Posted at 14:58h in The Friday Brief by
The U.S. Economy continues to grow steadily.  The Commerce Department reported today that the economy grew at a rate of 3.4% during the second quarter.  It was the ninth straight quarter of growth exceeding 3%.  We have to go all the way back to 1983 to find a longer growth streak over 3% and it lasted for 13 quarters, ending in March of 1986. 

22 Jul 2005

Posted at 15:05h in The Friday Brief by
Back in February of this year Mr. Greenspan labeled the unusual condition of falling long-term rates and steadily rising short-term rates, a ‘conundrum’.  The rates generally move in parallel.  Yesterday, he told the Congress that the reason long-term bond yields have continued to fall while short-term rates have tripled over the past year was that global savings exceeded investment, inflation expectations are low, and the world economy is stable.  He also debunked the theory that an inverted yield curve signaled an economic slowdown, calling it a “misconception.”  He said “the quality of that signal has been declining in the last decade, in fact, quite measurably.”