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The Return of Muddle Through The dollar reaches new lows. The housing market shows no sign of a bottom. Oil almost touches $84 before backing off. Interest rates go up after the Fed cuts. So naturally the stock market keeps climbing. But then, consumer spending came in strong, employment looks like it...
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Sea Change at the Fed "Of his bones are coral made: Those are pearls that were his eyes: Nothing of him that doth fade, But doth suffer a sea change Into something rich and strange" (The Tempest - Shakespeare) The term "sea change" has come to mean a profound transformation ever since...
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The Mortgage Pig in the Python Inflation is Baked into the CPI Numbers The Mortgage Pig in the Python Housing Starts Look to Stop A Few Thoughts on the Recent Credit Crisis Half of All Hedge Funds Gone? Golf, Weddings, and Europe With the economy increasingly looking like it will slow down materially...
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Introduction Today's Outside the Box is a very interesting piece written by Louis-Vincent Gave and the team at GaveKal entitled "Part 2: So What Should We Worry About?" His article is a follow up to an earlier one that he wrote on why he, and the rest of the GaveKal team, had been bullish...
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Introduction This week we had two more Federal Reserve members repeat what has become the theme for their chorus, but not one the market seems to be paying much attention to. It should be. The market believes the Fed will soon start to cut rates, perhaps as early as first quarter of next year. It is...
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Introduction "The opera ain't over 'til the fat lady sings." And speech after speech by members of the Federal Reserve over the past few weeks suggest that the fat lady is still waiting offstage, not sure of her cue. Today we look at a thoughtful speech given last night to a private...
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Introduction The Fed elected to pause in its rate hiking assault on inflation this week. With the backward looking data pointing to higher inflation that must mean they expect the economy to slow down and thus tame what incipient inflation is lurking around the corner. But wait, the data this week suggests...
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Introduction Exactly how do you measure inflation? Last week's letter showed how the Bureau of Labor Statistics uses "owners' equivalent rent" to measure the rise in housing costs rather than the actual price. The conclusion is that it certainly smoothes out the volatility of housing...