Markets are reacting today to the news that China has taken over Japan as the second largest economy and will surpass the United States as the world’s largest economy within 20 years. Jon Nadler pointed out in his metals update this morning that the U.S. dollar was lower and the euro gained, while gold was up a bit. He also said that Japan and China could flip-flop for the number two spot in the economy as seasons and metrics used to calculate GDP change. (more…)
Posts Tagged ‘economy’
China: We’re #2
Monday, August 16th, 2010The Fed reinvests
Tuesday, August 10th, 2010In its rate decision today, the Federal Reserve held interest rates as expected, but announced it would reinvest in mortgage-backed securities, or, as Phil Flynn predicted in his energy report this morning, “the fearful Fed may just pump that cash back out there and buy more MBS or bonds to try to inspire some economic activity and maybe even some job creation.”
Bummer from Bernanke
Monday, August 2nd, 2010In a speech in South Carolina today, Federal Reserve Chairman Ben Bernanke gave another subdued forecast for the economy. He said that while “the financial crisis appears mostly behind us…we still have a considerable way to go to achieve a full recovery in our economy” due to persistent unemployment, foreclosure and lost savings for many Americans.
Can we make tough choices?
Thursday, July 29th, 2010Last week I attended an interesting forum at the University Club of Chicago. It was entitled “America’s Fiscal Futures: Making Difficult Choices.”
The forum was put on by the MacArthur Foundation and included a discussion with Dr. John Palmer and Rudolph Penner. The two speakers, who come from different sides of the political spectrum, recently co-chaired a joint National Academy of Sciences/National Academy of Public Administration committee that produced the report “Choosing the Nation’s Fiscal Future.”
No double dip, says Fed
Wednesday, July 14th, 2010The Federal Reserve released the minutes of its June meeting today. Here are their predictions, which contrast with what many experts are predicting (namely, a double-dip recession) as economic data on housing and employment remains grim. In the minutes, the FOMC said it “continued to anticipate a moderate recovery in economic activity through 2011.” However, due to current financial conditions “most participants revised down slightly their outlook for economic growth, and about one-half of the participants judged the balance of risks to growth as having moved to the downside.” (more…)
The economy: How Canada got it right
Tuesday, July 13th, 2010If America wants to learn something about economic prosperity, they might find it by looking to the north. The LA Times featured this interesting piece about the lessons the United States could learn from Canada on the economic front. The United States is still recovering from economic collapse, but the effects of 2008′s market meltdown on Canada have been much milder in comparison.
Is a double dip coming?
Wednesday, June 23rd, 2010There has been several analysts predicting that the U.S. economy is headed for a double dip recession, which is looking more likely with each economic report we see. Whether we officially fall into a double dip recession or not, the economy clearly is still struggling. The current economic crisis began with housing and if it is likely to also end with housing, that end does not appear anywhere in site.
Holding pattern
Wednesday, June 23rd, 2010No surprise here: in its meeting today, the Federal Open Market Committee held the Fed funds rate at 0 to 0.25%. The Fed also said the pace of economic recovery is likely to only be moderate for the time being, citing weakness in employment, depressed housing numbers and sinking growth abroad. “Financial conditions have become less supportive of economic growth on balance,” the statement said.
Economic outlook: A mixed bag
Wednesday, June 9th, 2010Federal Reserve Chairman Ben Bernanke offered a mixed outlook for the economy in a speech today before the House Committee on the Budget. He said that although economic recovery has continued at a moderate pace, “significant restraints on the pace of the recovery remain.” Those restraints include continued strains on the housing market and cuts in employment and construction due to pressures on state and local budgets. Although he noted the slight uptick in employment in May, Bernanke said “a significant amount of time will be required” to restore jobs back to pre-2008 levels. (more…)
What Happened?
Friday, May 7th, 2010Thursday May 6 was an odd day in the markets but perhaps not as odd as some may suspect. We pointed out a week earlier how the Dow Jones was pushing some pretty significant resistance, the 61.8% retracement level of the move from the 2007 high to the March 2009 low. The Dow touched that level and failed at the end of April (see chart below).
Add to that an odd consensus between bears and bulls of a significant downturn. Many bears were thinking we were at a historic high and ready for a reversal as the economy is poised for a double dip recession. Many bulls, realizing the market cannot go up forever and seeing that the S&P 500 rallied more than 80% from the March 2009 lows, were expecting a correction, a significant correction of as much as 10%. (more…)
