Capacity utilization dropped in November. The drop makes me reflect upon when I first began formulating the equations for effective demand in 2012-13. I made predictions to test the equations. Each prediction guided me to understand effective demand. One early prediction was that the natural rate of unemployment was around 7%. This graph comes…
Econintersect: The Federal Open Market Committee (FOMC) – the board of directors of the Federal Reserve finally bit the bullet and raised the Federal Funds Rate stating …. …. The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium…
In the early 20th century, Argentina was ranked as one of the 10 richest countries in the world. People used the phrase “rich like Argentina” to describe the fabulously wealthy. It was the future. Then a combination of factors made the country come crashing down – including military dictatorships, the populism that was Peronism, various…
The Federal Reserve delivered a hawkish hike. The dot plot reflects expectations for four rate hikes in 2016. There were no dissents. This is important. It underscores the decisiveness of the decision. There have been three voting Fed members that were thought to be likely dissents. The Fed will also continue to reinvest maturing securities until the…
Stocks were not impressed at all out of the gate but once Janet started talking, the algos lifted them to the highs (and of course gold was whacked). Crude oil was dumped, along with “sell the news” US Dollar longs. Bonds were well bid at the long-end…
As expected by a large majority of economists, investors and analysts, the Federal Reserve Bank of the United States has decided to finally raise short-term interest rates. At today’s meeting the long anticipated announcement was made that the central bank will raise rates to the “0.25-0.50% range.” Thus we come to the end of the…
Times are changing. American consumers are changing the way that they shop for the holidays and everyday items. Rather than rushing into brick and mortar retailers, mobile shopping and online is taking over. In fact, over the most recent Black Friday weekend more shoppers clicked their way to items than bricked their way to items….
2015 Breadth Versus 2010 and 2011 This post contains updated breadth stats of Tuesday, December 15, 2015. Market breadth speaks to the percentage of stocks participating in a stock market rally. All things being equal, the broader the participation the healthier the market. In this article, we will examine breadth for both the S&P 500…
In my book I tell a story about a friend in college who claimed to have a foolproof gambling strategy. We would simply watch a roulette wheel and identify a trend in specific spins and then bet against it until we won. The thinking here is that a roulette wheel has about a 50% chance…
Today, the Fed hiked by 1/4 point as widely expected and signaled. Here is a snip from the Fed’s Statement The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective. Given the economic…
