One Hundred and Sixty-Two Thousand jobs; that is how many new jobs the United States economy added in one month, March 2010. That certainly sounds impressive, however, a closer examination of the numbers reveal one of the troubling aspects of this economic recovery.
Since the start of the economic recession of 2007, 2008 and 2009, the US economy has lost more than 8 Million jobs. In addition, the normal rate of population growth dictates that the economy should have...
Of all the questions circling the halls of congress, the question of whether or not to reform financial regulation seems to be one that is generally agreeable—finally we’ve found something. Unfortunately, the larger question is, “Exactly how should the vast regulatory framework of the United States be changed in order to more effectively regulate the financial services industry?” The answer to the question lies in an evaluation of what parts of the...
In the wake of the continued slide in jobs, I continue to be asked about the relationship between the economic recovery and the continuation of job losses in America. It seems that if we are in the middle of an economic recovery, we should logically see gains in the number of jobs.
Unfortunately, history has shown us that gains in the number of American jobs occurs very slowly, over an unusually long period of time, even as an economic recovery gains speed. For many...
As we enter the last month of 2009, it is helpful to reflect on the year we have had and look cautiously into next year’s expectations.
As the economy paces through extraordinary times, it can sometimes seem that the market is simply a tide that moves all boats—and the unfortunate swimmers—in the same direction. The market has been in this mode from 2007 and 2008 as the markets and economy deteriorated; and, it has clearly continued through the market...
This morning the U.S. Commerce Department released the most recent revision of the third quarter 2009 Gross Domestic Product (GDP) statistics. At the end of October, the Commerce Department initially announced that GDP grew at 3.5%. This morning, the GDP statistic was revised down to 2.8%.
Although the financial markets have recovered significantly, the business environment, employment situation and bank lending capacity seem to indicate that we have not yet...
Recently, as I meet with investors I have been asked, “Is this rally for real?” In many ways the rally over the last eight months has been phenomenal. As I write, the market has been up nearly 10% over the last 10 trading days—an incredible record given the rally is eight months old and has recorded over 60 percent in gains to this point.
Fortunately, or unfortunately depending on your portfolio profile, the stock market rally is for real and...
As I continue to receive questions about the direction of the stock market, it seems that many investors are in awe of the rapid move downward in 2008 followed by the rapid move upward in 2009. It would seem that although the economy is going through a difficult time, it probably wasn’t really as bad as we thought it was last year; and, it probably isn’t as good as we think it is this year.
In the short run, the market is a voting mechanism where the next voter...
With the market pressing forward toward record-setting gains, I continue to see clients that don’t believe that this market rally is for real. In the face of economic challenges, employment declines, widespread de-leveraging and an increasing tax load the market has continued to climb. In part the question is an attempt by some investors to pick a market top and make an investment decision based on a view of a short term market reversal.
One of the...
With the market indices reaching near-term highs on the strength of continuous daily gains, I feel the need to update the discussion on the process of completing a down cycle in the stock market.
In the later stages of a down market cycle, the market will tend to overshoot on the upside, just as it tended to overshoot on the downside. The challenge is that while there is a sign of recovery, much of the data hasn’t confirmed it and market participants will experience a bull...
On the floor or the New York Stock Exchange these days you may hear traders discuss the 17.6 year cycle. The idea has reference to an old adage that the market experiences short-term cycles as well as long-term secular cycles.
If, for example, in September 1929, with the Dow around 350, you look backward 17.6 years, the market experienced incredible prosperity. On the other hand, if you look from September 1929 forward 17.6 years, the markets and economies of the world...