Ed Yardeni points out an interesting article in the WSJ from a couple of days ago that I didn’t see, titled “Sluggish Economic Recovery Proves Resilient”.

From the linked article:

The recovery from the recession has been nasty, brutish and long. It also is shaping up as one of the most enduring.

The National Bureau of Economic Research, the semiofficial arbiter of business cycles, judges that the U.S. economy began expanding again in June 2009, just over 58 months ago. That means the current stretch of growth, in terms of duration, is poised to drift past the average for post-World War II recoveries.

Yet after almost five years, the recovery is proving to be one of the most lackluster in modern times. The nation’s 6.7% jobless rate is the highest on record at this stage of recent expansions. Gross domestic product has grown 1.8% a year on average since the recession, half the pace of the previous three expansions.

From Yardeni Research Morning Briefing today discussing the article:

So why is the recovery so slow? The article notes that Republicans blame Democrats for burdening the economy with taxes, debt, and regulations. Democrats blame Republicans for not agreeing to more fiscal spending and for playing a game of chicken with the debt ceiling. Economists are also a disagreeable lot, with some saying that the financial crisis of 2008 is still weighing on the economy. Others see “secular stagnation.” Not mentioned in the article was income inequality, which has recently become one of the main explanations of progressive economists.

Debbie and I tend to side with the conservatives. We’ve frequently marveled at the resilience of the US economy notwithstanding the meddling of the federal government. We also believe that powerful deflationary forces have been unleashed by the proliferation of globalization and technological innovations. They are keeping a lid on inflation, which lowers the likelihood of a recession caused by tight money conditions.



by Laura Ehrenberg-Chesler on April 14, 2014 in Geopolitical

I was tempted to write about the great March retail sales this morning.  It is certainly a positive for the economy and the markets.  But I heard something this morning on NPR that is timely, and such an important reminder about the value of freedom, that I am highlighting that instead. The civil war in [...]

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What’s new?

by Laura Ehrenberg-Chesler on April 10, 2014 in Economic Indicators

With the equity markets selling off, and the 10-year Treasury trading just under to 2.65%.  What’s new?  What is going on that has created this wave of selling. Our good friend from Sandler O’Neill, Marc Flaster, visited us today and had these interesting comments: 1.  The Federal Reserve is not “moving off the dime”. They will not [...]

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The Fed Effect on the Market

by Marilou Long on April 1, 2014 in Employment

We mentioned in our Q1 letter the effect that commentary from the new Chair of the Federal Reserve has on the market. Here is a video from CNBC that goes in to more detail.

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China needs a Safety Net

by Laura Ehrenberg-Chesler on March 27, 2014 in Economic Indicators

On the “WSJ Blog” post supplied by Dow Jones yesterday, there was a fascinating article about China and it’s need for a social “safety net”.  The article highlights the reasons Chinese households hate to consume: pension provisions are scant,  and the lack of a decent insurance system causes medical costs to weigh heavily on the sick. Stephen [...]

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The Middle Aged Bull Market

by Marilou Long on March 25, 2014 in Credit Crisis

As the market continues to churn around these levels, the key question is whether or not the economy is going to limp along or continue to improve.  The bad winter weather certainly contributed to some weakness at home, and there are also problems with the recovery abroad.  This column by Kopin Tan in this week’s [...]

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Janet Yellen’s Testimony Today

by Laura Ehrenberg-Chesler on March 19, 2014 in Fed policy

Janet Yellen, the new chairman of the Federal Reserve, held her first press conference today following the meeting of the FOMC or Federal Open Market Committee.  When asked a question about how long she plans to keep the Fed Funds rate at 0%-.25%, she said at least for six months after quantitative easing ends.  This [...]

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I Want to Meet This Guy

by Marilou Long on March 11, 2014 in Investment Strategies

I saw this article on BusinessInsider this morning about Pimco’s new hire, Harley Bassman.  I really like his approach to life and business.  From the linked article: On his website,  Convexitymaven.com, Bassman reveals his life mantra: For those of you who are meeting me for the first  time, let me recite my Mantra: 1) It [...]

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Three things to add to the “Worry List”

by Laura Ehrenberg-Chesler on March 7, 2014 in Economic Indicators

From Ed Yardeni earlier this week: “Over the past five years of the bull market, the bears focused mainly on three worries, namely: (1) a double-dip recession in the US, (2) a financial meltdown in the Eurozone, and (3) a hard landing in China.  They haven’t given up on those concerns. Instead, they’ve added three [...]

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Market quote for the Week

by Laura Ehrenberg-Chesler on March 3, 2014 in Earnings

Great quote from Kopin Tan of Barron’s.  I thought it summed up the current market sentiment, perfectly. “So what do we have here?  We’re in a bull market, but it’s an uncommitted, antsy herd.  Maybe we’re bullish because bonds in the face of rising interest rates, cash parked in savings, and pricey Picassos aren’t exactly [...]

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