January 26, 2010
We start the New Year deep in the debris of the economic and market collapse of 2008. News coming in from the last quarter is still very gloomy, as consumers, businesses and government alike work to assess the damage, incorporate the right adjustments to carry on through this recession, and create the plan for clearing the fallout and rebuilding. <Read Full Article>
July 6, 2009
I hope you enjoyed a wonderful 4th of July! News reports stated that New York City set off 45,000 pounds (22.5 tons) of fireworks on the Hudson River—wow; that sure beats my personal best... And now, while some of us enjoyed a short vacation, others are looking for work and the markets are back to worrying about the future. It is pretty clear to me that, while there is certainly cause for worry, there is also room for optimism. <Read Full Article>
June 26, 2009
It is amazing where we sit today and how the mood and sentiment of investors has changed. With the market’s about-face starting March 9 and its near 35% rally off the bottom, the world does not feel quite so scary, the markets look less menacing, and our futures appear less fuzzy. But it’s crazy how we got here. <Read Full Article>
June 4, 2009
We are between the quarterly earnings report seasons and that has left markets free to fret about all sorts of things – economic reports, government policy announcements and actions, bankruptcy filings, various scandals, etc., etc. Right now it appears that we are "climbing the wall of worry".<Read Full Article>
April 29, 2009
Here we are with the blessings of spring upon us. In these recent weeks the financial markets have started to rebound from the lows hit this winter. Yet, broad equity price indices remain well below the 2007 peak levels and from a long-term perspective are about 40-45 percent below the peaks hit in 2000 and 2007. So, we have a long road to full recovery, however there are some signs that the market's recovery is progressing. <Read Full Article>
April 1, 2009
The Obama administration, and the Federal Reserve (the Fed); have been very busy in the first quarter, moving ahead quickly with policy actions aimed at countering the recession. In addition to accommodative monetary policies, the government's large stimulus spending initiatives will begin to work its way through the economy and at least part of it will be helpful. As with most previous anti-recession spending programs, the recession will likely be over before a large part of the programs has been executed. If so, I expect that at least part of the "stimulus package" will end up being reduced as forward years' budgets are formulated in more normal economic conditions. <Read Full Article>
February 20, 2009
Financial markets remain choppy and distressed as markets apparently view Treasury Secretary Geithner's rollout of the "Financial Stability Plan" as a disappointment. I certainly was underwhelmed by the plan and its lack of details. <Read Full Article>
February 3, 2009
Since his inauguration President Obama has been moving swiftly to address the recession and financial collapse, but in some areas the recovery effort has been stalled by the transition and other issues. Also, a raft of post-September economic and financial market statistics have been coming out that document a serious recession around the globe. All this bad news has slowed the "healing" in credit markets and led to further weakness in equity markets. The S&P 500 is down about 10% so far this year, but still well above the low hit last November. Hardest hit have been Financials, down nearly 30% year-to-date due to economic conditions and the dithering over how to use the Troubled Asset Relief Program (TARP). Industrials and Consumer Discretionary are the second and third worst performers, while Healthcare and Utilities are down less than 2%. Given the economic backdrop, this relative performance picture indicates that investors may be through with the undifferentiated panic selling we saw in the fourth quarter, and are returning to discretionary investing based on policy and economic indicators. <Read Full Article>
January 9, 2009
We start the New Year deep in the debris of the economic and market collapse of 2008. News coming in from the last quarter is still very gloomy, as consumers, businesses and government alike work to assess the damage, incorporate the right adjustments to carry on through this recession, and create the plan for clearing the fallout and rebuilding. <Read Full Article>
November 7, 2008
Well, it is pretty clear that we are now in the thick of a recession. The November 7 U.S. employment report for October showed a rise in the unemployment rate from 6.1% to 6.5% and a 240,000 decline in payroll employment in October. Also, there was a big downward revision of the September figure to a 284,000 decline. Previous to September, the employment declines over the prior eight months had been moderate, averaging about 84,000 a month. So I would date the recession as beginning in September, and cite as the driving forces the delayed impact of the huge oil price spike over the first half of the year, which increased our imported oil bill by about $400 billion compared to 2000, and the global collapse in credit markets that hit after Lehman and AIG failed in mid-September. <Read Full Article>
Oct. 27, 2008
As we wait for indications that the bottoming process is working through, we had another bad week. The Dow fell 473 points over the week ended last Friday, more than erasing the 401 point gain the prior week. And international equity markets started out this week badly, with Hong Kong's Hang Seng equity index down 12.6%, Japan's NIKKEI 225 index down 6.4%, the FTSE index down 1.7% and so on. Emerging Markets have really been hammered, especially equity markets in countries that have a heavy reliance on energy, materials, or precious metals production and sales. In Brazil, for example, the Bovespa stock index fell 6.5% and is down 64% in dollar terms so far this year. <Read Full Article>
Oct. 23, 2008
Equity markets around the world continue to experience high volatility as investors deal with a great deal of uncertainty about just about everything. Although we still face a long list of unanswered questions, volatile markets, and yes, a recession, some of the right answers are starting to come in. <Read Full Article>
October 16, 2008
On Tuesday and Wednesday we gave up much of the ground we gained on the Monday rally in U.S. equity markets. Then today, after being up and down, U.S. equity markets closed higher, with the Dow up 401 points. This high volatility reflects a whole host of concerns. Markets are worried about whether the government rescue plan will work, how deep the recession will be, a continued "freeze" in interbank lending, arcane but very serious issues involving "credit default swaps", concerns that hedge funds may blow up, and on and on. On the other hand, I think many stocks are looking cheap, attracting buyers. I expect markets will remain volatile for some time. I hope we have seen the low but, of course, have no way to know. <Read Full Article>
October 13, 2008
Last week was awful, bad enough to push governments around the world into action against the underlying drivers of the financial panic that caused global financial markets to just plain crash. And today we're seeing the markets around the world respond to these government efforts with sizable rebounds. <Read Full Article>
September 29, 2008
At the risk of offering too many communications, I want to keep you informed during these very turbulent weeks. Last Thursday night, Washington Mutual failed. Despite this being, by far, the largest U.S. bank failure, JPMorgan Chase took over their operations, assets and deposits immediately and with surprising smoothness. Depositors and customers should be fine. However, Washington Mutual equity holders were wiped out, and debt holders will likely get little return of their investment. Today, the FDIC announced that Citigroup was immediately taking over the commercial and investment banking operations of Wachovia in a complex transaction. <Read Full Article>
September 15, 2008
The events of this last weekend represent a major step towards resolution of the financial market crisis. Another big investment bank, Lehman Brothers, failed. Also, Merrill Lynch agreed to be acquired by Bank of America. This comes on the heels of the failures of Fannie Mae and Freddie Mac. And it is by no means clear that the bad news and instability of financial institutions is over. In my view the problems are not due to widespread instability in the credit markets. <Read Full Article>
September 8, 2008
Along with the end of this summer, the markets also are poised to enter a new season. The three months ended August 31 were pretty tough for financial markets, driven by continuing effects from the meltdown in the Financial sector, high energy prices and fears of recession. So far in September it has been more of the same, with the stock market down and economic indicators mixed—employment down, consumers cutting back, but factory orders and shipments strong. < Read Full Article >
August 8, 2008
Well, we got through a lot of data on the economy and a slew of company earnings over the last two weeks. And the stock market also stabilized with the S&P 500 Index unchanged! Looking at the data, the "glass is half empty" crowd note the rise to a 5.7% unemployment rate in July, the seventh month in a row of declines, albeit small declines, in payroll employment, revisions that now show a 0.2% decline in fourth quarter 2007 GDP, and a "weaker than expected" rise of 1.9% in second quarter GDP. < Read Full Article >
