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Quantitative Easing

Riding a Growth Wave

Michael Farr | Posted 06.25.2015 | Business
Michael Farr

It is still early days for the American newfound interest in health and wellness, but as organics only make up 5 percent of total food sales I think the industry has a long runway of growth ahead.

Irrational Exuberance?

Michael Farr | Posted 05.22.2015 | Business
Michael Farr

I've stated repeatedly that a massive amount of stimulus has been required to generate GDP growth of just 2.0%-2.5% annually since the end of the Great Recession (June 2009). We have further said that the removal or reversal of some of these stimulants will be a tough hurdle for the economy to overcome.

What Is About To Crash - The Markets, The Economy? Neither, Even If Greenspan (Who?) Says So!

Terry Connelly | Posted 05.19.2015 | Business
Terry Connelly

It's late spring, and the Chicken Littles are back. They don't fly but they do cluck.

Poking Holes in the Strong-Dollar Thesis

Michael Farr | Posted 05.11.2015 | Business
Michael Farr

The dollar began its ascent against other major world currencies in mid-2014. The move higher was fast and furious, but the greenback ran into some resistance beginning in the middle of March.

Where Is That GDP Growth We Keep Waiting For?

Luis Ubiñas | Posted 05.04.2015 | Money
Luis Ubiñas

Balancing the budget through reduced spending and increased revenues, ending the vast expansion of the Federal Reserve's balance sheet and normalizing interest rates, are all necessary actions in the effort to right the economy in the face of the Great Recession.

Protester Attacks ECB President Mario Draghi

The Huffington Post | Alexander C. Kaufman | Posted 04.15.2015 | Business

"End the ECB dictatorship!"

Fed Near the Cliff

Michael Farr | Posted 06.09.2015 | Business
Michael Farr

The incessant parsing and analysis of each and every Fed utterance is becoming quite comical. God love Steve Liesman and Mark Zandi, but are they really adding much value by trying to read between the lines of each statement from each Fed member?

Why Do Interest Rates Keep Decreasing?

Michael Farr | Posted 05.27.2015 | Business
Michael Farr

The market's response to Wednesday's economic data was somewhat perplexing at first blush.

How Germany Can Make or Break the Euro

Helen I. Hwang | Posted 05.17.2015 | World
Helen I. Hwang

The eurozone's largest economy, Germany can essentially "make or break" the euro, especially now at this critical juncture of the crisis. Germany is the largest in the eurozone and that heft is putting it in the role as "rule-maker -- providing order and discipline."

Why Is a Central Bank Taking the Risks of Quantitative Easing?

Stefan Bielmeier | Posted 05.15.2015 | Money
Stefan Bielmeier

Surging liquidity, more risk on the balance sheets of banks and insurers, sky-high valuations in individual asset classes -- these are some of the already visible consequences of the ECB's policy, and the trend is set to continue.

The End of the Gravy Train?

Michael Farr | Posted 04.25.2015 | Business
Michael Farr

In the summer of 2013, a sharp spike higher in interest rates caused by the "taper tantrum" (fear that the Fed will soon end monetary easing) reduced both housing affordability and the opportunities to lower mortgage rates through refinancing.

Maybe The Federal Reserve Has Been Right About The U.S. Economy All Along

Terry Connelly | Posted 04.12.2015 | Business
Terry Connelly

Hard as it may be for its legion of economic, political and media critics (and even some of its own members) to accept, the most recent bullish jobs report from the Labor Department looks like a ringing endorsement of Federal Reserve policies and perspectives on the economy.

The Bernanke-Yellen Recovery

Harlan Green | Posted 04.09.2015 | Business
Harlan Green

This is something that Germany, instigator of the eurozone's austerity policies, has to learn if it wants to bring Europe out of its Second Great Depression; by supporting policies that will unite Europe into a greater union, rather than cause its disintegration.

ECB Paddles Both Ways in the Rubicon

Stephen G. Cecchetti | Posted 04.11.2015 | Business
Stephen G. Cecchetti

On January 22, the ECB crossed the Rubicon twice -- but in opposite directions. In an effort to combat deflation and years of anemic growth, the central bank announced a sustained program of large-scale asset purchases.

A Race Against Time

Michael Farr | Posted 04.01.2015 | Business
Michael Farr

The year 2015 may yet produce solid returns for investors in US stocks. However, it's looking more and more likely that TINA ("There Is No Alternative"), more than any other factor, will be responsible rather than strong earnings growth.

Week to Week News Quiz for 1/23/15

John Zipperer | Posted 03.25.2015 | San Francisco
John Zipperer

Find out the State of the News with our latest Week to Week news quiz. Here are some random but real hints: Sneezy won't be making his usual appearan...

Bold Action Plan or Delusional Rant?

Michael Farr | Posted 03.23.2015 | Business
Michael Farr

Wherever you stand on the political spectrum, I think there are some undeniable truths regarding our economy that need to be addressed before we reach the next phase of robust and sustainable economic growth.

Taking Stock

Michael Farr | Posted 03.17.2015 | Business
Michael Farr

There are many positive signs in the US. Gross Domestic Product (GDP) for the 3rd quarter was up 5% on an annualized basis compared to the 2nd quarter (adjusted for inflation).

The ECB's Not-So-Sweet 16th

Kermit Schoenholtz | Posted 03.15.2015 | Business
Kermit Schoenholtz

If the ECB is willing to use all its available tools without limit, there is little reason to doubt that it can hit its inflation target of close to 2%. However, making that policy commitment credible remains a great challenge because of the controversy and dissent about acquiring risky government debt.

Time to Get Excited?!

Michael Farr | Posted 02.28.2015 | Business
Michael Farr

Surging stock prices will likely increase rather than decrease the costs of saving for retirement for most folks. Why? Because most people, including baby boomers who are inching closer to "retirement age", remain vastly underprepared for retirement.

Should the Fed Be Worried About Deflation?

Michael Farr | Posted 02.17.2015 | Business
Michael Farr

For an economy heavily dependent on consumer spending, this is not a trivial consideration.

The Squeeze of the Middle Class

Michael Farr | Posted 02.04.2015 | Business
Michael Farr

The median household income in 2013 was only slightly above that reported for 1995 (after adjusting for inflation), while costs for necessities like housing (rent), health care, and education are making it much more difficult for middle-class folks to get by. 

What Is Causing the Drag?

Michael Farr | Posted 01.21.2015 | Business
Michael Farr

Using inflation-adjusted numbers, we indexed each component of GDP to 4Q07 levels, beginning with a value of 100 for each. We graphically display the results below, followed by some commentary.

Deleveraging Has Not Yet Run Its Course

Michael Farr | Posted 01.06.2015 | Business
Michael Farr

I've argued for some time that the process of deleveraging has yet to run its course. The aggregate level of debt in our economy currently stands at a record high, even though many pundits continue to say that debt levels are much more manageable now as compared to the pre-crisis days.

Federal Reserve Policy Keeps Fracking Bubble Afloat and That May Change Soon

Steve Horn | Posted 01.04.2015 | Green
Steve Horn

But even with the generous cash flow facilitated by the Fed, annual productivity of many shale gas and tight oil fields have either peaked or are in terminal decline.