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Tapering

Should the Fed Be Worried About Deflation?

Michael Farr | Posted 12.18.2014 | 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 12.05.2014 | 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 11.21.2014 | 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 11.06.2014 | 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.

What Oil Is Telling You

Michael Farr | Posted 10.31.2014 | Business
Michael Farr

The drop in oil (and corresponding drop in energy stocks) is causing much consternation throughout the investment world because it is inconsistent with the narrative articulated by most economists.

Should You Sell???

Michael Farr | Posted 12.15.2014 | Business
Michael Farr

The growth of the American and global economies are the underlying drivers for most all equity investments. A clear discipline, dogged research, and dispassionate assessment are an investor's best friends.

The Buyback Binge

Michael Farr | Posted 12.02.2014 | Business
Michael Farr

Remember, markets go down from time to time, and it's normal. Cool heads and steady hands make money over time.

Too Clever by Half

Daniel P. Collins | Posted 11.15.2014 | Business
Daniel P. Collins

It is one thing to read the 'so-called' Fed tea leave and another to be so tied to your point-of-view that you ignore the writing in front of you, and instead attempt to read between the lines.

Another Flash Crash or Market Shutdown?

Michael Farr | Posted 11.11.2014 | Business
Michael Farr

Technology seems to have solved the trade execution issue, so I don't foresee an overwhelming market shutdown. Fidelity now offers an amazing 1 second trade confirmation guarantee.

Loan Me $250,000. Please!

Michael Farr | Posted 11.04.2014 | Money
Michael Farr

I want to buy a house. Would you be willing to loan me $250,000 for 30 years at 4.25 percent? Your answer is crucially important. Before you answer, keep in mind that you will be taxed on the interest you receive.

Margins Remain Suspicious

Michael Farr | Posted 10.22.2014 | Business
Michael Farr

So what are the causes for optimism with regard to future earnings power? Well, the most notable are probably the recent sharp decreases in interest rates and gas prices.

Enough Fed! Give Free Markets a Chance!

Michael Farr | Posted 09.24.2014 | Business
Michael Farr

The widespread expansion of credit to car-buyers, especially to sub-prime borrowers, is beginning to cause some industry observers to cry "bubble." Is this economic progress?

The Federal Reserve Board --The Adults in the Room

Terry Connelly | Posted 08.27.2014 | Business
Terry Connelly

If you asked the average person how they feel about the Federal Reserve's latest economic projection that trimmed its estimate of 2014 U.S. GDP growth to a range of 2.1-2.3 percent, they would probably say that's not so hot -- not a recession, but quite depressing nonetheless.

More of the Same

Michael Farr | Posted 08.18.2014 | Business
Michael Farr

As expected, the Federal Reserve stuck to its pattern of reducing asset purchases by another $10 billion. The monthly pace is now down to just $35 bi...

Fed Cuts Stimulus By Another $10 Billion

Reuters | By Howard Schneider and Jason Lange | Posted 08.18.2014 | Business

WASHINGTON, June 18 (Reuters) - The Federal Reserve on Wednesday slashed its forecast for U.S. economic growth this year but expressed confidence the ...

What's Going on With Interest Rates?

Michael Farr | Posted 07.29.2014 | Business
Michael Farr

An aggressive rally in the Treasury market this morning has resulted in the lowest 10-year Treasury yield since June of last year.  Nearly everyone is looking for an explanation as to why longer-term interest rates continue to fall in the face of reduced Fed support and better economic data.  So what is going on?

Tracking Earnings

Michael Farr | Posted 07.19.2014 | Business
Michael Farr

While the overall quality and composition of earnings in the 1Q may have improved somewhat, index earnings growth remains highly dependent on margin expansion.

Economists Are Wrong

Michael Farr | Posted 07.07.2014 | Business
Michael Farr

To boil things down, there are really only two roads we can follow in an environment of such as this. The economy will either muddle along at a sub-par rate of about 2 percent until balance is restored, or we go down the path of running up debt in an effort to produce higher growth rates in the near term.

Market Noise and Fed Messaging

Michael Farr | Posted 06.16.2014 | Business
Michael Farr

So far this year, the mid-cap banks are outperforming their behemoth cousins, and we now may know why. The big question, though, is how detrimental have these new regulations been to the economic recovery?

Anatomy of a Market Lie: CNBC Misreads the Fed and Helps Out Short Sellers

Terry Connelly | Posted 05.20.2014 | Business
Terry Connelly

Despite Yellen's evident caution and discomfort in expressing any specific quantitative definition of "considerable period," the stock and bond markets chose to take Yellen ultra-literally about the six months and turned suddenly and violently downward.

Mother Nature Clouds the Outlook

Michael Farr | Posted 04.27.2014 | Business
Michael Farr

How much of the slowing can be blamed on Mother Nature? Nobody knows for sure, of course, but there is enough reason to believe that the brisk pace of growth recorded in the second half of 2013 will not be sustained in 2014.

Fed Officials Agreed On Cuts To Stimulus

AP | By MARTIN CRUTSINGER | Posted 04.21.2014 | Business

WASHINGTON (AP) — Federal Reserve officials agreed at their January meeting that further gradual reductions in their stimulus would be appropriate a...

New Fed Chair Janet Yellen Faces Global Financial Woes From Tapering

Sheldon Filger | Posted 04.07.2014 | Business
Sheldon Filger

Even more worrisome than the wild swings on Wall Street and many other stock markets has been the impact of tapering on major emerging markets.

The 'Wag the Dog' Market -- Stock Manipulation Made Easy

Terry Connelly | Posted 04.07.2014 | Business
Terry Connelly

Market suckers have been taken in by these speculative games for four years running; why should 2014 be any different, especially with CNBC cheering them on by not explaining what's really going on?

The VIX Also Rises

Michael Farr | Posted 04.05.2014 | Business
Michael Farr

The more people working, earning income and spending, the greater the economic benefits. The masses move the needle, not the 1% at the top.