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Quantitative Easing

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.

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

Steve Horn | Posted 11.04.2014 | 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.

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.

Fed Ends Stimulus Program With Economy Still On Shaky Ground

The Huffington Post | Mark Gongloff | Posted 11.05.2014 | Business

Janet Yellen and the Federal Reserve just declared the U.S. economy well enough to leave intensive care, though it is not yet the picture of health. ...

Which Hazard Is Better Contained: Ebola or Extreme Economic Inequality?

Timothy J. Barnett | Posted 10.27.2014 | Politics
Timothy J. Barnett

Design changes in Ebola management protocols make it highly probable that the Ebola hazard in America will be successfully contained. In contrast, the hazard of wealth-concentration policies implemented by central banks is not under containment. This problem threatens the very fabric of democratic enterprise.

Should You Sell???

Michael Farr | Posted 10.17.2014 | 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.

Why Europe Is Doing the Ice Bucket Challenge With a Glass of Water

Gemma Godfrey | Posted 10.06.2014 | World
Gemma Godfrey

ECB President Mario Draghi has been highly effective with his words alone -- moving markets with speeches and little action. However, by doing so he has also set the bar high and expectations for action are becoming the norm.

The Buyback Binge

Michael Farr | Posted 10.02.2014 | Business
Michael Farr

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

Unanswered Questions for a Consequential Autumn

Terry Connelly | Posted 11.26.2014 | Business
Terry Connelly

In the American democracy we have collectively (or by passive default) chosen to have at the moment, to serve and assuage our divergent biases, the question is whether a governing plurality, as Jack Nicholson said, is "as good as it gets."

The Fed's Schizophrenia

Jerry Jasinowski | Posted 11.22.2014 | Business
Jerry Jasinowski

Even though the Fed is moving to reduce its purchase of bonds, it indicates it will keep interest rates at near zero indefinitely. Fed Chairman Janet Yellen is clearly more concerned about slow growth and modest labor market gains than about inflation or increased financial instability.

Market Manipulators Are Back in Season for the Fed "Septaper" Sequel: "Septighten"

Terry Connelly | Posted 11.16.2014 | Business
Terry Connelly

The summer is coming to an end without much success at the movie box office, but one "sequel" has emerged a winner this week although its ultimate fate awaits further developments.

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.

Yellen Warns That The Job Market Is Still Not Great

Reuters | Posted 08.22.2014 | Business

By Howard Schneider JACKSON HOLE, Wyo., Aug 22 (Reuters) - U.S. labor markets remain hampered by the effects of the Great Recession and the Federal...

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 Dow May Be Above 17,000, But Not For Long

Terry Burnham, Ph.D. | Posted 09.15.2014 | Business
Terry Burnham, Ph.D.

The rise in the stock market has been relentless. We are living through the greatest macroeconomic experiment in the history of the U.S. Never was so much printed and spent by so few. And I continue to believe that the Dow will see 5,000 before it sees 20,000.

Buying Up the Planet: Central Banks on a Corporate Buying Spree

Ellen Brown | Posted 08.24.2014 | Business
Ellen Brown

Whatever power plays are going on behind the scenes, it is increasingly clear that they are not serving we-the-people.

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...

Send In the Clowns

D. Sidney Potter | Posted 08.03.2014 | Business
D. Sidney Potter

Since time memorial, man has been motivated by an easy buck and short skirts. The recent frenzy of mortgage lenders to repeat the mistakes of history may be upon us again, as some lenders are experiencing 'greed creep' all over again.

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.

Maybe Quantitative Easing Was Helping a Little More than You Thought

Jared Bernstein | Posted 06.24.2014 | Politics
Jared Bernstein

While there's evidence that the Fed's large-scale asset purchase program had direct impact of lowering longer-term interest rates, there's less evidence that it hit its broader, indirect target of investment, growth and jobs.