10/31/12 – The Hurricane and the Election

October 31, 2012

The hurricane has muddied a lot of waters but, surprisingly, may have helped to clear those around the election. Post-Sandy, Intrade continues to have President Obama as almost a two-to-one favorite, 65 to 35, and Nate Silver has him as more than a three-to-one favorite, at 77 to 22. Not all of the models call it for Obama, though. A recent political science paper I looked at reviewed 12 different political prediction models, with the models split evenly down the middle, 6 each.

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10/30/12 – Sunshine After the Storm

October 30, 2012

I am grateful to be back at work. Grateful, because it means we got through the storm with no damage or even inconvenience. My biggest problems yesterday were shoving the cat off the keyboard and entertaining a four-year-old boy. I am much more fortunate than many others, especially in New York and the Mid-Atlantic states. Here’s hoping that everyone recovers as quickly and with as little aggravation as possible.

The storm yesterday got me thinking about weather, particularly here in Massachusetts. We don’t normally have hurricanes, but we’re not known for our sunshine either, as my California colleagues typically remind me in February. Which brings me to a very interesting conversation I had with some clients a couple of weeks ago.

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10/29/12 – Europe in the Hurricane

October 29, 2012

A metaphor I have used repeatedly to describe the European crisis is Hurricane Season, where individual storms brew up and slam into the mainland, with the consequent damage that implies. It is a good metaphor, which is why I use it, but it occurred to me as I looked out my window at a real hurricane that it was worth another look right now.

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10/29/12 – Special Storm Issue Before We Are All Swept Away

October 29, 2012

The good news is that GDP growth came in a bit better than expected—at 2 percent versus 1.8 percent, which is up from 1.3 percent in the previous quarter. This was front-page news in the weekend editions of the New York Times (NYT) and the Wall Street Journal (WSJ). For the first time in two years, government spending was a major driver of growth. Consumer spending was also a significant contributor, but it came at the cost of lower saving rates, so it may not be sustainable. Business investment dropped, as did exports, in the face of growing weakness in Europe and China.

The sustainability of the growth is questionable, given that government spending is very likely to decrease going forward; in addition, consumer spending is also likely to slow (at best) as the fiscal cliff tax increases come closer. Nonetheless, a good quarter.

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10/29/12 – Scary Movies Versus Documentaries

October 29, 2012

A friend recently forwarded me an e-mail to comment on. This friend is a very intelligent and informed woman, but the e-mail had raised concerns that she wanted addressed.

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10/26/12 – Cracks in the Great Wall

October 26, 2012

I am old enough to remember the last time an Asian economic superpower was going to take over the U.S. Back in the day, we heard a lot about how Japan was inevitably going to overtake the U.S. because of its superior work ethic, economic efficiency, and availability of low-cost capital because of high savings rates—and particularly how its government was so much better at managing its economy through agencies like MITI. Loud cries were heard that the U.S. needed to heed the lessons of Asia and become more like the Japanese. Does this sound familiar today?

Unfortunately, in many respects, we have become more like the Japanese. But that is the subject of another post. What I want to talk about right now are the similarities between China and Japan, especially about how Japan never looked as invincible as it did just before its two lost decades started.

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10/26/12 – California at the Bleeding Edge Again

October 26, 2012

There is a fair bit of news today, which I will deal with in other posts, but I wanted to start with this one because I think it encapsulates a lot of the arguments that are being made at a national level.

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10/25/12 – Can the Stock Market and Real Economy Decouple?

October 25, 2012

Over periods of time, the performance of the stock market and the real economy are closely linked. This is no surprise; in fact, it’s inevitable if you think about it, as the stock market is just the business expression of the real economy. The correlation of changes in the two has been about 60 percent over the past decade, meaning that the majority of the changes in the stock market can be explained by changes in the size of the real economy.

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10/25/12 – Looking Past The Cliff

October 25, 2012

As we move into the last days before the election, both sides have a lot to say on any and every issue that could vaguely be considered relevant. Ever smaller groups of voters are being targeted and pandered to. Today, it’s the “waitress moms,” per the front-page article in the New York Times (NYT), “Crucial Subset: Female Voters Still Deciding.” Obama continues to be the favorite, but at slowly eroding odds. And people are starting to realize that regardless of who wins the election, we are still going to have to deal with the same problems.

The headlines now are focusing more on what we will do, rather than who is going to be doing it. Even as the political uncertainty escalates—the presidential race is getting tighter, and “Number of Competitive Senate Races Rises” on page A6 of the Wall Street Journal (WSJ) points out that control of the Senate may be up for grabs as well—the economic focus is narrowing. Whoever wins, there is a set of problems that will have to be addressed, and those problems are becoming the focus.

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10/24/12 – Middle of the Road

October 24, 2012

“Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides.” — Margaret Thatcher

Margaret Thatcher is not usually associated with the middle of the road, but I have always liked the above quote. And, indeed, there is no question that the middle of the road may be the place to be in American politics.

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10/24/12 – Back to the Future

October 24, 2012

In the past couple of weeks, I have given several talks to groups of clients, and there have been a couple of common questions and themes in the discussions. The most popular theme is employment—when and whether we will be able to get back to an economy that provides good jobs for lower- and middle-class workers that allow them to buy homes and live a good life. This is really the key question for everyone who loves this country.

The answer I have been giving is that we are not going back to the 1950s. At that time, America was the workshop of the world—because most of the rest of the developed world had destroyed itself. Europe was in ruins, Japan was worse, and the rest of the world had never industrialized. We could sell everything we made because we had no competition. In fact, our policy was to build up the other areas of the world again.

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10/23/12 – An Article Worth Reading

October 23, 2012

I sent a tweet about this earlier, but I want to mention it here as well. This Wall Street Journal article by Daniel Yergin, “The Real Stimulus: Low-Cost Natural Gas,” is worth a read.

The title pretty much tells the story, but Yergin goes into some detail about the numbers behind the story, as well as some of the second-order repercussions.

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10/23/12 – Politics Starts at the Water’s Edge

October 23, 2012

Contrary to the old adage that politics stops at the water’s edge, last night’s presidential debate started there and headed straight into politics. The debate made the front page of the U.S. papers, unsurprisingly, but it was a bit of a surprise that there was no real consensus as to who won or lost. To the extent that both candidates had something to lose here, that makes sense. Romney wanted to avoid looking out of his depth or making some obvious misstatement, and Obama had to continue to seem tough and engaged. Both hit their marks, but neither seemed to go much beyond that.

Overall, the race has tightened quite a bit since before the first debate, and, nationally, it seems to be pretty close to a draw. Elections aren’t decided nationally, though, but in the Electoral College based on state results, and there the president still appears to have an edge. Nate Silver has a good article on page A10 of the New York Times (NYT)—“Cutting to the Chase: What Are the Odds?”—that addresses exactly that. Basically, per his analysis, Obama still has a two-thirds chance of winning, based largely on his slight but persistent polling advantages in some of the battleground states.

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10/23/12 – The Next Crisis: Student Debt and the Future of Higher Education

October 23, 2012

The market is a beautiful thing. Money flows to what people want, and the end result is that the optimal balance of desires and available resources is obtained with minimal guidance and intervention.

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10/22/12 – We Now Return to Our Regular Programming

October 22, 2012

All right, we did the optimism thing last week—now, back to the regular program. Not quite as bad as that, of course, but last Friday was the 25th anniversary of the 1987 crash, and that has focused minds a bit.

The anniversary of the crash hit the papers last Friday and over the weekend, with “Unhappy Anniversary, Dow” in the weekend Wall Street Journal (WSJ) followed by “That Old Sinking Feeling Returns, Circa October 1987” (p. B1 and p. B5, respectively). These articles were supported by “It’s Time to Time the Market” (WSJ, p. B7), which is about how the market is priced at a level that historically has produced disappointing returns going forward. I will note that my own research, as well as that of many others, also supports the conclusions of that article. The New York Times (NYT) didn’t explicitly headline the crash, but it did put “Shares Fall as Earnings Disappoint on Wall St.” on B1, the front business page.

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10/22/12 - Unpopularity Alpha

October 22, 2012

I have been talking with advisors recently about alternatives. One of the points I always make is that the definition of alternative investments has varied significantly over time, so it’s important to be very specific about what you mean when you say alternative.

In the middle of the last century, for example, you could have made the case that stocks themselves were alternative. At the time, stocks had always yielded more than bonds and always would because they were riskier. Since then, of course, we have seen the opposite conclusion, that stocks are less risky than bonds over time, become the prevailing wisdom. Stocks, at the time, meant U.S. large-cap. Small-cap stocks were dangerous, risky, not for small investors. Until, of course, they weren’t, and now small-cap is a core part of most portfolios. Foreign stocks were dangerous, scary—they don’t speak the same language, so how can we trust their assets? Until they weren’t scary anymore, and again, foreign stocks are now part of many core portfolios. The same logic has played out with emerging markets, with high-yield bonds—formerly known as junk—and now with alternatives.

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10/19/12 — The Power and Limits of the Web

October 19, 2012

Two stories that made the front pages today illustrate both the power and the limits of technology. The first was the accidental prerelease of Google’s disappointing earnings. I was looking at my screen yesterday afternoon, watching the Nasdaq drop, and asking anyone who would listen, “What the heck is happening here?” No one knew at the time, though it became apparent an hour or so later what had happened.

For people who haven’t seen the story yet, the financial printer handling Google’s results report accidentally posted it prematurely to the SEC’s website. Although it was rapidly pulled, the damage had been done. The results were well below expectations, showing declines in profits and in the revenue growth rate. The stock tanked.

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10/18/12 – Why Are Women . . . So Much More Interesting to Men Than Men Are to Women? —Virginia Woolf

October 18, 2012

Well, because they vote, in this case. The big story today, which made the front pages of the major papers, was the discovery by both campaigns that women vote. The Financial Times (FT) led with “Fiery Obama seizes on debate to put Romney in a bind over female voters,” the Wall Street Journal (WSJ) led with a more sedate “Candidates Zero In on Women Voters,” and the New York Times (NYT) had a relatively stuffy “Rival Campaigns Intently Pursue Votes of Women.” The underlying story is the same, that women voters—a “minority” that actually constitutes 53 percent (a majority) of the electorate—are now up for grabs, as Romney has narrowed down what had been a large Obama lead to almost even in some polls. One more example of how politics is proving much more fluid than was commonly expected.

Now that the Romney rebound is in full swing, as predicted, I think we can expect to see more pro-Obama coverage in the next round of the horse race. This has already started, with Obama being reported as more energized on the trail, but it will intensify. It is worth noting that despite the Romney rebound, Obama is still ahead by almost two to one in the Nate Silver forecast and in the Intrade market, although both of those numbers are down from their highs.

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10/17/12 – Inflation Coming Soon? Maybe Not.

October 17, 2012

As a follow-up to yesterday’s post on inflation, I wanted to add some interesting charts prepared by Pete Essele, who has contributed before. As you can see in the first chart below, there appears to be a lag between the blue line, which is food and energy inflation, and the red line, which is the core rate for everything else.

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10/17/12 – Ad Astra per Aspera (To the Stars Through Adversity)

October 17, 2012

An interesting couple of days in the news. Yesterday, the lead story in the Financial Times (FT) was “Fears over US banks’ mortgage dominance,” which discussed how the banks are making too much money off the refinancing wave. I have to say, it is interesting to note the change that has occurred when we see this kind of article, as opposed to the ones that focus on failing banks. This follows earlier articles about higher-than-expected profit gains at J.P. Morgan and Wells Fargo and suggests that the U.S. financial system is actually getting to be in pretty good shape.

Now, for the aspera. The big news today is the surprise resignation of the CEO of Citicorp and his immediate replacement by another executive. The story made the front page of the major papers, as it should, because it’s a little strange. Supposedly, the board has been discontented for a while, and the CEO just decided to resign. Certainly possible, but it does not usually play out that way. This sort of suggests that there is something else going on, and if so, it should emerge shortly. Perhaps the U.S. financial system, at least as far as the large banks go, isn’t out of the woods yet.

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10/16/12 – Looking at the U.S. Consumer

October 16, 2012

The U.S. consumer represents approximately two-thirds of the total economy, so what he or she does matters to everyone. The paradox of thrift is particularly relevant here, in that the less consumers spend and the more they save, the slower the economy grows. We need to delever—and that is happening, but not too fast.

In that light, the recent September retail sales report indicated an increase of 1.1 percent, which was higher than expected. The overall figure had to be revised down a bit for one-time factors, such as the release of the iPhone 5, but it still was a very strong result.

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10/16/12 – Looking at U.S. Inflation Trends

October 16, 2012

Two pieces of economic data came out in the past couple of days that I think are worth a look. I want to start with inflation; my other post deals with the recent retail sales numbers.

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10/15/12 – Housing Really Is Foundational: Consumer Psychology Continues to Recover

October 15, 2012

Two major banks, J.P. Morgan and Wells Fargo, reported substantially stronger profits over the weekend, largely due to mortgage lending. The weekend Wall Street Journal (WSJ) had “JP Morgan and Wells Fargo: Housing on Mend” on page B1, and the weekend Financial Times had “Dimon bullish on US housing market” on the front page. The weekend New York Times (NYT) had two housing stories on B1: “Mortgage Lending Helps JPMorgan Profit Rise 34%” and “Which House Is Worth More?”

The first point I want to make is that as housing recovers, it helps across the board. Rising home values generate more transactions, which generate multiple business spin-off benefits: realtor fees, mortgage fees, furniture sales, and everything that goes with the transaction and the new property. For existing owners, rising prices make them wealthier. For underwater owners, the power of leverage that made them broke on the downside is now making them whole just as fast. Fewer underwater owners means fewer foreclosures going forward. The fact that the improving housing market is showing up in the financials of the largest banks is a sign of how large and widespread the recovery is becoming. The publicity around it can help build confidence even further.

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10/15/12—The European Union Is a Political Project

October 15, 2012

The Nobel Peace Prize was awarded this weekend to the European Union (EU) for the stabilizing role it has played in a continent that was wracked by war for most of the last century. The prize was also explicitly awarded as a warning for what could happen if the EU were to abandon the unifying process amid the current turmoil.

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10/12/12 – The Two “Uns”: Uncertainty and Unemployment

October 12, 2012

I have been doing some detailed review work on the economy, both historically and going forward, for my presentation at Commonwealth’s upcoming National Conference. As part of that, I put together a chart that I thought was worth sharing as we move closer to the election. The blue line is business uncertainty, and the red line is the U-6 unemployment series. Note how changes in the blue line lead changes in the red line.

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10/11/12 – Optimism Day Today

October 11, 2012

I have been getting some feedback that, although people like the blog, there is a sense that it is pessimistic. To which I can only say, pessimistic? Me?

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10/11/12 – Not Much Today, but a Big Banking Story Yesterday

October 11, 2012

Looking at today’s news, there really isn’t a lot that’s new. Election. China/Japan. Europe, Europe, Europe. Nothing we have not already talked about—a lot. So I am going to go back to yesterday to look at what I think may be a big story going forward.

When a major financial paper has not one, not two, but three stories on a particular topic, you have to assume it’s probably a big deal. The Financial Times had three stories on Walmart and American Express’s launch of a new product intended to take on the banks. The product is a separately branded, prepaid card that can be used as a debit card wherever AmEx is accepted. According to the stories, the card is aimed at lower-income households that are tired of or unwilling to pay the fees charged by most banks. Walmart wants to replace the bank for its customers.

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10/10/12 – Research All-Stars Again

October 10, 2012

I am very proud to announce that five members of the Commonwealth Investment Research team have once again been named All-Star analysts by Financial Advisor and Private Wealth magazines. This is an honor for the whole team, as well as for Commonwealth. Eight firms had analysts named: six firms each had one analyst honored, one had three analysts, and one firm—that’s us—had five individual All-Stars! We are very fortunate to have such a wide and deeply talented team.

Read the full story.

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10/10/12 – Gatekeepers and Sturgeon’s Law

October 10, 2012

The reason the posts are late today is that I was sitting on a panel at a conference, discussing the role of gatekeepers in the industry. For those who don’t know, a research department at a broker/dealer typically reviews myriad products and provides opinions on them for the broker/dealer’s advisors. Investment products that are considered “very good,” based on the research department’s analysis, may end up being recommended. As such, we analysts are considered the gatekeepers that product sponsors would like to have on their side. At the very least, they’d like to avoid getting a negative review.

Much of the discussion at the conference centered on the opportunities that exist for product sponsors to create new products to better serve advisors and clients, which is all to the good. We love to see new and innovative products. Other discussion was less edifying, though; it had to do with how companies can essentially get in with products that are, at best, about the same as every other product out there.

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10/9/12 – The U.S. Is Still the Best Place to Be

October 9, 2012

The slowing global economy was the big story this morning. It was front-page news in the Financial Times (FT) and the Wall Street Journal (WSJ), with “IMF cuts global growth forecasts” and “Global Recession Risk Rises,” respectively. Although it didn’t make the New York Times (NYT) front page, it did make the front of the business section, with “IMF Lowers Its Forecast for Global Growth.”

The short version is that Europe continues to tank, China continues to slow, and the U.S. is at risk because of political uncertainty. The IMF is projecting continued though slower global growth, but that depends on a few criteria: Europe implementing the sovereign bond purchase program successfully and navigating its multiple other problems, China achieving a soft landing, and the U.S. not going over the fiscal cliff. A hefty set of assumptions.

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10/8/12 - Protectionism and the Future

October 8, 2012

Looking at the stories for the past three days, I see several that hit the protectionism meme from a couple of different directions. The first, “China’s ‘New Left’ Gets Louder” from the weekend Wall Street Journal (WSJ), does not initially appear to be a protectionist piece; it deals with the resurgence of Maoist thought in China, in opposition to the current policies that have created, per the story, inequality and social unrest. What suggests protectionism is the inward focus on the Chinese economic model based on international trade, as well as the presence of the New Left at anti-Japanese rallies. The consensus for free trade has come under threat in the West, as I have written before, but there are also other threats arising that come from the left and from exporting countries. When a trend becomes this broad, it can’t be shut down easily by one country or even a group of countries.

Not that most countries, particularly the U.S., are exactly trying to stop the protectionist trend. Another article from the weekend WSJ worth noting, “Parched in the West, but Shipping Water to China Bale by Bale,” talks about how alfalfa is sold to China in the context of a water shortage. Protectionism justified by resource shortages—you will definitely be hearing this again, and not just from the U.S. See also the weekend Financial Times (FT) story “Chinese tourists steer clear of Japan.” As I have been discussing for a while, this is (already) a trade war if we are lucky and a shooting war if we’re not. Another U.S. protectionist story hit the front page of the WSJ with “China Tech Giant Under Fire” and page 2 of the FT with “US businesses urged to shun Huawei over security fears.” Protectionism under the guise of national security is another story to watch for in the future, with technology as the leading edge.

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10/8/12 – Lies, Damn Lies, and Statistics . . . Again

October 8, 2012

The big story over the weekend was the surprising drop in the unemployment rate to 7.8 percent, which is the lowest it has been during the Obama presidency. Employment growth remained slow, at 114,000 jobs, but the big story there was that the previous two months were revised upward to much better levels than had been initially estimated. The papers had different focuses, as expected. The Financial Times (FT) cut to the chase with “Obama boosted by US jobs figures” and “Jobs report better than expected but labour growth still slow.” The Wall Street Journal (WSJ) led with “Hiring Notches Modest Gains,” followed by “Jobless See Little Improvement in Outlook” (p. A2). The New York Times (NYT) took the opposite tack, with “Jobless Rate Sinks to 7.8%, Its Lowest for Obama’s Term.” Nice to see when the papers wear their hearts on their sleeves.

Surprisingly, the drop in the unemployment rate led to charges, most visibly by Jack Welch, that the government had cooked the numbers. The NYT addressed that directly with “Jobs Report: Cooked or Correct” (p. A17) and “Taming Volatile Data for Jobs Reports” (p. B1); the articles concluded that the numbers were legitimately volatile, not cooked, and explained how the numbers are derived. Apparently, the last time charges like this were widely aired was during the Nixon presidency—an indicator of how wide the political divide is now.

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10/5/12 – How Europe Fails: The Haves

October 5, 2012

I talked in the previous post on Europe about how the departure of a significant country could lead to the demise of the eurozone. Significant would obviously mean Germany, but also France, Italy, Spain, and, arguably, the Netherlands. These are the five largest economies in the eurozone, which together comprise more than 80 percent of the total economy. To break it down a bit further, Germany is 28 percent of the eurozone economy, France is 22 percent, Italy is 16 percent, Spain is 11 percent, and the Netherlands is 6 percent. Everything else amounts to 4 percent or less—in most cases, much less.

What is striking about this list is that only two of the big five are in good condition, fiscally speaking: Germany and the Netherlands. Combined, they account for 34 percent, or a bit more than a third of the total. All figures are as of 2011, as reported by Eurostat, and obtained from Wikipedia.com.

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10/05/12 – Romney Rebound Begins—Massachusetts Mitt Is Back!

October 5, 2012

As I predicted, the papers love a good horse race and have been dying to start the Romney rebound story. It is now well under way, with “Romney dominates glum president” on page 2 of the Financial Times (FT), “Romney Presses Edge After Obama Stumbles” on the front page of the Wall Street Journal, and “Campaign Gains a New Intensity in Debate’s Wake” on the front page of the New York Times (NYT). The consensus is that we now have a competitive race again, and reporters could not be happier.

I read the debate transcript again last night and realized something I didn’t mention enough yesterday—–Governor Romney of Massachusetts was back! The severe conservative of the Republican primaries did not show up; instead, we had a moderate, center-right, successful governor who embraced his own health-care reform plan, bragged of working with Democrats, stated categorically there would be no effective tax cut for the wealthy, and said that regulation was necessary and government had a role to play. One wonders what Paul Ryan thought of all that, not to mention all of the Republican primary voters.

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Market Update for the Quarter Ending September 30, 2012

October 5, 2012

Up the wall of worry

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Market Thoughts Video for October 2012

October 5, 2012

http://www.youtube.com/watch?v=IZJ7VG30tsw 

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10/4/12 – When Is a Tax Cut Not a Tax Cut?

October 4, 2012

I admit that I rarely watch speeches or debates live. I prefer to focus on the content, and reading the transcript allows me to do that without being affected by the atmospherics. But the real reason is that I usually end up yelling at the TV when either or both sides make misstatements.

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10/3/12 – U.S. Consumer Expectations Are Recovering

October 3, 2012

A couple of good things to talk about today for the U.S. economy. The first relates to the generally improving demand environment. I have talked before about the fact that the housing market is getting better; the trend continues today with mortgage applications increasing by 16.6 percent, which is a lot. Cheaper mortgages continue fuel the housing recovery, and the story is not over yet.

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10/3/12 – Household Deleveraging: Paying the Bills So We Can Spend More Later

October 3, 2012

We have some more good charts from Pete Essele, data maven in our Asset Management and Research groups, this time about household debt and how we are paying (or writing) it off.

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10/2/12 – The Sky Is Fall- . . . Wait, Never Mind?

October 2, 2012

We certainly are not free of the fiscal cliff, but it is at least comforting to know that our representatives are taking up the matter when they have a free minute. The New York Times (NYT) reports today on the front page, with “Senate Leaders See Path to Avert Mandatory Cuts,” that the Senate, the less irresponsible body, is “closing in on a path” to deal with the problem.

As well they should be. In addition to the 160 million people to be affected by the fiscal cliff mentioned in an article yesterday (“Payroll Tax Rise for 160 million is Likely in 2013,” NYT, p. A1), today the Financial Times (FT) has “Washington’s fiscal cliff to hit 90% of families, claims think tank” on page 3. That’s a lot of voters.

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10/2/12 – How Europe Fails

October 2, 2012

I have written many times about Europe and its problems, but always with a provision: because the European Union is ultimately a political project, rather than an economic one, politics will trump the many economic problems and the eurozone will survive because of that.

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10/1/12 – Two Things Are Inevitable—Taxes and Something Else That I Forget

October 1, 2012

Oh, yes—spending cuts! The papers this morning are all about both. The key article, and the one most people (160 million of them) will be talking about shortly is on the front page of the New York Times (NYT), “Payroll Tax Rise for 160 million Is Likely in 2013.” The expiration of the 2-percent payroll tax on earnings will hit everyone immediately in the new year, and it’s not likely to be reinstated.

This is just a part of the fiscal cliff, which is becoming clearer and clearer as the election approaches. Taxes will be going up, and spending will be cut—the question is how. “Way round the fiscal cliff still unclear” on page 2 of the Financial Times (FT) is pretty self-explanatory and leads with the conclusion that Congress is unlikely to resolve the issues in 2012, leaving another potential pending crisis in 2013. Patriotic citizens are glad to contribute more, led, of course, by private equity managers. According to “Private equity managers fear tax hit” in the FT (p. 17), they are attempting to rewrite existing agreements to specify that they will make more money to compensate if their taxes go up. Clients, unsurprisingly, do not seem to be in favor. No doubt, the managers want to make sure they can continue to spend and stimulate the economy, which will then trickle down.

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