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Monthly Archives: November 2010

Ireland & Germany bun fight

The past week has been something of a replay of the sovereign bond crisis in Europe that we watched in April & May this year.  From the financial media, we know: Ireland’s banks are toast, and that the losses from those banks are enough to push the country into the same thing as a national bankruptcy when they default on their loans. The bond […] Read the rest of this entry »

Guinea PIIGS are cannon fodder for Germany’s Dirty Harry

Consider this timeline from the past 6 months: The springtime European financial crisis caused the Euro currency to be devalued vs the dollar. The lower Euro currency in turn fueled a German economic recovery (fastest growth in over a decade. ) At the same time, the US economy slowed from a 5% growth rate to 1.7%. Since that time / late summer, the Fed […] Read the rest of this entry »

US Economy gains 151K jobs and loses 330K in the same month

Last week we talked about the October employment report from the Bureau of Labor Statistics. The headline was 151,000 new private payroll jobs. That figure creates a somewhat distorted picture versus reality. Let’s see why that is. First, understand that roughly 4 million Americans gain or lose a job every month. The net difference in gains vs losses is what is printed in the BLS […] Read the rest of this entry »

G20 conference disappoints big

Wednesday saw a press release from the German Chancellor Angela Merkel. It was designed to set low expectations for this week’s G20 meeting in South Korea. The statement opposed the US position to limit trade surpluses to 4% of GDP. Currently Germany has a 6% trade surplus. China and Japan are the other big exporters and trade surplus countries that oppose the US request […] Read the rest of this entry »

QE2 + PIIGS = Reckoning

International bond markets got a little exciting on Monday. I’ve mentioned previously that Germany had to be dragged kicking and screaming into the $1T European bailout program this past spring. Rightfully and predictably so, Germany has learned from the Greece bailout, and has not stopped pushing for a rewrite of European treaties to reduce its exposure to bailing out yet more PIIGS countries.  On Friday […] Read the rest of this entry »

The US economy gained 151K jobs. Sort of.

Friday saw the release of the much anticipated October employment report from the Bureau of Labor Statistics – the BLS. The report showed 159,000 new private payroll jobs created. A few thousand state and local government jobs were lost, bringing the total non-farm payrolls down slightly to an overall gain of 151,000. This is the first month we’ve seen a decent private payrolls number […] Read the rest of this entry »

The QE2 is launched

Wednesday saw the Fed’s QE2 announcement. Arguably the most important piece of economic data we’ve had in months. That’s why we’ve talked a great deal about the Fed and the QE2 in recent weeks. To those of you that aren’t up to speed… a brief synopsis: the QE2 is the second round of quantitative easing from the Fed. Quantitative easing is the government printing dollars […] Read the rest of this entry »

What does the midterm election mean to investors?

Let’s talk about what the election might mean to investors in the coming months and years. While it is true that most years after a mid-term election are good years for US stock and bond investors, it would be fair to say that sort of result would be reasonable to predict if our economy were anything like what it has been in the past […] Read the rest of this entry »

The stealth wealth transfer: low interest rates.

The Federal Reserve’s ultra-low interest rate policy is slowly transferring money from those of us that have savings to those that have debt. Pretty much at any point in the past half century, if you had $1M saved up, you could have invested it extremely conservatively in a mixture of money market, CDS, short term Treasury Bonds, and intermediate term TIPS. This would have […] Read the rest of this entry »