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Monthly Archives: July 2011

US 2Q 2011 GDP Report

The BEA took an axe to their previous GDP estimates. Previously, the BEA estimated average annualized GDP growth over the 4 year period 2007-2010 to be less than +0.1%. Today, they slashed that growth rate to -0.3%/year. This is the same effect as a 4 year recession. Ouch. For the same 4 year period, the BEA lowered their estimate of real personal income growth […] Read the rest of this entry »

Weekly Short Economic Stories

Gold hit new record highs – approx $1630/oz.  Gold is increasingly functioning like a currency hedge (as opposed to inflation hedge). The reasons are obvious and well explained in previous articles. Gold is up nearly 4500% since 1967 — the year before the US Congress began making noise about walking away from the gold standard in the Bretton Woods agreement. Looked at another way, […] Read the rest of this entry »

Greedometer: Dow 5000 in 2012 (Wall St Journal Ad)

On July 25th 2011 (today), Triangle Wealth Management ran a quarter page advertisement in the Wall St Journal.  (the ad is running in the Southeast US)  Here it is. That’s too small to read, so here’s the text. Dow 5000. You’re Welcome. July 2000… July 2007… July 2011. Each saw stock markets rise to within 1 % of a secular (long term) stock market […] Read the rest of this entry »

When is it going to get better ?

Millions of Americans are asking this question with differing degrees of desperation. A short answer is: Expect more US government and Fed tricks to prevent a full-on depression like Japan has done for the past 21 years (but is nearing the end of their rope). No real solution to the problem will be seen until the political will is in place to deliver the […] Read the rest of this entry »

Weekly Short Economic Stories

Profit margins in this quarter’s US earnings season are the highest ever. Revenue growth isn’t impressive, and most of the growth continues to be from business units outside the US. But what is impressive is how companies are holding down costs. Thank you 16% real unemployment rate. Profit margins are one of the best mean-reverting datasets there are –> translation: if something tends to […] Read the rest of this entry »

Europe’s Sovereign Debt Crisis: Phase 2

When the European sovereign debt crisis began -over a year ago- I wrote that it would not be contained to Greece, that other peripheral countries would be dragged into it, and that ultimately defaults would be required because the debt-loads are simply too high to recover from. I expected -and still do- that Greece will default, as will Portugal and Ireland. The nightmare scenario […] Read the rest of this entry »

Weekly Short Economic Stories

The US debt ceiling talks continued -more or less. It comes as no surprise that Congress and the White House are taking until the Treasury imposed deadline.  The $4T deficit reduction deal is apparently off the table, and we’re stuck with trying to get a $2T reduction done. Doubtless even that would have most of the cutting 5-10 years out.  Pathetic.  If $2T is […] Read the rest of this entry »

June Employment Report Craters

Last month set a record for the average length of time Americans are on unemployment benefits — 40 weeks. Look at this graph and tell me we have a healthy country… There can only be one conclusion. In the 66 years since WWII, there has never been a harder time laying in front of us. The data from the June jobs report: initial claims unemployment […] Read the rest of this entry »

Weekly Short Economic Stories

$200B/year in cuts will not get the job done. Back in April I crunched some numbers on what I thought we’d end up with in terms of a deficit cutting plan (which was oddly enough – $200B in cuts per year for 10 years).  This is the sort of graph that NEEDS to be shown to the public so that necessary cutting of $300-$400B/year […] Read the rest of this entry »

Greece lives to fight another day

Greece held parliamentary votes this week that were arguably the most import in several decades. Parliament passed the newest round of austerity — 5 years worth of hard slogging and guaranteed recession.  Because Greece passed the latest round of cuts, it gets an immediate $17B injection of loans (part of last year’s $150B Greek bailout 1.0). This $17B will prevent a default that would […] Read the rest of this entry »