|By Paul Wiseman, Time, 01/31/2011|
MarketMinder's View: It ultimately doesn’t matter who’s number one or two, but the fact US manufacturing is still a dominant global presence is often overlooked by those worried about overseas competition.
|By Alex Brittain, The Wall Street Journal , 01/31/2011|
Consumer prices can be volatile, but that’s nothing new. Plus, it seems the ECB is not overly worried about current inflation rates.
|By Allan Roth, MoneyWatch, 01/31/2011|
MarketMinder's View: It may prove difficult, but “try to ignore both the media and short-term movements of the stock market.” Stocks can easily move up as well as down in very short periods.
|By Christine Harper, Bloomberg via Washington Post, 01/31/2011|
Predicting an impending crisis right now is just plain silly—and calling for a crisis to hit in four-plus years even more so. Ignore.
|By Adam Shell, USA Today, 01/31/2011|
MarketMinder's View: Stocks could fall for a number of reasons, but simply because they’ve been rising is not one of them. Investors should focus on big picture fundamentals, not fearful speculation.
|By Aaron Smith, CNN Money, 01/31/2011|
MarketMinder's View: Turmoil anywhere is unsettling—but it often has less impact on global stock markets than first assumed.
|By Joseph Lazzaro, Daily Finance, 01/31/2011|
MarketMinder's View: Debt will always be a hot-button issue. But today’s debt relative to GDP remains at historically manageable levels. Plus, as the article mentions, nations can have high debt ratios and still be economic powerhouses.
|By Jeff Bater and Jamila Trindle, The Wall Street Journal , 01/31/2011|
MarketMinder's View: Despite fears high unemployment will curb spending, December proves consumers continue to open their wallets. For more on the recovery, please see today’s cover story, “Recovery Ends. Expansion Begins.”
|By Matt Krantz, USA Today, 01/31/2011|
MarketMinder's View: Sorry folks, silver is no more an investment holy grail than gold. Both are simply commodities whose prices are subject to supply and demand pressures.
|By Luca Di Leo and Jeffrey Sparshott, The Wall Street Journal, 01/28/2011|
MarketMinder's View: US Q4 GDP grew at a 3.2% annual rate.
|By Staff, BBC News, 01/28/2011|
MarketMinder's View: While the finance bill has yet to obtain final approval, this is something to keep an eye on—Ireland received the aid it needed and now just needs to pass an austerity budget. See our 11/23/2010 cover story, “The Still-Fighting Irish,” for more.
|By Larry Downes, Slate, 01/28/2011|
MarketMinder's View: Here’s a good, well-reasoned argument about net neutrality. Government intervention, even with the best intentions, can spin off negative, unintended consequences. For more, see our 12/23/2010 cover story, “With Liberty and Internet for All.”
|By Jeannine Aversa, Associated Press, 01/28/2011|
Jobs recovery has historically lagged—sometimes greatly—economic recovery. Even so, recent numbers are already showing some improvement. For more, see our 01/04/2011 cover story, “On an Up Note.”
|By Howard Schneider, The Washington Post, 01/28/2011|
Historically, the US has had higher percentages of debt relative to GDP, and we’ve done just fine. For more, see our 01/20/2010 column, “A Taxing Situation.”
|By Robert J. Samuelson, The Washington Post, 01/28/2011|
The story of China growing at the expense of the US is overblown. Both countries can gain from the relationship, as each has over the last several years. Some US jobs may be shifted overseas, but that simply provides room for other employment opportunities to be created. See our 08/17/2010 cover story, “And the Silver Goes to…” for more.
|By Robert Reich, The Christian Science Monitor, 01/27/2011|
MarketMinder's View: Classes are incredibly fluid in America—it’s part of what makes the US the land of opportunity. Instead of engaging in melodramatic handwringing about the middle class’s death at the hands of the wealthy, politicians should focus on getting out of the way to create greater opportunities for entrepreneurs and businesses—a sure way to boost success across the board.
|By Aaron Smith, CNN Money, 01/27/2011|
Give little weight to credit agencies’ ratings—they tend to lag what the market already knows. For more, see our 12/10/2010 cover story, “Dodd-Frank Says Ditch Fitch.”
|By Staff, The Wall Street Journal, 01/27/2011|
MarketMinder's View: “We appreciate Mr. Obama’s call for more regulatory reason, but it would be more credible if one of his key agencies wasn’t literally crying over unspilled milk.” Well said. For more, see today’s cover story, “SOTU: An Acronym Promising Fewer Acronyms.”
|By Tammy Whitehouse, Compliance Week, 01/27/2011|
MarketMinder's View: Requiring banks to book loans intended to be held to maturity at market value makes little sense—and likely played a significant role in the 2008 financial crisis. The newly proposed categories of financial assets appear to be more logical and should allow financial institutions the flexibility necessary to safely hold them.
|By Jeff Reeves, MarketWatch, 01/27/2011|
MarketMinder's View: This article is based on a whopping three years of data—starting in 2008. Hardly a sufficient sample size for such an absolute conclusion.
|By Stephen Foley, The Independent, 01/27/2011|
The Financial Crisis Inquiry Commission split its vote on the cause of 2008’s financial crisis—and the vote-winning version doesn’t address the root causes of the crisis. No surprise there.
|By Donald Boudreaux, The Christian Science Monitor, 01/27/2011|
MarketMinder's View: “An American trade deficit means that foreigners are keen to invest in America. And that’s just what they’re doing, in a big way—bigger even than in China, a nation whose impressive economic growth is interpreted by many Americans as a threat to our economy.” Yep. Exactly.
|By Margaret Collins, Bloomberg, 01/27/2011|
MarketMinder's View: Stop losses frequently prevent gains rather than limit losses—as May 2010’s “flash crash” demonstrated perfectly. For more, see our 03/20/2008 cover story, “Making Heads and Tails of Stop-Losses.”
|By William Watts, Marketwatch, 01/26/2011|
Dr. Doom is at it again. It’s true European sovereign debt issues remain a concern, but the large bailout in place likely means there is no immediate threat—and buys the EMU time to get their house in order.
|By Lucia Mutikani, Reuters, 01/26/2011|
MarketMinder's View: New home sales beating expectations and notching an eight-month high is certainly good news. But investors must remember a housing recovery isn’t requisite for continued economic recovery. For more, see our 01/20/2010 cover story, “Ho Hum Housing.”
|By Michael B. Marois, Bloomberg, 01/26/2011|
Simply stated, gratuitous taxes are bad for businesses.
|By Tom Barkley, The Wall Street Journal, 01/26/2011|
MarketMinder's View: The government is turning a profit while winding down its investments in bailed-out banks—further proof TARP was not the financial disaster once feared. For more, see our 01/25/2010 cover story, “Not-So-Toxic TARP.”
|By Staff, International Business Times, 01/26/2011|
MarketMinder's View: China continues to attempt to cool its economy to more manageable growth levels—this isn’t necessarily a negative. For more, see our 01/21/2010 cover story, “Chinese Inflation Conundrum.”
|By Staff, Bloomberg, 01/26/2011|
MarketMinder's View: Simplifying the tax code and cutting the corporate tax rate sound like good ideas to us. But watch what politicians do, not what they say— so far, this is just a lot of high-level political chatter.
|By Lori Montgomery, The Washington Post, 01/26/2011|
Doing away with wasteful spending wouldn’t hurt, but it’s growth that creates jobs—it’s as simple as that. For more, see our 08/13/2010 cover story, “Growth on Capital Spending’s Heels.”
|By Jonathan Cheng, The Wall Street Journal, 01/26/2011|
The Dow (a poorly constructed index in our opinion) passing an arbitrary mark like 12,000 offers investors no insight into what stocks will do next. For more, see our 03/18/2010 cover story, “Meaningless Marker.”
|By Kelly Olsen, Associated Press, 01/26/2011|
MarketMinder's View: Be wary of overly dour headlines. South Korea’s GDP growth slowed (but was still positive) in Q4—but its economy grew at the fastest pace in eight years in 2010!
|By V. Phani Kumar, MarketWatch, 01/25/2011|
MarketMinder's View: Though the world loosened nearly in lockstep in response to 2008’s credit crisis, the exit will likely be driven by country-specific conditions.
|By William Watts, MarketWatch, 01/25/2011|
Bad weather and austerity measures combined for dislocations in the British economy in Q4. Preliminary GDP figures do get restated, and these could move higher—or lower! Fact is, a global economy doesn’t proceed in an orderly fashion. There will always be weaker and stronger single economies.
|By Staff, BBC, 01/25/2011|
MarketMinder's View: Always take IMF predictions with a grain of salt. However, growth predictions continue to be better than what many would have thought possible just six months ago—the IMF revised its 2011 growth forecast for the global economy up to 4.4%.
|By Irwin Kellner, MarketWatch, 01/25/2011|
According to the Super Bowl theory, stocks will rise this year no matter which team wins. Fun! And utter nonsense. Stocks may rise for myriad reasons—none of them have anything to do with either team’s athletic prowess.
|By Staff, The Associated Press, 01/25/2011|
MarketMinder's View: The wave of free trade agreements sweeping the globe continues, this time with India and Indonesia inking agreements to increase bilateral trade to $25 billion by 2015.
|By Alex Viega, MSN Money, 01/25/2011|
Housing continues to be a weak spot. However, though a strong housing rebound would be additive, it’s not necessary for continued economic growth. For more, see our 01/20/2011 cover story “Ho Hum Housing.”
|By Ruth Mantell, MarketWatch, 01/25/2011|
Consumers are more confident—which is nice—but utterly meaningless for stocks looking forward. Confidence surveys are coincident at best, if not lagging.
|By Matthew Saltmarsh, The New York Times, 01/25/2011|
MarketMinder's View: The big bailout fund buys the eurozone some time. However, longer term, they must address more permanent frameworks for dealing with fiscally troubled members.
|By Nicholas Larkin and Sungwoo Park, Bloomberg, 01/25/2011|
MarketMinder's View: Contrary to what many believe, over short periods, gold can be very volatile—just like any single, volatile stock.
|By James Hurley, The Telegraph, 01/24/2011|
Double-dip talk again? Sure, the UK could slow down again—so could any country. But with a significant period of growth behind it, drivers causing the next slowdown will likely be vastly different from those causing the last. Our guess is UK growth won’t be gangbusters, but another big recession is a ways off.
|By Brian Blackstone and Marcus Walker, The Wall Street Journal, 01/24/2011|
MarketMinder's View: Food and energy prices are indeed volatile, which is why many "core" inflation metrics strip them out. Overall, inflation has remained very tame. For more, see our 01/18/2011 cover story, "Eyeing the Exit."
|By Nicholas Winning and Ainsley Thomson, The Wall Street Journal, 01/24/2011|
MarketMinder's View: The eurozone has kicked off 2011 on the right foot, reporting solid recent growth figures.
|By Garry White and Rowena Mason, The Telegraph , 01/24/2011|
"Inflation is back with a vengeance—and global weather patterns could make things much worse." Can weather impact a local economy? Of course! But can weather cause a global, sustained downturn? That would be unprecedented.
|By Prieur du Plessis, Seeking Alpha, 01/24/2011|
MarketMinder's View: The VIX is inherently a backward-looking, broken indicator. It doesn’t reliably tell you where stocks are headed, and peaks and troughs are always relative—and are therefore impossible to predict.
|By Rachelle Younglai, Reuters, 01/24/2011|
MarketMinder's View: "The program was scaled down considerably as banks proved they could attract private capital in both the equity and debt markets without first selling off illiquid securities." Yep, these assets weren’t so toxic after all.
|By Edward Wyatt, The New York Times, 01/24/2011|
MarketMinder's View: As we discuss in today’s cover story, “Rumored Rulemaking,” this recommendation could lead to a change in how retail brokers operate.
|By Charles Riley, CNN Money, 01/24/2011|
MarketMinder's View: As we’ve frequently noted, jobs follow growth and sometimes significantly lag a recovery. And it does look like more hiring is on the horizon.
|By Rick Newman, Seeking Alpha, 01/21/2011|
MarketMinder's View: "Our biggest enemy isn't China. It's ourselves. Critics tend to describe China as 'taking American jobs'...That's not how capitalism works. Jobs always move from place to place…As low-paying jobs migrate away from the US, it's up to us to replace them with higher-paying jobs that require more skill and generate more innovative products." Well said.
|By Frank J. Constantino, Seeking Alpha, 01/21/2011|
MarketMinder's View: Stock corrections always happen—in both bull and bear markets. That's normal. And when stocks correct, it doesn't mean they won't keep rising overall afterwards. For more, see our 01/14/2010 cover story, "Correct Correction Behavior."
|By Peter Orzag, Financial Times, 01/21/2011|
US federal debt fears have been rehashed over and over the last couple of years—and yet, the economy is recovering just fine. And comparing the US recovery to Greece's is a bit overwrought; the US economy is huge, deep, and incredibly diverse compared to Greece.
|By Don Boudreaux, Café Hayek, 01/21/2011|
MarketMinder's View: "For any economics reporter to take seriously such notions as 'the imbalance of bilateral trade' is akin to a medical reporter taking seriously such notions as the healing powers of crystals." Here’s a refreshing (and sensible) take on trade.
|By Michael Kahn, Barron’s, 01/21/2011|
MarketMinder's View: Beware using short-term, non-fundamental trends to predict future stock market movements—such information can tell little about the future, but plenty about the past. For more, see our 10/18/2010 cover story, "A Recent History of Technical Analysis' Recent History Lessons."
|By Staff, Taiwan News, 01/21/2011|
MarketMinder's View: More positive news from Emerging Markets to support continued economic recovery.
|By Paul R. La Monica, CNN Money, 01/21/2011|
MarketMinder's View: Oil prices stalling the economy is a common fear. But higher prices don't always automatically mean doom. Frequently, they can move higher as a result of increasing economic activity increasing demand.
|By Kent Bernhard, Jr., Portfolio.com, 01/21/2011|
MarketMinder's View: Private money is sniffing out new investments—a sign investors are more confident about the economy.
|By RA, The Economist, 01/20/2011|
Gas prices have risen frequently in the past with no long-term ill effects. Also, how does raising the gas tax keep gas prices down? (It doesn’t.)
|By Jan Strupczewski, Reuters, 01/20/2011|
MarketMinder's View: Allowing the European Financial Stability Facility (EFSF) to buy bonds from countries facing debt troubles would add another arrow to the eurozone’s monetary policy quiver—and highlights the myriad options available to avoid default and contagion.
|By Jeremy Warner, The Sydney Morning Herald, 01/20/2011|
MarketMinder's View: High prices have historically spurred innovation and investment. Consider the huge leaps made in the efficiency of the combustion engine since its invention. And as this article points out, extrapolations for energy use far in the future are frequently overstated or vastly misguided.
|By Michael Sainsbury, The Australian, 01/20/2011|
MarketMinder's View: That China is experiencing inflation is hardly surprising—their GDP growth was 10.3 percent in 2010. But that hardly means disastrous, runaway inflation is just around the corner. China has already instituted tightening measures and will likely continue to do so should inflation continue to increase.
|By Nicholas Southwich Levis, Seeking Alpha, 01/20/2011|
Sure, a correction is always possible and should be expected. But the bounce off the bottom being big and fast should have been expected given the severity of the initial fall in 2008. To take a handful of existing conditions—increasing energy prices, a perceived “reach for yield,” etc.—and say prices are too high and must decline ignores history. Not to mention the fact that stock prices do rise more than fall.
|By Timothy Homan, Bloomberg, 01/20/2011|
MarketMinder's View: Economic indicators including Philadelphia manufacturing, the index of leading economic indicators, sales of previously owned homes, and jobless claims all point toward continued recovery.
|By Don Boudreaux, Café Hayek, 01/20/2011|
MarketMinder's View: China has inarguably attracted investment recently, as have many other emerging economies. But to assert it detracts from foreign investment in the US is patently false.
|By Mitchell Hooke, The Australian, 01/20/2011|
MarketMinder's View: The thesis applied here to Australia’s mining sector applies elsewhere—the auto industry, farming, etc.—equally: “Rather than seeking blunt policy sledgehammers, the key to dealing with non-uniform growth is to have the tools in place to permit economic adjustments to occur relatively smoothly and at low cost.” Exactly.
|By Vishesh Kumar, Daily Finance, 01/19/2011|
MarketMinder's View: “There's no shortage of pundits who shot to fame on the back of a bold call only to come up empty afterwards.” The longer you cry wolf, the likelier he comes. But for investors, a successful long-term track record is far more valuable than one accurate market call.
|By Staff, Fox Business, 01/19/2011|
Increased economic cooperation between the US and China is better than the alternative—but governments negotiating business deals isn’t exactly ideal. Why not stand aside, reduce tariffs, and allow businesses and consumers to freely determine who buys and sells what and for how much?
|By Neil Irwin and Brady Dennis, The Washington Post, 01/19/2011|
MarketMinder's View: The principles-based Dodd-Frank bill gave regulators extensive discretion to implement changes—and the complexity of that task is now becoming clear. It may be awhile before the bill’s impact is fully realized.
|By Staff, BBC, 01/19/2011|
MarketMinder's View: 2011 might not be quite as strong as a stellar 2010, but it wouldn’t surprise us to see Germany continue rolling. For more, see our 10/15/2010 cover story, “We’re All Jelly Donuts.”
|By SoldAtTheTop, The Christian Science Monitor, 01/19/2011|
Misery is just half the equation (and these are but an arbitrary four of many possible “misery” indicators). Investors need to consider the good things too and—more importantly—in comparison to the bad. Neither good nor bad alone paints an accurate market portrait.
|By James R. Hagerty, The Wall Street Journal , 01/19/2011|
This is nice, but the longer trend is rising productivity and declining manufacturing employment, a process that frees Americans to ply their talents in new industries even as factories keep “making” as many things as ever. Contrary to popular belief, that’s a great thing—and we hope it continues.
|By Staff, International Business Times, 01/19/2011|
MarketMinder's View: As we’ve said, QE2 probably wasn’t necessary, but it shouldn’t cause too much harm either. For more, see our 12/06/2010 column, “In Depth: Q&A on QE2.”
|By Emily Flitter, Reuters, 01/19/2011|
There’s simply no incentive for China to dump its US debt holdings all at once. Such a sudden, massive trade would severely decrease the value of said debt. If instead China sells US debt holdings in an orderly fashion, those assets are purchased on the secondary market—and it’s a wash for the US.
|By Martin Crutsinger, Associated Press, 01/18/2011|
Over the past few years, China has occasionally increased and decreased its US Treasury holdings. This fluctuation commonly gives rise to articles like this one—which stokes omnipresent US debt fears by focusing heavily on a slight dip in Chinese holdings while only lightly mentioning other countries that increased their stake.
|By Trent Hamm, The Christian Science Monitor, 01/18/2011|
This article is wrong on many counts—ignoring key differences between bank and brokerage accounts. Focusing on SIPC insurance as a key leg of investment strategy is folly. It’s easy (and takes under five minutes) to find a firm offering it, but that’s highly unlikely to be a determinant in an investor’s success.
|By Bob Willis, Bloomberg, 01/18/2011|
MarketMinder's View: “Orders and sales at factories in the New York region picked up in January, signaling manufacturing will keep contributing to the expansion.” That about sums it up. Manufacturing has been an economic bright spot lately, and today’s regional report illustrates this is continuing. For more, see our 01/04/2011 cover story, “On an Up Note.”
|By Staff, Reuters, 01/18/2011|
MarketMinder's View: Despite eurozone debt concerns rising lately (yes, again), Tuesday’s Spanish debt auction went off without a hitch. For more, see our 01/14/2011 cover story, “Iberian-Induced Anxiety.”
|By Stefan Karlsson, The Christian Science Monitor, 01/18/2011|
According to this article, those who got rich by creating consumer products are a-ok, but those who did so through helping companies obtain financing via the capital markets are not. This is just a different version of the flawed fixed-pie economic theory. But realistically, a banker earning more doesn’t detract from others’ earnings.
|By Elizabeth Williamson, The Wall Street Journal, 01/18/2011|
MarketMinder's View: There are certainly ways in which US government regulation is burdensome to American businesses, and we’d support more business friendly regulatory practices. But as we frequently say, watch what politicians do and not what they say. This fits the latter category as of now. Also, politicians claiming to do what’s right for business isn’t new and they’re frequently off target. An interesting story to follow.
|By Maya MacGuineas, CNNMoney, 01/18/2011|
The headline of this piece makes the reader expect facts, but what it really contains is a healthy dose of speculation about where US debt levels would be in a decade, political wrangling, and quotes from dubious credit rating agencies. Why not point out the cost to service our debt compared to the past? Perhaps because it doesn’t support the article’s thesis.
|By Nikki Tait, Financial Times, 01/18/2011|
MarketMinder's View: While stress tests can be useful in raising confidence in the strength of the banking system, they can also put regulators in a bit of a bind since criteria used will almost always be questioned. The prior tests weren’t perfect—but they did provide greater transparency assisting investors in their own number-crunching.
|By Staff, EU Business, 01/14/2011|
MarketMinder's View: Spain sold debt at slightly lower rates to solid demand—adding to the case against a eurozone or euro break-up. For more, see today’s cover story, “Iberian-Induced Anxiety.”
|By Annalyn Censky, CNN Money, 01/14/2011|
Just a few months ago, there was much handwringing over the low level of inflation and the threat of deflation. Then others bemoaned QE2 as sure to create hyperinflation. With the CPI up 1.5% in 2010 though, neither outcome seems particularly likely, and the Fed should have ample time to adjust monetary policy as necessary should prices heat up.
|By Gonzalo Lira, The Hourly G, 01/14/2011|
This article assumes debt is always a bad thing and there’s some absolute level at which a country will go bankrupt and disintegrate into conflict. More important than the absolute debt level, though, is the cost of financing it, which is currently well within our means. For more, see our 06/10/2010 cover story, “Debunking Debt Concerns.”
|By Jeremy Warner, The Telegraph, 01/14/2011|
MarketMinder's View: As we’ve said before, global trade is neither a fixed pie nor an exclusively two-way transaction. Rather, trade deficits and surpluses balance globally, and all participants benefit from freer, more open economies. Closing the door to a large trade partner and source of economic growth is shortsighted and downright dangerous.
|By Bob Willis, BusinessWeek, 01/14/2011|
MarketMinder's View: “Industrial production in the US rose in December more than forecast, boosted by gains in business equipment and home electronics that indicate factories remain at the forefront of the recovery as the new year begins.”
|By Timothy Homan, Bloomberg, 01/14/2011|
MarketMinder's View: Consumers were out in force again in 2010—signaling confidence in recovery continues to grow, and a good sign for retailers.
|By Robert McTeer, Forbes, 01/14/2011|
MarketMinder's View: This article makes the salient point that credit agencies are designed to warn against the threat of default, not inflation. And the chances of a US default are slim to none.
|By James Picerno, Seeking Alpha, 01/14/2011|
Not only will employment improvements lag recovery, they’re also over-emphasized as the end-all, be-all economic indicator. For more, see our 01/10/2010 cover story, “A Tale of Two Unemployment Rates.”
|By Mark Brown and Nathalie Boschat, Dow Jones Newswires, 01/13/2011|
Inflated reputation notwithstanding, credit ratings are no more insightful than any other analyst opinion. Economic recovery is already upping tax receipts—a cyclical deficit killer.
|By Svenja O’Donnell, Bloomberg, 01/13/2011|
MarketMinder's View: The UK has its trouble spots, but overall economic recovery across the pond continues.
|By Staff, Reuters, 01/13/2011|
MarketMinder's View: Weekly jobless claims tend to be very volatile. The longer trend continues to show improvement.
|By Jack Ewing and Julia Werdigier, The New York Times, 01/13/2011|
MarketMinder's View: The European Central Bank and Bank of England continue to show their willingness to support growth by maintaining accommodative monetary policy.
|By Matt Krantz, USA Today, 01/13/2011|
MarketMinder's View: Q4 looks set to add to a string of excellent earnings revival well over a year in the making.
|By Emese Bartha, The Wall Street Journal , 01/13/2011|
MarketMinder's View: As 2011 sovereign funding geared up this week, the European periphery continued to attract investors at auction. More drama may be in store, but a euro collapse remains unlikely for now. See our 01/11/2011 cover story, “The Piggy Bank’s Still Intact,” for more.
|By John Nyaradi, Seeking Alpha, 01/13/2011|
MarketMinder's View: January’s stock market movements don’t predict performance much better than any other month. For more, see our 02/02/2010 cover story, “Flipping the January Argument on Its Head.”
|By Lingling Wei, The Wall Street Journal , 01/12/2011|
MarketMinder's View: In a positive move to increase open global trading of its currency and further reform its financial system, China is allowing trading of the yuan in the US.
|By Staff, International Business Times, 01/12/2011|
In good and bad times, there are always risks to the economy. Question is, do they outweigh the positive drivers? We don’t think they do. For more, see our 01/05/2011 cover story, “Abandoning the Absolute.”
|By Dave Kansas, SmartMoney, 01/12/2011|
Gold’s on a run to be sure—but it hasn’t done as well as stocks in this bull market or over the long run. For more, see our 11/11/2010 cover story, “Cause and Effect?”
|By Porter Stansberry, S&A Digest, 01/12/2011|
We don’t know which is more outlandish, the forecast or the prescription. Please ignore.
|By Emese Bartha, The Wall Street Journal , 01/12/2011|
MarketMinder's View: Despite bailout fears, “Portugal sold the maximum amount of government bonds planned at yields that weren't as high as the market had anticipated.” For more, see our 01/11/2010 cover story, “The Piggy Bank’s Still Intact.”
|By Staff, Associated Press , 01/12/2011|
MarketMinder's View: Germany had a banner year economically and was a major source of strength as Europe dealt with debt troubles on the periphery.
|By Kevin Hamlin, Bloomberg, 01/12/2011|
Spain is covered by the €750 billion bailout—a fund that has only been tapped by Ireland so far. The risk the euro falls remains low for now. Reform will have to happen longer term, but it needn’t be catastrophic. For more, see our 12/29/2010 column, “In Depth: The Eurozone in Perspective.”
|By Don Boudreaux, Café Hayek, 01/12/2011|
MarketMinder's View: Many decry “the death of manufacturing in the US” and the loss of US jobs overseas, but it turns out this has actually been a boon for workers in the US. “For every one job lost in manufacturing since 1991, our economy has created five in better-paying service sectors, three in less well-paying sectors, and one in government.” For more, see our 11/09/2010 column, “The Ever-Evolving Economic Engine.”
|By Ambrose Evans-Pritchard, The Telegraph, 01/11/2011|
There will always be winners and losers in a free society—and frequently, it’s a game of musical chairs in which winners of one round become losers of the next, and vice versa. But to foretell such doom and gloom based on the fact luxury retailers recently experienced strong sales strains credibility at best.
|By Monty Pelerin, American Thinker, 01/11/2011|
This article underestimates the resilience of the American economic engine—which has been through worse periods and come out stronger on the other side in the past.
|By Toru Fujioka and Aki Ito, Bloomberg, 01/11/2011|
MarketMinder's View: What will countries with large currency reserves like China and Japan do with all that cash? They could buy bonds, thereby helping to ease credit markets in the eurozone. Free markets are frequently useful like that.
|By David Lawder, Reuters, 01/11/2011|
MarketMinder's View: Leaner inventories suggest strong demand and may necessitate orders to replenish them down the line.
|By Jeannine Aversa, Associated Press, 01/11/2011|
QE2 could certainly lead to inflation…at some point. But it is highly unlikely prices instantaneously soar without any chance for the Fed to take corrective action. For more, see our 10/28/2010 cover story, “In Queue, QE2.”
|By John Mason, Seeking Alpha, 01/11/2011|
Could the debt levels of various parties—the eurozone, corporations, municipalities, etc.—develop into larger issues? Absolutely. But given recent successful debt auctions in Europe and continued signals from central banks globally that monetary policies will remain accommodative, they are likely more benign than this article would have you believe.
|By Staff, BBC, 01/11/2011|
MarketMinder's View: While there’s a long way to go, opening capital markets and allowing the first taste of capitalism into one of the world’s poorest nations is undoubtedly a step in the right direction.
|By Emese Bartha, The Wall Street Journal, 01/11/2011|
MarketMinder's View: The eurozone continues to successfully sell debt at mostly only marginally higher spreads.
|By Aaron Smith, CNN Money, 01/11/2011|
MarketMinder's View: Government regulation tends to have myriad unintended consequences—like preventing businesses and free markets from functioning efficiently. While sensible regulations are a necessity, those born of political expediency can create unnecessary red tape, introduce barriers to entry, and hinder the global competitiveness of US companies.
|By Emma Ross-Thomas, Bloomberg, 01/10/2011|
MarketMinder's View: Yet another bailout rumor being denied. Is it true? Politicians typically aren’t so forthcoming on these issues. Watch what they do, not what they say. This could cause some near-term volatility and higher bond yields. But fortunately, there’s a massive bailout already in place for this exact purpose.
|By Staff, BBC, 01/10/2011|
MarketMinder's View: A recent surge in imports shows domestic consumption is on the rise in China.
|By Paul Hannon, The Wall Street Journal , 01/10/2011|
MarketMinder's View: The OECD isn’t infallible. But recall, just six months ago, there were unceasing cries for an impending “double dip.”
|By Tony Czuczka and James G. Neuger, The Washington Post, 01/10/2011|
Does the bailout fund really need to increase? Probably not—odds are the massive bailout never gets fully tapped. But perhaps this is more of a psychological issue. Either way, a default from any PIIGS nation seems increasingly unlikely, but that doesn’t mean the fears can’t still rattle markets.
|By Adam Shell, USA Today, 01/10/2011|
“The month of January is akin to a crystal ball for stock market forecasters on Wall Street. And for good reason: How stocks fare in the first month of the year often foreshadows the direction of stocks for the rest of the year.” This couldn’t be further from the truth. Don’t believe silly, easily disproved old adages.
|By Barry Eichengreen, VOX, 01/10/2011|
We’re not sure what evidence anyone could possibly look at to predict a currency crisis two years from now.
|By Mike Ramsey, The Wall Street Journal , 01/10/2011|
MarketMinder's View: The auto industry is vastly less important than it once was, but this is still more evidence economic recovery is becoming increasingly broad-based.
|By Staff, Associated Press, 01/10/2011|
MarketMinder's View: Consumers are rejuvenated as fewer worry about losing their jobs.
|By Paul Hsieh, Real Clear Markets, 01/07/2011|
MarketMinder's View: “A free market is naturally self-regulating....Government-imposed artificial limits such as trading halts and short-sale bans merely delay (or prevent) traders from finding mutually acceptable equilibrium prices.” Yep. For more, see our 08/06/2009 cover story, “Attack of the Machines!”
|By Jeremy Warner, The Telegraph, 01/07/2011|
Most economic relationships are unbalanced—equilibrium is theoretical, never actually achieved. And ever freer trade allows mutually beneficial economic relationships, not zero sum.
|By Mark J. Perry and Matt Ridley, Carpe Diem, 01/07/2011|
MarketMinder's View: “The economic growth of the past decade took a century to achieve in 1810 and took a millennium to achieve in 810. That acceleration shows no signs of stopping, indeed it may be about to redouble.” For more, see our 01/05/2011 cover story, “Abandoning the Absolute.”
|By Colin Kruger, The Sydney Morning Herald, 01/07/2011|
MarketMinder's View: Increasing business confidence and cheap valuations will likely result in more mergers next year—especially down under, where economic growth is benefiting from Asian strength.
|By Javier E. David, The Wall Street Journal, 01/07/2011|
MarketMinder's View: Eurozone debt will likely continue to make headlines in 2011, but the euro is unlikely to fall this year. For more, see our 12/29/2010 column, “In Depth: The Eurozone in Perspective.”
|By Zachary Karabell, Time, 01/07/2011|
MarketMinder's View: Beware “this time it’s different.” Unemployment in the early 80s was higher and almost as stubborn. Also, the most recent report showed job growth in December, revised October and November higher, and noted the unemployment rate fell to its lowest level in a year and a half.
|By Staff, SME Times, 01/06/2011|
MarketMinder's View: “The agreements are aimed at reducing or eliminating tariffs over 90 per cent of the goods traded between the countries”—good news for both businesses and consumers in Japan and India.
|By Staff, The Sydney Morning Herald, 01/06/2011|
MarketMinder's View: Not only was the yield relatively low, but demand was high—nearly four times the offer. Given the recent angst surrounding the eurozone and its chances of survival, this provides some evidence to the contrary and points to the determination of the EU to support its members.
|By John McKinnon and Elizabeth Williamson, The Wall Street Journal, 01/06/2011|
MarketMinder's View: US corporate tax rates are among the highest globally. Simplifying and cutting tax rates would be a step in the right direction and may provide a further boost to businesses’ spending and hiring plans.
|By Howard Richman, Seeking Alpha, 01/06/2011|
In our increasingly interconnected global economy, trade needn’t be balanced between two nations. First, globally, trade balances by definition. Second, for many nations, the benefits they receive from importing goods manufactured more efficiently elsewhere can (and usually do) far outweigh the deficit. There’s no evidence that for a developed nation, a trade deficit is a long-term economic negative. Quite the contrary.
|By Lucia Mutikani, Reuters, 01/06/2011|
MarketMinder's View: “The spike in claims does little to change perceptions the economy is now on a sustainable growth path, as flagged by sturdy data on consumer spending, trade and manufacturing.”
|By Bill McBride, Calculated Risk, 01/06/2011|
MarketMinder's View: Even sectors hit hardest during the recent recession, like real estate, are starting to turn around.
|By Hibah Yousuf and Penelope Wang, CNNMoney, 01/06/2011|
Yes, investing can be nerve-wracking, and the market can be quite volatile, as evidenced by the most recent decade. But to sit forever on the sidelines is to miss out on the tremendous upside offered by the stock market and the engine of capitalist growth. For more, see our 01/03/2010 cover story, “A Resolution Good Enough to Keep.”
|By Rana Foroohar, Time, 01/06/2011|
This article proposes there’s only one possible outcome for global financial markets but ignores that in reality, markets have a remarkable ability to adjust according to existing conditions. Countries like China who are flush with cash will ultimately find ways to deploy it, greasing the wheels of financial markets and enabling other countries to borrow.
|By Jana Randow, Bloomberg, 01/06/2011|
MarketMinder's View: German factory orders rose a whopping five times more than forecast by economists! If that’s not an indication the strength and robustness of the recovery are being underestimated, we’re not sure what is.
|By Randall Forsyth, Barron’s, 01/06/2011|
We would disagree that sentiment is euphoric—in fact, stocks have persistently climbed the wall of worry over the past year and look likely to continue in that direction. For more, see our 12/01/2010 cover story, “2010’s Wall of Worry.”
|By Staff, BBC, 01/05/2011|
Higher oil prices aren’t a risk to economic recovery—they’re proof it’s underway! Energy prices typically rise as growing economies demand fuel to power economic expansion.
|By Zhou Xin, Aileen Wang, Simon Rabinovitch, and Kevin Yao, Reuters, 01/05/2011|
MarketMinder's View: China continues to revalue the yuan on its own terms—allowing them to both better set monetary policy and improve trade relations with the US. For more, see our 06/22/2010 cover story, “Yuan for You, Yuan for Me.”
|By Nils Pratley, The Sydney Morning Herald, 01/05/2011|
No doubt 2011 will bring a unique set of challenges, but beware capital markets forecasts beyond one or two years—secular “bull” or “bear” predictions should be viewed with a critical eye.
|By Staff, Associated Press, 01/05/2011|
MarketMinder's View: More confirmation of an excellent holiday sales season for retailers.
|By Harold Meyerson, The Washington Post, 01/05/2011|
This is a grand example of overly pessimistic thinking with faulty conclusions. For more, see today’s cover story, “Abandoning the Absolute.”
|By Neil Irwin, The Washington Post, 01/05/2011|
MarketMinder's View: QE2 appears set to continue. While we’re not convinced QE2 was necessary in the first place, it shouldn’t cause too much harm. For more, see our 12/06/2010 column, “In Depth: Q&A on QE2.”
|By Staff, Reuters, 01/05/2011|
MarketMinder's View: Economies commonly switch gears. After slowing over the summer, growth looks to be reaccelerating going into 2011. For more, see our 01/04/2011 cover story, “On an Up Note.”
|By Robin Sidel, The Wall Street Journal , 01/05/2011|
“As regulation curtailing financial institutions from levying certain charges on consumers has mounted over the past year, banks have had to dream up new fees to replace those now trimmed by laws.” Said another way, despite the best efforts of lawmakers, banks are finding ways to stay in business and turn a profit.
|By Nicholas Winning and Paul Hannon, The Wall Street Journal , 01/05/2011|
MarketMinder's View: Led by France and Germany, the European recovery remains intact.
|By Ambrose Evans-Pritchard, The Telegraph, 01/04/2011|
This is a wild and overly dramatic collection of all the stories that made 2010 a difficult year for investors but also didn’t prevent stocks from posting double-digit positive returns. For more, see our 01/03/2010 cover story, “A Resolution Good Enough to Keep.”
|By Lucia Mutikani, Reuters, 01/04/2011|
MarketMinder's View: US factory orders received in November unexpectedly rose—more evidence of manufacturing’s robust recovery.
|By Stephen King, The Independent, 01/04/2011|
Three points about this piece: First, the timeline of “crises” is inaccurate (Lehman was in 2008, not 2009). Second, the impact of QE2 on currency markets is dramatically overstated. And last, exactly what would replace the dollar as the primary global reserve currency?
|By Jordan Roy-Byrne, Seeking Alpha, 01/04/2011|
We’re waiting, but we’ve yet to hear gold proponents cite what isn’t bullish for precious metals. Maybe gold continues higher, maybe not. But rising rates (if and when they happen) aren’t doom for the economy, and they’re also not fuel for a gold boom.
|By Jay Alabaster, The Associated Press, 01/04/2011|
MarketMinder's View: While we’re not wild about the idea of Japan raising its sales tax, the concept of Japan opening to greater free trade is on target. Japan would be well-served by less mercantilism and more capitalism.
|By Joseph Stiglitz, The Sydney Morning Herald, 01/04/2011|
2010 was a “nightmare?” Really? The global economy grew all year, and stocks rose over 10%. That doesn’t seem much like a nightmare to us.
|By Gideon Rachman, Foreign Policy, 01/04/2011|
This is just a different version of the longstanding, xenophobic fear of the US falling out of the global economic pole position. But the facts don’t support the thesis, which is of questionable value in the first place. China has a long road ahead of it to be on par with the US economically, and they face significant challenges along that road. And who’s in first place really doesn’t matter much anyway—the economy is not a fixed pie where Chinese growth detracts from US growth. On the contrary, Chinese growth aids US growth through increased trade.
|By Michael J. De La Merced and Jeffrey Cane, The New York Times, 01/04/2011|
MarketMinder's View: Merger and acquisition activity increased 23% in 2010—a good sign many corporations are out of batten-down-the-hatches mode and have returned to expansionary planning.
|By Russ Roberts, Café Hayek, 01/04/2011|
MarketMinder's View: The global economy is a highly complex and interconnected web—one that doesn’t always lend itself to the simplistic numerical calculations so frequently the subject of news stories.
|By Philip Aldrick, The Telegraph, 01/04/2011|
MarketMinder's View: December UK manufacturing PMI surprised analysts with its fastest growth since 1994—continuing manufacturing’s strong showing worldwide as 2010 came to a close. For more, see today’s cover story, “On an Up Note.”
|By Shobhana Chandra, Bloomberg via The Washington Post, 01/03/2011|
MarketMinder's View: US manufacturing looks to have ended 2010 on a strong note.
|By Harry Wilson, The Telegraph, 01/03/2011|
MarketMinder's View: It’s true, more debt is to be refinanced in 2011—but we think a euro collapse remains unlikely in the near term. For more, see our 12/29/2010 column, “In Depth: The Eurozone in Perspective.”
|By James R. Hagerty and Dana Mattioli, The Wall Street Journal, 01/03/2011|
MarketMinder's View: "Big US companies have cleaned up their balance sheets and, flush with cash, appear open to using it in 2011 on factories, stores and even hiring." High cash balances aren’t bullish, but the increasing likelihood they’ll be spent is.
|By Hibah Yousuf, CNNMoney, 01/03/2011|
MarketMinder's View: We like a market chewing over the same old risks—stocks tend to do fine during such periods. For more, see today’s cover story, “A Resolution Good Enough to Keep.”
|By Paul Hannon, The Wall Street Journal, 01/03/2011|
MarketMinder's View: In December, the eurozone chalked up continued manufacturing expansion in the core and even showed improving growth in Italy, Spain, and Ireland.
|By Paul Krugman, The New York Times, 01/03/2011|
Unemployment is still high (although it’s improving). But GDP in a deep hole? Nominal GDP already surpassed its all-time high, and real GDP is merely a hair below its pre-recession peak.
|By Jack Hough, SmartMoney, 01/03/2011|
MarketMinder's View: Relatively speaking, human beings have things better today than we ever have—a perspective often forgotten and a good reminder to begin 2011.
|By Graham Ruddick, The Telegraph, 01/03/2011|
MarketMinder's View: Tighter policy may slow growth in China—but we don’t expect it to halt expansion altogether. For more see our 12/14/2010 cover story, “China’s Not Choking.”