|By Joanne O'Connell, The Guardian, 04/30/2012|
MarketMinder's View: This is all very patriotic and nice, but purchasing locally made goods without an eye toward the economics of the decision (like price and how much quality you get for the price) isn’t a road to growth. In fact, it’s highly likely many of those goods were made with imported components, ingredients or tools. Narrowly focusing purchasing power within a single country rings more of politically popular protectionism than actually boosting overall growth and improving its place in a global economy.
|By Sam Gustin, Time, 04/30/2012|
MarketMinder's View: As we discuss in today’s cover story, when you actually dig beneath the headline GDP growth rate, the report doesn’t actually seem much like stalling at all. What’s more, there’s little evidence the Fed’s earlier rounds of quantitative easing really spurred growth all that much. Ultimately, there’s just very little here we think is actually on target.
|By Joshua M. Brown, The Christian Science Monitor, 04/30/2012|
MarketMinder's View: While it’s true Q1 earnings growth has thus far slowed from Q4 2011, the reality is that’s not uncommon during bull markets. Historically, more often than not, slowing earnings growth isn’t a sign a bull market is ending. Rather, it’s a relatively common occurrence as a bull market matures.
|By Shobhana Chandra, Bloomberg, 04/30/2012|
MarketMinder's View: Consumer spending, incomes and payroll numbers all increased, and ISM’s Chicago business barometer read above its growth signal of 50. Though the numbers may have disappointed some by missing estimates or slightly decelerating, overall, these numbers indicate economic growth likely continues ahead. For more, see today’s cover story, “Better Than (Widely) Received.”
|By Victor Mallet, Financial Times, 04/30/2012|
MarketMinder's View: While it remains to be seen whether Spain will implement a “bad bank” strategy to take on some of the nation’s soured loans, this is an interesting story to follow.
|By Donald Boudreaux, Café Hayek, 04/30/2012|
MarketMinder's View: Economies have many millions if not billions of inputs that constantly shift, change and evolve. This diversity means it’s awfully difficult for politicians and regulators to effectively design programs that yield only the intended results. Among FA Hayek’s most important thoughts was the “pretense of knowledge,” described very well by the analogy shared here.
|By Shaila Dewan, The New York Times, 04/27/2012|
MarketMinder's View: Like most credit ratings agencies’ decisions, S&P’s Spanish downgrade confirms what markets have known for some time. More important, despite Spain’s woes, it’s still largely met its targets at recent bond auctions and has overcome many of its 2012 funding hurdles. For more, see our 04/20/2012 cover story, “Crossing the Pyrenees”
|By Jeff Cox, CNBC, 04/27/2012|
MarketMinder's View: Well, we’d argue they don’t say much at all, despite the connections purported here. That milk prices have recently tended to fall as economies have slowed is an interesting observation, but coincidence isn’t causality.
|By Paul Krugman, The New York Times, 04/27/2012|
MarketMinder's View: It’s well documented austerity does have at least some deleterious impact on economic growth in the near term, but the assessment here is very short-term focused. Expecting troubled, uncompetitive sovereigns to return to growth immediately after tough fiscal consolidations seems unrealistic. And while we agree further pro-growth changes are likely necessary, we rather doubt the Keynesian methods touted here are the right answer—more sensible, in our view, are measures to reform labor markets, shrink bloated public sectors and make it easier for private firms to compete.
|By Wolfgang Kaden, Der Spiegel, 04/27/2012|
MarketMinder's View: While this gives a high-level overview of French presidential candidate Francois Hollande and his campaign platform, it likely overstates how much impact he’ll have on EU policy if he wins. And remember, he’s a politician—and history suggests politicians tend to moderate once elected. There’s no guarantee Hollande takes his tough rhetoric straight to Brussels.
|By Brad Plumer, The Washington Post, 04/27/2012|
MarketMinder's View: “The GDP figures are, after all, just a first-pass estimate—and they’ll be revised later on.” Indeed! Plus, consumer spending notched its highest growth rate in over a year, and the largest detractor from headline growth was falling government spending. Overall, today’s report is more evidence the US private sector is plenty healthy.
|By Staff, Reuters, 04/27/2012|
MarketMinder's View: While we’re not sure a largely fiscally sound nation’s failure to agree on an arbitrary deficit limit by the European Commission’s arbitrary deadline would necessarily constitute a crisis, the broader agreement likely removes at least some investor uncertainty. For more, see our 04/05/2012 cover story, “Dutch Power-Play, French Populism.”
|By Malcolm Foster, Associated Press, 04/27/2012|
MarketMinder's View: More evidence Japan’s economy continues to rebound from the Great Tohoku earthquake over a year ago—and likely will continue as the country rebuilds. For more, see our 03/13/2012 cover story, “Japan, One Year Later.”
|By Staff, EUbusiness, 04/27/2012|
MarketMinder's View: As Myanmar takes steps to address its human rights record and opens its markets to foreign investment, the EU has taken note, prompting talks of boosting cooperation in trade and other areas—a good thing overall for all involved, if talk leads to action.
|By David Leonhardt, The New York Times, 04/26/2012|
MarketMinder's View: As we’ve said many times, no economic data point grows (or contracts) in straight-line fashion. That jobless claims apparently paused doesn’t really tell you much about where they go from here—which is also why unemployment recovery is a backward-looking economic indicator and therefore not terribly useful for extrapolating to overall economic growth.
|By Robert Reich, Robert Reich Blog, 04/26/2012|
MarketMinder's View: We find much to disagree with here—but especially the suggestion a recession in one part of the globe necessarily translates to recession elsewhere. Markets and economies just aren’t that simple, and history’s shown before parts of the world can slow or even go through recession while the rest of the world grows just fine. Never mind the fact the UK’s “recession” is for the moment quite shallow and has seemingly been bolstered recently by improving economic data. For more, see today’s cover story, “’Tis but a Scratch.”
|By Taos Turner, The Wall Street Journal, 04/26/2012|
MarketMinder's View: While possibly politically popular, the reality is nationalizing private industry is hardly the path to sustainable and healthy free-market operations. Not only that, but it’s potentially a significant deterrent to investment—both domestic and international—and creates a considerable amount of uncertainty and risk for potential investors.
|By Dan Kadlec, Time, 04/26/2012|
MarketMinder's View: The fact such trends are indeed slow motion speaks to markets’ consequent ability to anticipate and largely sidestep—or at least plan for—them. The likelihood we find zero solutions to any problems potentially posed by prospective demographic challenges with ample lead time vastly underestimates the innovative capacity of both markets and humans.
|By Don Stammer, The Australian, 04/26/2012|
MarketMinder's View: Some very sensible advice: “Investors generally do best to look at how the key economic statistics are behaving over a run of months—to ‘watch and wait a while’—rather than alter their investment approach on the latest economic number, especially aberrant ones.”
|By Tom Bawden, Lucy Tobin and Gideon Spanier, The Independent, 04/26/2012|
MarketMinder's View: Though Wednesday’s British GDP figure inspired some dour headlines, it seems some in business are less convinced the situation’s quite that bad. For more, see today’s cover story, “’Tis but a Scratch.”
|By Staff, EU Business, 04/26/2012|
MarketMinder's View: Demonstrating effectively the disparate challenges faced by eurozone nations, Ireland, who not long ago faced seemingly immense economic woes, has come a long way—though hurdles undoubtedly remain.
|By Marcin Sobczyk, The Wall Street Journal, 04/26/2012|
MarketMinder's View: Though this is mostly talk at this point, increased global trade would benefit many beyond the shores of the countries directly involved.
|By Angela Monaghan and Szu Ping Chan, The Telegraph, 04/25/2012|
MarketMinder's View: While two straight contractions fits one traditional definition of recession, it’s important to keep a measured perspective. The services sector—by far the largest component of the British economy—remained firm, and the preliminary estimate is based on only 40% of the ultimate dataset. The small headline contraction needn’t mean the UK is uniformly weak.
|By Peter Orszag, Bloomberg, 04/25/2012|
MarketMinder's View: While there will no doubt be some political debate about US tax changes later this year, it remains to be seen whether it will be materially different from 2010’s heated tax debate. Or virtually any election year’s. In this case, because the potential changes discussed here were temporary, they’ve been known since the cuts were enacted—markets have had plenty of time to digest potential changes. Moreover, tax rates are far from the only variable impacting stocks or the economy. Ultimately, we’d argue consternation about the impacts of “taxmageddon” (or the “fiscal cliff”) is overwrought.
|By Victoria McGrane, Robin Sidel and Jeffrey Sparshott, The Wall Street Journal, 04/25/2012|
MarketMinder's View: Sure, some small banks can’t repay TARP, but they’re outweighed by those that already have—to the extent, in fact, the Capital Purchase Program (bank bailout) portion of TARP is already in the black. For more, see our 03/16/2012 cover story, “Pulling Back (the) TARP.”
|By Ylan Q. Mui and Zachary A. Goldfarb, The Washington Post, 04/25/2012|
MarketMinder's View: It seems rather unrealistic to expect all segments of an economy to grow in lockstep—pockets of strength and weakness are normal and expected amid an overall expansion. Perhaps the US economy doesn’t grow at a gangbusters pace this year, but overall and on average, data suggest it remains far healthier than most appreciate.
|By Timothy R. Homan, Bloomberg, 04/25/2012|
MarketMinder's View: Ho-hum headline print often obscures encouraging underlying data, and today’s durable goods report is no exception. The increase in business investment suggests US firms remain expansionary, supporting the notion of continued growth.
|By Matthew Dalton, The Wall Street Journal, 04/25/2012|
MarketMinder's View: The struggle described here illustrates the drawbacks of requiring nations to adhere to arbitrary deficit limits—it could force policy changes that run counter to the economic environment. A more qualitative approach to fiscal consolidation, accounting for each nation’s overall economic competitiveness, would likely be more helpful in the long run.
|By Harsh Hosji, The Wall Street Journal, 04/25/2012|
MarketMinder's View: As India’s now learning, the more you tax something, the less you get of it. In this, case, that “something” is foreign investment—an important contributor to India’s robust economic growth in recent years.
|By Paul Geitner, The New York Times, 04/25/2012|
MarketMinder's View: The European Commission agreed to resume aid talks with Hungary following Prime Minister Viktor Orban’s decision to reinstate his central bank’s independence. This is an encouraging step, though other freedom-infringing legislation has yet to be modified. For more, see our 04/09/2012 cover story, “The Tempest in Budapest.”
|By James Surowiecki, The New Yorker, 04/24/2012|
MarketMinder's View: As we’ve written, unemployment, while undoubtedly challenging for folks facing it, lags economic growth. The chances it’s different this time and unemployment does unprecedented damage to the US economy seem quite slim to us.
|By Peter Diamond and Emmanuel Saez, The Wall Street Journal, 04/24/2012|
MarketMinder's View: We agree tax rates’ impact on growth is likely overstated—high tax rates do not automatically kill growth. But evidence low rates contribute to slow growth is lacking—the noted correlation ignores the fact the US government has cut taxes several times in recent years when the economy was already entering or in recession. Moreover, one simply can’t assert that of all the factors contributing to an economy, taxes are the one influencing growth most—more likely, various factors wax and wane in importance. For more, see our 04/04/2012 contribution to The Street.
|By Staff, The Associated Press, 04/24/2012|
MarketMinder's View: Given the events of the last few years, this isn’t likely to surprise many folks. Nor does it materially change the hurdles Greece needs to overcome in the months and years ahead.
|By Leah McGrath Goodman, CNN Money, 04/24/2012|
MarketMinder's View: This piece misses the simple fact oil companies would very likely pass any increase in royalties paid to the US government right on to US consumers, ultimately creating the very issue it sought to solve—higher gas prices for US consumers. For more energy-related news, see our 04/18/2012 cover story, “Global Energy Grab Bag.”
|By Robin Wigglesworth, Financial Times, 04/24/2012|
MarketMinder's View: Successful government debt auctions in Spain, Italy and the Netherlands show continued investor confidence in relative eurozone resilience, though challenges undoubtedly remain. For more, see our 04/20/2012 cover story, “Crossing the Pyrenees.”
|By Mark J. Perry, Carpe Diem, 04/24/2012|
MarketMinder's View: An interesting look at academic research indicating there are “strong indications that recent oil price fluctuations were mainly associated with changes in the global business cycle.” Oil and gas, like any commodities purchased and sold on a market, are subject to the forces of supply and demand.
|By Staff, EUbusiness, 04/24/2012|
MarketMinder's View: More trade barriers seem poised to fall—a development we heartily applaud.
|By Stephen B. Meister, New York Post, 04/24/2012|
MarketMinder's View: Though we’d quibble with aspects of this, overall, we agree: It may seem counterintuitive, but rent control laws actually create higher rent for most people by effectively discouraging supply sufficient to meet demand. For more, see our 02/03/2012 column, “Want Cheaper Rent? End Rent Control.”
|By Jeff Sommer, The New York Times, 04/23/2012|
MarketMinder's View: There’s very little here we agree with. If you wait for the economy to reflect exactly what stocks do, you’ll likely miss quite a lot of return over time. Stocks are a leading economic indicator, typically reflecting conditions ahead. Meanwhile, data points like those referenced here—unemployment and poll data—tend to be lagging or at best, coincident indicators.
|By Staff, Reuters, 04/23/2012|
MarketMinder's View: Considering the wide array of inputs into determining economic outcomes, long-term forecasts like this one regarding Social Security are just very unlikely to come to pass.
|By Michael Sivy, Time, 04/23/2012|
MarketMinder's View: Could popular sentiment turn broadly against the euro, similarly influencing elected leaders? Sure. But citing a small fraction of French voters who voted for one anti-euro candidate and quoting a Dutch politician who’s widely known to be on the fringe isn’t really great evidence that’s occurring now. Or is all that probable in the near future.
|By Justin Lahart, The Wall Street Journal, 04/23/2012|
MarketMinder's View: There’s a lot of middle ground between the Europe-as-global-disaster-trigger and Europe-as-tailwind arguments. In our view, it’s more likely Europe’s pulled along by the rest of the world—the vast majority of which is growing. For more, see our 04/11/2012 cover story, “Depictions of Growth.”
|By Staff, The Economist, 04/23/2012|
MarketMinder's View: While this article might overstate the case a touch regarding the present state of manufacturing developments, it does sensibly illustrate the constantly evolving nature of capitalism—a dynamism presenting new opportunities that feed one another—and how this evolution can challenge politicians.
|By Mathieu von Rohr, Der Spiegel, 04/23/2012|
MarketMinder's View: An interesting look at the first round of France’s presidential election, which has set the stage for a run-off between Nicolas Sarkozy and François Hollande. Both candidates are considered pro-euro, though they have very different views regarding how best to support the French economy and common currency. For more, see our 04/20/2012 cover story, “Crossing the Pyrenees.”
|By William Kazer, The Wall Street Journal, 04/23/2012|
MarketMinder's View: As expected, HSBC’s preliminary China manufacturing PMI (which mostly omits large state-owned enterprises) posted a reading below 50 for April. However, the reading rose from March, and many subcomponents showed improvement—possibly beginning to reflect easier credit conditions.
|By Mark J. Perry, Carpe Diem, 04/23/2012|
MarketMinder's View: An interesting counterpoint. We’d add one more piece of evidence a bit more long term in nature: Natural gas prices are near decade lows. Is speculation to blame (or credit) for that? Here’s a second post of Dr. Perry’s providing more food for thought on the subject of speculation and commodities.
|By M. Joy Hayes, PhD, The Motley Fool, 04/20/2012|
MarketMinder's View: Seems speculators are the #1 scapegoat nowadays. But fact is, rising food prices are likely more the result of supply and demand factors—overall and on average, speculation just makes this price discovery more efficient. As Emerging Markets like China and Brazil see their middle classes grow, demand for meats and processed foods also increases—thus increasing the price of food.
|By Annie Lowrey, The New York Times, 04/20/2012|
MarketMinder's View: Faltering-recovery fears seem to crop up every other day or so for the past few years—yet the global economy continues to grow. And latest economic data, like March’s strong US and UK retail sales and robust Chinese loan growth, point to continued growth.
|By Staff, Der Spiegel, 04/20/2012|
MarketMinder's View: Free cross-border trade—including free movement of European migrant workers—is something core European economies have benefited from. Reintroducing border controls could prove a solution in search of a problem, as it could keep out plenty of productive would-be workers.
|By Barrie McKenna, The Globe and Mail, 04/20/2012|
MarketMinder's View: Perhaps the BRIC nations indeed slow their growth rates somewhat—but those four economies hardly represent all Emerging Markets. What’s more, fast growth in recent years means even a slower growth rate is building off a bigger base, so the amount of economic activity added each year or quarter could be higher. Besides, economies don’t grow at a steady pace—sometimes they’ll be faster, sometimes slower, and that’s normal.
|By Caroline Baum, Bloomberg, 04/20/2012|
MarketMinder's View: A highly sensible take on the monthly jobs report and other economic data—and why it isn’t a great idea to judge how the economy’s doing based on these numbers alone.
|By Nicholas Winning and Jason Douglas, The Wall Street Journal, 04/20/2012|
MarketMinder's View: More evidence the British economy is likely doing better than many expect—especially noteworthy, sales growth was broad-based. Growth rates could very well remain volatile, but it seems even the more maligned corners of the global economy may fare better than feared. For more, see our 04/12/2012 cover story, “British Pop.”
|By Kim Lane Scheppele, The New York Times, 04/20/2012|
MarketMinder's View: For those wondering why EU officials are pressing for change in Hungary, this piece explains it—under PM Viktor Orban, the country has leaned farther and farther away from democracy and ever closer to an authoritarian police state. Recent agreements to reinstall the Central Bank’s independence are merely a start on the road back to economic and political freedom, which is the lifeblood of a thriving economy. For more, see our 04/19/2012 cover story, “The Tempest in Budapest.”
|By Bruno Waterfield, The Telegraph, 04/20/2012|
MarketMinder's View: At a time when EU countries are tightening domestic spending, demanding more money for the European Commission’s budget will likely result in a heated political debate—which this piece provides interesting insight on. As ever, EU politicking bears watching.
|By Annalyn Censky, CNN Money, 04/19/2012|
MarketMinder's View: Economic growth is nearly always subject to some volatility, expanding in fits and spurts. Just because we’ve grown in spurts lately isn’t indicative of continued sluggish growth ahead.
|By Anthony Mirhaydari, MSN Money, 04/19/2012|
MarketMinder's View: The US, like every country, has its challenges, but they seem vastly overstated here—the US is far from being in PIIGS-like shape. Moreover, we’ve experienced issues, like the debt ceiling, numerous times in the past, and despite political posturing, they’re nearly always resolved. For more, revisit our 07/14/2011 cover story, “Fisher Investments On Debt Ceilings and Downgrades.”
|By Christopher S. Rugaber, Associated Press, 04/19/2012|
MarketMinder's View: One or two data points do not a trend make. And economic metrics, like jobless claims, almost never move in a perfectly straight line—they’re nearly always subject to some volatility.
|By John Stossel, Reason.com, 04/19/2012|
MarketMinder's View: This entertaining read highlights the fallacy that governments create jobs. Rather, enterprising individuals create long-term, self-justifying jobs and economic value—and better quality of life than some historical government employment schemes, like ancient Egypt’s pyramid-building.
|By Eleanor Warnock, The Wall Street Journal, 04/19/2012|
MarketMinder's View: Look past the headline, and you’ll find valuable analysis of import and export figures—rises in both speak to a stronger-than-widely appreciated Japanese and global economy.
|By James Ledbetter, Reuters, 04/19/2012|
MarketMinder's View: Hear, hear! The economy has come a long way since the 2008-2009 recession—US GDP is at all-time highs after 10 straight quarters of growth (likely 11 when Q1 2012 data is released). However one defines it, “double-dip” talk seems misplaced.
|By Ruth Mantell, MarketWatch, 04/19/2012|
MarketMinder's View: The LEI index marked its highest level since 2008—another underappreciated sign of economic strength. Though it’s but one indicator, as we’ve detailed before, recessions have historically not tended to follow high and rising LEI trends.
|By Staff, The Telegraph, 04/19/2012|
MarketMinder's View: Despite higher long-term yields in Spain’s auction, coverage was ample in both nations—showing continued eurozone resilience. For more, see our 04/05/2012 cover story, “The Pain in Spain?”
|By Louise Armitstead, The Telegraph, 04/18/2012|
MarketMinder's View: The headline factoid is interesting, but it’s not necessarily evidence a coming wave of Spanish bank failures will disrupt the Continent. Consider the environment in 1994: Europe was emerging from a true double-dip recession and financial crisis tied to monetary dislocations in the pre-euro currency exchange mechanism. Sound familiar? The global economy and capital markets proved resilient then, and we think they can do the same today. For more, see our 03/03/2012 commentary on iStockAnalyst.com, “Eurozone Recession, Global Growth.”
|By Ross Koesterich, Seeking Alpha, 04/18/2012|
MarketMinder's View: We have a few quibbles with this piece, chief among them the idea another round of quantitative easing is necessary for a sustained rally. Volatility could very well continue this quarter, and corrections are always possible, but this bull market is already underpinned by several underappreciated positive fundamentals—not just “central bank generosity.”
|By Calafia Beach Pundit, Seeking Alpha, 04/18/2012|
MarketMinder's View: We agree the Fed’s efforts to rein in loose monetary policy at the appropriate time will bear watching, but the analysis here, which argues the Fed should have tightened already, seems too narrow and backward-looking. Capacity utilization is but one economic statistic and inflation indicator—other metrics, including long-term Treasury yields, suggest the near-term risk of runaway inflation remains subdued for now.
|By Staff, EUbusiness, 04/18/2012|
MarketMinder's View: François Hollande’s comments bear watching given his poll leadership ahead of Sunday’s election, but it seems unlikely his opposition to the EU budget pact will much alter Europe’s course. Only 12 of 25 participating nations need ratify the agreement for it to take force. If anything, a new side agreement on common growth-oriented policy seems more likely than a full rewrite of the existing text.
|By Staff, EUbusiness, 04/18/2012|
MarketMinder's View: A big, likely positive U-turn for Hungary, and not just because it may help unlock external aid the country needs. An independent central bank is key to a well-functioning economy—politicizing the institution likely increases the chances of misguided monetary policy changes.
|By Isabella Steger, The Wall Street Journal, 04/18/2012|
MarketMinder's View: Cambodia’s first IPO—a privatization of a state-owned firm, no less—is a poignant milestone for a country whose capital markets were all but obliterated under the devastating Khmer Rouge regime in the 1970s.
|By Staff, Reuters, 04/18/2012|
MarketMinder's View: A sensible ruling, in our view—protectionism is never the answer. It interferes with free-functioning global markets, often causing price dislocations, and can ultimately hurt the very industries it seeks to help.
|By Dan Burrows, CBS Money Watch, 04/17/2012|
MarketMinder's View: This exhibits many classic misperceptions about US debt and deficits—including dividing total outstanding public debt by the current US labor force’s size. But to do so overlooks one (among several) crucial fact: To truly grasp whether a single worker’s “share” of US debt is too big, you must compare it to a US worker’s “share” of US assets. And in so doing, we’d be willing to bet most folks would worry less about the US’s debt burden. For more, see our 03/12/2012 column, “US Debt Perspectives.”
|By Michael Pento, The Street, 04/17/2012|
MarketMinder's View: This is just far too hyperbolic, in our view, and states everything in terms of absolutes with little data to back its assertions. Consider just one counter-example of a country with an extremely high debt-to-GDP ratio: the UK in the 19th century. And as history showed, it grew just fine from there. So saying the developed world’s debt levels lead inexorably toward mass default this time strains credulity to say the least.
|By Helene Cooper, The New York Times, 04/17/2012|
MarketMinder's View: We find much to disagree with here, but especially the notion the government will somehow be able to monitor and catch “oil manipulators.” First, how does one define such people and their presumed actions? Second, how does one definitively ascertain those actions are always harmful? As Prof. Don Boudreaux presciently pointed out, sometimes “speculators” (or manipulators) look suspiciously like normal US consumers….
|By Almudena Calatrava, Associated Press, 04/17/2012|
MarketMinder's View: One of the most crucial underpinnings of properly functioning markets is property rights. Moves like this by Argentina’s government create significant uncertainty, not to mention likely decrease investors’ appetites for investing there.
|By Justin Lahart, The Wall Street Journal, 04/17/2012|
MarketMinder's View: A largely sensible look at the current status of US consumers—which also more or less debunks the concern current consumer spending may only curtail future spending.
|By Timothy Homan, Bloomberg, 04/17/2012|
MarketMinder's View: As with any economic data point, manufacturing won’t grow (or contract) in straight-line fashion. So that March’s 0.2% decline followed “a revised 3.4 percent gain from December through February that marked the biggest three-month jump since March 1984” doesn’t strike us as terribly concerning—rather, more like entirely normal economic data volatility.
|By Staff, Associated Press, 04/17/2012|
MarketMinder's View: Well, that’s nice. The sensible aspect here is less the forecast itself (we’re generally skeptical consumers of forecasts of any sort) and more that the IMF is seemingly catching on to the fact things aren’t so bad globally as some believe.
|By Tommy Stubbington, Dow Jones Newswires, 04/17/2012|
MarketMinder's View: Though Spain still faces ongoing challenges, as acknowledged, and higher rates are less than ideal, strong demand at Spain’s and Italy’s auctions seemingly points to continued eurozone resilience.
|By Tommy Stubbington, Dow Jones Newswires, 04/17/2012|
MarketMinder's View: Though Spain still faces ongoing challenges, as acknowledged, and higher rates are less than ideal, strong demand at Spain’s and Italy’s auctions seemingly points to continued eurozone resilience.
|By Robert Reich, The Christian Science Monitor, 04/16/2012|
MarketMinder's View: “Fair” is a pleasant concept, but when getting down to brass tacks, it’s fairly subjective. What’s more, whether the economy has been fair or not, it’s been growing nicely since June 2009 and, in fact, has grown with occasional and fairly normal fits of contraction for basically its entire existence.
|By John Grgurich, The Motley Fool, 04/16/2012|
MarketMinder's View: Taking one part of one sentence uttered by one regulator—that wasn’t even a negative comment—and extrapolating this conclusion is beyond a stretch. We’re as skeptical as anyone of the government’s stress tests, but credit markets, the stress tests, bank balance sheets, earnings and revenues, the stock market and an expanding economy all seemingly allude to the fact another financial crisis isn’t likely any time soon.
|By Max Colchester and David Enrich, The Wall Street Journal, 04/16/2012|
MarketMinder's View: Folks pay far too much heed to ratings agencies, and here’s another example. Should Moody’s follow through and downgrade 114 European banks in eurozone nations, would anyone be surprised? Fear over eurozone banks has swirled for a very long time—and the ECB has shown in recent months a commitment to backstopping them.
|By Chris Giles, Financial Times, 04/16/2012|
MarketMinder's View: Yes, pockets of weakness exist. But even so, the world has surpassed prior peak levels of output, and expectations broadly are for ongoing growth in 2012. We fail to see how that is “on life support.”
|By Michael J. Boskin, The Wall Street Journal, 04/16/2012|
MarketMinder's View: A more peaceful world is one where more nations are interconnected through free trade and investment. For more, read our 04/16/2012 cover story, “Another Step on Kashmir’s Silk Road.”
|By Staff, BBC, 04/16/2012|
MarketMinder's View: This is a good, incremental move in the right direction. Though, in our view, China’s managed currency—which does cause dislocations—harms China as much as other nations.
|By Shobhana Chandra, Bloomberg, 04/16/2012|
MarketMinder's View: More evidence of ongoing economic vibrancy—one of many underappreciated positives at work.
|By Victor Mallet, Financial Times, 04/16/2012|
MarketMinder's View: Spanish regional governments—which have historically had a great deal of autonomy—have been major contributors to the country’s recent budget deficit woes. It seems the federal government is moving toward bringing regional budgets more under control—a sensible step toward implementing meaningful national economic reforms.
|By Jeremy Warner, The Telegraph, 04/13/2012|
MarketMinder's View: We’ve many quibbles with this piece, but a big one is its omission of the euro’s accomplishments, like facilitating cross-border trade—a positive for all nations. This and other benefits are why officials are working so hard to preserve the euro, and their “kicking cans” strategy to do seems largely sensible, in our view.
|By Alex Barker and Brooke Masters, Financial Times, 04/13/2012|
MarketMinder's View: Capping bank bonuses is a solution in search of a problem, in our view, and will likely just result in driving top talent to other industries where regulations don’t limit pay.
|By Constantine von Hoffman, , CBS Moneywatch, 04/13/2012|
MarketMinder's View: First, if 10 straight quarters of GDP growth isn’t an economic recovery (or expansion), then what is? Second, unemployment numbers typically lag stocks and the economy—still-elevated unemployment at this stage in an expansion is historically fairly typical, and on balance, public- and private-sector employment metrics continue showing overall improvement. For more, see our 4/10/2012 cover story, “Don’t Miss the Forest for the Trees on Unemployment.”
|By Richard Milne and Michael Mackenzie, Financial Times, 04/13/2012|
MarketMinder's View: The “risks” cited here seem like classic wall-of-worry fodder to us—all have been widely discussed for some time. Particularly PIIGS fears, which turn three this year, likely mitigating their market impact. In our view, positive fundamentals overwhelmingly outweigh the negatives, and while volatility could always resurge, a continued bull market run seems likely.
|By Joe McDonald, Associated Press, 04/13/2012|
MarketMinder's View: As this article points out, a Chinese hard landing seems unlikely—and Q1’s 8.1% GDP growth, though a touch slower than recent print, is still fine. And as we’ve written before, Chinese officials typically let growth slow prior to an election year, so they speed it up again during the transition without risking runaway inflation. For more, today’s cover story, “China Check-Up.”
|By Editorial Staff, The Wall Street Journal, 04/13/2012|
MarketMinder's View: Protectionism, be it in trade or work visas, typically hurts more than helps. As this piece points out, it’s likely “raising fees on worker visas only depresses job creation for all,” since it hampers firms’ ability to function as they otherwise would.
|By Mark J. Perry, Carpe Diem, 04/13/2012|
MarketMinder's View: “In another sign that the labor market is slowly recovering, the number of workers quitting their jobs is rising.” More folks typically quit when they have the confidence they’ll find something better in short order, making this yet more data showing US unemployment is slowly improving.
|By Richard Martin, CNN Money, 04/13/2012|
MarketMinder's View: As oil-extraction technology improves, extracting oil from shale and deepwater fields will likely be an increasingly big part of the Energy industry’s future—and though this piece perhaps overstates the potential impact, it can mean good things for US employment and the economy.
|By Eddy Elfenbein, Crossing Wall Street, 04/12/2012|
MarketMinder's View: We’d quibble with basing any analysis on the Dow. But even if one plays along, neither S&P 500 nor Dow history allude to market seasonality. In S&P 500 history, the June-August period averages the best performance of any three-month span. Moreover, for both the Dow and S&P, neither May, June, July nor August is the month with the greatest frequency of negative returns. Rather, it’s September—a month “Sell in May” seasonal myths suggest should be better than average.
|By David Weidner, The Wall Street Journal, 04/12/2012|
MarketMinder's View: That computers move faster these days and derivatives exist doesn’t seemingly allude to any of the grandiose conclusions drawn in this piece. And surveys and anecdotes regarding the “flash crash” are pretty far from solid evidence supporting the case. Numerous studies have shown individual investors hold on to pain associated with loss far too long, and that they do so today really isn’t surprising. The discussion here—which could be categorized broadly as “it’s different this time”—seems like an attempt to rationalize what’s mostly an emotional or psychological phenomenon.
|By A. Gary Shilling, Bloomberg, 04/12/2012|
MarketMinder's View: We quibble with nearly all of this. Much of it seems to be picking and choosing which economic indicators support the overall negative bent. Moreover, equating a slowing growth rate—in the cases where there actually is one as many aren’t slowing—to indicate a looming recession is a mistake many have made time and again during the current expansion. Simply, growth rate volatility is normal. And while economies enter recession for many, many reasons, an expansion’s age is not among them.
|By Antonia van de Velde, CNBC, 04/12/2012|
MarketMinder's View: The idea public debt above 50% of GDP “changes the functioning of the economy” has a few major flaws: Like, what exactly does “function” refer to? If we’re to think “growth,” when did this begin? Considering Britain, the US and many other nations have had debt exceeding that arbitrary marker many times historically—and economies seemingly grew just fine—maybe we’re not to equate “function” to “growth.” But then the measure’s significance is a bit beyond us.
|By Corey Flintoff, NPR, 04/12/2012|
MarketMinder's View: Middle Eastern nations’ share of US oil imports has been falling for some time. Here’s an interesting and sensible look at developments in the industry.
|By Staff, Bloomberg, 04/12/2012|
MarketMinder's View: It appears Chinese policymakers’ easing is showing signs of taking root. Loan growth—an important leading economic indicator for China—accelerated sharply in March, widely exceeding estimates. As we’ve written, China seems likely to attempt to buoy growth during this power transition year.
|By James Wilson, Financial Times, 04/12/2012|
MarketMinder's View: To the surprise of few, yearly eurozone industrial production fell -1.8% in February. But to the surprise of many analysts, it rose +0.5% m/m from January—seemingly suggesting the eurozone’s overall weakness is likely rather shallow.
|By John Viverito and Myles Hankin, The Deal, 04/12/2012|
MarketMinder's View: Mongolia’s a very small nation both economically and in terms of capital markets, but its recent growth and reforms targeting increased foreign investment and a liberalized economy are noteworthy. Recent capital markets reform—which seeks to modernize Mongolia’s stock exchanges based on London’s structure—seems a sensible step toward a further embrace of free markets.
|By George A. Pieler and Jens F. Laurson, Forbes, 04/12/2012|
MarketMinder's View: While we’d temper the discussion here a bit (election rhetoric often turns out to be little more than hot air), we agree protectionism—while often politically popular—is economically damaging.
|By Peter Coy, BloombergBusinessweek, 04/11/2012|
MarketMinder's View: True, Spain has issues to overcome, but eurozone officials still have tools at their disposal should Spain (or Italy, for that matter) need assistance. Further, it doesn’t seem doom is quite so imminent (or necessarily guaranteed) as many in the media presume. For more, see our 04/05/2012 cover story, “The Pain in Spain.”
|By Joseph P. Kennedy II, The New York Times, 04/11/2012|
MarketMinder's View: There are many problems with this concept. First, if middlemen were actually driving up costs and not adding to efficiency, it’s likely the market would already have done away with them. (See this salient article by Prof. Donald Boudreaux for more on that.) Second, speculators bet on both sides—rising and falling prices. What’s the impact of that long term? Moreover, banning speculation would make the oil market like onions (no futures, no speculation). Onion prices, as shown in this article penned by Prof. Mark J. Perry, are more volatile than oil prices, not less. Simply, while speculation might account for some aspect of price movement, it’s far from a proven point its overall effect is negative or even how much price movement is related to it.
|By Peter Morici, The Street, 04/11/2012|
MarketMinder's View: The import tax noted here (no matter the rhetoric) is essentially protectionism. Simply, government interference in freely functioning markets is unlikely to create growth or jobs in the long term.
|By Scott S. Powell, Investor’s Business Daily, 04/11/2012|
MarketMinder's View: Folks have been arguing the dollar may lose its reserve status for some time now. But fact is, there isn’t a terribly realistic replacement in the near term for that to be much of a possibility—given there are few other currencies in the world with the dollar’s or the US financial markets’ depth and liquidity.
|By Peter Wallison, The Wall Street Journal, 04/11/2012|
MarketMinder's View: An eloquent and informative look not only at the Volcker Rule’s flaws, but also at the fatal flaw in even attempting to regulate an aspect of banking so complex—many of which complexities are useful if not crucial functions of the banking sector.
|By Paul Hannon, The Wall Street Journal, 04/11/2012|
MarketMinder's View: Global growth (and myriad other economic positives) is still widely underappreciated. For more, see today’s cover story, “Depictions of Growth.”
|By Mark Deen and Jana Randow, Bloomberg, 04/11/2012|
MarketMinder's View: Speculation aside, the interesting aspect of this is the reminder eurozone officials still have plenty of tools available to them to help head off potential troubles should peripheral Europe require aid. For more, see our 04/05/2012 cover story, “The Pain in Spain?”
|By Ilona Billington, The Wall Street Journal, 04/11/2012|
MarketMinder's View: Though data have been volatile (as is to be expected), economic indicators from across the pond continue reflecting a strengthening economy.
|By Bernard S. Donefer, Bloomberg, 04/11/2012|
MarketMinder's View: This sensible piece deconstructs some of the misperceptions and criticisms of high-speed trading—and elucidates the important role it likely plays in actually smoothing market volatility some.
|By Emese Bartha and Nick Cawley, The Wall Street Journal, 04/11/2012|
MarketMinder's View: Though demand for German debt was lower, it seems likely that was partly driven by exceptionally low yields—negative on a real basis. But as described here, across the eurozone, investors’ appetites for debt seem largely intact, lowering the chances of near-term funding crunches.
|By Joe McDonald, Associated Press, 04/10/2012|
MarketMinder's View: We wouldn’t necessarily characterize 8.9% export growth and 5.3% import growth as “weak.” Perhaps it’s less than the gangbusters pace folks expect from China, but growth is growth. Plus, exports accelerated from January and February, suggesting the flagging eurozone hasn’t much dampened the market for Chinese goods.
|By Toby Connor, Minyanville, 04/10/2012|
MarketMinder's View: We’ve many quibbles with this, but chief is the assertion Fed printing “aborted the bear market that was beginning last year.” If quantitative easing were so hugely impactful, why did most of it end up parked back at the Fed as excess reserves, rather than deployed in capital markets? Stocks’ ongoing rally seems supported by plenty more than an accommodative Fed.
|By Michael James McDonald, Seeking Alpha, 04/10/2012|
MarketMinder's View: The “bearish” factors underpinning this gloomy forecast seem more like bricks in the typical wall of worry bull markets love to climb. Moreover, the strategies suggested have historically proven either perilous (“go away in May”) or impossible (“avoid corrections lasting three to five weeks”). In our view, investors are better off keeping a measured view and a longer perspective. For more, see our 04/02/2012 cover story, “Quarterly Questions.”
|By David Roman and Christopher Bjork, The Wall Street Journal, 04/10/2012|
MarketMinder's View: Though this nicely captures Spain’s latest austerity efforts, it lends a bit much credence to arbitrary benchmarks like 6% yields. While yields have crept up lately, they remain well off 2011’s peaks, and Spain already addressed much of its 2012 financing needs at Q1’s lower rates. For more, see our 04/05/2012 cover story, “The Pain in Spain?”
|By Staff, EUbusiness, 04/10/2012|
MarketMinder's View: Though Germany’s March trade figures are but one data set, they provide a couple key takeaways: Rising imports suggest German demand is more resilient than widely assumed, while rising exports to non-EU nations highlight how the US and Emerging Markets have thus far counterbalanced Europe’s weakness.
|By Robert J. Shiller, The New York Times, 04/10/2012|
MarketMinder's View: “Democratizing” Wall Street—finding innovative ways to increase people’s participation in capital markets activity—could have vast socio-economic benefits over time. Throughout history, when the government has made it easier for folks to invest and start businesses, they’ve responded in kind, helping increase the US’s output.
|By Jayati Ghosh, The Guardian, 04/10/2012|
MarketMinder's View: On balance, this is a fair assessment of Burma’s economic liberalization and some of the challenges the emerging nation faces, though perhaps it overstates the latter. Though foreign investment in Burma benefited only a few when corrupt military regimes ruled, should Burma’s economy continue becoming freer, the likelihood capital influxes lift the entire nation increases.
|By Staff, Central News Agency, 04/10/2012|
MarketMinder's View: That Taiwan’s government is considering privatizing its energy firms is encouraging—privatization typically improves supply and pricing efficiency. However, whether action follows these talks is far from certain.
|By Peter Morici, The Street, 04/09/2012|
MarketMinder's View: As we’ve said before, unemployment is an inherently lagging aspect of economic recovery and growth—particularly in the wake of a significant financial crisis. Further, expecting it to grow in straight-line manner betrays an under-appreciation not only for how employment works, but how economies overall work. Further, we quibble with the notion the trade balance or domestic oil production is really an obstacle preventing job growth today.
|By Moran Zhang, International Business Times, 04/09/2012|
MarketMinder's View: The assumption here is economic growth almost exclusively comes from consumer spending—which isn’t the case. Further, even if consumers are saving at a higher rate than previously, those dollars still have to go somewhere—presumably to some form of investments. Meaning those dollars still make their way back into the economy for productive use. So aside from the obvious pleasure folks would get from pay raises, we’re not convinced the economy imminently collapses without them.
|By Eric Posner and Glen Weyl, Slate, 04/09/2012|
MarketMinder's View: We’d actually argue there’s a significant difference between political betting and financial derivatives, which (as the authors correctly point out) play an important role in markets—meaning their banning likely ultimately hurts more than it helps. For more, see Dr. Mark J. Perry’s recent post.
|By Ben Chu, The Independent, 04/09/2012|
MarketMinder's View: To be sure, the eurozone still faces issues—but this overstates the immediate severity, in our view. Especially considering European officials have overall successfully kicked the can down the road for nearly two years now—the chances that suddenly reverses and backfires on them seem fairly slim.
|By Mark J. Perry, Carpe Diem, 04/09/2012|
MarketMinder's View: US manufacturing has grown strongly recently—seemingly led primarily by the Midwest: “Manufacturing output in the Midwest region rose 10.1% from a year earlier in February, almost twice the 4.7% increase in national manufacturing output over the same period.”
|By Staff, BBC, 04/09/2012|
MarketMinder's View: Even within the United Kingdom, growth isn’t uniform—Scotland experienced strong private sector growth in March.
|By Ben Casselman, The Wall Street Journal, 04/09/2012|
MarketMinder's View: A few interesting examples of just how wonky unemployment numbers can be. For more, see our 12/06/2010 cover story, “A Lesson in Government Math.”
|By Jason Zweig, The Wall Street Journal, 04/09/2012|
MarketMinder's View: An interesting foray into “risk’s” etymology—with some bonus lessons for investors.
|By Simon Nixon, The Wall Street Journal, 04/05/2012|
MarketMinder's View: In our view, it’s very premature to suggest the euro crisis is about to resume with gusto. While it’s true Spanish rates have risen lately—and that isn’t great—the negativity should be tempered by the fact they have a manageable debt-to-GDP level, low debt servicing costs relative to tax receipts and have already successfully rolled over a large portion of maturing debt. For more, see today’s cover story, “The Pain in Spain?”
|By Catherine Rampell, The New York Times, 04/05/2012|
MarketMinder's View: Folks, volatility is normal and isn’t predictive of returns or even future volatility. Using the VIX as a forward-looking gauge—in this case, as something to be encouraged by—is a fallacy. For more, see our 03/15/2012 cover story, “What Does VIX^2 Equal?”
|By Peter Schiff, Seeking Alpha, 04/05/2012|
MarketMinder's View: We have many quibbles with this, but we’ll limit ourselves to three here: Trade deficits are not a meaningful metric of jobs, economic growth or markets; interest rates do not appear poised to spike higher or “revert to mean” rates in a shocking, dramatic fashion; and folks have fretted fast inflation for years, yet it hasn’t happened. This seems mostly a function of prevalent and persistent bearish sentiment above all else.
|By Art Carden, Forbes, 04/05/2012|
MarketMinder's View: An enjoyable and interesting take arguing (correctly, in our view) a cyclical downturn isn’t a failure of capitalism. This seems to sum it up well: “Indeed, as the economist Joseph Schumpeter pointed out long ago, capitalism has given us the time and energy to criticize capitalism.”
|By Flavia Krause-Jackson and Shamim Adam, Bloomberg, 04/05/2012|
MarketMinder's View: Myanmar’s political reforms allowing more democratic elections and policies are now starting to be received by the international community. The easing of trade restrictions likely amounts to the opening of one of Asia’s last closed economies.
|By Shan Li, Los Angeles Times, 04/05/2012|
MarketMinder's View: US retailers posted a solid month in March, with sales logging 4.3% y/y growth—topping analysts’ estimates by a healthy margin.
|By Joshua Hall, The Wall Street Journal, 04/05/2012|
MarketMinder's View: A look at the positive unintended impact of the new US-Korea FTA—specifically for wine. The deal, which reduced tariffs on US wine by 15%, is causing an increased focus among Korean consumers on taxes and other restrictive practices by the Korean government. And in the process, the chatter has seemingly increased Koreans’ attention to imported American wine.
|By Charles Forelle, The Wall Street Journal, 04/04/2012|
MarketMinder's View: Spain’s auction wasn’t great by any stretch, but this piece overstates the implications, in our view. Spain’s total debt servicing costs are only marginally higher after today’s offering, and the country’s met nearly half its 2012 funding needs. Besides, as we’ve said, even “just ok” auctions should surpass uniformly dour expectations. For more, see our 02/03/2012 cover story, “These PIIGS Went to Market.”
|By Detlev S. Schlichter, The Wall Street Journal, 04/04/2012|
MarketMinder's View: If this is the case against free-floating currency, we’re hard-pressed to find it guilty of much. And the conclusion is head-scratching—if fiat money is so “unsustainable,” why have fiat systems lasted while every hard currency system in history has failed?
|By Paolo Santos, Seeking Alpha, 04/04/2012|
MarketMinder's View: Sure, another flash crash is possible—short-term volatility always is. But it’s by nature impossible to predict. Moreover, 2010’s flash crash was hardly a long-term market disruption. Bull markets are regularly punctuated by short-term swings that feel huge at the time, but become blips in the long run.
|By Mike Dolan, Reuters, 04/04/2012|
MarketMinder's View: It seems a stretch to say equities’ recent strong performance is solely due to monetary stimulus efforts. Plenty of fundamentals underpin this bull market, and in our view, drivers like a profitable private sector and healthy global demand should continue providing tailwinds for the foreseeable future. For more, see our 04/02/2012 cover story, “Quarterly Questions.”
|By Ambrose Evans-Pritchard, The Telegraph, 04/04/2012|
MarketMinder's View: To say the eurozone will “hurtle towards its great, final, and obliterating crisis,” overstates the challenges facing the monetary union. Though the eurozone isn’t out of the woods and resurging PIIGS troubles aren’t surprising, officials continue taking incremental steps to preserve the euro, which buys the private sector time to find solutions.
|By Joe McDonald, Associated Press, 04/04/2012|
MarketMinder's View: Premier Wen’s proposals seem like they would improve credit access for all the small businesses shut out by China’s larger state-owned banks—in our view, a positive and important step in China’s ongoing economic liberalization.
|By Giada Zampano, The Wall Street Journal, 04/04/2012|
MarketMinder's View: Italy is the issue of primacy in the eurozone, and though Q4 2011’s smaller deficit is but one data point, it’s a tangible sign of austerity progress in that nation.
|By Fisher Investments Editorial Staff, The Street, 04/04/2012|
MarketMinder's View: Our latest for The Street.
|By Staff, Reuters, 04/04/2012|
MarketMinder's View: Overall and on average, the many US employment indicators have been trending positive for a while now. Today’s private-sector report is just the latest evidence of a healthy jobs market.
|By Angela Monaghan, The Telegraph, 04/04/2012|
MarketMinder's View: Along with the manufacturing and service sectors’ expansions, rising profits are a sign the British private sector, like its American counterpart, is stronger than many appreciate.
|By Edward P. Lazear, The Wall Street Journal, 04/03/2012|
MarketMinder's View: We have myriad quibbles with this piece. For one, it presumes economic growth should always return to the historical trend. Moreover, for investors, it’s important to remember stocks don’t necessarily require robust economic growth to deliver robust returns.
|By Jeff Nielson, The Street, 04/03/2012|
MarketMinder's View: There’s been zero evidence—outside pure conjecture reported in this piece—quality of life has fallen 50% over the last 40 years. To the contrary, there’s been massive evidence quality of life has increased by many magnitudes. Likewise, the other conclusions and solutions presented in this piece are equally unsupported and misguided.
|By Kent Hoover, The Business Journals, 04/03/2012|
MarketMinder's View: Though few firms pay the headline rate, thanks to the many deductions and loopholes, it still makes the US less business-friendly and likely encourages many firms to domicile in tax-friendlier countries. Likewise, it incentivizes US companies to leave foreign profits overseas to avoid the US’s onerous tax—as we’ve oft said, the more you tax something, the less you get of it.
|By Matt Ridley, Reader’s Digest, 04/03/2012|
MarketMinder's View: Here are a few reasons (among myriad) the world is a better place today than it’s ever been—like freer trade, better access to food, cheaper electricity and greater wealth, to name a few. And on balance, as society keeps innovating, it’s only likely to get better in the long term.
|By Staff, The Guardian, 04/03/2012|
MarketMinder's View: “The dramatic speed at which life expectancy is changing means that we need to radically rethink our perceptions about our later lives.” That includes investment time horizon—your assets may need to provide for you for a lot longer than you think.
|By Timothy R. Homan, Bloomberg, 04/03/2012|
MarketMinder's View: US manufacturing continues exhibiting strength and firms continue investing in new equipment, underscoring the private sector’s underappreciated strength. For more, see today’s cover story, “Around the World in Manufacturing.”
|By Martin Sandbu, Financial Times, 04/03/2012|
MarketMinder's View: On balance, this is a sensible look at the merits of the euro and its role in the eurozone crisis.
|By Mukesh Jagota and Prasanta Sahu, The Wall Street Journal, 04/03/2012|
MarketMinder's View: Though likely not a material global negative, India’s proposal to retroactively tax overseas transactions is a perfect example of a political risk to watch in global investing. Such a move is fraught with unintended consequences and potentially have business-activity freezing implications for the country.
|By David Marsh, MarketWatch, 04/02/2012|
MarketMinder's View: While Europe undoubtedly faces some continued challenges ahead, we largely think the scenario is the opposite of what’s posited here. In our view, more likely this year is markets and global economies move past now well-trodden news stories and continue growing as the world enters the bull market’s fourth year. For more, see today’s cover story, “Quarterly Questions.”
|By Nassim Taleb, The New York Times, 04/02/2012|
MarketMinder's View: No economic model will ever perfectly predict the future, and no doubt they all must be used with a sense of caution surrounding their imperfections—but that’s not a sufficient reason to throw the baby out with the bathwater. Fact is, probabilities models can serve an immensely useful economic purpose when used appropriately. It occurs to us pushing probabilities models to the side implies guessing from among a literally endless range of possible outcomes.
|By Gretchen Morgenson, The New York Times, 04/02/2012|
MarketMinder's View: We have a number of questions, not least of which is, don’t we already have such an institution? Perhaps even more than one, when you consider the various regulators involved at the federal and state levels? But even if we were to create a new institution, we’re not convinced it’s quite so easy to measure things like “social utility” and whether a product might be “too costly to society over all.” Such subjective judgments are more likely to do harm and prevent overall useful financial products than they are to protect investors.
|By Staff, EU Business, 04/02/2012|
MarketMinder's View: We remain skeptical of such taxes—whatever their ultimate form—particularly since they’re pretty likely to be passed directly onto consumers. Lessening the likelihood they achieve their stated aim, however ill-advised—“to make the financial services industry pay its way.”
|By Lorraine Woellert, Bloomberg, 04/02/2012|
MarketMinder's View: The US economy continues exhibiting strength, even in the face of some global pockets of slowness—suggesting growth likely continues apace.
|By Ilona Billington, The Wall Street Journal, 04/02/2012|
MarketMinder's View: The UK may still face some economic sluggishness this year, but a strong manufacturing report indicates its economy is more resilient than many may have presumed.
|By Tim Worstall, Forbes, 04/02/2012|
MarketMinder's View: The overall point here is sound: “Things people do voluntarily, without coercion, are by definition fair. For if the people engaged in these activities did not think the terms on offer were fair then they would not engage in these activities. So free trade, voluntary trade, is fair trade.” All the more reason for increasing global participation.
|By Staff, Associated Press, 04/02/2012|
MarketMinder's View: A potentially interesting source of relief for some of America’s unemployed construction workers (a group hit hard by joblessness in recent years)—Australia’s short on construction workers. If nothing else, this is a testament to the variety of benefits an increasingly globalized, open world brings.
|By Staff, EU Business, 04/02/2012|
MarketMinder's View: More apparent progress on the free trade front—meaning more potential winners from its myriad benefits.
|By Lucia Mutikani, Reuters, 04/02/2012|
MarketMinder's View: “The Commerce Department said on Friday that consumer spending rose 0.8 percent in February as demand for long-lasting goods, like automobiles, rose sharply. It also said spending in January was double the previously reported 0.2 percent gain.” More indications of a strong US economy. For more, see today’s cover story, “Quarterly Questions.”