|By Jeremy Warner, The Telegraph, 05/31/2012|
MarketMinder's View: Hyperbolic descriptions of the EMU (“like an inoperable tumor”) aside, this overstates politicians’ reluctance to salvage the euro, in our view. On the contrary, most politicians and officials have seemingly demonstrated ample willingness to take necessary measures (even quite politically unpopular ones, domestically) to backstop struggling nations.
|By Tennille Tracy, The Wall Street Journal, 05/31/2012|
MarketMinder's View: The misperception here isn’t so much in the reporting as it is in the government’s apparent confusion about economies’ general functioning. As we’ve said many times, increased trade is by definition a win for all involved parties—else they wouldn’t participate in it. The likelihood is increased natural gas exports would not only help global consumers (like Japan), but would also help keep domestic prices down in the long run as producers would be incentivized to continue production.
|By Michael Hiltzik, Los Angeles Times, 05/31/2012|
MarketMinder's View: One problem (of many) with such propositions is the assumption we can legislate away all risk. Not only is that an impossible task, it’s ill-advised as every regulation brings with it some unintended consequences—some may prove harmless, but more often than not, they wind up doing more harm than good.
|By Robert Reich, Financial Times, 05/31/2012|
MarketMinder's View: We find several things to disagree with here—primarily the assumption US companies will experience ever-increasing profits at the expense of employees. On the contrary—as productivity begins shrinking (which we’re already seeing some evidence of), companies will likely increase hiring, and employment will (as ever) follow in economic growth’s wake.
|By Brian Blackstone and Margit Feher, The Wall Street Journal, 05/31/2012|
MarketMinder's View: While any reforms in the direction of tighter fiscal integration are likely a ways off, in our view, that officials keep discussing alternatives and attempting to find new solutions to eurozone issues speaks to the widespread political will to maintain the monetary union. For more, see today’s cover story, “A Mediterranean Smorgasbord.”
|By Fisher Investments Editorial Staff, Real Clear Markets, 05/31/2012|
MarketMinder's View: Our latest contribution to Real Clear Markets.
|By Staff, EU Business, 05/31/2012|
MarketMinder's View: Another win in the race toward freer global economic trade—and as we typically note, a win for all involved parties. For more, see our 10/17/2011 cover story, “Racing Towards Zero.”
|By Karen Talley, The Wall Street Journal, 05/31/2012|
MarketMinder's View: As with any economic data point, retail sales are historically volatile—as demonstrated by May’s bounce-back from a relatively slower number in April.
|By RA, The Economist, 05/31/2012|
MarketMinder's View: This sums it up best: “Rules are often sold on the basis of safety but all too often serve as nothing more than a barrier to entry to the profession, raising prices to consumers and eroding competition—and standing between willing buyers and the monk-made caskets they’d like to purchase.” For more, see our 05/14/2012 cover story, “Local Lessons in Overregulation.”
|By Casey B. Mulligan, The New York Times, 05/30/2012|
This article operates on the presumption the present economic recovery should be symmetrical and easy to see in disparate data points. Yet this is rarely the case—there are virtually always data communicating conflicting information. In this case, few would argue the labor market is fully recovered. Similarly, few would argue it has shown zero improvement. The facts are squarely in the middle, which neither factoid included here shows.
|By Cyrus Sanati, CNN Money, 05/30/2012|
By positioning the European Monetary Union’s architecture as the main driver of the eurozone crisis, this piece misses an important truth: No matter the situation, unsustainable spending and uncompetitive private industry likely contribute more to economic crises—European or not.
|By Martin Wolf, Financial Times, 05/30/2012|
In our view, and apparently Germany’s, the eurozone is greater than the sum of its parts. Therefore, the underlying assumption—Germany’s acting primarily out of self-interest—seems unlikely in light of Germany’s participation in the orderly defaults, austerity measures and compromises of the last three years.
|By Vanessa Mock, Matina Stevis and David Roman, The Wall Street Journal, 05/30/2012|
The European Commission seems poised to extend Spain’s deficit-reduction deadline by another year, inviting proposals for 2013 and 2014 budget plans—further illustrating EU officials’ willingness to take steps designed to improve members’ economic outlooks.
|By Alex Morales and Ben Sills, Bloomberg, 05/30/2012|
This article is a good look at how the budget pressures in Spain are impacting alternative energy in a nation once known for heavily backing the industry. Ultimately, government can cause investors to fear what might happen if a case like Spain’s develops—one more reason the market is far more efficient at allocating capital than governments. For more, see today’s cover story, “Solar Eclipse 2012?”
|By Kana Inagaki and Atsuko Fukase, The Wall Street Journal, 05/30/2012|
While we don’t agree with all of this, on balance, it’s a very interesting take on the global economy. Japanese firms are sitting on a mountain of yen, and it seems company directors are increasingly looking to put it to work.
|By Ben Chu, The Independent, 05/29/2012|
MarketMinder's View: While it’s within the realm of possibility Spain ultimately requires a bailout, this overstates the case some, in our view. For one thing, Spanish banks’ recent woes are nothing new. And elevated yields on Spanish debt, while understandably concerning and worth watching, don’t necessarily portend doom, either. For more, see our 05/21/2012 cover story, “Just You Wait, Henry Higgins.”
|By Ruth Mantell, MarketWatch, 05/29/2012|
MarketMinder's View: Consumer confidence and other sentiment-based readings are backward-looking and presage little about the future direction of the economy or markets. Furthermore, extrapolating from such surveys what to expect moving forward in hiring is something of a folly.
|By Betsey Stevenson and Justin Wolfers, Bloomberg, 05/29/2012|
MarketMinder's View: The debt-ceiling debate has come and gone over 90 times since 1940. And in our view, it has been (and likely always will be) more about political posturing than fiscal responsibility. We also quibble with the notion congressional stagnation has the power to stymie markets or the economy. For more, revisit our 07/14/2011 cover story, “On Debt Ceilings and Downgrades.”
|By Tom Orlik, The Wall Street Journal, 05/29/2012|
MarketMinder's View: Numbers from China are understandably somewhat suspect, but what’s interesting here is the salient observation: “For China’s leaders, growth is not an end in itself, but a means to support employment, reducing the risk of social unrest. If China is still working, the government’s tolerance for lower growth might be higher than the markets expect.” For more, see our 04/13/2012 cover story, “China Check-Up.”
|By Joe Nocera, The New York Times, 05/29/2012|
MarketMinder's View: Overall, the notion of simpler regulation is one we can get behind. The other recommendations here, while thought provoking, we find less appealing. For more, revisit our 04/21/2011 cover story, “The Dodd-Frank ‘Act’ Strikes Again?”
|By Staff, BBC, 05/29/2012|
MarketMinder's View: Signs of continued Japanese economic progress post-earthquake continue emerging.
|By Jon Hilsenrath and Joshua Mitchell, The Wall Street Journal, 05/25/2012|
MarketMinder's View: This article heavily relies on selective information as evidence—like one month’s US core capital goods orders, data showing slowing growth (still growth) and anecdotal evidence. Also, other recent data seemingly discount this thesis: accelerating Japanese GDP, heightened US factory activity, positive US housing data and more. Point being, it’s easy to lose sight of a bigger (generally better) picture, when too focused on some dour data.
|By Staff, New York Times, 05/25/2012|
MarketMinder's View: As we’ve written, growth and austerity don’t necessarily conflict. Therefore, claiming austerity’s failure seems quite premature and a bit bizarre. In reality, there is a world beyond government budgeting—the private sector. And Europe’s periphery could do with structural reform to boost competitiveness in that arena. To exclusively focus on government spending as the solution is more than a bit oversimplified.
|By Peter Gumbel, Reuters, 05/25/2012|
MarketMinder's View: While France takes a step in the wrong direction, it’s highly unlikely “deglobalization” actually comes to pass. This kind of talk is common in political campaigning and posturing, and much less common in action.
|By John Stossel, Reason, 05/25/2012|
MarketMinder's View: “Free competition—the striving for a good reputation—protects consumers better than government ever will.” We whole-heartedly agree, as we’ve written (again and again). While some regulation is necessary, overall, too much (and misunderstanding) regulation tends to hurt more than help.
|By Rebecca Smith and Mari Iwata, The Wall Street Journal, 05/25/2012|
MarketMinder's View: US shale gas currently sits near deacde-lows. In Japan, prices have surged as nuclear plants went offline. There’s opportunity here to globalize the Liquified Natural Gas (LNG) market more through the US becoming an exporter. Now, does this mean the US would permanently get a windfall from this? No, not necessarily. But allowing this liquefied gas to flow where it’s most needed makes for a more efficient market.
|By Mark J. Perry, American Enterprise Institute, 05/25/2012|
MarketMinder's View: Using the example of electric vehicles, this article outlines several reasons why subsidies are generally more successful politically than economically. In our view, electric vehicle quality and competitiveness are likely improved if left to the innovation and competition of free markets.
|By Peter Morici, The Street , 05/24/2012|
MarketMinder's View: This is predicated on far too many assumptions to hold much water—the reality is Greece constitutes a minute sliver of US economic activity. Even Europe as a whole isn’t such a dominant share. Furthermore, history shows parts of the world can enter recession and the rest grow just fine. And as we’ve said, the US’s impending “fiscal cliff” is unlikely to do much (if any) damage to the economy. Meaning the likelihood all these events combine to drag the US into recession seems fairly slim to us, barring a more unexpected and severe turn of events.
|By Edward Hadas, Reuters, 05/24/2012|
MarketMinder's View: We disagree governments more efficiently create jobs than the private industry. Businesses generally hire based on need and growth—two characteristics of efficient, sustainable hiring. Furthermore, the very existence of “employment asymmetry” (as defined) illustrates the US’s is an efficient, mobile, capitalist economy—which we believe promotes overall, long-term growth.
|By Staff, Associated Press, 05/24/2012|
MarketMinder's View: Putin’s decision to reverse privatization in Russia’s energy industry seems mostly a matter of protecting government influence. However, his statement seems quite revealing about the privatization’s typical success: "We would hate to see them [energy companies] privatized for pennies and then sold off for big money."
|By Anthony Mirhaydari, MSN Money, 05/24/2012|
MarketMinder's View: The problems with such arguments are many, but the primary one is they’re predicated on such long-term forecasts, they dismiss capital markets’ and free economies’ innovative natures. The likelihood such far-in-the-future issues actually prove the problems feared is slim, given not only the ample time to plan accordingly, but also markets’ ability to price such events in ahead of time.
|By Kathleen Madigan, The Wall Street Journal, 05/24/2012|
MarketMinder's View: Though some regional surveys have showed slowing growth, Kansas City actually registered a fairly strong rebound—indicating underlying strength in the US economy may still be underappreciated. Keep in mind, too, volatility in such metrics is always to be expected.
|By Brian Domitrovic, Forbes, 05/24/2012|
MarketMinder's View: Though we don’t agree with every statement here, the overall concept is sensible: Growth versus austerity likely shouldn’t be the eurozone’s sole focus (as we’ve written before). On balance, as illustrated by its past, the currency union has benefited Europe—which still has the ability (through free markets as well as economic policy) to spur growth.
|By David Malpass, The Wall Street Journal, 05/24/2012|
MarketMinder's View: While we quibble with aspects of this, the primary, over-arching point is largely on-target, in our view: Namely, that the choice between “growth” and “austerity” as typically presented in the media is something of a false choice. And it depends enormously on how one defines those terms. For more, see our 05/11/2012 column, “What’s In a Name?”
|By Timothy Aeppel, The Wall Street Journal, 05/24/2012|
MarketMinder's View: An interesting look at global manufacturing’s ever-shifting nature—as costs in China (like labor and transportation, for example) have gone up, “muted wage gains in the US and fast productivity advances have reshaped many US factories into tougher competitors.” Meaning ultimately, consumers are likely to be the biggest winners as they’re able to pay for increasingly cheaper goods.
|By David Pilling, Financial Times, 05/24/2012|
MarketMinder's View: We largely agree while many have bemoaned China’s rather abrupt economic slowdown thus far, it’s likely there’s still gas in the tank—and there’s undoubtedly still time for China to turn the car around before the end of the year. For more, see our 04/13/2012 cover story, “China Check-Up.”
|By Staff, Der Spiegel, 05/23/2012|
MarketMinder's View: We rather doubt historically low sovereign yields in Germany, the US and UK are a sign “paper money has no meaning anymore.” On the contrary, high demand for assets backed by the full faith and credit of fiscally sound governments suggests the system’s working as it should.
|By Chris Isidore, CNN Money, 05/23/2012|
MarketMinder's View: This article rehashes many well-known eurozone fears about a possible Greek exit—which would no doubt pose the eurozone significant challenges, but doesn’t necessitate huge consequences with transatlantic reach. Furthermore, the reality is Greece is a relatively small piece of the eurozone and global pie—lessening the likelihood its long-term impact is so deleterious.
|By Joe McDonald, Associated Press, 05/23/2012|
MarketMinder's View: Though Asia may feel minor tremors from the eurozone crisis, fears discussed here are likely overstated. It’s not unprecedented for parts (or even most) of the world to grow while others enter recession (though the US is currently growing and the eurozone’s thus far averted a recession, albeit narrowly). As the piece itself points out, East Asian growth figures are “still-robust” positive numbers.
|By Jomo Kwame Sundaram, Project Syndicate, 05/23/2012|
MarketMinder's View: We have a hard time believing merely increasing “public investment and social protection” will boost economic recovery—especially given over time, the majority of global growth has come from the private sector, not the public. Increased government spending may not hurt growth, but neither does it by itself create growth.
|By Staff, EUbusiness, 05/23/2012|
MarketMinder's View: A succinct rundown of the policies EU leaders discussed Wednesday—and the political debate surrounding each. Notably, Germany seems to be gradually easing its resistance to some measures, underscoring the prevailing will to do what’s needed to preserve the euro. For more, see our 05/22/2012 cover story, “The Greek Gambit.”
|By Pete Sweeney and Langi Chiang, Reuters, 05/23/2012|
MarketMinder's View: Though this is largely talk at this point, the Chinese government looking to allow private investments and open up markets would undoubtedly be a positive for global markets and Chinese growth.
|By Lauran Frayer, NPR, 05/23/2012|
MarketMinder's View: The Spanish are beginning to understand there’s no such thing as a free lunch...er, vacation. Many lengthy holiday weekends no doubt decrease national productivity some and make business dealings with foreigners on different schedules difficult. Limiting vacation time likely saves the Spanish government money—and more office hours may ultimately lead to increased employment.
|By Richard E Farley, The New York Times, 05/23/2012|
MarketMinder's View: This article makes a very salient point: “Before we jettison ‘too big to fail’ by breaking up the megabanks, we need to take a careful look at the pitfalls of having banks be too small for us to care.” Agreed—any legislation aimed at big banks is likely to be fraught with unintended consequences. Legislators would do well to proceed cautiously.
|By Geoffrey T. Smith and William Horobin, The Wall Street Journal, 05/22/2012|
MarketMinder's View: Weak eurozone growth shouldn’t surprise many—the weaker periphery has countered core countries’ strength for the better part of three years. That’s likely to continue until reforms begin to work their way through the system, productivity improves and the immediate impacts of austerity measures fade—the eurozone needs time more than OECD’s prescribed sweeping fiscal stimulus. For more, see our 05/16/2012 cover story, “North and South.”
|By Ben McLannahan, Financial Times, 05/22/2012|
MarketMinder's View: We quibble with the notion Japan needs to raise its consumption tax. As we’ve often said, tax something and you’ll get less of it—thus, doubling the 5% consumption tax might compound Japan’s finances by stymieing demand.
|By David Jolly, The New York Times, 05/22/2012|
MarketMinder's View: Well, it hasn’t thus far, and eurozone growth was surprisingly resilient in Q1. It could well be the eurozone falls into recession, but as we saw in the early 1990s (in Europe) and in 1998 (in Asia), even a big chunk of the world can contract while the overall world grows and stocks boom.
|By Andrew Ross Sorkin, The New York Times, 05/22/2012|
MarketMinder's View: Minor quibbles aside, this rings true: “The facts—basic facts—just aren’t that convenient. While the repeal of Glass-Steagall has seemingly become the sine qua non of the financial crisis, it is pure historical revisionism.” There’s no rule, no silver bullet to prevent all future risk. And implementing Glass-Steagall or some form of it would have done little to prevent the last financial crisis.
|By Staff, EUbusiness, 05/22/2012|
MarketMinder's View: In our view, this exemplifies officials’ resolve to prevent the disorderly breakup of the eurozone right now. And that resolve likely prompts compromise as needed to keep Greece in the fold. For more, see today’s cover story, “The Greek Gambit.”
|By Staff, Bloomberg, 05/22/2012|
MarketMinder's View: The Chinese leading index gauge increased again in April, suggesting resilience in the world’s second largest economy. For more, see our 04/13/2012 cover story, “China Check-Up.”
|By Joel Kurtzman, The Wall Street Journal, 05/22/2012|
MarketMinder's View: Prices, not policy, have largely driven gains in energy extraction and production. “While Washington squabbled over which energy direction to take, and which energy bill to kill, the markets moved us in exactly the direction the country should go—toward cheap, plentiful energy." Well said.
|By Nicholas Owens, The Wall Street Journal, 05/22/2012|
MarketMinder's View: Sensible regulation can help protect businesses and customers from harm by (fairly rare) bad actors. Runaway regulation for the sake of regulating isn’t just head-scratching—it can hurt (if not kill) business. Not the outcome anyone wants.
|By Ambrose Evans-Pritchard, The Telegraph, 05/21/2012|
MarketMinder's View: A couple negative (or below-expectations) data points do not a recession—let alone a depression—make. The chances the US’s current sluggish growth causes a European recession seem slim, in our view.
|By Jeanne Sahadi, CNN Money, 05/21/2012|
MarketMinder's View: Politicians waiting until the last minute to deal with tough fiscal issues? That’s only happened since always. In our view, projections about the impact of the so-called fiscal cliff are likely off. Then, too, the market impact of higher taxes (if that even happens) is mixed—particularly when those higher taxes are known to be coming for some time. For more, see our 05/07/2012 column on Real Clear Markets.
|By Wallace Witkowski, MarketWatch, 05/21/2012|
MarketMinder's View: Will this summer be weak or not? A better question is, why is anyone who’s investing long-term capital so short-term focused? Making shifts based on so short a time frame means you must be right both selling and buying, which is tough to do. Then, whatever alternative you park the money in must not only outperform stocks, but also make up for related transaction costs, including short-term capital gains.
|By Ian Talley, The Wall Street Journal, 05/21/2012|
MarketMinder's View: We rather agree. Politicians have spent far too much capital—actual and political—to back away now.
|By Mark J. Perry, Carpe Diem, 05/21/2012|
MarketMinder's View: An interesting look at economic development in emerging economies which suggests capitalism’s power is largely as we thought—a force for societal good that unleashes growth and wealth across all income levels.
|By Jessica Vascellaro, The Wall Street Journal, 05/21/2012|
MarketMinder's View: It’s popular in the media to muse our best days are behind us and we’re ill prepared to meet whatever challenges lie ahead because it’s “different this time.” Yet here’s a technology that just 10 years ago was seen as science fiction. Never underestimate the power of profit motive to spur game-changing innovation.
|By John W. Miller, The Wall Street Journal, 05/21/2012|
MarketMinder's View: Though oft demonized, globalization can actually be a rising tide that lifts all boats—and here’s an interesting example of that. In a nutshell, “Not only does it often mean cheaper goods for American manufacturers, but it puts pressure on US factories to become more efficient to keep up with global competition, making it possible for them to survive.”
|By Kevin Carson, The China Post, 05/18/2012|
MarketMinder's View: Intellectual property rights “prevent competition from passing along cost savings from innovation to the consumer”? We think not! IP rights incentivize innovation by rewarding creators for their work, which ultimately gives consumers better products and more choice. Where would society be if there were nothing to gain from creating something new?
|By Staff, Reuters, 05/18/2012|
MarketMinder's View: That many Spanish banks have sizable chunks of bad debt has been widely discussed for two-plus years. As ever, ratings agencies are merely confirming what’s long been known.
|By Shahien Nasiripour, Financial Times, 05/18/2012|
MarketMinder's View: This latest debate is emblematic of the numerous problems with Dodd-Frank and the Volcker Rule. Banks very often hedge portfolios to manage risk. Trades don’t always work as intended—no tool is failsafe and there’s no such thing as a perfect hedge—but that doesn’t make hedging inherently bad.
|By Staff, EUbusiness, 05/18/2012|
MarketMinder's View: This move is somewhat head-scratching, considering Hungary came under EU fire for similar taxes—which target foreign multinationals—last year. Moreover, while this is an incremental change, it likely makes Hungary even less business-friendly, which may only compound that nation’s financial problems over time.
|By Ezra Klein, Bloomberg, 05/18/2012|
MarketMinder's View: In our view, the problems America faces are overstated here. But it’s very true gangbusters growth in Emerging Markets is good for the US and global economies—and hardly means America’s in decline. Consider the alternative: “In hundreds of millions of Chinese and Indians continue to be stick on unproductive farms or in unskilled jobs rather than being freed to develop their human capital, the rest of the world will be denied access to the endless innovations they otherwise might have developed.”
|By Harry Papachristou and Peter Graff, Reuters, 05/18/2012|
MarketMinder's View: Though it’s early, this poll suggests the second Greek election needn’t automatically lead to Greece’s eurozone exit. The election likely ends up a referendum on euro membership—which over 75% of Greek voters favor—and a bailout-friendly coalition could yet emerge.
|By Wayne Ma, The Wall Street Journal, 05/18/2012|
MarketMinder's View: China’s response to the US’s new tariff on Chinese solar panels exemplifies why protectionism backfires: Tariffs frequently spawn retaliatory measures even worse than the “problem” they aim to solve. And that benefits no one.
|By Bastien Inzaurralde, The Christian Science Monitor, 05/18/2012|
MarketMinder's View: Eurozone politicians, no matter what ideological side or country they come from, seemingly remain committed to preventing the disorderly breakup of the euro.
|By Staff, Central News Agency, 05/18/2012|
MarketMinder's View: Spurred on by South Korea’s free-trade blitz, Taiwan’s pushing for several free trade agreements. A race toward zero protectionism, indeed!
|By Marco Evers, Der Spiegel, 05/18/2012|
MarketMinder's View: This seems anecdotal but still underscores that François Hollande’s 75% income tax on France’s highest earners may not be the revenue machine he assumes. If the wealthy French vote with their feet, France’s loss will be the UK’s (and Switzerland’s and Belgium’s) gain, as those nations benefit from an influx of human capital. For more, see our 05/09/2012 cover story, “An Earnings Sandwich.”
|By Paul La Monica, CNN Money, 05/17/2012|
MarketMinder's View: Simply, no. Not because it won’t struggle or even ultimately exit the Eurozone altogether, but because a scenario in which a Greek collapse leads to Eurozone contagion is simply nothing like 2008’s financial crisis. Moreover, the odds Greece is unceremoniously booted from the euro remain, in our view, slim.
|By Edward Hadas, Reuters, 05/17/2012|
MarketMinder's View: We reject the notion we’re currently in anything resembling a depression—lesser or otherwise. So the conclusion from there we must come up with extraordinarily different means of “exiting” this “depression” are similarly overwrought.
|By Jeremy Warner, The Telegraph, 05/17/2012|
MarketMinder's View: In the UK’s case, we disagree the debt level’s been overly problematic—particularly considering the UK’s debt-to-GDP ratio was well over 100% during its most globally dominant period of history. Overall, the conclusions drawn are just too hyperbolic, given there hasn’t been a single crisis in history from which the world as a whole has failed to recover.
|By Staff, Associated Press, 05/17/2012|
MarketMinder's View: While there undoubtedly remain pockets of weakness, overall, the US economy’s grown quite nicely thus far in 2012, as highlighted sensibly and succinctly here.
|By Leonard Gilroy and Harris Kenny, Real Clear Markets, 05/17/2012|
MarketMinder's View: We’re fans of overall smaller government—in no small part because it allows for greater private sector activity, as demonstrated effectively here. If governments can’t afford to finance infrastructure construction, the private sector no doubt can—and it can probably do the job cheaper, faster and with better quality, meaning everyone wins.
|By Amit Kara, The Wall Street Journal, 05/17/2012|
MarketMinder's View: Peripheral economies don’t need more German spending—they need more capitalism and more competitive economies of their own. The likelihood increased German consumption helps either of those problems much is slim.
|By Ben McLannahan and Mure Dickie, Financial Times, 05/17/2012|
MarketMinder's View: Japan notched solid growth in Q1—up 1% quarterly from a flat fourth quarter—on the back of a particularly strong showing from consumers.
|By Editorial Board, The Wall Street Journal, 05/16/2012|
MarketMinder's View: This piece makes some valid points, but it misses a key one: Greece isn’t in its present predicament because the bailouts or euro architecture have failed, but because decades of socialism left it with a bloated public sector and uncompetitive economy. Whether Greeks accept that socialism doesn’t work will be key to the nation’s fate.
|By Lori Spechler, CNBC, 05/16/2012|
MarketMinder's View: Gold was never a safe haven in the first place—it’s a just a commodity, albeit a shiny one. And like any commodity, it’s inherently volatile. For more, see our 02/12/2010 cover story, “Gold’s Safety Blanket Myth.”
|By Randall W. Forsyth, Barron’s, 05/16/2012|
MarketMinder's View: We recommend taking any chart-based prediction—good or bad—with a huge grain of salt. Technical analysis is inherently backward looking. It ignores forward-looking fundamentals, which typically drive markets over time. For more, see our 12/12/2007 column, “Technical Paralysis.”
|By Marc Frank, Reuters, 05/16/2012|
MarketMinder's View: Cuba’s seemingly backward progress on foreign investment is disappointing, but overnight free-market change was likely always an unrealistic expectation for the communist nation. If Cuba were serious about attracting foreign firms and capital, leaders would relax the “rigorous controls” on them.
|By Staff, EUbusiness, 05/16/2012|
MarketMinder's View: While the efficacy of the regulations outlined in the 600-page agreement remains to be seen, the broader deal perhaps removes some uncertainty over pending changes to European banking oversight. For more, see our 05/04/2012 cover story, “Basel Bickering.”
|By Jeremy Torobin, The Globe and Mail, 05/16/2012|
MarketMinder's View: Minor quibbles aside, this piece presents a key point policymakers sometimes miss: A country’s currency value isn’t the sole determinant of its manufacturers’ ability to compete in global markets. Though, no argument would be complete without mentioning the impacts of regulatory red tape and trade protectionism.
|By Anthony Faiola and Michael Birnbaum, The Washington Post, 05/16/2012|
MarketMinder's View: Merkel’s softening exemplifies the ongoing political will to preserve the euro. And while fiscal stimulus likely isn’t a cure-all for Greece, if it helps curry favor with Greek voters ahead of Election 2.0, the broader political impact could be an incremental positive.
|By Tim Worstall, The Telegraph, 05/16/2012|
MarketMinder's View: On balance, this sensibly debunks the myth of peak oil as an economic apocalypse: “Even if we accept the geological conventional wisdom, then there’s still no cause for panic. Prices will rise, yes, so people will go off and do other things. Either use something else instead of oil (that ever cheaper shale gas for example) or simply doing things that require less energy.” For more, see our 05/14/2012 book review on The End of Growth.
|By Lori Montgomery and Rosalind Helderman, Washington Post, 05/15/2012|
MarketMinder's View: While Washington’s hemming and hawing no doubt makes some business planning trickier, the likelihood such a widely known and anticipated expiration of tax cuts and other spending measures derails the US economy is exceedingly slim. For more, see our recent commentary on Real Clear Markets.
|By Staff, New York Times, 05/15/2012|
MarketMinder's View: More than anything, this betrays a fundamental lack of understanding about how capital markets work. Sure, maybe investors have felt timid in the wake of what was a historically deep recession. But that doesn’t mean by any stretch they’re never returning. Far from it, actually. And to presume this time is different than any time in the past is likely to investors’ ultimate detriment.
|By Michael Sivy, Time, 05/15/2012|
MarketMinder's View: Throughout history, there have always been risks and seemingly overwhelming fears for investors to contend with. However, those listed here have been widely known for some time—removing most of their potential surprise power to move markets in the long run, though they could certainly cause some short-term choppiness.
|By Brian Blackstone, The Wall Street Journal, 05/15/2012|
MarketMinder's View: We find a few things to quibble with here, but it shouldn’t surprise many folks the European periphery struggled while the core continued exhibiting strength. That’s been the case for some time now. What’s more important is the degree to which the larger core countries continue pulling the rest of the eurozone along—it’s also illustrative of how economic strength in the rest of the world can pull a weak, proportionally smaller Europe along with it. For more, see our 05/10/2012 cover story, “German(e) Data.”
|By Lorraine Woellert, Bloomberg, 05/15/2012|
MarketMinder's View: Actually, it blew forecasts out of the water—an indication economic growth continues in the US, despite global pockets of weakness and eurozone concerns.
|By Staff, BBC, 05/15/2012|
MarketMinder's View: Yet another milestone in the race toward zero protectionism. For more, revisit our 05/06/2011 cover story, “A Torrent of Free Trade.”
|By Jeffrey Sparshott and Eric Morath, The Wall Street Journal, 05/15/2012|
MarketMinder's View: Though retail sales grew slower than last month, the bigger story is they continued advancing. For more, see our recent commentary on The Street.
|By Joseph E Stiglitz, Project Syndicate, 05/14/2012|
MarketMinder's View: We quibble with many claims here—like citing free trade, free migration and tax competition as principal drivers of the eurozone’s woes. As we’ve written before, the assumption government austerity measures prevent growth overall and indefinitely is a one-sided (demand) point of view. Moreover, we’d suggest the major notion underpinning this piece—that markets need the stability brought by governments—is a bit backwards, which Greece and the eurozone seemingly illustrate rather well.
|By William Deresiwicz, The New York Times, 05/14/2012|
MarketMinder's View: Another example of the misperception there’s a strict dichotomy in the division of wealth: rich versus poor. This emotional rhetoric overlooks the fact capitalism works for both corporations and individuals—demonstrated by now commonplace luxury items like smartphones. Additionally, focusing on success of the whole allows corporations to create myriad jobs and widely spread wealth, benefitting people of all categories. As the author even writes, “It’s neither party’s goal (workers or entrepreneurs) to benefit the other, but that’s what happens nonetheless.” Labels and moralistic judgment aside, that’s capitalism at work.
|By John Snow, The Wall Street Journal, 05/14/2012|
MarketMinder's View: We agree with a couple points here—if you tax something, you get less of it, and lower taxes are likely an incremental economic positive. However, we doubt “taxmageddon” plays out as suggested here—politicking, extensions and foot-dragging wouldn’t surprise, but politicians likely ultimately understand substantially higher taxes make voters unhappy.
|By Staff, Bloomberg, 05/14/2012|
MarketMinder's View: Though domestic resistance may indeed arise, that China, Japan and South Korea will begin free-trade talks is a positive for everyone. It seems South Korean President Lee Myung Bak is really on to something: “In times of crisis, if countries, for their own survival, carry out protectionist ideas, then the recovery of the economy will take a long time.” Open markets are key to an overall healthy global economy.
|By Paul Krugman, The New York Times, 05/14/2012|
MarketMinder's View: It seems to us a bit forgotten, but panics do happen and have in the past: before the Fed, before fiat money—heck, before Wall Street was paved. What to take from this? All these earlier financial crises—some far more severe than 2008’s—didn’t bring the end of growth in the long run, so we see little reason to believe this time is so fundamentally different.
|By Staff, The Economist, 05/14/2012|
MarketMinder's View: Thawing trade relations between India and Pakistan are another milestone in the race toward zero protectionism. For more, see our 04/16/2012 cover story, “Another Step on Kashmir’s Silk Road.”
|By Paul Krugman, The New York Times, 05/11/2012|
MarketMinder's View: While we largely agree today’s unemployment situation isn’t very structural at all, using the term “depression” to describe today is beyond bizarre considering the economy is growing, unemployment is falling and other economic data overall continue to be positive.
|By Louis Uchitelle, The New York Times, 05/11/2012|
MarketMinder's View: The evidence included in this piece is nearly all anecdotal. But in actuality, much of US manufacturing is doing just fine—and without subsidies at that. In fact, manufacturing has largely led the way during the current economic expansion.
|By Floyd Norris, The New York Times, 05/11/2012|
MarketMinder's View: We already largely have global accounting standards, so adding to them could entail some negative, unintended consequences. Plus, global accounting implies a global accounting enforcement body—who exactly would that be?
|By Carolynne Wheeler, The Globe and Mail, 05/11/2012|
MarketMinder's View: Economies sometimes grow faster, sometimes slower—and that’s normal. Fact is, China’s still growing, the Chinese government recently announced one trillion yuan in new loans and leaders there typically slow growth right before an election (which is likely what’s happening now). For more, see our 04/13/2012 cover story, “China Check-Up.”
|By Jason Chow and Angus Loten, The Wall Street Journal, 05/11/2012|
MarketMinder's View: Here’s an example of how political uncertainty (and lack of political freedom) can drive wealthy folks to seek citizenship elsewhere—and why China’s economic model, despite what some believe, isn’t superior to the US’s or other freer countries’.
|By Staff, EUbusiness, 05/11/2012|
MarketMinder's View: More evidence Italy continues drawing healthy investor demand.
|By Dick Carpenter and Lisa Knepper, The Wall Street Journal, 05/11/2012|
MarketMinder's View: Nope—we think most folks are smart enough to discern whether to trust their barber, license or no. And as this article points out, regulations surrounding licensing requirements differ greatly from state to state (some border on the ridiculous, requiring more training than an EMT!) and stifle job creation—yet another example of onerous regulations overall hurting rather than helping.
|By David Böcking, Der Spiegel, 05/11/2012|
MarketMinder's View: Spain’s real estate market woes have been known for some time—and whether its move to nationalize some banks proves beneficial remains to be seen. For more on Spain, see today’s cover story, “Slow and Steady Spain,” and our 05/10/2012 research analysis, “Spanish Trials.”
|By Ambrose Evans-Pritchard, The Telegraph, 05/10/2012|
MarketMinder's View: We’ve discussed many times the problems the eurozone overall and Greece specifically still have and need to address—but this reaches overly hyperbolic conclusions at this point. The reality is a disorderly euro breakup and a Greek return to the drachma likely do more harm than good in the short run. Ultimately, politicians seem to grasp this, too. For more, see today’s cover story, “German(e) Data.”
|By Marcus Mabry, International Herald Tribune, 05/10/2012|
MarketMinder's View: Let’s be clear: Greece’s problem isn’t really the euro, whether it stays on it or not. A credible currency is one of relatively few things it has going for it at the moment. And leaving it at this point could hurt everyone, perhaps Greece worst of all. And even if it went back in time and didn’t join the euro, Greece could easily be more of a mess than it currently is, not less.
|By Kevin Carmichael, The Globe and Mail, 05/10/2012|
MarketMinder's View: One beauty of markets in which goods and funds flow freely is regardless of “imbalances,” globally, all accounts balance. So to be concerned about shifts between current account surpluses and deficits and trade surpluses and deficits is largely fretting over something that isn’t really much of a problem. After all, countries won’t participate in such transactions if they don’t overall benefit in some way.
|By Don Lee, Los Angeles Times, 05/10/2012|
MarketMinder's View: Yes, a wider trade deficit could ding the US’s Q1 GDP number some—but that’s more an anomaly of GDP’s calculation than it is a serious comment about the economy’s overall health. Fact is a wider trade gap (with imports and exports increasing nicely) can indicate a higher level of global economic activity. And those dollars “exported” to pay for our increased imports must be used somehow. That’s what’s typically referred to as our current account surplus—and it’s not a bad thing. For more, see our 09/09/2011 cover story, “Trade Deficit Trifles.”
|By Staff, The Telegraph, 05/10/2012|
MarketMinder's View: We largely agree—there just isn’t a solution that magically eliminates the eurozone’s debt woes. As Chancellor Merkel said, “Only one thing is and remains sustainable: accepting that overcoming the crisis will be a long and difficult process that will only be achieved if we attack the origins of the crisis, which are the horrendous debts and a lack of competitiveness in some European countries.” Sounds about right.
|By Jon Hilsenrath, Robin Sidel and Lingling Wei, The Wall Street Journal, 05/10/2012|
More open markets are nearly always beneficial—not just when it comes to trade, but in the financial world, too. While this isn’t yet a done deal, steps toward more open financial interaction between the US and China would likely prove positive for all involved.
|By Ben Rooney, CNN Money, 05/10/2012|
MarketMinder's View: We essentially agree—though Greece’s politicians may continue rocking the boat for awhile, it seems to us the reality is too many parties across Europe have too much invested to just walk away at this point. Including Greece, whether they say it or not. Odds are they continue muddling through—uncomfortable though that may prove in the interim. For more, see our 05/08/2012 cover story, “Europe the Morning After.”
|By Lam Thuy Vo, NPR, 05/10/2012|
MarketMinder's View: An interesting look at the revenue many US companies generate from royalties and licensing—and further evidence even though the US may increasingly shift from a manufacturing to a service-intensive economy, that needn’t imply economic decline.
|By Stephen Nielsen, Bloomberg, 05/10/2012|
MarketMinder's View: It seems Brazil’s learning some common lessons of government regulations’ unintended consequences—namely, that however well-intentioned, government institutions with multiple layers of red tape likely hinder private-sector activity more often than they spur it.
|By Michael Moran, Slate, 05/09/2012|
MarketMinder's View: Actually, they have one—die Chuzpe. Moreover, it’s off-base to say austerity “removes the fuel that can stoke economic growth,” as that implies demand-side stimulus is the only solution. Though the ongoing public-sector reforms can come with painful short-term side effects, in the long run they likely make Greece more competitive and give it better odds of sustainable growth. And at that point, the euro—and the cross-border trade it facilitates—likely proves beneficial, not a “straitjacket.”
|By R.A., The Economist, 05/09/2012|
MarketMinder's View: It is a fair point to note that had the government laid off fewer people, we could have—but are not guaranteed to have—a lower unemployment rate. That said, this seems to greatly overstate the Fed’s influence on private-sector hiring. And this is all based on a very bizarrely calculated government statistic. Consider: There could’ve been all the fundamental forces (easy Fed, no government layoffs, private sector hiring) of the “but-for” case here, and the unemployment rate could still be higher. Simply, if more discouraged workers rejoined the hunt, they’re added back in. So this piece just seems highly speculative to us.
|By Gregory Viscusi, Bloomberg, 05/09/2012|
MarketMinder's View: While polls indeed suggest the center-right UMP loses relative power to François Hollande’s Socialists in the National Assembly, that doesn’t necessarily mean Hollande’s more onerous campaign pledges automatically become law. France could end up with a hung parliament, Hollande could continue moderating or markets could force a pause. For more, see today’s cover story, “An Earnings Sandwich.”
|By Tami Luhby, CNN Money, 05/09/2012|
MarketMinder's View: Realistically, there will always be some over-indebted individuals across the nation. But this article provides little perspective for actually considering current stats. And some statistics, like the percentage of underwater homeowners, don’t tell you much about the issue of over-indebtedness. In many respects, like delinquencies, leverage ratios, incomes and more, the consumer is actually quite healthy now relative to the past 15 years.
|By Staff, Reuters, 05/09/2012|
MarketMinder's View: Syriza party leader Alexis Tsipras is making the most of his given three days to form a coalition, but it’s likely his anti-bailout thundering—and letter informing the ECB Greece is reneging on austerity commitments—come to naught. The communists and pro-bailout parties have already rejected his overtures, and his likely failure to form a government should render his words and plans null and void. For more, see today’s cover story, “An Earnings Sandwich.”
|By Staff, Associated Press, 05/09/2012|
|By Tom Fairless, The Wall Street Journal, 05/09/2012|
MarketMinder's View: German economic data—this time, rising imports and exports—continue illustrating huge disparities in economic results across the eurozone. Simply, not all eurozone—much less, European—economies are showing uniformly negative results.
|By Matthew Sparkes, The Telegraph, 05/09/2012|
MarketMinder's View: Portugal continues enacting reforms targeting improved fiscal footing and economic competitiveness. While these moves —incremental positives for the eurozone—likely don’t carry much immediate economic return, they’re at the heart of many issues in peripheral Europe.
|By Christopher Hope, The Telegraph, 05/09/2012|
MarketMinder's View: The British government announced its agenda for the next parliamentary session, including measures to increase the retirement age and separate retail and investment banking. These measures, and their potential impact on the UK’s economic competitiveness, bear watching in the months ahead.
|By Jorge Rueda, Associated Press, 05/09/2012|
MarketMinder's View: As this piece highlights, Hugo’s attempt to curry populist favor may prove a solution in search of a problem—potentially decreasing productivity, increasing firms’ operating costs and stifling overall output and job creation.
|By Jeffrey Sachs, Financial Times, 05/08/2012|
MarketMinder's View: While the headline seems sensible enough, the assessment of peripheral Europe’s troubles and potential solutions miss some key points. Europe’s issues aren’t so much “banking reform, job training and inequality”—rather, it’s structural issues that make it difficult for some nations to compete. Reforming these, while buying time for markets to adapt and devise solutions, seems the most sensible prescription.
|By Scott Murdoch, The Australian, 05/08/2012|
MarketMinder's View: Balancing Australia’s budget is a fine enough goal in theory, but the government’s making some rather iffy choices to get there—reneging on corporate tax cuts may make the nation less business-friendly, and certain redistributive measures could equally prove solutions in search of a problem.
|By Michael Sivy, Time, 05/08/2012|
MarketMinder's View: Fact is, job growth typically lags economic recovery. And as economic growth in the US continues to roll on, we largely expect the employment situation to continue its ongoing improvement. There may be volatility along the way—generally is—but there are few, if any, signs the solutions noted here are necessary. For more, see our 04/10/2012 commentary, “Don’t Miss the Forest for the Trees on Unemployment.”
|By Alex Spillus, The Telegraph, 05/08/2012|
MarketMinder's View: An informative outline of what lies ahead for Greece in the days (and potentially weeks) ahead. For more, see today’s cover story, “Europe the Morning After.”
|By Gregory Viscusi and Mark Deen, Bloomberg Businessweek, 05/08/2012|
MarketMinder's View: This sensible piece outlines the risks of well-intentioned, but misguided, regulations and how they impact jobs (and businesses).
|By Morgan Zhang, International Business Tines, 05/08/2012|
MarketMinder's View: Yet another sign pockets of economic strength exist globally and within the eurozone. For more, see our 04/11/2012 cover story, “Depictions of Growth.”
|By James Pickford, Financial Times, 05/08/2012|
MarketMinder's View: Here’s some anecdotal evidence France’s high-earners may vote with their feet and leave, should François Hollande’s 75% tax on them come to pass. That’s just one reason his campaign agenda may prove tough to enact. For more, see today’s cover story, “Europe the Morning After.”
|By Donald L. Luskin, The Wall Street Journal, 05/07/2012|
MarketMinder's View: We agree lower taxes on investment income and capital gains are likely better economically and philosophically. But the down-big market scenario presented here if they rise isn’t so assured. Markets are far too complicated for things to ever work out as simplistically as this. For one thing, they’re very efficient at discounting widely known factors—one reason tax policy has historically shown little repeatable, formulaic influence related to changes. For more, see our latest contribution to Real Clear Markets.
|By Lauren Weber and Melissa Korn, The Wall Street Journal, 05/07/2012|
MarketMinder's View: We have little doubt this isn’t the easiest job market to enter. But this article is long on opinion, short on supporting evidence. Consider: Is the job market truly so different in this particular go-round than it normally is? How about when unemployment’s been elevated before? But these comparisons aren’t made here. Moreover, an unemployment rate of 6.4% (1.7% lower than the national rate) and an expected 10.2% y/y gain in college recruiting doesn’t support the overall argument.
|By Robert B. Reich, Robert Reich’s Blog, 05/07/2012|
MarketMinder's View: We agree socialism isn’t the answer. But we find little to agree with here beyond that. We disagree with the notion productivity gains haven’t benefited society at large. What’s more, there’s little evidence a wealth gap caused—or was even a noteworthy contributor to—the Great Depression or 2007-2009’s recession.
|By Joseph de Weck, Bloomberg, 05/07/2012|
MarketMinder's View: German factory orders jumped 2.2% from February. “The numbers show that despite the crisis in the euro area, Germany is growing and benefiting from a revival in international trade”—a positive sign for the global economy and a sign the eurozone economy shows huge differentiation by member nation.
|By Anant Vijay Kala and Shefali Anand, The Wall Street Journal, 05/07/2012|
MarketMinder's View: This is a sensible move away from an ill thought-out tax plan regarding foreign acquisitions of Indian firms. It doesn’t mean the plan is now dead, but having an extra year for firms to plan—and Indian leaders to rethink—is a plus.
|By Mark J. Perry, Carpe Diem, 05/07/2012|
MarketMinder's View: Much like GDP statistics (and many economic estimates), payroll growth estimates are created from sampling including a huge margin of error. Keeping this in mind, it is easier to look past fatalistic headlines about slow job growth and focus on the bigger picture—growth is growth.
|By Amanda Williams, Real Clear Markets, 05/07/2012|
MarketMinder's View: The latest from MarketMinder Editorial Staff member Amanda Williams on Real Clear Markets.
|By Mohamed A. El-Erian, Washington Post, 05/04/2012|
MarketMinder's View: The premise here seems disconnected from historical experience—that the combination of mandatory spending cuts plus expiring tax breaks will derail the US economy. On the contrary, the US has weathered myriad combinations of spending and tax levels over the years mostly fine. To presume this time is different is to underestimate the economy’s resilience and the market’s ability to anticipate the impending “cliff.”
|By Robert Reich, Salon, 05/04/2012|
MarketMinder's View: This is entirely too dour, in our view. In fact, consumers have proven they’re far from tapped out. On top of that, it ignores fully half the equation: the supply side. And time and again, the economy’s demonstrated the ability to initiate activity among producers. This time likely isn’t so different.
|By Laura D’Andrea Tyson, New York Times, 05/04/2012|
MarketMinder's View: We disagree with nearly all of this, but here’s just one aspect to muse: If much of our current “unemployment problem” is because of skill mismatches and a lack of education, why was unemployment just five years ago roughly 4%?
|By Chico Harlan, The Washington Post, 05/04/2012|
MarketMinder's View: The trouble here isn’t the article so much, but Japan’s decision to shut down all of its nuclear power plants—which seems based much more on politics than rationally argued economic or public safety reasons.
|By Klaus F. Zimmerman, The Wall Street Journal, 05/04/2012|
MarketMinder's View: Despite the common media portrayal of an absolute choice between either growth or austerity, there is a middle ground—as Germany’s in fact demonstrated lately: “So contrary to what we keep hearing … there is no rigid either/or choice between budget consolidation and growth. Both will be crucial for Europe’s economic health going forward.” Hear, hear!
|By Jeff Franks, Reuters, 05/04/2012|
MarketMinder's View: Though they undoubtedly have a long way to go, Cuba’s economic reforms are steps in the right direction—for example, cutting government payrolls, encouraging self-employment and giving citizens the right to buy and sell homes. For more on the benefits of capitalism and freer markets, see our 05/03/2012 column, “Resurrecting Capitalism in the Killing Fields.”
|By Joe McDonald, Associated Press, 05/04/2012|
MarketMinder's View: We’ll see whether Chinese officials follow through, but the fact China is considering making its markets more open is a good development.
|By Mark J. Perry, Carpe Diem, 05/04/2012|
MarketMinder's View: Despite widespread beliefs the US manufacturing sector’s languishing, it’s actually leading the way in several respects—including employment growth.
|By Ezra Klein, Bloomberg, 05/03/2012|
MarketMinder's View: We agree we’re practically nothing like Greece and entirely unlikely to share its fate. But the conclusions about the UK—that austerity has doomed it and therefore is ill-advised—are off-target, in our view. For one thing, the method of austerity matters immensely (tax increases versus government cuts, for example). For another, to jump from, “Austerity doesn’t work,” to, “Therefore, stimulus will,” is a bridge too far. It seems to us European lessons are far more nuanced than simply focusing on such broad brushstrokes.
|By Peter Coy, Bloomberg Businessweek, 05/03/2012|
MarketMinder's View: Given unemployment data’s well-known volatility and lagging nature, it seems early to conclude a one-month jump in German unemployment spells disaster for Europe as a whole—nor does it necessarily signal Germany must begin immediate austerity measures. Without more information, it’s just too soon to say whether Germany’s slowing.
|By Ambrose Evans-Pritchard, The Telegraph, 05/03/2012|
MarketMinder's View: It’s entirely possible France may need to enact some market-oriented reforms (like some of its European neighbors) in coming years, but that doesn’t seal its fate. In our view, the conclusions here are just too hyperbolic and definitive at this point.
|By Bryce Covert, The Nation, 05/03/2012|
MarketMinder's View: While more folks might be working part time than would ideally like to, we’d suggest employment improvements will continue as global economic recovery and growth do as well. Further, we’re not sure how to define “bad jobs”—or whether that’s a terribly meaningful distinction if it is possible.
|By Emese Bartha, The Wall Street Journal, 05/03/2012|
MarketMinder's View: Though rates have ticked up, Spain’s continued to successfully auction bonds, meaning the government’s been able to borrow what it needs—positive news for a country still facing significant fiscal and economic challenges.
|By Robert Samuelson, The Washington Post, 05/03/2012|
MarketMinder's View: Though we’d disagree with bits of this (like the suggestion the solution lies in an energy tax), overall, this is a sensible explanation of why oil and energy prices move as they do. Hint: It has fairly little to do with speculators.
|By Angelo Young, International Business Times, 05/03/2012|
MarketMinder's View: That nations globally—not just in the troubled eurozone—are taking steps to bolster financial buffers is likely an overall positive. While it doesn’t guarantee perfectly smooth sailing (nothing really does), it certainly helps diminish the likelihood we retread lessons largely already learned.
|By Carolyn Cui and Liam Pleven, The Wall Street Journal, 05/03/2012|
MarketMinder's View: The invisible hand at work—as we’d expect. Historically low natural gas prices have discouraged as much production—which will over time causes prices to rise, particularly as now-low prices encourage consumers to shift consumption to natural gas. Which will in turn spur production again—highlighting the efficiency with which free-market prices can communicate an enormous amount of information.
|By Jeremy Warner, The Telegraph, 05/02/2012|
MarketMinder's View: The latest eurozone unemployment and PMI data aren’t great by any stretch—but they only confirm what’s long been known: Some European nations have tough structural issues to work through, and the adjustments can have painful short-term effects. Yet history tells us the world, on balance, can continue growing even as the eurozone pulls back. For more, see our 03/03/2012 commentary on iStockAnalyst.com, “Eurozone Recession, Global Growth.”
|By Matthew Yglesias, Slate, 05/02/2012|
MarketMinder's View: Yes, the economic fallout of monetary dislocations is hitting peripheral Europe—but that doesn’t mean quitting the euro is the right solution. Moreover, the euro itself isn’t the cause of southern Europe’s woes—that’s much more a function of uncompetitive economies and bloated public sectors. If stressed nations continue making much-needed structural reforms, they could very well benefit from eurozone membership and the cross-border trade it facilitates.
|By Jack Hough, SmartMoney, 05/02/2012|
MarketMinder's View: By focusing on a single chart, this ignores the wide swath of global fundamentals that influence stock returns. Plus, that total US market cap exceeds annual GDP doesn’t mean stocks are overvalued relative to the economy—there’s no law saying the divergence is unsustainable. Stocks measure wealth, while GDP is essentially an annual flow of economic output—meaning they’re not measuring the same thing, making the comparison a bit odd.
|By Kathleen Madigan, The Wall Street Journal, 05/02/2012|
MarketMinder's View: While the ADP private-sector job report missed expectations, we’d argue this piece lends it a bit too much significance. It’s only one of several employment metrics, all of which—though volatile from month to month—in aggregate point to improving employment over time. For more, see our 03/12/2012 cover story, “Evidence of Employment.”
|By Staff, Der Spiegel, 05/02/2012|
MarketMinder's View: In this look at the poverty and overall grim way of life brought by North Korean communism, we see a huge opportunity for capitalism to provide a way back from devastation—free, open markets, private property rights and personal freedom can do more to modernize the country than centrally planned apartment buildings ever could. For more on capitalism’s healing powers, see our 05/01/2012 column, “Resurrecting Capitalism in the Killing Fields.”
|By Fisher Investments Editorial Staff, iStockAnalyst.com, 05/02/2012|
MarketMinder's View: Our latest for iStockAnalyst.
|By Philip Aldrick, The Telegraph, 05/02/2012|
MarketMinder's View: Strong construction PMIs could indeed be a sign the British economy is stronger than Q1 GDP would suggest—especially considering falling construction spending was largely responsible for the headline contraction. And as the discrepancy between the reports reminds us, no single data point—even GDP—can fully capture a country’s overall economic health.
|By Staff, Associated Press, 05/02/2012|
MarketMinder's View: Though an actual deal is a long way off (if it’s even reached), it seems quite positive for global commerce, and the talks are an encouraging step. For more, see our 10/17/2011 cover story, “Racing Towards Zero.”
|By Craig Stephen, MarketWatch, 05/01/2012|
MarketMinder's View: It seems premature to issue such a harsh verdict on Chinese officials’ efforts to goad growth. Monetary policy changes typically take some time to be felt through an economy. For more, see our 04/13/2012 cover story, “China Check-Up.”
|By Markos Kaminis, Seeking Alpha, 05/01/2012|
MarketMinder's View: It seems odd to list seven manufacturing data points that all logged growth and call that a malaise. For more on manufacturing’s overall strength, see our 04/21/2012 story on The Street, “The Industrial Evolution.”
|By Scott S. Powell, New York Post, 05/01/2012|
MarketMinder's View: Stories of the dollar’s demise continue to fade in and out of popularity. But there’s rarely much indication, if any, the US is in danger of losing its status as the world’s reserve currency. Although this piece names some anecdotal examples of other currencies being accepted for trade recently, there are basically no other currencies in the world with the vast liquidity and transparency as the US dollar. For more, revisit our 10/08/2009 cover story, “The Dollar’s Doom Looms?”
|By G. Scott Thomas, BizJournals.com, 05/01/2012|
MarketMinder's View: Comparing where a lagging economic indicator was at two seemingly arbitrary points in time isn’t very telling about the business cycle. The 2008-2009 recession was bigger than 2001’s and resulted in more job losses, but that’s also well known and has few investment implications today. Moreover, while the headline factoid is, in a vacuum, technically true, it also fails to account for some mitigating facts—like an expanding population and larger workforce.
|By Christopher S. Rugaber, Associated Press, 05/01/2012|
MarketMinder's View: This marks the 33rd straight month of expansion for the manufacturing index—reflecting underlying strength in the US economy.
|By James R. Otteson, Manhattan Institute for Policy Research, 05/01/2012|
MarketMinder's View: An engaging (although lengthy) read on the myriad benefits of a free-enterprise society.
|By Gideon Rachman, Financial Times, 05/01/2012|
MarketMinder's View: Though we quibble with some aspects of this, we largely agree the eurozone’s periphery needs some combination of austerity, pro-growth reforms and time to work itself out of its current situation. For more, see today’s cover story, “The EU’s Great Growth Debate.”
|By John Grgurich, The Motley Fool, 05/01/2012|
MarketMinder's View: On balance, a sensible look at some reasons last week’s GDP announcement should be “quite encouraging.” And we’d add a few more—including strong trends in personal consumption and overall trade. For more, see our 04/30/2012 cover story, “Better Than (Widely) Received.”