|By Mark Gongloff, The Wall Street Journal, 06/30/2011|
MarketMinder's View: Folks are starting to cite the past few days’ increase in Treasury yields as a sign markets will panic when QE2 officially ends. Even beyond a few short days being too myopic to indicate much, the Fed isn’t stepping away altogether—and markets have known for months QE2 would end in June. Remember, surprises tend to move markets most. For more, see our 06/27/2011 cover story, “Not So Breaking News.”
|By Dina Kyriakidou and Renee Maltezou, Reuters, 06/30/2011|
MarketMinder's View: And another hurdle cleared in the continuing Greek debt saga. The involved parties—eurozone governments, private banks that hold Greek debt and Greece itself—seemingly continue to make progress, albeit slowly.
|By Dina Kyriakidou and Renee Maltezou, Reuters, 06/30/2011|
MarketMinder's View: That increasing numbers of European banks are amenable to rolling over Greek debt is a positive sign the crisis needn’t create wider contagion. For more, see our 06/28/2011 cover story, “French History Lessons.”
|By Ann Saphir, Reuters, 06/30/2011|
MarketMinder's View: The Chicago ISM manufacturing index (also called Chicago PMI) accelerated and beat expectations soundly in June. That speaks partly to how low expectations have fallen—and partly to extant strength in the economy. Yes, readings have been up and down, but they’re overall positive, and here’s yet another example. For more, see our 06/15/2011 cover story, “The Great Expectations Gap.”
|By Matt Phillips and Min Zeng, The Wall Street Journal, 06/30/2011|
MarketMinder's View: Well, we’d disagree with the conclusion QE2’s expiration (which actually occurs today) will cause higher interest rates based on three days of data. Particularly since those days happened to coincide with stocks and economic data rebounding from recent weakness. Moreover, if the theory is QE2’s end inevitably results in higher bond yields, then why did yields tick up for a few days after QE2 was formally announced last November? A tiny, selectively chosen data set and an argument that doesn’t touch on myriad other factors impacting bond rates isn’t really ironclad evidence to support a theory.
|By Randall Forsyth, Barron’s, 06/30/2011|
MarketMinder's View: The reality is, markets’ short-term bumps and wiggles just don’t make or break overall returns in the long run. And making investment decisions based on the calendar day—or old adages like “Sell in May”—risks missing opportunities from staying in the market. For more, see our 05/02/2011 cover story, “April Showers Bring May Myths.”
|By Michael Snyder, Seeking Alpha, 06/30/2011|
MarketMinder's View: This is an overly dour piece, conveniently ignoring facts that don’t fit its argument—like that corporate profits grew at an all-time high rate in Q1 2011 or US real personal consumption and US GDP are at all-time highs. The end of QE2 isn’t likely to spell the end of continued US economic growth. For more, see our 06/01/2011 cover story, “Cue the Curtain for QE2?”
|By Staff, Investment News, 06/30/2011|
MarketMinder's View: Let’s be clear: The debt ceiling has far more to do with politics than the soundness of the US economy or its ability to pay its debts. Politicians will likely vote to increase the limit when push comes to shove. But even if they don’t, the US generates sufficient tax revenue to service its debt—meaning there isn’t anything about the debt ceiling that automatically results in default.
|By Phillip Swagel, Real Clear Markets, 06/29/2011|
MarketMinder's View: A sensible review of differing takes on 2008’s financial crisis—Inside Job and Too Big To Fail. While both movies have their faults, one certainly tells the story more accurately, seeking to explain events and subsequent reactions from the government and other players, rather than strictly placing blame.
|By Glenn Somerville, Reuters, 06/29/2011|
MarketMinder's View: The debt ceiling is mostly a political issue and will likely be raised—like it has over 90 times before. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”
|By Roya Wolverson, Time, 06/29/2011|
MarketMinder's View: Will the 14 economic deals and 22 cooperation agreements between Germany and China hurt the US (or greater Europe)? Highly unlikely. Greater free trade globally—whether the US is directly involved or not—is a plus. Fact is, the global economy isn’t a fixed pie. And if the deals signed lead to greater German and Chinese growth in years ahead, that means a bigger market in each for US businesses to target. For more, see our 05/18/2011 cover story, “Make a Trade for Trade.”
|By Simone Meier, Bloomberg, 06/29/2011|
MarketMinder's View: Surveys of what consumers say they’ll do have historically not been very predictive of their actions—or the stock markets’ for that matter. For more, see our 02/24/2011 cover story, “A False Prophet.”
|By Kathleen Madigan, The Wall Street Journal, 06/29/2011|
MarketMinder's View: Sure, there are plenty of negative headlines out there—but they’re the same old stories we’ve seen for over a year. What data actually show is economic expansion—and that’s likely to continue. For more, see our 06/06/2011 cover story, “Recycled Financial Headlines.”
|By Staff, CNBC, 06/29/2011|
MarketMinder's View: The political gamesmanship surrounding Greece across Europe is likely to continue, but thus far, European politicians seem committed to avoiding the worst-case scenario—a disorderly breakup of the euro (or the EMU). For more, see our 06/21/2011 cover story, “PIIGS Political Posturing.”
|By Takashi Mochizuki, Dow Jones Newswires, 06/29/2011|
MarketMinder's View: Japan posting its second largest industrial output gain ever in May is further proof economies are more resilient than many believe in the wake of disaster.
|By Dave Kansas, The Wall Street Journal, 06/29/2011|
MarketMinder's View: As we’ve said, 2011 is likely to be a muted year for broad equity index returns as a tug of war between bulls and bears dominate sentiment. That financial headlines are overly negative while economic data primarily show continued growth is a positive longer term—over the course of a bull market, stocks tend to climb a wall of worry.
|By Anton Troianovski and Craig Karmin, The Wall Street Journal, 06/29/2011|
MarketMinder's View: Nontraded REITs have made a number of headlines recently. This is an interesting look at some of the issues that primarily stem from a lack of transparency and liquidity. These alternative investments aren’t as simple as they might seem, and those considering investing in them should execute extensive due diligence.
|By John Nyaradi, MarketWatch, 06/28/2011|
MarketMinder's View: This is a nice and very concise rehash of the widely known. To be sure, Greece, the US debt-ceiling debate and the end of QE2 may cause some additional market volatility in the weeks ahead, but as matters stand presently, they’re far from surprises and thus, highly unlikely to cause a material, lasting downturn for stocks or the economy. For more, see our 06/27/2011 cover story, “Not So Breaking News.”
|By Jonnelle Marte, SmartMoney, 06/28/2011|
MarketMinder's View: As this article points out, since the vast majority of investors can't approach accurately timing the market, cash hoarders run the risk of missing out on gains as the market recovers. The power of compound growth means missing “the first 5% or 10% rise” is likely to amount to far more than one might think over the course of a bull market or an investor’s time horizon.
|By Sean O’Grady, The Independent, 06/28/2011|
MarketMinder's View: We think it’s somewhat misleading to assume the world hasn’t always faced economic shocks or risks. While it’s true the global economy is more interconnected than ever, this should be seen as a strength, not a weakness.
|By Anne D’Innocenzio, Associated Press, 06/28/2011|
MarketMinder's View: Typical consumer confidence measures are backward-looking sentiment indicators and have little predictive power for markets.
|By Bob Eisenbeis, Business Insider, 06/28/2011|
MarketMinder's View: A sensible look at how quantitative easing works and why QE2’s end isn’t likely to be as impactful as some fear. For more, see our 06/23/2011 cover story, “Waving the Fed’s Wand.”
|By Elizabeth Williamson, The Wall Street Journal, 06/28/2011|
MarketMinder's View: Critical US trade pacts with Korea, Panama and Colombia took another step toward becoming a reality yesterday. For more, see our 05/06/2011 cover story, “A Torrent of Free Trade.”
|By John Tamny, Real Clear Markets, 06/28/2011|
MarketMinder's View: This is a sensible piece explaining why the all-too-common theory that current economic conditions indicate a long-term US stagnation is likely incorrect: “What history tells us is that precisely because they're innovations, the amazing, wealth-enhancing advancements created by the entrepreneurially minded hit us somewhat unexpectedly, and fulfill needs we perhaps didn't know we had.”
|By Vipal Monga, The Wall Street Journal, 06/28/2011|
MarketMinder's View: Cash-rich corporations in the US have been and will likely continue spending in myriad ways, providing a strong potential boost to overall economic activity.
|By Rachel Cooper, The Telegraph , 06/27/2011|
MarketMinder's View: “A rise in the volatility index indicates a fall in appetite for riskier assets such as equities.” Actually, the VIX is a flawed index and doesn’t indicate much of anything about the future.
|By Michael Tanner, The New York Post, 06/27/2011|
MarketMinder's View: The only way one approaches the figure referenced here is to change the definition of debt (including a lot of things that aren’t debt), lump in intragovernmental debts (that, by definition, are also assets so they actually offset) and extrapolate current borrowing trends and legislative entitlements far into the future. Any of these—taken independently or together—can easily result in a misleading view of the US government’s fiscal standing. For more see our 03/07/2011 cover story, “A Welcome, Yet Flawed Addition.”
|By David Barboza, The New York Times, 06/27/2011|
MarketMinder's View: Talk of China’s local debts has been easy to find lately. But what’s critical to understand is their economic system is not an exact mirror of ours—China has used its authoritarian, centrally planned structure to bail banks and local governments out of bad debts many times in the past. And with massive reserves available resulting from their economic boom, there’s little reason they couldn’t do the same here and now if need be. For more, see our 06/08/2011 research analysis, “China: Bank Bailout Rumor.”
|By Staff, Associated Press, 06/27/2011|
MarketMinder's View: As with all economic data, consumer spending ebbs and flows month to month. We find it interesting this piece focuses solely on recent reports people perceive as negatives. Where’s the discussion of ISM services or Friday’s durable goods orders, for example? Moreover, the analysis in this piece of consumer spending doesn’t go any further than the headline rate.
|By Staff, EU Business, 06/27/2011|
MarketMinder's View: “Britain and China signed new trade deals worth GBP 1.4 billion at a summit on Monday, Prime Minister David Cameron said after meeting Chinese Premier Wen Jiabao in London.” Brokering deals in order to provide better access between countries is always a positive thing.
|By Steven Bodzin, The Christian Science Monitor, 06/27/2011|
MarketMinder's View: A highly interesting look inside the development of two Latin-American Emerging Markets. The highway in question here is a bicoastal link across South America’s core—providing a potential gateway for increased trade.
|By Matthew Saltmarsh, The New York Times, 06/27/2011|
MarketMinder's View: Another passage in the Greek debt saga. French banks have agreed to a plan to voluntarily extend Greek bond maturities to potentially avoid default. This is a story to watch.
|By Hibah Yousuf, CNN Money, 06/27/2011|
MarketMinder's View: This story gets the point across: QE2 was largely an ineffectual program, so we think there’s little reason to believe further stimulus would have a meaningfully positive effect.
|By Robert Pozen, Bloomberg, 06/27/2011|
MarketMinder's View: Reforming the US corporate tax code to incentivize repatriation of profits earned overseas makes sense. This is just one idea of how to accomplish that, but it’s a step in the right direction in our view.
|By John Schoen, MSNBC, 06/24/2011|
MarketMinder's View: The crisis described here is predicated on two things: Higher interest rates and a higher debt-to-GDP ratio being harmful to the US economy. But interest rates have remained quite tame for now, and a high debt-to-GDP ratio wasn’t so bad for the economy during the World War II era. At the end of the day, politicians will likely reach an agreement. But even if they don’t, it needn’t spell US economic doom. For more, see our 02/02/2011 cover story, “That Four-Letter Word.”
|By Brad DeLong, Seeking Alpha, 06/24/2011|
MarketMinder's View: Nomenclature aside (we’re not sure how you define a depression, let alone a “little” one), the ten factors here leave a lot to be desired in a list of the 2008 financial panic’s causes. Where is the discussion of FAS 157 and the government actions that exacerbated the panic? It’s difficult to understand the crisis without touching on these two critical drivers.
|By Scott Horsley, NPR, 06/24/2011|
MarketMinder's View: That a smaller percentage of the population is employed in manufacturing is a testament to rising productivity—and a long-term positive for the US economy. Higher productivity frees workers to add more value in other areas. Tying current sluggishness in employment growth to a decrease in manufacturing jobs is at least a touch off-base. For more, see our 09/23/2010 column, “The Ever-Evolving Economic Engine.”
|By Staff, EUbusiness, 06/24/2011|
MarketMinder's View: Yes, Greece needs cash and has an important austerity vote upcoming. But in reality, the eurozone still has tools at its disposal to prevent a total currency collapse—and that’s with or without Greece. For more, see our 06/17/2011 cover story, “Kicking the Greek Debt Can.”
|By Costas Paris, The Wall Street Journal, 06/24/2011|
MarketMinder's View: “Secure” is probably a strong word to use considering all the political back-and-forth in Europe lately. But that EU leaders and Greece were able to outline an agreement to support Greece through 2014 demonstrates EU leaders’ ability to kick the Greek can further down the road. For more, see our 06/21/2011 cover story, “PIIGS Political Posturing.”
|By Alex Kowalski, Bloomberg, 06/24/2011|
MarketMinder's View: An indication the slowdown in manufacturing was likely just that—a slowdown. Growth rarely takes a straight-line trajectory, and periods of acceleration and deceleration need not portend a larger collapse. For more, see our 06/16/2011 cover story “The Great Non-Depression.”
|By John McKinnon, The Wall Street Journal, 06/24/2011|
MarketMinder's View: Businesses tend to go where they’re likely to earn the highest return and retain most of their profits—that’s a key tenet of a capitalist society. And an important factor in that is tax rates. Rather than bemoan the existence of tax havens, it makes more sense to try to turn the US into one and attract not only domestic businesses, but foreign businesses as well.
|By Binyamin Appelbaum, The New York Times, 06/24/2011|
MarketMinder's View: “This chain reaction—lower supply, higher prices, lower demand—is a key reason the economy is falling short in the second quarter. It also has helped to drive up inflation indexes. But there is a silver lining: By all indications, it is a problem that already appears to be fading away.” As we’ve said, knock-on effects from Japan’s disasters have likely slowed global economic indicators—but that seems like a fleeting impact.
|By Josef Joffe, The New Republic, 06/23/2011|
MarketMinder's View: “It is hard to think of a time when both the US and the EU, the two biggest players in the international economy, were in such miserable shape.” Well, we can think of one—2008. The world overall (the EU and US included) is growing economically. Plus, this isn’t the first time growth rates have cooled amid expansion, which is normal. For more, see our 06/02/2011 cover story, “The Great Non-Depression.”
|By Lucia Mutikani, Reuters, 06/23/2011|
MarketMinder's View: Yes—unemployment remains high. Yet jobless claims fluctuate all the time, and that’s normal—it doesn’t necessarily mean the job market’s softening. Remember, unemployment typically recovers at a lag after stocks and the economy—and never in a straight line. For more, see our 05/12/2011 cover story, “WPA, Reductio Ad Absurdum.”
|By Michael Kahn, Barron’s , 06/23/2011|
MarketMinder's View: Yes—unemployment remains high. Yet jobless claims fluctuate all the time, and that’s normal—it doesn’t necessarily mean the job market’s softening. Remember, unemployment typically recovers at a lag after stocks and the economy—and never in a straight line. For more, see our 05/12/2011 cover story, “WPA, Reductio Ad Absurdum.”
|By Barbara A. Rehm, Financial Planning, 06/23/2011|
MarketMinder's View: We agree bank capital is only one part of the story and doesn’t completely prevent risk. But empowering regulators to offer advice for the future direction of bank policy misses a critical point: Regulators are not infallible, and it’s impossible (and not entirely desirable) to regulate away all risk.
|By Craig Torres and Jeannine Aversa, Bloomberg, 06/23/2011|
MarketMinder's View: The coming (and expected) end of QE2 doesn’t mean a sudden reversal of monetary policy. Rather, the Fed will largely maintain its balance sheet for some time. For more, see our cover story, “Waving the Fed’s Wand.”
|By Staff, BBC News, 06/23/2011|
MarketMinder's View: “The 27 EU leaders are expected to reaffirm their determination to defend the single currency.” Nothing new there. EU leaders have proven that determination over and over again—at least for the near term. For more, see our 06/21/2011 cover story, “PIIGS Political Posturing.”
|By John Murray Brown, Financial Times, 06/23/2011|
MarketMinder's View: Further proof of continued global recovery and/or expansion—even a PIIGS country is now showing positive numbers.
|By Staff, BBC News, 06/23/2011|
MarketMinder's View: This act, a bit surprising in its timing, likely puts downward pressure on prices—but that impact is likely very fleeting. Demand should continue to rise from a growing global economy—keeping prices firm— and the Saudis have already agreed to increase output.
|By Nouriel Roubini, Project Syndicate, 06/22/2011|
MarketMinder's View: The reasons for the slowdown highlighted here are the same fears stocks have been battling for over a year now. It’s simply a mistake to draw vast conclusions from a month’s equity market returns or economic data that show some cooling rates of growth. For more, see our 06/06/2011 cover story, “Recycled Financial Headlines.”
|By Stephen Gandel, Time, 06/22/2011|
MarketMinder's View: After multiple attempts, you’d think most people would realize there's no government quick fix to a housing market with too much supply and not enough demand (short of bulldozing thousands of homes—which we don’t advocate). Nor is it very fruitful to try—housing is only 2.2% of US GDP, so while it would be nice to get a turnaround, it’s not necessary to drive economic recovery more broadly. What’s likely needed to fix housing is time and continued economic growth, not government stimulus.
|By Jeremy Torobin, The Globe and Mail, 06/22/2011|
MarketMinder's View: We’re not sure “risks to the economy and financial system have edged higher over the past six months.” Unexpected events tend to move markets most longer term—not widely known and much-hyped happenings. For more, see our 06/20/2011 cover story, “Below the Radar.”
|By Karl Smith, The Atlantic, 06/22/2011|
MarketMinder's View: Employment—a lagging economic indicator—continues to improve slowly (we’d love to see the pace increase). But even if the employment situation in the US doesn’t improve, it’s unlikely to stop economic expansion. For more, see our 05/12/2011 cover story, “WPA, Reductio Ad Absurdum.”
|By Staff, Associated Press, 06/22/2011|
MarketMinder's View: Greek Prime Minister Papandreou cleared an important political hurdle, but now the real work begins—passing new austerity measures to appease fellow EU members. Regardless of the Greek political situation, fears of an immediate Greek debt default and its effects on the global banking system are likely overstated. For more, see our 06/17/2011 cover story, “Kicking the Greek Debt Can.”
|By Annalyn Censky, CNN Money, 06/22/2011|
MarketMinder's View: No matter how you feel about QE2, its end is unlikely to derail economic growth. For more, see our 03/31/2011 cover story, “Cue the Curtain for QE2?”
|By Scott Davis, Fortune, 06/22/2011|
MarketMinder's View: Thepending US-South Korea and Colombia-Panama FTAs, if and when enacted, are a nice potential, incremental positive for all involved. As the author points out, “Global innovation and growth will happen with or without the US. If we as a country want to continue being the world's leading economic power, we really need to step back in the game.” For more, see our 05/06/2011 cover story, “A Torrent of Free Trade.”
|By Tim Worstall, Forbes, 06/22/2011|
MarketMinder's View: Those who bemoan the “death of manufacturing” in the UK and US miss some significant points: “We do have a decline in manufacturing employment but that’s because we’re getting more efficient at using labor to manufacture things. We’ve also [seen] a decline in manufacturing as a percentage of the economy, but that’s because the services part of the economy is growing even faster than manufacturing.” For more, see our 05/11/2011 cover story, “Dawn of the Not So Dead.”
|By Staff, International Business Times, 06/21/2011|
MarketMinder's View: This article highlights the dangers and knock-on effects of a euro collapse. But these very dangers and knock-on effect are what will likely eventually force eurozone politicians to develop, approve and implement solutions to these problems—they aren’t ignorant of the risks, and a messy dissolution of the eurozone is in no one’s best interest. Keep in mind, politics are slow and European politics even slower—it may take some time before such measures are in place. But officials have repeatedly proven themselves willing to take even incremental steps to maintain the union and buy time. For more, see today’s cover story, “PIIGS Political Posturing.”
|By Lucia Mutikani, Reuters, 06/21/2011|
MarketMinder's View: Its likely housing market weakness will continue for some time, but a lack of home sales needn’t sink our economic expansion today. For more, see our 05/25/2011 cover story, “A Headache Over Housing?”
|By Joe Nocera, The New York Times, 06/21/2011|
MarketMinder's View: This overstates the case for higher capital requirements a bit. Can higher capital cushions help forestall a crisis? Sure, but they are no panacea to warding off a true crisis. For example, if accounting rules are passed that substantially change the how capital is accounted for, then the amount of capital you had becomes quite irrelevant.
|By Jim Finnegan, Morningstar, 06/21/2011|
MarketMinder's View: This is a bit of a mixed bag. Most of the article focuses on short-term negatives and backward-looking indicators but then concedes the economy has substantial resilience.
|By Jared A. Favole and Kristina Peterson, The Wall Street Journal, 06/21/2011|
MarketMinder's View: Direct foreign investment in the United States jumped to $228 billion from $153 billion in 2009—which wouldn’t happen if foreigners had a dim view of America’s economic future. Direct foreign investment helps companies raise much sought-after capital and helps supports the creation of new factories, production and jobs that boost the US economy. For more, see our 05/13/2011 cover story, “Capital Wanted: Invest Within.”
|By Jeff Miller, Seeking Alpha, 06/21/2011|
MarketMinder's View: We’re strong advocates of “reading between the lines” in the financial press—an excellent point this article makes. For more, see our 06/20/2011 cover story, “Below the Radar.”
|By Graham Bowley, The New York Times, 06/21/2011|
|By Monty Pelerin, American Thinker, 06/20/2011|
MarketMinder's View: These really aren’t 29 unique things, it’s roughly the same 5 or 6 things that have been widely known, reported and pointed to as negatives for some time—including eurozone debt, political unrest in the Middle East, US debt, inflation/QE2/monetary policy and jobs. And let’s say this about the fears of structural problems: If you don’t believe any measure of our economy (as the author apparently doesn’t) you can see whatever you want. But that says more about sentiment than it does reality, which is also true of this list.
|By Jeanne Sahadi, CNN Money, 06/20/2011|
MarketMinder's View: The looming debt ceiling deadline is fast approaching, and this has some worrying over the potential negative effects. We’ve said it before: This is unlikely to set off a spiral of negative events—the debt ceiling is a political issue much more than an economic issue.
|By Paul Krugman, The New York Times, 06/20/2011|
MarketMinder's View: Forecasting a “lost decade” for the US economy misses some important points—like the fact GDP is already expansionary, having surpassed its pre-recession peak some time ago. That’s a key difference from Japan, which is still below its peak output achieved in the mid-1990s. Additionally, decade-long forecasts are foolish to begin with—one can’t foresee all the supply-side innovation and choices made over a 10-year period with any degree of accuracy.
|By Albert Bozzo, CNBC, 06/20/2011|
MarketMinder's View: Globalization is a good thing—not the scourge of the US economy as this article implies. The benefits brought by increased world trade, improved living standards in developing countries and greater openness are simply too many to list here.
|By Staff, Reuters, 06/20/2011|
MarketMinder's View: “There is recovery. There are positive numbers, (although) it is going to be a little softer than we thought initially.” At the end of the day, growth is growth, positive numbers are positive and we are seeing both in the world economy.
|By Howard LaFranchi, The Christian Science Monitor, 06/20/2011|
MarketMinder's View: This article highlights two interesting points: First, free trade agreements continue to be in favor globally. And second, the US has been very slow-moving in ratifying them.
|By Adam Shell, USA Today, 06/20/2011|
MarketMinder's View: Sure, markets have been choppy lately. But as this article illustrates, be cautious about extrapolating a recent short-term trend far into the future. Just because many are worrying doesn’t necessarily warrant jumping on the bandwagon—after all, “pessimism is actually bullish.”
|By Ian Traynor, Guardian, 06/20/2011|
MarketMinder's View: Promised funds are stuck in limbo (for now) as the eurozone delays disbursement until Greece enforces harsher austerity measures. For more, see our 06/17/2011 cover story, “Kicking the Greek Debt Can.”
|By Morgan Housel, The Motley Fool, 06/17/2011|
MarketMinder's View: An entertaining and highly sensible article providing some perspective to counter current headlines. We agree wholeheartedly with this piece.
|By Joe Leahy and Chris Giles, Financial Times, 06/17/2011|
MarketMinder's View: They also forecast continued global economic growth in 2011 at only a slightly slower clip than last month. The world is virtually never risk-free, and one shouldn’t expect it to be. What’s far more important is weighing probable risks against positives. For more, see our 06/16/2011 cover story, “Economic Predestination.”
|By Mohamed A. El-Erian, Financial Times, 06/17/2011|
MarketMinder's View: There are aspects of this article we agree with—like when it discusses some of Greece’s current problems. And yes, eurozone leaders face important choices today. But claiming any decision made here and now determines the course of the next decade of economic activity in Europe is a stretch—10 years is a long time in which many decisions and choices can be made.
|By Staff, MSNBC, 06/17/2011|
MarketMinder's View: Sentiment is a fickle thing—any news one way or another can hugely influence it. But as we’ve said many times, consumer sentiment isn’t a great indicator of future behavior—it’s more a reflection of the recent past.
|By Michael Schuman, Time, 06/17/2011|
MarketMinder's View: Yes, centuries ago, Greece was the cradle of democracy. But claiming present-day Greece is now showing the way forward for Western civilizations is quite an over-the-top statement. Greece’s situation is completely different from the situations in the US, UK, Germany, etc. For more, see our 03/07/2011 cover story, “Greek Prologue.”
|By Chao Deng, The Street, 06/17/2011|
MarketMinder's View: While the LEI is far from a perfect gauge of future economic activity, it does highlight a couple points: First, not all economic indicators have been disappointingly weak lately. And second, analysts’ estimates have been wide of the mark in both directions lately, likely contributing to recent stock market volatility. For more see our 06/15/2011 cover story, “The Great Expectations Gap.”
|By Mark J. Perry, Carpe Diem, 06/17/2011|
MarketMinder's View: Despite worries to the contrary, US manufacturing is alive and well.
|By Marcus Walker, The Wall Street Journal, 06/17/2011|
MarketMinder's View: We’re not surprised—Germany has flip-flopped its position on further funds for Greece multiple times in the recent past. But in the end, EU leaders have proven time and again their willingness to buy additional time to consider future steps—which they did again yesterday.
|By Staff, CNN Money, 06/17/2011|
MarketMinder's View: We’ve said Greek leaders face some difficult decisions ahead—and appointing new leaders is one of them, even if it’s mostly political posturing. For more, see today’s cover story, “Kicking the Greek Debt Can.”
|By Robert J. Samuelson, The Washington Post, 06/16/2011|
MarketMinder's View: This piece is a touch confusing. It first attempts to draw parallels between today’s economy and 1937-38, then acknowledges it’s actually fairly different today (which we agree with), then concludes with this: “Still, the parallels are unsettling, because government officials then didn’t intend to trigger a slump.” We’d wager officials never intend to trigger a slump. Ultimately, we find the comparison to 1937-38 rather weak. For more, see today’s cover story, "Economic Predestination."
|By Ian McAbeer, Seeking Alpha, 06/16/2011|
MarketMinder's View: This is an overly one-sided look at the economy—and specifically unemployment. Government is only part of the picture. To neglect the private sector and growth potential there is to ignore what has always been the primary engine of the US economy.
|By Richard Wolf, USA Today, 06/16/2011|
MarketMinder's View: The most likely outcome of debt ceiling wrangling is a (possibly last-minute) passage of an increase—which has been done numerous times before. But even if it’s not increased, a US default is highly unlikely. For more, see our 05/17/2011 cover story, "Breaking the Debt Ceiling."
|By Anthony Faiola and Howard Schneider, The Washington Post, 06/16/2011|
MarketMinder's View: As we’ve said, Greece is worth keeping an eye on. But the EU still has options available to help backstop Greece (which are already being discussed), as well as measures such as the EFSF already in place. At this point, it needn’t definitely spark a broader contagion.
|By Rachel Donadio and Niki Kitsantonis, The New York Times, 06/16/2011|
MarketMinder's View: Greece is indeed in turmoil—which shouldn’t come as a huge surprise because it’s been in turmoil for quite awhile now. It’s a situation worthy of attention, but investors should weigh likely and potential negative fallout against other global positives. For more, see our 05/10/2011 cover story, "Rumors and Bailouts."
|By Emma Rowley, The Telegraph, 06/16/2011|
MarketMinder's View: Spain held a fairly successful debt auction—indicating eurozone issues seem fairly country-specific at this point and risk of wider contagion is likely contained for the time being.
|By Mark J. Perry, Carpe Diem, 06/16/2011|
MarketMinder's View: As we’ve said before, much more important than the trade deficit is the totality of trade—which not only ultimately benefits the participants but must by definition balance every quarter.
|By Paul Krugman, The New York Times, 06/16/2011|
MarketMinder's View: "But if you’re going to do Europe-US comparisons, you need to recognize that there are big differences in labor market institutions, so that comparable-depth recessions produce a much larger rise in unemployment in the US. It is not true, as the report says, that the European recovery has been notably faster than the US recovery—in terms of outputs, we’re similar." Which, if nothing else, speaks to the wonkiness of economic metrics in general and unemployment metrics specifically.
|By Stephen Roach, The Globe and Mail, 06/15/2011|
MarketMinder's View: Retail sales fell less than expected—which is good considering the supply chain disruptions stemming from Japan’s earthquake. Still, some bemoan a “generation of zombies—the economic walking dead”—though consumer spending has grown consistently since the recession. Sometimes the critical driver for stocks is how data compare to expectations. For more, see today’s cover story, “The Great Expectations Gap.”
|By Jonathan Stearns and Natalie Weeks, Bloomberg, 06/15/2011|
MarketMinder's View: Euro finance chiefs met in an emergency session to discuss the ongoing issues in Greece. But the worst-case scenario—a sudden and disorderly breakup of the euro—remains a distant possibility in the near term. For more, see our 06/06/2011 cover story, “Rumors and Bailouts.”
|By Roya Wolverson, Time, 06/15/2011|
MarketMinder's View: We’d disagree “it's hard to find an economist who isn't annoyingly upbeat.” In fact, we see two distinct camps—newly bullish and dug-in bearish. As for the five ways to “kill” the recovery, these are all widely discussed possibilities, lacking much surprise power to move stocks.
|By Staff, BBC, 06/15/2011|
MarketMinder's View: Another day, another debt ceiling story. Remember, Congress has raised the debt ceiling more than 90 times since the limit was imposed. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”
|By Stephen L. Bernard, The Wall Street Journal , 06/15/2011|
MarketMinder's View: The US debt situation is accurately described as a “nonsensical political issue.” Simply, the US and Greek debt situations aren’t comparable. But if investors need further proof from markets, an easy one is comparing yields on each country’s two-year notes.
|By Christine Hauser, The New York Times, 06/15/2011|
MarketMinder's View: Consumer prices inched up in May but remain overall benign. The risk of deflation seems well past—which is very positive.
|By Phil Condon, Ashton Goodfield, Carol Flynn and Anthony Parish, Morningstar, 06/15/2011|
MarketMinder's View: We’re halfway through 2011, and the much-hyped muni meltdown hasn’t panned out. We said then the fear was bigger than the reality, and that seems about right. For more, see our 05/19/2011 cover story, “Attack of the Muni Monsters.”
|By Mark J. Perry, Seeking Alpha, 06/15/2011|
MarketMinder's View: “We are constantly hammered with bad news about the decline in the number of manufacturing jobs in the US, but we never hear the good news about why that is happening: Manufacturing workers in America keep getting more and more productive, which then allows us to produce more and more output over time, with fewer and fewer workers.“ For more, see our 05/11/2011 cover story, “Dawn of the Not So Dead.”
|By Michael Pento, Real Clear Markets, 06/14/2011|
MarketMinder's View: We agree, if the Fed launched a massive fire sale to unwind its balance sheet rapidly while simultaneously hiking short-term interest rates, that could carry negative consequences. But that’s also highly unlikely. The Fed is far from perfect, but in our view, they at least deserve enough credit to know that. Moreover, worrying about the Fed’s solvency is more than a bit wide of the mark.
|By Jennifer Ryan, The Washington Post, 06/14/2011|
MarketMinder's View: With or without ratings agencies’ two bits, the market is largely aware of the issues in Greece. That S&P has again downgraded Greece isn’t very surprising and doesn’t represent much new insight. For more, see our 05/10/2011 cover story, “Rumors and Bailouts.”
|By Vicky Buffery and Leigh Thomas, Reuters, 06/14/2011|
MarketMinder's View: It’s important to keep a few things in mind about OECD reports on economic growth: First, the OECD is hardly a perfect predictor of growth, so there’s always a chance they’re wrong (for better or worse). And second, despite the headline, the report seems to indicate global growth continues to increase, albeit at a slowing pace in some regions of the world. For more, see our 05/26/2011 cover story, “On Economic Calls and Data.”
|By Daniel Gross, Yahoo! Finance, 06/14/2011|
MarketMinder's View: This article highlights one of the primary problems with ratings agencies’ opinions: “Are there objective conditions that would automatically cause a downgrade? Not really.” And that’s what’s primarily at work in recent outlook announcements regarding US debt—which mostly rely on a subjective view of the American political process, not a fact-driven view of our economy. For more, see our 04/19/2011 cover story, “The Scarlet Letter.”
|By Tom Madell, Seeking Alpha, 06/14/2011|
MarketMinder's View: We’ve long held investor sentiment and consumer confidence indicators are flawed measures. This article is an in-depth look at some of the reasons.
|By Elizabeth Williamson and Evan Ramstad, The Wall Street Journal, 06/14/2011|
MarketMinder's View: Pending US free trade deals with South Korea, Panama and Colombia continue to be embroiled in political wrangling. South Korean officials pushing for passage of the FTA are headed in the correct direction: Free trade is good, but more free trade is even better. For more, see our 05/18/2011 cover story, “Make a Trade for Trade.”
|By Tomoko A. Hosaka, Associated Press, 06/14/2011|
MarketMinder's View: Accommodative policy measures, such as the one expanded by Japan yesterday, are important policy measures supporting Japan’s recovery from March’s earthquake and tsunami. However, it’s important to keep in mind—even if Japan languishes for some time, a localized disaster alone has never pushed global markets into a bear market in modern history. For more, see our 03/15/2011 cover story, “Japan’s Impact.”
|By Chris Oliver, MarketWatch, 06/14/2011|
MarketMinder's View: Emerging Market inflation continues to garner attention. To date, Emerging Markets central banks have seemingly taken mostly appropriate measures to attempt to counter it. That said, this is a valid factor to monitor looking forward.
|By Douglas Kass, Barron’s, 06/13/2011|
MarketMinder's View: First of all, US inflation isn’t running very hot right now. Second, the wealth gap mentioned here is a purely political invention, with little actual economic meaning. Whatever percentage of income is attributable to the top 1%, 5% or 10% doesn’t bar those at other income levels from earning more. The only way you come up with a wealth gap is by comparing relative incomes—but folks don’t spend relative dollars, they spend actual dollars.
|By Justin Lahart, The Wall Street Journal, 06/13/2011|
MarketMinder's View: Looking to household debt is neither here nor there. Average household debt service payments as a percent of disposable personal income are at far from problematic levels (and are roughly where they were in the mid-1990s), no matter what the absolute level of debt is. We’re sure some folks are over-indebted (always are), but the average household isn’t.
|By Robert Reich, The Christian Science Monitor, 06/13/2011|
MarketMinder's View: “Supply-side economics doesn’t work. It’s been tried for thirty years to no avail.” This is just confusing. Our economy has grown by leaps and bounds the past 30 years, so how is that “to no avail”? Moreover, supply-side economics is a theory that hasn’t been purely practiced for all of that time.
|By Chris Isidore, CNN Money, 06/13/2011|
MarketMinder's View: The survey alluded to here is far from a fact-driven way to assess future US economic conditions. A recession is always possible, but slowing job growth and a handful of economic statistics growing less than expected aren’t unusual during periods of economic growth, so they aren’t very indicative of recession risk. For more, see today’s cover story, “A Not So Trivial Quiz.”
|By David K. Randall, Associated Press, 06/13/2011|
MarketMinder's View: A correction is always a real possibility. But the important thing to remember is they’re typically sentiment driven. Sentiment is erratic in nature and, with time, generally succumbs to whatever economic fundamentals prevail—and right now, fundamentals are overall positive.
|By Eric Morath, The Wall Street Journal, 06/13/2011|
MarketMinder's View: More evidence of ongoing economic growth.
|By Julie Pace, Associated Press, 06/13/2011|
MarketMinder's View: Trimming government fat is a good idea. As new details develop, this is worth keeping an eye on to see whether it’s mere political posturing or actual fat-trimming.
|By Adam Shell, Chicago Sun-Times, 06/13/2011|
MarketMinder's View: “The lesson here is: Chill, stay invested, stay disciplined and be diversified.” While there are rare times it makes sense to reduce stock exposure you need to be in stocks more often than not if you need equity-like long-term returns. Moreover, too many investors focus on short-term results and lose sight of their true time horizon.
|By James G. Wiles, American Thinker, 06/10/2011|
MarketMinder's View: Since we haven’t been in recession globally for two years, our guess is no. Employment numbers alone do not an entire economy make. Unemployment typically recovers well after the economy does—this has always been the case. For more, see our 06/02/2011 cover story, “The Great Non-Depression.”
|By Regina Lewis, Daily Finance, 06/10/2011|
MarketMinder's View: Sentiment doesn’t predict future market or economic direction—at best, it’s a coincident indicator; at worst, it’s a lagging one. While we agree jobs numbers could use some improvement, other data show the economy is doing much better than people ever expected.
|By Jamie Chisholm, Financial Times, 06/10/2011|
MarketMinder's View: We’d argue the bears never left and also argue the global economy, though in a slower patch, is still growing. Global economic growth typically happens in fits and spurts and is nothing to worry about. More importantly, this is another example of the bifurcated sentiment we expect for this year.
|By Robin Harding, Financial Times, 06/10/2011|
MarketMinder's View: “Business borrowing grew faster during the first quarter of 2011 than at any time since the collapse of Lehman Brothers.” More signs credit markets are functioning more normally.
|By Carlos Torres and Alex Tanzi, Bloomberg, 06/10/2011|
MarketMinder's View: “Rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events like poor weather and the disaster in Japan.” Makes sense—history shows the impact of even huge natural disasters are localized and ultimately fleeting.
|By Niki Kitsantonis, The New York Times, 06/10/2011|
MarketMinder's View: Under a global spotlight of criticism, Greece reveals new plans to reduce the country’s debt. No doubt, Greece must make (and follow through on) some tough choices. In the near term, they still have a sizable backstop preventing outright default—at least until 2013. For more, see our 05/24/2011 cover story, “Indebted Europe.”
|By Editorial Staff, The Wall Street Journal, 06/10/2011|
MarketMinder's View: What do you know? Here’s one way to increase competitiveness, jobs, incomes, etc.: Lower taxes and be more business-friendly—like Texas.
|By Mark J. Perry, Carpe Diem, 06/10/2011|
MarketMinder's View: “Distressed home sales are dragging down overall home prices and mask the fact that home prices in the "non-distressed" sector of the market are actually starting to show some healthy, positive appreciation.” Interesting data. The overhang in distressed properties has had an influence on headline housing statistics. Make no mistake: It will likely take time for housing to work through extant oversupply. But this is how the market works—prices readjust until they meet demand. Looking beyond the headlines helps show this at work.
|By Ben Levisohn, The Wall Street Journal, 06/09/2011|
MarketMinder's View: First, we don’t advocate flipping into or out of the market based on any one economic statistic. More specifically though, this is a rather bizarre analysis of today’s US trade data. Yes, as Japan recovers, they’ll likely recoup some of the trade that dipped in this month’s report, but much of the decelerating US economic data lately has been partly influenced by Japan’s tragedies. So if Japan reaccelerates, isn’t that a good thing? You can’t have it both ways! A great illustration of why the trade deficit isn’t a very economically significant measure.
|By Doug Casey, Seeking Alpha, 06/09/2011|
MarketMinder's View: There are a number of things wrong with this article. It might be fun to try and speculate as to what economic conditions will be 20 years from now, but it’s folly to place any significance on it. Moreover, even within these long range speculations, the best-case scenario is overly dour. How can you admit there are “many, many more (possible outcomes)” but then attempt to categorize them within a narrow, dour framework?
|By Carol E. Lee and Janet Hook, The Wall Street Journal, 06/09/2011|
MarketMinder's View: It isn’t too surprising Fitch followed Moody’s and S&P’s outlook changes with one of their own—citing nearly the exact same rationale. The credit ratings agencies not only have dubious track records, they tend to opine in herds.
|By Peter Coy, Bloomberg Businessweek, 06/09/2011|
MarketMinder's View: The ideas here aren’t necessarily all so bad—but the sentiment that our economy is broken (and thus, needs a fix) is an overstatement. Could we do with some reforms? Yes. But let’s not overstate the case. An idea for fixing things like unemployment that many shun is we need more patience.
|By Stephen Gandel, Time, 06/09/2011|
MarketMinder's View: A sensible look at why a double dip is highly unlikely (though we’d suggest this doesn’t go far enough given that US GDP has grown for two years and is at an all-time high). For more, see our 03/10/2011 cover story, “Many Happy Returns!”
|By Morgan Housel, The Motley Fool, 06/09/2011|
MarketMinder's View: A mostly sensible look at QE2—including a chart showing excess bank reserves, which many overlook. We’d go a step further and also consider the interest paid on excess reserves. This article likely overstates the effect on capital markets a bit, but in general, it’s a good look at QE2. For more, see our 06/01/2011 cover story, “Cue the Curtain for QE2?”
|By Mark J. Perry, Carpe Diem, 06/09/2011|
MarketMinder's View: “Combine these restrictions on drilling with instability in the Middle East and it’s no wonder consumers are gritting their teeth at the price of gasoline. But we shouldn’t blame oil companies for soaring prices, when they have nothing to do with the restrictions on domestic energy sources or the geopolitical events elsewhere that are the real culprits for higher gas prices.” While rising oil prices aren’t solely responsible for gas prices (taxes and refining-related issues likely contribute as well), this is a good point to recall.
|By Staff, The Wall Street Journal, 06/09/2011|
MarketMinder's View: The unintended consequences of Dodd-Frank continue to surface—this time as relates to swaps, which are widely used by companies to hedge some of the risk inherent in fluctuating input prices such as energy or currency. For more, see our 04/14/2011 cover story, “A Lesson in the Law of Unintended Consequences.”
|By Mike Dorning and Hans Nichols, Bloomberg, 06/09/2011|
MarketMinder's View: As we’ve said, it’s important to watch what politicians do, not what they say. But we would heartily support a cut in the payroll tax—leaving more money in businesses’ hands could help spur hiring and business spending in general.
|By John Cassidy, CNN Money, 06/08/2011|
MarketMinder's View: Forecasting a double-dip recession based on the recent slowdown of economic data is emblematic of the overly bearish sentiment present today and ignores a mountain of evidence to the contrary. Economic growth doesn’t occur uniformly—during expansion it’s normal for there to be periods of sluggish and accelerated growth. For more, see our 06/06/2011 cover story, “Recycled Financial Headlines.”
|By Emma Rowley, The Telegraph , 06/08/2011|
MarketMinder's View: The ratings agencies have a dubious forecasting track record. Anything said by a ratings agency should be taken with a grain of salt—especially when it’s an unofficial comment made by an analyst. They’re often late to the party and usually only confirm what’s already reflected by markets.
|By Steve Ladurantaye, The Globe and Mail , 06/08/2011|
|By Emily Kaiser, Reuters , 06/08/2011|
MarketMinder's View: Fears a US debt default will “destabilize” the global economy are largely overblown. Sure, a default wouldn’t be positive, but it’s also highly unlikely to occur. Like most things in Washington, the ongoing Beltway budget battle is principally political theater.
|By Bradford Plumer, The New Republic, 06/08/2011|
MarketMinder's View: We disagree “unexpected crises and disasters seem to happen with a fair amount of regularity these days.” And the “list of things that could still go very wrong in the months ahead” is just the same old fears stocks have encountered since last year. For more, see our 04/01/2011 cover story, “Don’t Fool Yourself.”
|By Neil Irwin, The Washington Post , 06/08/2011|
MarketMinder's View: Federal Reserve Chairman Bernanke characterized economic growth as “frustratingly slow”—and we agree faster growth would be better. But despite the slow pace, data prove economic expansion is underway. For more, see our 06/06/2011 cover story, “Recycled Financial Headlines.”
|By Steve Hargreaves, CNN Money, 06/08/2011|
MarketMinder's View: Oil prices rose on the heels of OPEC’s inability reach a production agreement. And while rising oil prices can be frustrating for consumers, the US economy is likely better prepared to deal with temporarily elevated energy prices than widely believed. For more, see our 05/05/2011 column, “Oil Prices and the US Economy.”
|By Alex Brittain, The Wall Street Journal , 06/08/2011|
MarketMinder's View: Business investment spending accounted for half of the eurozone’s economic growth in Q1—a positive sign economic expansion is seemingly “gradually broadening out.”
|By Alex Kennedy, Associated Press, 06/08/2011|
MarketMinder's View: Freer trade between the EU and Singapore is undoubtedly a positive for both parties.
|By Staff, The New York Times, 06/08/2011|
MarketMinder's View: “Since the financial crisis began in 2008, G-20 countries have imposed 550 measures to restrict or potentially distort trade. Such measures disrupt international supply chains, reduce economic activity and dent the sense of common purpose that was needed to survive the economic crisis. Giving in to the protectionist impulse now can only make matters worse.” Now, most of these measures have been minutiae and are more than offset by the wave of free trade agreements signed since 2008. But as the article suggests, resisting the protectionist urge is important and a key factor to watch. For more, see our 05/06/2011 cover story, “A Torrent of Free Trade.”
|By Kelly Evans, The Wall Street Journal, 06/07/2011|
MarketMinder's View: Consumer spending increased for its 10th straight month in April and is now $450 billion above its pre-panic 2008 peak. Now, there’s no statistical breakdown explaining exactly what portion of this expanding consumer spending is attributable to the undead, but frankly we’re not sure that matters. Let’s get this straight: Comparing total household debt to disposable personal income is faulty. A better comparison would compare like and like: Which means, balance debts against assets, and debt service costs against incomes.
|By RA, The Economist, 06/07/2011|
MarketMinder's View: As we’ve said before, we don’t believe QE2 alone propelled economic growth or the market’s rise. Those two trends began well before QE2. The return of a more normal monetary policy is a welcome sign of a healthy and growing economy. For more, see our 06/01/2011 cover story, “Cue the Curtain for QE2?”
|By Dean Baker, The New Republic, 06/07/2011|
MarketMinder's View: We could spend hours detailing everything wrong in this piece. It’s a re-write of economic history (that plays loose and fast with the facts), with misapplied lessons based on incorrect assumptions about the current state of the US economy. For more, see our cover story “The Great Non-Depression.”
|By Morgan Housel, The Motley Fool, 06/07/2011|
MarketMinder's View: “It's perfectly normal for monthly jobs numbers to bounce all over the place, taking huge drops even during strong economic times ... Even in the best of times—mid-'80s, late '90s—the numbers don't go up in a straight line. It's just not how these things work.” We concur.
MarketMinder's View: “German companies are facing a luxury problem of too many, rather than too few, orders.” Despite the tenor of media headlines lately, this latest release from Europe’s largest economy is further evidence of its strength and continued global economic growth overall.
|By Deborah Solomon and Victoria McGrane, The Wall Street Journal, 06/07/2011|
MarketMinder's View: “More than 100 new derivatives requirements in the law take effect on July 16, even though regulators have yet to issue final rules in the affected areas.” This article aptly summarizes some of the problems we see with wide-sweeping regulations like Dodd-Frank, which was widely hailed as the most sweeping reform of financial regulation since the 1930s. Fact is, in many cases, it didn’t actually create new rules but only outlined the goals for these rules—the details and mechanics of which remain undefined a month before scheduled implementation. For more, see our 05/31/2011 cover story, “Showdown at the Deregulatory Corral.”
|By Richard Thaler, The New York Times, 06/06/2011|
MarketMinder's View: This is a very skewed view of annuities, leaving out the costs and lost opportunity inherent in most of them. The way a buyer wins in an annuity is fairly simple: You must live longer than your money would last. And insurance companies have an entire staff (actuaries) working on their side to ensure that happens only rarely. The fact is, annuities are not a magic investment solution accomplishing something investors couldn’t do without an annuity. There likely are times when annuities make sense, but investors must do far more analysis than what’s provided here to determine if that’s true in their specific case.
|By Colin Barr, Fortune, 06/06/2011|
MarketMinder's View: Yes, the Fed is fallible. But trying to forecast central bank errors before they’re made is quite a speculative exercise.
|By Matthew West, CNBC, 06/06/2011|
MarketMinder's View: None of this is new news. It’s a rundown of many things over the past two years folks felt could cause a return to recession but didn’t. And it’s a myopic piece at that—suggesting markets are never that far from “another bad news story” since “the financial crisis of 2008” is just downright silly. There are virtually always pockets of weakness and bad news—today being no exception. But there have been quite a few economic positives of late, which this piece entirely ignores.
|By Paul Davidson, USA Today, 06/06/2011|
MarketMinder's View: In the middle of this story, which spends the vast majority of the time discussing weak employment in construction, the author makes passing reference to a positive force: “Many discouraged workers…switched to trucking or manufacturing.” That’s right—and it’s part of the way the economy works.
|By Mark J. Perry, Carpe Diem, 06/06/2011|
MarketMinder's View: During the last 40 years, there have been shifts in leadership among the fastest growing economies of the world. But all the while, the US has retained nearly the exact same share of global GDP it has today—which speaks to the resilience and underlying strength of our economy.
|By Jonathan Laing, Barron’s, 06/06/2011|
MarketMinder's View: Some of the best investing opportunities are found during times when investors experience bouts of negativity. If you’re waiting for everything to look rosy, you’re likely going to wait a very long time and are probably going to miss out on some significant opportunities along the way.
|By Michael Santoli, Barron’s, 06/06/2011|
MarketMinder's View: QE2’s end has been a widely known factor since the first day it was announced, and the reality is QE2 is frequently given more credit for improving economic and market conditions than it likely warrants. For more, see our 06/01/2011 cover story, “Cue the Curtain for QE2?”
|By Dave Kansas, The Wall Street Journal, 06/06/2011|
MarketMinder's View: “Just about everything is now getting viewed through a lens of glumness. But the market isn’t emitting universally negative signals. Indeed, there are a number of positive factors getting overlooked.” That says a lot about folks’ perception of recent economic data, the vast majority of which has indicated continued expansion, albeit slower than many previously expected. For more, see our 06/02/2011 cover story, “The Great Non-Depression.”
|By Jeff Fick, The Wall Street Journal, 06/06/2011|
MarketMinder's View: "The latest snapshot of Latin America's largest economy ‘confirms that the Brazilian economy is in a cycle of sustained expansion, at a pace that is harmonious with internal and external balance.’” Economies all over the globe are growing, and that’s good.
|By John Detrixhe and Heidi Przybyla, Bloomberg, 06/03/2011|
MarketMinder's View: Well, here’s another ratings agency opinion on American political theater. But when all the posturing and dramatics are done, it’s highly likely Congress raises the debt ceiling for the 91st time since WWII. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”
|By Catherine Rampell, The New York Times, 06/03/2011|
MarketMinder's View: Slowing job growth doesn’t mean the economy is “running out of steam once again.” Job growth numbers will vary month to month—just like other economic data. As much as we’d like job numbers to continue growing hugely, that’s just not realistic. What’s more important is that tens of thousands of jobs were added.
|By Peter Coy, Bloomberg, 06/03/2011|
MarketMinder's View: Data just don’t support the opinions offered in this piece, we’re sorry to say. Consumer spending hasn’t been stagnant since “a stare-down between businesses and consumers started in December 2007.” It fell slightly in recession and has since fully recovered. As to the suggestion “we are stuck in a vicious circle,” we wonder what this circle is characterized by. Growth? Because that’s what we have—but that doesn’t seem “vicious.” For more, see our 06/02/2011 cover story, “The Great Non-Depression.”
|By Nin-Hai Tseng, Fortune, 06/03/2011|
MarketMinder's View: Yes, private sector hiring slowed in May. But acceleration and deceleration are normal in economic statistics and really aren’t terribly meaningful about the direction of the broader US economy. And all this occurred while QE2 was nearing its peak easing in May. So why would QE3 be warranted based on that evidence?
|By Kathleen Madigan, The Wall Street Journal, 06/03/2011|
MarketMinder's View: Not all parts of the economy will grow in lockstep. But the fact is, economic growth is still happening—and this is further proof it’ll likely continue.
|By Tomi Kilgore, The Wall Street Journal, 06/03/2011|
MarketMinder's View: “Analysts believe that investors have placed too much emphasis on a single data point, and that fears the economy is falling apart are overdone.” We agree, and we’d take it a step further: Using jobs data as a forecasting tool is just faulty analysis. Employment is a lagging economic indicator, while stocks look forward.
|By Staff, Reuters, 06/03/2011|
MarketMinder's View: As we’ve said, it remains highly likely eurozone leaders will act to aid Greece—it’s overall in their best interest. And while Greece does need to get its fiscal house in order, they likely have time to enact needed reforms. For more, see our 04/27/2011 cover story, “Greek Theater.”
|By Jonathan Hoenig, SmartMoney, 06/03/2011|
MarketMinder's View: We’ve always said the VIX is a flawed index. And investing in ETFs tracking it—some of them leveraged—is even more flawed. Not only that, but “there have been over 50,000 trading days since the NYSE was created…but arguably only a handful of true meltdowns.”
|By Robert Reich, Financial Times, 06/02/2011|
MarketMinder's View: We are a bit confused by this quote, “It is unlikely that America will find itself back in recession but the possibility of a double dip cannot be dismissed.” How do you get a double dip if we don’t fall into recession? Growth isn’t a double dip, and we have growth. Recession is always a possibility at any time but seems unlikely now. Temporary slowdowns (that are still growth) are normal throughout all growth cycles. What’s more, rather than increase its economic involvement, we’d suggest the federal government should remove some of the onerous barriers hampering private businesses. For more, see our 05/12/2011 cover story, “WPA, Reductio Ad Absurdum.”
|By Patrick Allen, CNBC, 06/02/2011|
MarketMinder's View: “‘It seems that almost every bit of data about the health of the US economy has disappointed expectations recently.’” Really? Every bit of data? And we’d argue in those areas falling short of expectations, it’s primarily because sentiment (and hence, expectations) has improved recently—most readings are indicating growth, even if it’s slower. Growth! The horror! For more, see today’s cover story, “The Great Non-Depression.”
|By Michael Schuman, Time, 06/02/2011|
MarketMinder's View: This is far too dismissive of the euro’s positives for member nations—and it assumes if the eurozone was dissolved, a devaluation of resulting independent currencies by troubled nations like Greece would be some magical cure for their economic woes. Yes, the eurozone has its issues, but all in all, this makes an overly reductionist argument.
|By Adam Shell, USA Today, 06/02/2011|
MarketMinder's View: Wait a minute—one day into June, it’s already living up to a “bad reputation”?Not to mention looking at a single month of Dow performance is based not only on a wonky index but also on a rather arbitrary timeframe unless you’re invested for the very, very short term. All around, worth ignoring.
|By James Altucher, MarketWatch, 06/02/2011|
MarketMinder's View: Granted, we’re not quite this bullish in the very near term, nor do we particularly advocate following such a wonkily constructed index as the Dow. But beyond the attention-grabbing headline, this is a mostly accurate, humorous read on some of the strong fundamentals underpinning markets and the US economy right now. Enjoy.
|By Jim Tankersley, National Journal, 06/02/2011|
MarketMinder's View: There are aspects of this article we agree with and some we don’t. But that said, it’s an interesting example of currently bifurcated sentiment.The existence of greater bullish sentiment pushed economic expectations higher—and when those still bearish saw data that missed these higher expectations on Wednesday (but still showed growth), they converted slower growth into contraction. Which it isn’t.
|By Emese Bartha, The Wall Street Journal, 06/02/2011|
MarketMinder's View: “Spain passed a key test of investor confidence Thursday, selling €3.953 billion ($5.67 billion) in short-term government bonds—almost the maximum targeted—despite continuing worries about the risk of contagion from the financial turmoil in Greece.” The eurozone still faces challenges and heretofore unanswered questions, but a break-up or collapse looks highly unlikely in the near term. For more, see our 05/24/2011 cover story, “Indebted Europe.”
|By Joe Light, The Wall Street Journal, 06/02/2011|
MarketMinder's View: Much like sentiment surveys, online job ads data aren’t the most reliable when it comes to tracking unemployment, but the piece’s closing line sums it up best: “So consider this report another finger in the wind, but at least one that shows the wind blowing in the right direction.” For more, see our 03/03/2011 cover story, “Help Wanted?”
|By Leah Schnurr, Reuters, 06/01/2011|
MarketMinder's View: Yes, manufacturing growth slowed. But US manufacturing is still firmly in expansionary territory—for the 22nd consecutive month. It is normal in a growth cycle for all metrics to ebb and flow. For more, see our 05/11/2011 cover story, “Dawn of the Not So Dead.”
|By Andy Sullivan, Reuters, 06/01/2011|
MarketMinder's View: In what is nothing more than a symbolic gesture, “the House of Representatives on Tuesday defeated a bill to raise the debt limit.” Eventually, the grandstanding should cease, and the debt ceiling likely gets raised, as it has more than 90 times before. For more, see our 05/17/2011 cover story, “Breaking the Debt Ceiling.”
|By Laurie Segall and Annalyn Censky, CNN Money, 06/01/2011|
MarketMinder's View: We wouldn’t exactly say the ADP employment report “coughed up a hairball” because fewer jobs than expected were added in May. Growth, albeit slower than most would like, is still growth. As businesses recover, employment will as well. For more, see our 05/12/2011 cover story, “WPA, Reductio Ad Absurdum.”
|By Thomas Kee, MarketWatch, 06/01/2011|
MarketMinder's View: In our view, QE2’s value has been overstated, so its end likely won’t be so treacherous—but it could cause some sentiment-related volatility. Keep in mind, too, that the Fed has said it’s ending its purchases, but will continue to reinvest proceeds as bonds come due. This is not a complete reversal of monetary stimulus. For more, see today’s cover story, “Cue the Curtain for QE2?”
|By Alejandro Lazo, Los Angeles Times, 06/01/2011|
MarketMinder's View: A housing turnaround would be an added tailwind for continued growth, but it’s certainly not required for ongoing growth. For more, see our 05/25/2011 cover story, “A Headache Over Housing.”
|By James G. Neuger, Bloomberg, 06/01/2011|
MarketMinder's View: While the issues in Europe’s periphery aren’t uniform, investors shouldn’t be surprised by short-term volatility, thanks to ongoing talks on Europe’s fiscally weaker nations. For more, see our 05/24/2011 cover story, “Indebted Europe.”
|By Allan Sloan, Fortune, 06/01/2011|
MarketMinder's View: Markets are cyclical, not seasonal. An examination of historical data reveals the “summer rally,” like “sell in May,” is pure myth. For more, see our 05/02/2011 cover story, “April Showers Bring May Myths.”
|By David Uren, The Australian, 06/01/2011|
MarketMinder's View: Floods and cyclones were “a hell of a pothole” for Australian growth in Q1. But in Australia, as in other developed nations, the economy is too resilient to be waylaid by weather-related problems and natural disasters—even severe ones.