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Federal Reserve Sticks to its guns on lower interest rates and asset purchase programs in 2013   [Posted on: 02/27/2013 ]
The US Federal Reserve Bank has been following an aggressively accommodative monetary policy (via zero interest rates and by purchasing long bonds in the open markets) to help recover the US economy. Some analysts have been calling this program per se has been ineffective in helping the economy, and inadvertently contributing to creating a bond bubble. Even Fed governors have been debating in the recent months if the bond buying should be moderated and dependent upon the economic data. However, in a recent congressional testimony, the Fed Chairman Bernanke has forcefully reiterated his position on bond buying to say that such moderation is premature at this time.
Housing recovery points to improving US Economic Growth   [Posted on: 02/27/2013 ]
Housing, one of the key drivers of US economic growth (along with consumer spending on big ticket items such as autos and appliances), is pointing to an improving economy in 2013. Low interest rates and lower housing prices (from the peak in 2007) seem to make purchase of homes more affordable, and thus attracting buyers. This could bode well for recovery in the job markets too!
Gut Check Time For Gold!   [Posted on: 02/18/2013 ]
Gold ETF (GLD) is trading as of 2/15/2012 8.47% below its 200 day moving average. Is it time to exercise that stop loss? For some thoughts on GLD for longer term investors in gold, please read this article.
Watch out for Market Euphoria!   [Posted on: 02/01/2013 ]
The VIX index - so called fear index measured by the calls and puts purchased is reaching multi year lows at this time. Equity and bond markets have been rallying based upon Central Banks force fed seas of liquidity in the global economies. Every one seems to be jumping into the pool at this time. Now is the time to assess the risk built into these rallies.
Inescapable Forces at Play - PART V / Potential Risk   [Posted on: 02/01/2013 ]
In this final part Dr. Shilling explores potential risks to this liquidity driven - "risk on" rally in equities etc.
Inescapable Forces at Play - PART IV / Where to Invest?   [Posted on: 01/31/2013 ]
Dr. Shilling outlines an investment strategy for a slow growth environment.
Inescapable Forces at Play - PART III / Are we in yet another asset bubble?   [Posted on: 01/30/2013 ]
The US Federal Reserve is currently pursuing a "go for broke" ultra liberal monetary policy to achieve its stated goal of lower and sustainable unemployment rate (approximately 6.5%) in the US Economy. However, Dr. Shilling argues that this policy is resulting in unintended consequences in the near future and in possibly creating new asset bubbles.
Inescapable Forces at Play - PART II / Currency Wars - The new weapons of choice for Central Bankers   [Posted on: 01/30/2013 ]
We are now facing full blown "currency wars" among major economies (example: Japan's present efforts to devalue the Yen to improve exports). Dr. Shilling argues that the US dollar usually does well under this scenario.
Inescapable Forces at Play - 2013 PART I / Painfully slow GDP growth in major economies predicted   [Posted on: 01/30/2013 ]
Economist A Gary Shilling discusses (in this five part series) why deleveraging still rules the macro economic forces in the United States and in major economies like Europe and Japan.
Markets are up - What is going on? October 2012   [Posted on: 10/08/2012 ]
Since the beginning of June 2012, US and European equity markets, as represented by the S&P 500 and by the MSCI Europe Indices, have rallied approximately 13.0% and 19.3% respectively. These rallies took place in an environment of slowing economic growth and stubborn unemployment on both sides of the Atlantic. European sovereign debt crisis, while periodically simmering down, remains mostly unresolved with ever larger countries such as Spain and Italy being drawn in the vortex of the crisis. Separately, China – mostly considered a global leader for economic growth – found its growth rates slowing sharply due to a global slump for its exports. In light of these economic headwinds, what factors do account for these equity market rallies? More importantly, are these rallies sustainable in the long run or are they the latest version of the market sugar highs that we experienced in 2010 and 2011 – which we surrendered back after a few months? For some thoughts read this analysis.
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