Equities Archive

Mortgage Applications in U.S. Increase for Third Week on Gain in Purchases

Still at extremely low levels, but moving up none the less, along with car sales, as happens at the early stages of a consumer credit expansion, supported by the trillions in financial equity from federal deficit spending that continues to add large quantities of income and savings to the economy. Risks for ...Read More

Zoellick Sees ‘Elephant,’ Not Endorsing Gold Standard

Back pedaling from yesterday’s remarks, but just getting the fish hook in deeper. Gold is a non financial asset,not an ‘alternative monetary asset’ Starting to look like the QE fairy dust is wearing off. The dollar selling was the focus of the ‘risk on’ hysteria, and it looks like the dollar may ...Read More

QE still driving portfolio shifting

When Japan First Did QE, Stocks Shot Up And Then Quickly Cratered Massively Pragmatic Capitalist November 4 — There appears to be some confusion over the response of equity markets to quantitative easing. Of course, the Fed is hoping that they can ignite a “wealth effect” by driving stocks higher. But as ...Read More

QE and the wealth effect

>    >   (email exchange) >    >   On Thu, Nov 4, 2010 at 11:26 PM, wrote: >    >   Do you have any thoughts on this supposed wealth effect? >    There is one but I see it as coming from deficit spending, and probably not QE. Federal deficits support income and add to net financial assets, which ...Read More

QE still driving portfolio shifting

I’ve been watching for a ‘buy the rumor sell the news’ ‘risk off’ reversal, but it happened at best only momentarily after the Fed announcement, when the 10 year tsy note dipped to maybe 2.62 very briefly, stocks dipped, the dollar sort of held, gold was off a touch, etc. But now ...Read More

next week….

Getting really bad feelings for the next week or so: QE believed to be inflationary money printing but doesn’t actually do anything Gridlock presumed good but is actually bad as it could mean taxes rise at year end Republican fiscal conservatives deemed ‘good’ but in fact bad with their spending cuts and ...Read More

cross currents

I wasn’t sure whether to send this, as it reveals my lack of clarity on current events, but decided to send it to make the point. Here’s what I see: Markets are already discounting a large QE and are also discounting that QE actually makes a difference: The dollar went down Gold ...Read More

deficits vs corporate profits since 97

>    >   (email exchange) >    >   On Tue, Oct 12, 2010 at 11:31 PM, Michael wrote: >    >   Thought you might like this. There is a hugely strong relationship between deficit >   spending and corporate profits 1 year later. This is corporate profits with a 1 >   year lag, regressed against Quarterly debt to GDP. >    Yes, ...Read More

Unfunded state and local pensions

Not to worry – as long as they keep full allocations to equity markets the coming doubling of equity prices over the next few years will bail them out. Provided the political leadership doesn’t get too serious about federal govt deficit reduction with tax increases and spending cuts. US Cities Face Half ...Read More

Boehner says he’d support a middle-class tax cut

As previously suggested, Boehner reverses course and does what should have been his obvious choice. This gives everyone in Congress a pre election window to try to tax cut their way to victory before the election. With the current level of deficit spending already supportive of modest GDP growth, and these latest ...Read More