What will a new Congress bring? A new level of bipartisanship? More gridlock? What will be the impact to investors? Markets hope the stage is set for a constructive relationship between the parties and pro-growth legislative initiatives, but more gridlock may be in store. That said, people who believe the conventional wisdom about politics may
This week we continue the theme begun last week—examining the economy and the stock market as we turn the page on a New Year. This week we present three articles that in varying degrees, address the economy and markets from different angles. The first article compares present conditions to those that existed prior to the
The last few days have brought some good news for both Main Street and Wall Street. The House passed a budget deal, so we can avoid the uncertainty of a government shutdown for at least two more years. Regulators finally agreed on rules that reduce the potential of banks making risky trading bets that spill
I sure am glad that’s over—that is—the debt ceiling standoff, even though Congress simply “kicked the can down the road.” Maybe next time cooler heads will prevail. Maybe some lessons have been learned, such as The debt limit is out of bounds. The debate next time should be on legitimate budgetary issues, not on the
It appears the government shutdown will not be resolved quickly; brinksmanship likely will continue, with the focus shifted to the debt ceiling increase, whose deadline has been targeted as October 17.
The way Congress goes about its business is maddening, counter-productive, and basically, a drag on the economy. This week we examine the partial government shutdown and its ramifications.
As St. Augustine spoke of the need for restraint, so also the Fed has spoken of its need to begin restraining its large scale asset purchase program. Though the initial bond-buying program may have helped stimulate demand in 2010 and 2011, keeping it going is now doing very little to stimulate economic growth and employment. In its announcement September 18 the Fed showed that it was as reluctant as the great Saint to implement restraint by tapering the size of its asset purchases; its message was “not yet”. Critics of the Fed believe the Fed’s unconventional program creates economic imbalances, stokes inflation, and provides markets a short-term, unsustainable “sugar high”. The unconventional program will continue, at least for a while. Markets were positively surprised by the announcement.
Labor Day is behind us and fall—usually a volatile period-- is before us. The last weeks of August showed signs of optimism for the economy and as well as a rise in tensions in the Middle East.