It’s time to roll up our sleeves, put on our waders and plunge into the inflation-deflation question once again. It’s going to get messy. But it’s probably the most important question to answer for investors right now. That’s because the price direction of almost every asset on the planet depends on these monetary forces.
Despite the worry of a flu pandemic, a unexpectedly large contraction in US GDP and a recent prediction by the IMF that US banks’ loan losses would top $2.7 trillion, the world, as Justice Litle puts it in Taipan Daily, “is pounding the table for a V-shaped recovery.”
The extent of the government’s involvement in the markets has reached scary levels. It is our humble opinion here at Notes that you cannot stop the will of the real economy. That doesn’t stop the feds from trying.
The U.S. trade deficit narrowed for a record sixth consecutive month in January to the lowest level in six years as imports and exports both slumped on weak domestic demand, government data showed on Friday.
Everything but Treasuries trades heavily… Fundamentally speaking on Australia… Bank of Canada to cut rates today… Tell me your story… And Now… Today’s Pfennig!
The news this morning is as grey and damp as the weather. First, the U.S. stock market did nothing yesterday. The Dow ended down 9 measly points. The Dow is about 10% above its November low; have we seen the rebound already?
Gold had another strong day, shooting higher at the London open that carried through to mid-morning in New York, then rebounding from a short, sharp selloff to push higher the rest of the day, finishing at $926.30/oz., up $18.00. For the week, gold tacked on 3%.
The dollar remains strong… GDP sinks to -3.8% … Central Bank rate meeting week… Gold outperforms just about everything! And Now… Today’s Pfennig!
With the way stocks are being whipsawed, investors often ask me how to tell when the market is ready for a rebound. While there’s no way to ever be 100% certain, I usually just let history be my guide. And history has a very interesting story to tell right now.
The Congressional Budget Office’s announcement Wednesday that 2009’s budget deficit was going to be $1.19 trillion – before a nickel of President-elect Barack Obama’s stimulus plan has been included – raises a crucial question for the U.S. economy: Is there too much stimulus, and what effect would too much stimulus have?
