United States Forecast Highlights

Previously published September 28 in the “California Economic Forecast”:

The saga of the Great Recession continues. Over six million people have been unemployed for more than 27 weeks, and job growth may be slow enough in the next few months that the unemployment rate rises again. Major revisions to GDP, released in late July, . . . → Read More: United States Forecast Highlights

Operation Twist

In the 1960s, the Federal Reserve attempted to conduct an operation to lower longer term yields and raise short-term yields.  This maneuver was called “Operation Twist” and the purpose was to stimulate private sector borrowing and spending.  It is generally agreed that the policy was modestly successful in temporarily pushing long-term rates lower.

There . . . → Read More: Operation Twist

Why the Eurozone Will Come Apart

Europe has been in the news a lot lately. One day it has a plan to, temporarily at least, deal with the debt problems of delinquent members, and markets climb. The next day there is a glitch and markets fall. What is going on here? Why are markets so spooky?

We’re witnessing what are . . . → Read More: Why the Eurozone Will Come Apart

Rising Spreads May Indicate Regime Shift

Interest rate spreads are returning to higher levels, levels that indicate financial and economic instability. This could mean that could indicate that an economic regime shift may occur this year.

The normalized TED, which is the 3 month LIBOR minus the 3-month Treasury divided by the 3-month Treasury, has reached a level not seen since . . . → Read More: Rising Spreads May Indicate Regime Shift

The Warren Buffett Tax

In a widely read NYT editorial, famous investor Warren Buffett has proposed tax increases for the rich, like himself.  Although one of the richest men in the world, Mr. Buffett claims that he pays a lower tax rate than the secretaries in his office.  That seems really strange.  The data put forth by Warren . . . → Read More: The Warren Buffett Tax