Posts Tagged ‘GDP’

2011/09/18: Weekend Thought: During His Jim Cramer Interview, Secretary Geithner Spilled the Beans

September 18, 2011 2 comments

Quite a bit of softball questioning, and others that were leading insofar as they allowed Treasury Secretary Geithner to promote the administration’s renewed stimulus agenda. Nothing necessarily wrong with that; high-level political interviews are after all the art of the trade-off.

However, some of the questions were so generalist as to be meaningless. “Europe alive or dead in three years?” We presume Mr. Cramer meant “the Euro-zone”. And of course the correct answer is “absolutely“, without having to qualify in what form. While they agreed that would include saving Greece within the zone, we are not so sure (and will have more to say on that sometime soon.)

And one of the most telling insights from the interview came in response to one of those seemingly softball questions regarding why the administration’s new jobs initiative must be passed to avoid crippling economic weakness. It was less about the specific benefits or costs of the program, and more so about an aspect of the general economic context that very few have been willing to explore.

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2011/09/09: Obama Jobs Plan DOA: Higher Taxes Won’t Fly with Republican House

September 9, 2011 Leave a comment

First of all let’s allow that there are many other factors buffeting the equity markets today. Greece had a failed T-bill auction, which heightens the fears that either over the weekend or some other time very soon it will actually default. There was also the downbeat communication from the ECB at yesterday’s post-rate decision press conference that it had significantly lowered its 2011-2012 growth forecast.

That was much like the recent change in the Fed’s projections. Yet, it was different for the ECB, because it had maintained upbeat expectations and raised interest rates over the earlier part of this year. It’s downside revisions for what was considered one of the few remaining much strong economic centers is that much more telling for the global economy as well as Europe. And in yesterday’s post we discussed why Monsieur Trichet’s claim that at 1.50% the ECB’s base rate was still accommodative was misguided; with political implications for Chancellor Merkel as well as a negative influence for the European economy.

Of course, Mr. Bernanke’s reiteration yesterday of the Fed’s concerns about the near-term economic weakness didn’t help either. Although, we can’t imagine what else he would’ve said without being completely disingenuous and looking foolish. And he revisited a very relevant point that set the stage for Mr. Obama’s jobs program speech yesterday evening: the current economic weakness was not created by faulty monetary policy, it is a creature of the political class, and they’re the ones who have to address it. And it seems less likely than ever that the political process in the United States is going to offer any solutions for the economic mess anytime soon… and that’s the real problem with what President Obama proposed yesterday evening.

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2011/08/26: QuickPost: Hurricane Benny a Full Force Problem?

August 26, 2011 Leave a comment

We certainly hope not. And it’s possible equities already discounted the impact of what is likely to be a lack of explicit QE2 commitment by Mr. Bernanke today at Jackson Hole. The further challenge facing traders and portfolio managers is while the discussion of what the Fed Chairman might say has been ubiquitous, it’s possible it has already been built into the market on yesterday’s late session slide.

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