The DVR is cued up and ready to go with President Obama’s State of the Union speech and its aftermath. Presumably, nothing like what you see below happened earlier this evening.
From the Joel Pett archive at the Lexington Herald-Leader.
REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.
On January 25, 2011,
in Economy,
by Tim
There’s been a good deal of discussion recently about the remarkable rise in stock prices that has been, to some degree at least, a product of the Federal Reserve’s latest $600 billion asset purchase program (a.k.a. “quantitative easing” or money printing). As a result, more than a few commentators have taken to calling higher stock prices the Fed’s third mandate.
For some time now, Fed chief Ben Bernanke has been crowing about the benefits of higher stock prices, first in a Washington Post op-ed where he noted, “higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion”.
More recently, during a CNBC panel discussion he noted that the Fed’s policies “have contributed to a stronger stock market, just as they did in March of 2009, when we did the last iteration (of quantitative easing). The S&P 500 is up about 20 percent plus and the Russell 2000 is up 30 percent plus.”
There, he sounds as if he’s taking credit for the stock markets rise … as he probably should.
On January 25, 2011,
in Housing,
by Tim
Standard and Poor’s reports(.pdf) that U.S. home prices continued their recent decline, the Case-Shiller 20-City Home Price Index down 1.0 percent from October to November on an unadjusted basis, now 1.6 percent lower than a year ago. On a seasonally adjusted basis, the 20-city index was down 0.5 percent in November.
All but one region saw price declines, San Diego home prices rising 0.1 percent for the month, while declines were paced by Detroit (-2.7 percent), Atlanta (-2.5 percent), and Chicago (-2.2 percent). David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s noted the following regarding the much talked about housing “double-dip”:
With these numbers more analysts will be calling for a double-dip in home prices. Let’s take a moment to define a double-dip as seeing the 10- and 20-City Composites set new post-peak lows. The series are now only 4.8% and 3.3% above their April 2009 lows, suggesting that a double-dip could be confirmed before Spring. Certainly eight cities setting new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices.
Well, that’s one way to define a double-dip – others would argue that it’s already here. Note that the Case-Shiller data is not only reported with a two-month delay but, since it is a three-month average, the November report contains price data for both September and October. Other, more timely, reports on home prices have shown further declines.
On January 25, 2011,
in Uncategorized,
by Tim
MUST READS
UK economy suffers 0.5% contraction – BBC
Uncertainty Over Economy Clouds Obama Speech – NY Times
Spain tempts fate with minimalist bank rescue – Telegraph
Financial Crisis Panel Refers Evidence to Prosecutors – WSJ
McDonald’s likely to raise prices in 2011 – Reuters
Wall St. firms earn high profits while owing Uncle Sam – McClatchy
At Fort Sill, High-Interest Lenders Circle The Gates – HuffPost
BofA Putbacks May Cost $8.5 Billion; Lawyers `Smell Blood,’ – Bloomberg
House majority leader opposes bailouts or bankruptcy for states – LA Times
An Inherently Unsound Approach to Banking Regulation – Naked Capitalism
Russian Central Bank to buy over 100 tons of gold every year – ITAR
The War on Demand – Krugman, NY Times
MARKETS/INVESTING
Oil falls as Saudis hint at raising supply – AP
Gold eyes 10-week low as safe-haven bid fades – Reuters
7 Reasons to Feel Good About This Market – CNBC
Paulson Recaps Big Bets in Year-End Letter – DealBook
S&P warns of more muni bond downgrades – CNN/Money
Inflation: Bond Market is Changing its Tune – WSJ
Gold is to China as paper currency is to US – CSM
How gold became politically correct – USA Gold
ECONOMY/WORLD/HOUSING/BANKING
IMF: Instability Threatens Recovery – WSJ
Worker backlash to spending cuts – CNN/Money
The Moral Heart of Economics – NY Times
My Reply to Krugman on Austrian Business-Cycle Theory – Murphy, Mises
Germany’s FDP Trying to Boost Popularity With Tough Line on Euro – Spiegel
India raises interest rates by quarter-point – MarketWatch
The property that sums up America’s mortgage nightmare – Daily Mail
How ‘Distressed’ Home Sales Are Fuzzing the Numbers – Olick, CNBC
Local homes selling for the price of a car – Sacramento Bee
Fed Likely to Press On With QE as Business Lending Rises – Bloomberg
Fed futures upping rate-hike likelihood – MarketWatch
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