Salient to Investors: Carmen Reinhart and Kenneth Rogoff at Harvard acknowledged on April 17 that they had inadvertently left some data out of their calculations in “Growth in a Time of Debt”, but the error did not change their basic findings that countries with public debt in excess of 90 percent of GDP suffered measurably
READ MORE... →Salient to Investors: Ben Inker writes: Capitalism should cause the return on capital to be in line with the cost of capital, and assets with similar risks should offer similar long-term returns. Equities should trade at replacement cost, and the long-term return to equities should be approximately the same as
READ MORE... →Salient to Investors: Jeremy Grantham writes: The world, in its reckless use of resources and natural systems, shows many of the indicators of potential failure that brought down many prior civilizations. However, we have two saving graces that may save us – declining fertility rates and progress in alternative energy.
READ MORE... →Salient to Investors: Brett Arends writes: It is not clear if high debt levels lead to slower growth, or result from slower growth, or that the two have only a loose connection, but we cannot borrow and print money indefinitely with no consequences whatsoever. Rogoff and Reinhart got their math
READ MORE... →Salient to Investors: William Pesek writes: Japan has taught us that slashing interest rates to zero and beyond is much easier than returning them to normalcy. In Japan, credit spreads mean little, the underlying assets on which they are based are drugged up on monetary stimulants, bank balance sheets get muddied, it
READ MORE... →Salient to Investors: Paul Krugman writes: Keynesian economics is close to a TKO over austerian economics, whose predictions about the real world failed completely and supporting academic research has turned out to be riddled with flaws. The two main studies supporting austerity – Alesina/Ardagna and Reinhart/Rogoff – were criticised almost as
READ MORE... →Salient to Investors: Heidi Moore writes: In July, the Bureau of Economic Analysis will add Hollywood royalties from TV, movies and songs and revenues from scientific R&D to GDP measurements, boosting GDP by as much as 3% from 0.4% currently. Adding in Hollywood royalties may boost US economic growth by as
READ MORE... →Salient to Investors: Kei Katayama at Daiwa SB Investments said QE has led to a bubble in bonds, and at some point, the Fed will have to end the policy. Economists expect 10-yr rates to climb to 2.26 percent in the US and to 0.73 percent in Japan by Dec. 31 2013.
READ MORE... →Salient to Investors: 16 of the 29 US states requiring utilities to buy renewable energy are considering paring back those mandates after a plunge in natural gas prices. Read the full article at http://www.bloomberg.com/news/2013-04-23/u-s-states-turn-against-renewable-energy-as-gas-plunges.html Click here to receive free and immediate email alerts of the latest forecasts.
READ MORE... →Salient to Investors: Michael Purves at Weeden said the markets are starting to process softening economic news and a correction. 72 percent of the 111 S&P 500 companies so far reporting have beaten earnings estimates. Thomas Nyheim at Christiana Trust said housing is showing modest improvement. William C. Dudley at
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