Salient to Investors: Robert Shiller at Yale said the housing recovery is fragile and should be spurred by reducing the role of government in the mortgage-finance system. The economy needs further fiscal stimulus to create jobs, with increases in spending offset by higher taxes on the wealthy to avoid enlarging the national debt. Read the full article
READ MORE... →Salient to Investors: German factory orders fell for a second straight month and by the most since September 2011. Thomas Harjes at Barclays said today’s data are a catastrophe – the huge problem in the rest of the euro area seems to be reaching Germany and its labor market. Harjes said the economic outlook is gloomy for
READ MORE... →Salient to Investors: Mark Gertler at NYU said Obama’s activism reflects a much larger federal-government role 80 years after Hoover, as well as the development of macroeconomics, giving officials more tools now to combat a slump. Gertler said Obama’s policies in this crisis are the mirror image of what happened during the Depression. Hugh
READ MORE... →Salient to Investors: Unlike Greece, Spain and Britain, the US economy is fundamentally healthy. The US debt problem can be readily resolved as long as both parties compromise. Over the past 5 years, Republicans in the Senate have threatened or used a filibuster 385 times, or almost double the rate
READ MORE... →Salient to Investors: Economic growth will accelerate in the next four years as the headwinds become tailwinds. Consumers are spending more and saving less after reducing household debt to the lowest since 2003. Home prices are rebounding after falling more than 30 percent from their 2006 highs. Banks are increasing
READ MORE... →Salient to Investors: Jim O’Sullivan at High Frequency Economics said the non-manufacturing part of the economy – the bulk of the economy – is much less weak, while manufacturingis more exposed to weakening foreign growth and exports -overall pretty sluggish growth. Retail Metrics said same-store sales at over 20 companies, excluding drugstores, beat estimates. Americans bought new homes
READ MORE... →Salient to Investors: Paul Dales at Capital Economics said today’s increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill. John Ryding at RDQ Economics said if we can produce this kind of job growth with all the uncertainty, imagine if we cleared up tax issues how much
READ MORE... →Salient to Investors: FRB San Francisco President John Williams said: The Fed should continue the MBS purchases into next year and continue the Treasury purchases because we have not seen a sustained, significant improvement in the labor market, such as payrolls growth more than 200,000 jobs a month or a measurable decline in
READ MORE... →Salient to Investors: Michael Althof at Pimco said: Pimco favors inflation protection in Australia and the US as global stimulus stokes faster price increases. Central banks are more willing to risk inflation as a trade-off for growth and employment, and pressure for higher inflation longer-term makes index-linked bonds attractive. Pimco likes Australian bonds
READ MORE... →Salient to Investors: Philippe Bacchetta at University of Lausanne and Eric van Wincoop at University of Virginia found that: Global trade and financial linkages weren’t strong enough by themselves to have caused the global recession in 2008 – self-fulfilling panics, not contagion, were to blame. The large losses of leveraged financial
READ MORE... →