Salient to Investors: Caroline Baum writes: Obama’s proposal to cut the corporate tax rate in exchange for new spending on education, training and infrastructure is a non-starter. 50 percent of economists say the Fed will taper in September but if economic conditions change, the Fed’s actions will change with them.
READ MORE... →Salient to Investors: Caroline Baum writes: The Fed’s forecast for improved half2 growth is just that – we’ve been waiting years for stronger growth. Many of the more hawkish Fed presidents have been uncomfortable with QE from the start, and are supported by little data on which to evaluate the
READ MORE... →Salient to Investors: Caroline Baum writes: For the past two months, the Fed has been doing everything in its power to depress long-term interest rates. The Fed seems to talk as if they can send rates tumbling again. They can’t. The problem is the underlying message, not communication. The US economy is gradually
READ MORE... →Salient to Investors: Caroline Baum writes: Productivity poses the biggest threat to jobs and wages, not immigrants. US expansions characterized by the strongest rebounds in productivity growth also witnessed the fastest pace of job creation – e.g. in 1970, 1975 and 1982. Duke University and UC Berkeley found that a quarter
READ MORE... →Salient to Investors: Caroline Baum writes: The Wall Street Journal’s Jon Hilsenrath is widely viewed as Bernanke’s unofficial spokesman. Bernanke was crystal clear when he communicated the Fed’s objectives. The rise in interest rates can be easily overwhelmed by better earnings as a result of stronger growth, so if the Fed’s optimistic
READ MORE... →Salient to Investors: Caroline Baum writes: The Fed buys risk-free Treasury securities, depressing yields, while the public is goaded into buying riskier assets, such as stocks and corporate bonds. Businesses financing with equity have more money to invest, while consumers feel wealthier and spend. quick paydayloan The Fed hopes money will
READ MORE... →Salient to Investors: Caroline Baum writes: The $1.2 trillion of revenue Obama hopes to generate by raising taxes on the rich represents only a small down payment on a budget solution. The real source of the problem is runaway growth in entitlements, especially health care. There are no real cuts on the
READ MORE... →Salient to Investors: Caroline Baum says: the effect of raising tax rates on labor supply is small since most don’t have the option to work less. the cut in marginal rates is minimal compared with earlier cuts from 70 percent to 50 percent to 28 percent in 2001 and 2003, which were followed by a decade of mediocre
READ MORE... →Salient to Investors: Caroline Baum writes: Nominal GDP is a good proxy for the Fed’s dual mandate, encompassing both real output and inflation. All the coaxing in the world hasn’t convinced the business community, focused on fiscal policy, that now is a good time to invest and hire. Read the full article at
READ MORE... →