The Standard & Poor’s 500 Index closed yesterday at a record high of more than 2,000. Yet many people feel that the economy is weak. There are numerous reasons for this, but the one I want to focus on has to do with employment and wages.
The economy feels weak because, depending on your education, employment and skill set, it very well may be weak to you. Unlike the typical post-credit-crisis recovery, this one features disappointing gross domestic product gains, subpar job creation, stagnant wages and weak retail sales. However, those represent the average. Different employment sectors have done considerably better or worse, depending on demand and scarcity of workers in that field.
The recovery is here, it just isn’t evenly distributed.
Fueling Road Spending with Federal Stimulus Sylvain Leduc and Dan Wilson FRBSF Economic Letter 2014-25 August 25, 2014 Highway spending in the United States between 2008 and 2011 was flat, despite the serious need for improvements and the big boost to state highway funds from the Recovery Act of 2009. A…Read More
Deflation Fear David R. Kotok August 26, 2014 A worldwide deflation fear is expanding and may actually be rampant. BCA Daily Insights (August 25, 2014) notes that, “out of 32 OEC countries, more than two-thirds have domestic inflation rates that fall short of 1%.” BCA analysts go on to argue that the worldwide…Read More
My afternoon train readings: • Cutting the corporate tax would make other problems (The Upshot) see also The Republican civil war over taxes is coming (WonkBlog) • Financial Beliefs You Might Not Like (WSJ) • Active Versus Passive Is the Wrong Question (Morningstar) • More Economists See Fed Policy As Too Loose (Real Time Economics)…Read More
Category: Financial Press
Student loans are the next great subprime crisis! At least that’s what the usual purveyors of doom and gloom say (see this, this and this). The numbers are big, the default rates are high and soon enough this is going to tip the economy into the next crisis or recession. Not so fast, writes…Read More
Just because it’s Tuesday does not mean we don’t have you covered with our dry-aged, prime reads: (continues here): • The US bull market looks like the dot-com bubble of the late 1990s, except when it comes to valuations. (Bloomberg) see also What stage of the bull market are we in? (A Wealth of Common Sense)…Read More
Category: Financial Press
Jim Stack of Investech has described what he calls “the competition to call the next bear market.” We have been going discussing this issue, and I am saving his comments for a Bloomberg column next week. But here is a flavor of what he has been writing, from his most recent commentary: 2011 We’re In…Read More
Sheila Bair, former chairman of the U.S. Federal Deposit Insurance Corp., describes what it was like in the room with former Treasury Secretary Hank Paulson and former Federal Reserve Chairman Ben Bernanke when the global economy was on the verge of falling into the abyss in this week’s “Masters in Business” podcast. Listen to the…Read More