The Capitalist's Edge

How Strong is our Economy?

crely — Thu, 29 Apr 2010 13:13:51 +0000

With only one state showing positive year to year growth (as of this February), it’s hard to believe that we are enjoying a robust recovery.

Tax Credit Creates Mini-Bubble

crely — Sun, 25 Apr 2010 13:54:54 +0000

Don’t read too much into this week’s enormous growth in new home sales. The homebuyer tax credit expires this week. The credit has had the impact of compressing the entire spring selling season into March and April. Don’t expect much for May!

Include Inflation Risk in Your Investment Planning!

crely — Mon, 05 Apr 2010 13:31:15 +0000

crely — Wed, 10 Mar 2010 12:44:12 +0000

A Not So Happy Anniversary

Remember how you felt on March 10, 2000?

Remember the Tech Bubble, the NASDAQ soaring, or initial public offerings gaining hundreds of percent on their first day of trading?

Well, that all came to an end on March 10, 2000, when the NASDAQ Composite closed at 5,048. Today, the NASDAQ stands at 2,332, still down 54% from the peak. I won’t even mention that the NASDAQ hit a low of 1129 before the NASDAQ finally began its recovery - oops, I just did. By the way, getting back to the old high may take another ten years assuming historical equity returns.

Economic Recovery Not Assured

crely — Tue, 09 Mar 2010 23:02:24 +0000

crely — Tue, 09 Mar 2010 12:42:18 +0000

A Happy Anniversary

Remember how you felt on March 9, 2009?

The Dow Jones Industrial Average closed at 6,547 on March 9, 2009. On March 8, 2010 the Dow closed at 10,553, a gain of 61%! Of course, on October 9, 2007, the Dow closed at 14,165. So we’re still down 25% from the peak. Oh well, Happy Anniversary anyway!

Some Bad News . . .

crely — Tue, 23 Feb 2010 15:38:13 +0000

And, when consumers don’t spend, sales tax revenues fall. Take a look at New York’s sales tax revenues:

LEI is Soaring

crely — Fri, 19 Feb 2010 13:25:36 +0000

Hard to ignore this dramatic improvement in the Leading Economic Indicators. The economy is getting better. How much growth and for how long remains the question.

A Stark Illustration . . .

crely — Thu, 18 Feb 2010 14:42:09 +0000

Take a look at this chart from an opinion piece by Daniel Henninger in the February 18, 2010, edition of the Wall Street Journal. (Here’s a link to the article.) This chart is a stark illustration of the problem facing the U.S economy. Simply put the growth of federal (and state and local) government spending is consuming more and more of the peoples’ income and wealth. This trend simply can’t continue because as Margaret Thatcher once said “…sooner or later, you run out of other people’s money”. How we deal with this problem will have profound implications for the economy.

Used with permission from The Wall Street Journal Online. Get The Wall Street Journal for 75% off!

An Opposing Point of View

crely — Mon, 15 Feb 2010 21:51:18 +0000