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No Winter Blues

Economists have a habit of downplaying the significance of data for a single month, famously noting that one-month does not make a trend. Investors, of course, do not always heed that warning, as they just as famously tend to overreact, particularly when incoming data either exceed or fall short of expectations. That divergent response has […]

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Do You Want to Restore Manufacturing Employment? Smash the Robots!

There has been much public discussion about the demise of U.S. manufacturing jobs and policies to restore manufacturing employment. U.S. manufacturing employment relative to total U.S. nonfarm employment has been trending lower throughout almost the entire post-WWII era. Although foreign trade is being advanced by some as the reason for the secular decline in U.S. […]

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Solid Start to 2017

The U.S. economy continues to ride a strong wave of optimism both on Main Street and Wall Street, and hopefully this upbeat mind-set will prevail longer than last year. The Federal Reserve and most private economists were upbeat regarding the outlook for 2016. Expecting stronger growth and higher inflation, the Fed ended 2015 by raising […]

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2017: A Good Year to Review Beneficiary Designations

Authored by: Brenton D. Teeling, Vice President of Client Services and Administration. In our business, one of the most important estate planning strategies is maintaining proper beneficiary designations. There are many variables to consider when naming beneficiaries: the type of account (trust, retirement, or insurance, to name just a few); goals regarding future distributions; and […]

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2017–Shades of 1937

As a result of some Fed actions taken in 1936 and 1937, the U.S. economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938. Based on the recent slowdown in thin-air credit growth, I believe that a significant slowdown in the growth […]

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High Hopes

Since optimism for 2017 is based on hope—as well as hype—only time will provide the answers. Yes, the economy picked up some momentum over the second half of last year and the fundamentals pointing to future growth remain positive. But the likely second-half growth pace of 2.5-3.0 hardly represents the escape velocity that has eluded […]

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If You Think the Pace of Economic Activity is Weak in 2016, Just Wait Until 2017

Based on published data so far for Q4:2016, the Atlanta Fed is forecasting real GDP annualized growth in this current quarter of 2.4%, down from the previous quarter’s 3.2% annualized growth. With current growth in thin-air credit already very weak and likely to get even weaker after the Fed contracts the monetary base more in […]

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Election Ends; Economic Uncertainty Continues

In the aftermath of the election, the equity markets moved higher, which was as surprising to many as the election outcome itself. While Hillary Clinton was a known quantity, likely to continue President Obama’s policies, President-elect Trump is expected to bring change. Investors and traders tend to react adversely to the unfamiliar, shunning risky assets […]

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Do Larger Federal Budget Deficits Stimulate Spending?

The U.S. equity markets have rallied in the wake of Donald Trump’s presidential election victory. A possible explanation for the post-election stock market rally is that U.S. economic growth will be stimulated by the almost certain business and personal tax-rate cuts that will occur in the next year, along with the somewhat less certain increase […]

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The Fed Began Tightening Policy in October and No One Knew It, Maybe Not Even the Fed

I believe that the Fed commenced a stealth tightening of monetary policy in October. But one possible difference between this current tightening and the tightenings of yesteryear is that it is not clear that even the Fed realizes that a tightening has occurred of late. Paul Kasriel Commentary November 2016

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