Some of the recent speculation about where rates are going seems to have gotten at least a bit overdone.» Read More
Respected columnist and author Thomas Friedman has been among the most audible voices in warning the USA about our dependency on foreign oil and our need to end our addiction to this commodity post haste. But his latest call for a $1.00 per gallon gasoline tax to curtail our fuel consumption, the proceeds of which would go towards deficit reduction, misses the mark.
First of all, where Mr. Friedman is absolutely correct is his concern itself which is well founded. Consider: in 1970 the USA imported 30 percent of its crude oil. That figure has effectively doubled in the last thirty years to just shy of 60 percent.
Proxy access is supposed to make corporate governance more democratic. But evidence from recent shareholder proposals suggests something very different is happening—labor unions are gaining more power.
Teasing out short term trading noise from durable economic news is tricky business.
As I wrote about earlier this morning, a ten dollar per barrel increase in oil price can have an equivalent economic effect of negating $120 billion in payroll tax cuts.
So what are we to make of it when we are treated to headlines such as this one , from the Associated Press: "As Oil Markets Calm, Shares on Wall Street Rise."
If you listen closely enough, you can hear the stagflation storm brewing across the economy. It’s the sound of rising prices and weak economic growth conspiring to create the Federal Reserve’s worst enemy.
Friday’s lame GDP print exemplified where we’re heading, with the economy gaining just 2.8 percent in the fourth quarter of 2010 no matter how much government economists tried to talk up the robust corporate balance sheet and supposed gains in employment.
Yes, this happened.
Municipal bond issuance dropped to an 11-year-low in January. It has not picked up substantially in February, according to the muni bond people I speak to.
January saw $12.2 billion of new debt, a decline of nearly 63 percent from January 2010. Volume hasn’t been this low since January of 2000.
The standard explanation for this is the end of the Build America Bond program, which offered qualified issuers a 35 percent federal tax subsidy to issue taxable debt.
Massive instability in North Africa is terrible news for a fragile US recovery: Though just how terrible remains to be seen.
The New York Times cuts to the chase this morning :
"Higher oil prices restrain growth because they translate to higher fuel prices for consumers and businesses. Mr. Lafakas [a Moody's energy economist] estimates that oil prices are on track to average $90 a barrel in 2011, from $80 in 2010, an increase that would offset nearly a quarter of the $120 billion payroll tax cut that Congress had intended to stimulate the economy this year."
Those are staggering numbers.
Despite its myriad troubles and doubters on Wall Street, Bank of America has a friend in Dick Bove.
Royal Bank of Scotland reported a modest increase in second quarter profit after booking a £1.05 billion charge for the costs of restructuring.
What's the harm in waiting six months to raise rates? asks "Fast Money" trader Brian Kelly.