Tag Archives: United States

The Election in Greece: Syriza Party’s Stunning Win

It was to be a grand thing, this Euro. It was the water that would raise all the boats of each European country and for 10 years it did just that. The headquarters was set up in Brussels. A troika would rule. It was the European Commission, The European Central Bank (ECB) and the International Monetary Fund (IMF). Each country could issue its own bonds. Interest rates fluctuated based on the relative economic strength of each country. Germany with its strong industrial capacity and exports rose to the top. The Southern countries of Greece, Spain, Portugal and Italy lacked the exports. Instead they relied on the money from their bonds to put people to work in the public sector. What no one realized at the time was that all the new debt being issued would eventually need to be repaid in Euros, not their old currency. This inflated the debt.Continue Reading

Oil Price War – Saudis up Ante Cutting Prices Another $2.00 Per Gallon

The State owned company Saudi Aramco announced that it is cutting prices to a record low $2.00 per barrel discount to Asia, Europe and all grades of crude to US refineries. To reinforce Saudi Arabia’s vow to crush US oil shale producers, Saudi prince, Turki Al-Faisal said: “Saudi Arabia won’t give up oil market share at this time for anybody.”Continue Reading

What Happened to the Oil Market?

While the focus has been on the Dow Jones Industrials and the S & P, there is another sea change taking place in the energy markets. This past summer the benchmark West Texas Intermediate (WTI) crude was trading near $107.00 per barrel. This past week we saw a low of $79.78 per barrel in the December futures contract, hitting a four year low.Continue Reading

Investors Seek the Fed’s Guidance on the Economy

What do the latest Fed minutes tell us? Since the recession began, the Fed has set two goals for the economy. Perhaps the foremost objective is to maintain inflation at or near the 2% level. The one crisis point would be a drop in inflation below the flat line. This would indicate that the economy is teetering on the brink of recession. The entire quantitative easing program is aimed at keeping the economy growing. We are seeing the effects of stagnation in Europe with the introduction of negative interest rates to stimulate the economy. So far, the US economy has been expanding, albeit very slowly. The latest 2nd quarter GDP numbers came in better than expected at 4.6%. The media has jumped on this number and is prodding the Fed to raise interest rates. However, all is not that great. The 1st quarter GDP actually fell 2.1% after a brutally cold winter in the Northeast. When taken together these numbers indicate a moderate expansion in the economy. According the Fed’s statistics, inflation in August was at 1.7%. However, this number does not include food, energy and shelter.Continue Reading

Fed Tools: The US Federal Reserve’s Toolbox

This past week Janet Yellen, Chairwoman of the US Federal Reserve, gave her report on the state of the economy. The theme was “steady as she goes” with only minor adjustments to monetary policy. Here are some highlights from her text:Continue Reading

Europe Goes to Negative Interest Rates-Investors Beware

Mario Draghi, Chief of the European Central Bank announced this week that it will go to “Negative Interest Rates.” Negative interest rates go below zero. The new rate will be (minus) -.1%. What does all this mean?Continue Reading

Market Update May 15, 2014

So far 2014 has proved to be quite frustrating and confusing. We ended 2013 on and upbeat note with the Dow and S & P making new all time highs. At the time only 16% of investors were bearish on the market. In December 2013, then Chairman, Ben Bernanke, of the US Federal Reserve started to taper bond purchases by $10 billion per month.Continue Reading

Will the Oil Glut Cause a Drop in Price?

The world is awash in oil. From the US to the Mid East oil supply is outstripping demand. It is already causing disruptions in worldwide delivery systems.Continue Reading

Investing in Agriculture Stocks

This week President Obama signed a $956 Billion dollar farm bill. As you can see just by the number, agriculture is a huge business in the United States. Now only do we have the raw commodity producers, but also we have the slew of businesses that bring the food to our supermarkets.Continue Reading

US Federal Reserve Monetary Policy 2013-2014

Monetary policy is an important driver of economic growth. It sets in motion and controls, by and large, the supply of money available for lending and commerce. As 2013 comes to a close, the Dow Jones Averages, the S & P and the Nasdaq are setting new highs. On December 20, 2013 the Dow closed at 16,221.14, the S & P at 1818.32 and the Nasdaq at 4,104.74. Much of this spectacular gain was the result of US Federal Reserve Monetary Policy.Continue Reading