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Jun 05 2021

Time To Start Thinking About “Thinking About…”

  • Jun 5, 2021

The COVID collapse showed the Fed could abandon its clunky forward guidance and make the appropriate “pivot” when the facts changed. Now that facts have changed for the better, the Fed is right back to the rigid and dogmatic approach that characterized Fed-speak for almost all of the last economic expansion.

Jan 08 2021

The Case For “Five Percent”

  • Jan 8, 2021

Forecasting GDP is hardly our forte, but 2021 should see a very big gain in real output. Our current guess is for real GDP to grow 5% this year. Statistically, though, that doesn’t imply that the stock market’s move will also be large (or even of the same “sign”). 

Apr 12 2019

Margins Prove Capitalism Still Works

  • Apr 12, 2019

Corporate profits were outstanding last year, but even the benefit of a 40% cut in the top income-tax rate wasn’t enough to lift the net profit margin back to the all-time high of 10.6% established in early 2012. Still, the latest 10.0% figure is more than a percentage point above the 2007 cycle high and about two points better than any other cycle high.


Mar 07 2019

Watch What They Do, Not What They Say

  • Mar 7, 2019

While the celebration over Jerome Powell’s “Christmas Capitulation” lingered throughout February, we’re still awaiting signs the capitulation consisted of anything more than words.

Jan 08 2019

Yields Might Be Throwing A Curve

  • Jan 8, 2019

While the number of recession forecasts is on the rise, there’s a general reluctance among economists to project a downturn in the absence of a yield curve inversion.

May 05 2018

The Gap Is Back!

  • May 5, 2018

We celebrated the official closure of the GDP Output Gap in December, but that milestone was revised away in April by the statisticians at the CBO through a downward adjustment to the estimated rate of “full employment.”

May 05 2018

Cashing In On The LEI?

  • May 5, 2018

The consensus view is that the stock market will be fine as long as there’s no recession in sight.The same LEI that has displayed a fine GDP forecasting record has shown essentially no relationship with S&P 500 forward twelve-month performance. In fact the regression line shows a slight negative slope!

Dec 07 2017

Not A Tipping Point, But A “Toggle” Point?

  • Dec 7, 2017

Evidently, being a bull in a bull market is no longer good enough.

Nov 07 2017

Below “Stall Speed”?

  • Nov 7, 2017

The last few months have served up some of the strongest readings observed during the U.S. economic expansion.

Sep 08 2017

Don’t Look Now, But...

  • Sep 8, 2017

We recognize it’s uncultured to discuss federal debt and deficits during a multi-year bull market, but in economics and investing it frequently pays to worry when others don’t, and to stop worrying when others do.

Oct 07 2015

Earnings: What Is Normal?

  • Oct 7, 2015

Corporate profits are notoriously cyclical, and for decades we’ve sought to temper their swings by using a five-year smoothing of S&P 500 EPS in our valuation work.

Jun 05 2015

Searching For Growth In Emerging Markets

  • Jun 5, 2015

Even though the ten EM sectors are growing at a much stronger pace than corresponding U.S. sectors on the Top-Line, only a small margin exceed the U.S. in terms of EPS growth.

Feb 06 2015

A Look At The Impact Of Lower Energy Prices On Countries

  • Feb 6, 2015

A big question for investors is: have oil prices bottomed? For the past four days, WTI jumped 19% from its low reached on January 28th, giving some the conviction that prices are reverting back to prior high levels.

Jan 08 2014

Corporate Profits In 2014

  • Jan 8, 2014

Earnings growth over the next few years will—in the  best case—be forced down to the rate of top-line growth (nominal GDP).

Dec 06 2013

Stocks And The Dismal Science

  • Dec 6, 2013

Has recent Fed experimentation compromised the stock market’s “social function” as an economic forecasting tool?

Oct 08 2013

It Doesn’t Get To Look Any Better

  • Oct 8, 2013

Ben Bernanke seems at peace with his looming retirement from the Fed. He’s certainly more relaxed and confident, and even looks more youthful. So much so, in fact, that Ben’s last appearance had me thinking of a young Tom Cruise - or more specifically, Cruise’s character Pete Mitchell (“Maverick”) in the 1986 film Top Gun. Remember when Maverick froze up during a dogfight with a Soviet MiG fighter, with his crosshairs trained perfectly on it?

Maverick: “Uh, it’s not good. It doesn’t look good.”

Aug 04 2011

Market Interrelationships: “Unlearning” What We Thought We Knew

  • Aug 4, 2011

Doug Ramsey examines several once very reliable relationships between stocks, bonds, inflation, and commodities.

Aug 05 2008

The GDP Report: “Exhuming McCarthy”

  • Aug 5, 2008

Significant disconnect between GDP Deflator and CPI. Recent GDP report implies a 1.1% inflation rate. It is ridiculous to assume the inflation rate is that low with the CPI at +5.5%.

May 06 2008

The GDP Report You Didn’t Read

  • May 6, 2008

We’re back on form after last month’s praise of government economists... questioning the value of the GDP Deflator.


May 06 2008

Economic Watch

  • May 6, 2008

Even though government statistics do not yet indicate a declining quarter of real GDP growth, we believe we are, in fact, in the grip of a recession.

Feb 05 2008

The Economy And The Stock Market

  • Feb 5, 2008

The stock market tends to peak out 6-12 months prior to recession but turns back up prior to the end of a recession.


Feb 05 2008

U.S. Economy Skirts Recession In Q4, Or Does It?

  • Feb 5, 2008

It now appears that the downward bias in inflationary pressures suggested by the CPI data is tame compared to the GDP Deflator. And if this is true, investors may be operating under a false sense of security  that economic growth remains positive (albeit ever so slight).

Jan 03 2007

Inflation Is A Potential Threat

  • Jan 3, 2007

Inflation prospects are especially unclear. While many inflation gauges seem to be slowing, the threat of an inflation flare-up remains.

Oct 04 2006

Today's Economic Recovery In Perspective

  • Oct 4, 2006

On a long term basis, we continue to be concerned about the sustainability of the current economic expansion, and we expect a significant slowdown by mid 2007.

Oct 04 2006

Inflation Watch

  • Oct 4, 2006

CPI on a twelve month basis expected to decelerate further over the next month or two. Final two months of the year, however, could be another story, with CPI twelve month inflation reaccelerating.

Sep 05 2006

Inflation Watch

  • Sep 5, 2006

CPI on a twelve month basis is expected to decelerate further over the next two months. The final 3 months of the year, however, could be another story.

Apr 05 2006

Has The Yield Curve Lost Its Luster?

  • Apr 5, 2006

The traditional definition versus the new definition of an inversion...How real GDP has responded historically to past yield curve inversions….Effect of inversions on Financial stocks.

Feb 05 2006

Update On The Economy….Q4 Just A Bump In The Road...Or Something More?

  • Feb 5, 2006

Real GDP in Q4 was not too robust, but the numbers will likely be revised upward.

Sep 04 2002

Corporate And Consumer Too Leveraged?

  • Sep 4, 2002

Increased reliance on debt to finance growth can cause problems down the road.

Sep 04 2002

Total U.S. Market Capitalization As A Percentage Of GDP: An Alternative Valuation Perspective

  • Sep 4, 2002

Total U.S. Market Capitalization As A Percentage Of GDP: Identifying “Fair Value.”

Aug 05 2002

Are There Any "Good" Numbers These Days?

  • Aug 5, 2002

Revisions continue: How many revisions are possible?

Aug 04 2001

Unreal Expectations, Unreal Money = Lingering Pain

  • Aug 4, 2001

By Kate Welling - Companies are still acting, by and large, as if they have an inalienable right to spin numbers in whatever direction produces the most pleasing results.

Aug 04 2000

View From The North Country

  • Aug 4, 2000

What are the economists missing? Dismal performance by practitioners of a dismal science! Jim Bianco, Bianco Research L.L.C., helps shed some light on the subject: “GDP Reality vs. Perception”.

Oct 05 1999

October: The Month Of Market Train Wrecks

  • Oct 5, 1999

Steve thinks too many people are looking for an Octber train wreck for it to happen, maybe in November. Market currently very short term oversold.

Apr 04 1999

Profitless Prosperity

  • Apr 4, 1999

Earnings are declining, while stock prices are marching higher. GDP strong, but corporate profits have weakened considerably.

Jun 05 1997

Bond Market Summary

  • Jun 5, 1997

Bond market looks attractive on 6-12 month basis. Economic expansion long in the tooth, but still surprisingly strong...Fed may tighten next time to slow down economy. Inflation cool, but wage pressures a worry.

Sep 05 1995

Comparing U.S. Equity Capitalization With GDP: Now Shows Stock Market Extremely Overvalued

  • Sep 5, 1995

Testing of this indicator has offered some strong evidence that potential returns from today's level could be quite minimal.

Aug 05 1995

Worth Noting

  • Aug 5, 1995

Steve’s notes on revising the GDP calculation, market implications of discount rate cut, stock market capitalization as a percentage of the GDP and more.

Nov 05 1994

View From the North Country

  • Nov 5, 1994

Economic growth and stock market performance don’t go hand in hand - the stock market looks ahead. Don’t be surprised by more wage irrflation. The AdvantHedge short selling program is updated and explained because readers have expressed a growing interest (maybe it’s the market).

Mar 05 1994

Stock Market Observations

  • Mar 5, 1994

February was a tough month for the stock market. Stock Market performance during various GDP and earnings growth environments and what we currently view as the most likely scenarios for 1994.