Thinking Things Over
Musings on the Markets from Inside the Beltway
By John L. Chapman
Vol. I, No.2
07/31/11
In this note:
“Balance sheet-” versus “Aggregate demand-” recessions: is there a difference, and does it matter for investors? What is our investment strategy in light of our findings?
Two days before the debt ceiling “deadline”, it appears the two major [...]
The focus last week was on the US debt ceiling debate but of greater importance is the slowdown in global economic growth. The US GDP report Friday showed just how weak the US economy was over the first half of 2011 but this isn’t just a US problem. Canada and Australia are also slowing - [...]
Durable goods orders and the stock market are highly correlated. We are starting to see some divergence.
There were concerns being voiced today that if a debt ceiling deal was struck, but didn’t address long term reduction of government spending, the US may still face a debt rating down grade. A downgrade is meaningful today because lower credit quality demands a higher return from the market. There are additional concerns that some [...]
