Thoughts From the Frontline, September 2006

Trim Inflation Now

September 29, 2006

It's been a random walk through the data fields this week. The headlines say that inflation rose a mere 0.1% in August. The markets liked that. But digging deeper, the data is not as sanguine. We had the depressing Philly Fed manufacturing index last week, but today we find that Chicago is doing more than fine. The Dow flirted with a new all-time high, but then took the train home early for the weekend, leaving those who care about such things feeling like a teenage boy at a Baptist...

The Visible Slowdown - A New Trend?

September 23, 2006

Yesterday the Philadelphia Fed Business Economic Survey came in at the lowest level since the recession in 2001. Some argue that it is just one month's worth of data, and "...besides, it is Philadelphia. Those numbers are always quirky." And why pay attention to the Conference Board's Index of Leading Economic Indicators? The bond market has its own opinions, and they are different than that of the stock market. With all of this as backdrop, we will then think about why we should be...

A Kinder, Gentler Mr. Market?

September 15, 2006

The market, my various mentors have all told me, is designed to cause the most pain to the largest number of people. And while I am not in pain, the recent move up in the various market indices is certainly not in keeping with my thoughts that the economy is going to slow down and thus should exert downward pressure on the equity markets. Has the world transitioned to a kinder, gentler Mr. Market? One who views investors with compassion and encouragement? Has he truly turned over a new...

The Fat Lady Hasn’t Sung

September 8, 2006

"The opera ain't over 'til the fat lady sings." And speech after speech by members of the Federal Reserve over the past few weeks suggest that the fat lady is still waiting offstage, not sure of her cue. Today we look at a thoughtful speech given last night to a private gathering by Richard Fisher, President of the Federal Reserve Bank of Dallas. We then look at a few worrisome charts on global liquidity and inflation and some more data on housing.

But first, I want to welcome all the...

Deja Vu All Over Again

September 1, 2006

I had occasion to be in my car this morning, listening to CNBC, when the host of the show (Bob Pisani, a very nice gentleman on the few occasions I have had the opportunity to meet him) was arguing with a modestly bearish guest. Yes, there are a lot of reasons for concern noted by bears, but the market is clearly disagreeing with their pessimistic views. Stock indices are hitting cycle highs and seem poised to go higher. He and many other optimists seem to be of the opinion that since...