America's Economic Future – A Discussion By Ted Kavadas
I ran across the following paper titled “Financial Conditions Indexes: A Fresh Look after the Financial Crisis” (pdf) dated February 22, 2010. This paper discusses and explains this new attempt to create a “financial conditions index” that will accurately predict economic activity. From the abstract: “As of the end of 2009, our FCI showed financial …
Lately there have been an increasing number of people citing the possibility of a “double-dip” recession. Much of this scenario is predicated upon the belief that as government stimulus spending fades, so too will economic activity. This March 5 article from CNBC.com summarizes some of the opinions regarding the double-dip reasoning and possibilities. I find …
Here is a link to the NY Fed’s page regarding the yield curve (specifically the 10-year rates vs. 3-month rates) as a leading indicator. What I find interesting is that the chart (pdf, at this link) plotting the current probability of recession indicates an imperceptibly small .04% chance of recession as of January 2010. As …
The February Wall Street Journal Economic Forecast Survey can be found at this link. There wasn’t much change in the survey results from last month. Also, as seen in the detail, there hasn’t been much change for many of the parameters for the last few months. As I have previously commented, I find it highly …
I came upon another economic outlook index, this one titled “USA TODAY/IHS Global Insight Economic Outlook Index.” The link is found here: http://www.usatoday.com/money/economy/economic-outlook.htm The index is designed to predict real GDP growth and is a composite of 11 indicators. Currently the chart shows a prediction for each month in 2010 up through June. The June …
Here is the link to the latest (January) Wall Street Journal Economic Forecast Survey: http://online.wsj.com/article/SB10001424052748704363504575002700724430016.html As seen in the survey details, there hasn’t been much change in expectations concerning full-year 2010 GDP or the Unemployment Rate for many months. The average expectation is for a full-year GDP of 3.0% and Unemployment Rate for December 2010 of 9.5%. …
Here are some indicators that are supposed to predict and/or depict economic activity. These indicators have been discussed in previous blog posts: The ECRI WLI (Weekly Leading Index) was at 131.5 for the week ended January 1. From the story in the link below: “‘With the WLI climbing to a one-and-a-half-year high, the U.S. economy …
Here is a story from yesterday on comments by Joseph Stiglitz about his views on 2010 economic performance: http://www.cnbc.com/id/34507080 From the article: “Nobel Prize-winning economist Joseph Stiglitz warned there’s a “significant” chance the U.S. economy will contract in the second half of next year…” I find Stiglitz’s view significant because it is in marked contrast to that of the …
Tommorrow’s Barron’s cover story has forecasts provided by 12 strategists and investment managers. I would like to highlight their S&P500 earnings forecasts for 2010. As seen on page 28, the average of the 12 stated forecasts is $75.75. From what I have seen, this $75 level is very common among forecasters, and as such seems like the predominant forecast for …
I would like to briefly comment on Ben Bernanke’s December 7 speech, that can be found at this link: http://www.federalreserve.gov/newsevents/speech/bernanke20091207a.htm Here is one excerpt that I found notable: “Economic forecasts are subject to great uncertainty, but my best guess at this point is that we will continue to see modest economic growth next year–sufficient to …