In our June newsletter (Heads or Tails) I mentioned that I was nervous about the Federal Reserve not dropping interest rates. Well, they have. At first it seemed that the new Fed Chairman was going to play a game of chicken between his views and the U.S. Economy. Well, that scenario never did fully play out, thank God. As I see it, the Federal Reserve had to drop interest rates to spur on the current economy at a time when everybody doubted themselves. They could lower rates and restore confidence or wait and create a large ugly mess. Also, by waiting they would have allowed the economy to slip into a recession just as inflation was picking up. That, if you recall, is called stagflation and it isn’t pretty. Now, by lowering rates they will spare themselves the punishment of having to lower interest rates 2 to 3 points later.
continue reading "The Markets Keep Moving"

The question lately is which way is the stock market moving? Well, first off, we need to determine which way the economy is moving. Usually, I am not at such a loss for sensing which way the economy is going. However, on one hand there are many positive indicators and on the other hand there are many negative factors. I understand the frustration of an economist in the sense that they spend their entire life studying the markets and even then they are usually only half right. If you had that kind of track record in most businesses you would be sitting in the unemployment office.
continue reading "Heads or Tails - Special Economic Report"