Insights

Note that on the total debt chart in the last post the previous spike in debt was in 1932. It was not due to financing WWII but reflects the economic crash in the early years of the Great Depression. However, the recent explosion in debt, except for the last four...

Here is a chart of total US debt since 1870. It includes all levels of government debt, including state and local and adds business and consumer debt. Just as trees don't grow to the sky, this line will come down significantly and has already started to come down...

The expected rally on news of the leaders agreeing on a budget deal lasted 4 minutes. In the first four minutes of trading the market was up 1.25% but that was the top so far. The S&P 500 is now down -0.4%. Worries: (1) Is the deal is strong enough to pass the House?...

The Institute for Supply Management (ISM) manufacturing index came out at 50.9, much lower than expectations. It is just 1 point away from turning negative, which would forecast contraction in the manufacturing sector. On top of the horrible GDP #s last Friday this is...

I posted this a little early so you could have the weekend to read it before the flood of news next week, for which this newsletter gives some important background. I also go over investment strategy in light of current circumstances.

While the debate drags on the markets decline. The S&P 500 was -0.6%, the Dow Jones Industrials -0.8%. Interestingly, small stocks, normally more volatile, were down only 0.25%. Treasury bond prices were up. Don't read too much into that. Its a very important weekend....

I had written that when the GDP report for 2Q/2011 was reported today that it might be surprisingly weak. It turns out I was not pessimistic enough. GDP came in 1.3% versus forecasts of 1.8%. But, just as importantly, there were large downward revision for the two...

I keep writing that each day without a budget compromise would be a down day in the market. The market teased us today, opening up stronger but after 11:00 slowly gave back all the gains and more. The S&P 500 finished the day down 0.3%, not too bad. Commodities were...