Insights

Are municipal bonds about to plunge in price? Meredith Whitney and some others think so. I don’t think so. First, let’s hear the bears’ case. “There are about 45,000 municipal-bond issues in existence, with a market value of about $1.3 trillion, according to June 30...

The primary driver of this 10% correction in stocks has been the slowing economy here and around the world (see chart at Tuesday, 7:54 AM). How slow is it? Take a look at the chart below that plots wages, employment & production. This plots the % change, not the...

US STOCKS will open slightly higher this morning but Asia and Europe are lower again and we'll have to see how this little bounce goes. Despite the sharp drop the last two weeks, markets are not deeply oversold. Volume has been heavy on selling and light on rally...

Stocks finished -2.1 (DJIA) to -3.26% (small stocks) lower. The S&P 500 is now negative on the year, excluding dividends of about 1.2%. Bonds were higher again as was gold, up 2.4%. The US dollar was also up which seems odd with slowing growth and mounting debt. But,...

Stock futures before the open are down -0.4%. World markets are down -0.5% - -1.0%. There are 3 main worries this AM. (1) Fresh major troubles in the European debt crisis. According to London's venerable Financial Times, "Benchmark 10-year bond yields reached 6.46 per...

Markets indexes finished down about 0.4% on average, even though it was apparent by 3:30 that the House would approve the debt ceiling bill. Stocks had been down over 1% mid-morning. Attention has shifted to the really poor economic #s of late. There is even...

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...