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The Bond Bear is Waking Up
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/4/13
Weve been bond bears for quite some time, and we still are. The good news is that the violent part of the bear market has passed. We expect a slower, but still painful and consistent, move higher in interest rates during the quarters ahead. The 30-year bull market in bonds is over.

Summers For Fed Chair
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/26/13
In the next month or two, President Obama will pick someone to succeed Ben Bernanke at the Federal Reserve. At this point, we think the odds-on favorite is Larry Summers.

Part-Timers and the Labor Market
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/20/13
Over the past few weeks we keep getting the same two questions about the labor market. Basically, investors want to know whether the labor market is really improving if so many of the jobs are going to part-timers and if the more expansive definition of the unemployment rate (the one that includes discouraged workers and part-timers who want to work full-time) is about double the regular unemployment rate.

A Bear Market Is Here: In Bonds!
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/19/13
While it certainly hasnt made the headlines that it should have, the bond market has been kicked in the teeth. After bottoming at 1.61% on May 1, the yield on the 10-year Treasury Note hit 2.84% on Friday, its highest level in two years the worst bear market move in bonds since the end of the 2008-09 financial panic.

Politicizing the Economy
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/6/13
If we were put in charge of the world, if we had complete control of fiscal and monetary policy, we would change things.

Fed Shows Its Dovish Side
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/2/13
The Federal Reserve made several small changes to the text of its statement, which, combined, suggest a slightly more dovish posture at this meeting than at the last one in June.

Get Ready for a Wild Week
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/30/13
Weeks with lots of data are always interesting; but this one will be more wild than most.

More Plow Horse in Q2
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/22/13
Forecasting economic growth for the second quarter of the year is always precarious. The reason is that the initial report on the second quarter is when the government goes back and makes revisions to GDP for the past several years. This time around, its particularly iffy because the government for the very first time is going to start accounting in GDP for the value of R&D spending by companies.

Deficit? What Deficit?
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/16/13
Hope that title caught your attention, but, you should know, we are only half joking. In June, the federal government recorded a $116.5 billion surplus! Yep, you read that right surplus! the largest surplus for any June ever. Government spending fell to $170 billion for June, 47% below last year.

Obamacare and Stocks
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/8/13
For much of the past four years, we have felt like psychologists who constantly must help hypochondriacs over their fear of one thing after another. There is no reason to remind everyone of the list its been endless, but the stock market and the economy have moved consistently higher despite these fears.

Watching Nominal GDP
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/1/13
One of the most important foundations of modern macroeconomics is something called the equation of exchange. It dates all the way back to John Stuart Mill but, in the past couple of generations, was popularized by free-market icon Milton Friedman.

Back to Normal
by Brian Wesbury, Bob Stein of First Trust Advisors, 6/25/13
Market behavior especially since Fed Chair Ben Bernanke mentioned QE tapering has been relatively dramatic. Not unprecedented, but dramatic. By contrast, the reaction of the punditry has been way over the top.

Fed Slightly More Optimistic
by Brian Wesbury, Bob Stein of First Trust Advisors, 6/20/13
The Federal Reserve made only slight changes to the text of its statement, but those it did make signal slightly more optimism. It said labor market conditions show further improvement, rather than some improvement and sees diminished downside risks for the broader economy.

Keynesian Model Blew It Again
by Brian Wesbury, Bob Stein of First Trust Advisors, 6/17/13
If theres one economic conclusion we can make from recent data, its that the Keynesian model has failed - again.

Is QE Really THAT Important?
by Brian Wesbury, Bob Stein of First Trust Advisors, 6/3/13
The punditry has decided that anything good happening is actually bad. It is all just a sugar high based on Quantitative Easing and government stimulus and that talk of winding down or tapering QE is negative. So the latest fear is that any good data on growth is actually bad, because it means the Fed will wind down QE. They say the economy cant possibly grow on its own without support from the Fed and Ben Bernanke.

Still Bullish
by Brian Wesbury, Bob Stein of First Trust Advisors, 5/20/13
Like Rip Van Winkle, imagine you went to sleep on October 9, 2007 and didnt wake up until yesterday. On 10/9/2007, equities were at record highs: 14,165 for the Dow Jones Industrial Average and 1,565 for the S&P 500.

It's Not That Bad Out There
by Brian Wesbury, Bob Stein of First Trust Advisors, 5/14/13
Certain things, like the sun rising, or the tides shifting, can be counted on. Its also true that when government shrinks as a share of GDP, things start to pick up.

Fed Doesn't Budge
by Brian Wesbury, Bob Stein of First Trust Advisors, 5/2/13
It would be hard to find a policy statement from the Federal Reserve with as few changes as the one issued today. The Fed made no changes to monetary policy and only minor changes to the language of its statement. Even the lone dissent, from Kansas City Fed Bank President Esther George, was a carbon copy from the last statement in March.

Guess What? Growth is Back!
by Brian Wesbury, Bob Stein of First Trust Advisors, 4/22/13
The first quarter has come and gone and lots of data have been released. Still, there are pieces of data missing and these missing data points make forecasting GDP treacherous.

Keynes And Retail Sales
by Brian Wesbury, Bob Stein of First Trust Advisors, 4/15/13
No, just because retail sales fell 0.4% in March does not mean Keynes was right. Sequestration did not cause the decline. Nor did the end of the temporary 2% payroll tax cut, back in January, cause it either.

Housing Recovery Still Young
by Brian Wesbury, Bob Stein of First Trust Advisors, 3/25/13
Into early 2012, conventional wisdom argued that the odds of a robust housing recovery were lower than the odds of New Mexico and Georgetown losing to Harvard and Florida GC.

Fed Still Inching Toward Optimism
by Brian Wesbury, Bob Stein of First Trust Advisors, 3/21/13
The Federal Reserve made no changes to monetary policy today and only some small changes to the language of its statement. Once again, the Feds comments were slightly more optimistic about the economy than they were after the prior meeting.

The Plow Horse is Trotting
by Brian Wesbury, Bob Stein of First Trust Advisors, 3/12/13
In October 2012, we raised our recession odds from 10% to 25%. We saw an increase in uncertainty and fear over the election and the fiscal cliff as having the potential to cause a drop in velocity. Panics (falling velocity) are rare. As a result, our base case (75% odds) was for a 2.5% to 3% increase in real GDP for 2013. Real GDP increased just 0.1% in Q4, but now it appears the Plow Horse is starting to trot a little.

There the Bears Go Again
by Brian Wesbury, Bob Stein of First Trust Advisors, 2/11/13
The S&P 500 is up 6% since the start of the year and 12% from a year ago. On cue, the bears have started to claim this run-up in stocks is just plain crazy, based on unreasonable euphoria or "it's just technical." It cant possibly last because "the fundamentals are bad."

Ignore the GDP Headline
by Brian Wesbury, Bob Stein of First Trust Advisors, 1/23/13
Next week, Fourth Quarter Real GDP will be released. Our forecast of 0.9% annualized growth, if correct, will encourage the pessimists to continue fretting about the economy in the year ahead. But we will ignore that dour response. Beneath the surface of the report will be evidence that the plow horse economy is picking up some steam.

Greedy Innkeeper or Generous Capitalist?
by Brian Wesbury, Bob Stein of First Trust Advisors, 12/21/12
Over the centuries, people have come to believe that because Jesus was born in a stable, and not in a hotel room, Mary and Joseph must have been mistreated by a greedy innkeeper. This narrative persists even though the Bible records no complaints at the time and there was apparently no charge for the use of the stable. It may be that the stable was the only place available. Bethlehem, like other small towns, was overflowing with people who were forced to return to their ancestral homes for the census - ordered by the Romans for the purpose of levying a tax.

Fed Talks Louder, To Little Avail
by Brian Wesbury, Bob Stein of First Trust Advisors, 12/17/12
When someone doesn't speak your language, yet you must communicate, funny things can happen. At first, most just talk normally, hoping the message somehow gets through with a hand gesture or two. If that doesn't work, some people start talking really slowly. And if all else fails, how about saying it REALLY LOUDLY, and emphatically, to finally get our point across. That's where the Federal Reserve is today. In its own collective mind, it has a very important message to convey: that monetary policy is going to be as expansionary as necessary to get this economic recovery off the ground.

To QE Infinity, and Beyond!
by Brian Wesbury, Bob Stein of First Trust Advisors, 12/12/12
The Federal Reserve made two big changes today, but changes that were mostly anticipated by the markets.

Is QE4 Really Coming?
by Brian Wesbury, Bob Stein of First Trust Advisors, 12/10/12
The Federal Reserve meets this week. Analysts are supposing and predicting what the statement will say and if the Fed will change its economic projections.

Leaning Left
by Brian Wesbury, Bob Stein of First Trust Advisors, 11/13/12
President Obama won a second term as president by three percent of the popular vote, while sweeping the battleground states and winning the Electoral College. Meanwhile, Democrats gained two seats in the Senate and the GOP held onto a comfortable majority in the House.

Election Matters, But Stocks are Cheap
by Brian Wesbury, Bob Stein of First Trust Advisors, 11/5/12
Tomorrow's election may be the most important one for economic policy of our generation. Years from now, we may look back at the choice Americans make as an inflection point leading toward either more economic freedom or less, with major effects on long-term economic growth and living standards.

Velocity, Uncertainty & the Economy
by Brian Wesbury, Bob Stein of First Trust Advisors, 10/29/12
Recently we lifted our recession odds to 25% from 10%. For some, this was worrisome. In recent weeks we've been asked, "If you guys get a little bearish on the economy, after being bullish for so long, shouldn't I get really nervous?" Our answer to this question is "no."

More Plow Horse
by Brian Wesbury, Bob Stein of First Trust Advisors, 10/22/12
If we see any theme in the third quarter, it was that the consumer had growing purchasing power while businesses temporarily pulled back from investing in plant and equipment. Usually, that kind of retreat in business investment would have us more concerned. Almost every time machinery orders are down 10% from the year before, like they are now, we are near recession. But we think many companies are temporarily waiting until after the election to decide what to do.

The Romney Tax Plan
by Brian Wesbury, Bob Stein of First Trust Advisors, 10/16/12
The US federal budget is a mess. Spending has soared, which has hurt economic growth and undermined tax revenues. The result is four consecutive years of trillion dollar deficits. Politicians are always tempted to hike taxes to fix deficits, but the US has reached the point where this is not possible.

Recession Risk Rising
by Brian Wesbury, Bob Stein, Strider Elass of First Trust Advisors, 10/1/12
Economic forecasting was relatively easy from the end of World War II until the middle of the prior decade. Most of the time, you could just focus on monetary policy. But then came the last recession, which had nothing to do with the Fed being too tight. Instead, falling home prices and mark-to-market rules rendered some major banks under- capitalized. A pure financial panic ensued, the likes of which we had not seen for 100 years. But what if this was not a one-time event?

Housing Recovery Still Young
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/24/12
The turnaround in the housing market is perhaps the brightest spot in an otherwise tepid economic recovery. Home sales, home building, and even home prices are all headed up. In the past twelve months, sales of existing homes are up 9% while sales of new homes are up 25%. Housing starts are up 29%. The two most prominent home price measures, Case-Shiller and FHFA, are both up at about a 7% annual rate in the past six months.

QE3, For Now
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/17/12
As we all know by now, the Federal Reserve launched QE3 on Thursday, announcing an open-ended program of buying an extra $40 billion a month in mortgage-backed securities until it sees a substantial improvement in the outlook for the labor market. It also adjusted its guidance for when it thinks it will start moving up short-term interest rates to mid-2015 from a previous late-2014.

Fed Sets Sail on QE3
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/13/12
They did it. The Federal Reserve today announced a third round of quantitative easing, making an open-ended commitment to buy additional mortgage-backed securities at a pace of $40 billion per month. The Fed said it also will "closely monitor" the economy and financial markets and continue these purchases and possibly expand them until they see substantial improvement in the outlook for the labor market.

Better Policy, Better Recovery
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/10/12
Politicians always shift the blame. So, hearing them say that "no one" could have cleaned up the so-called mess and fixed the economy in just a few years is not surprising. What else do you say when after three years of recovery the unemployment rate is still at 8.1% -- down only 1.9 points since the peak almost three years ago and real economic growth has averaged a tepid 2.2% for three years of economic recovery?

Still No Recession in Sight
by Brian Wesbury, Bob Stein of First Trust Advisors, 9/4/12
Real GDP in the US has grown 2.3% in the past year, a mediocre rate of growth, little different than its 2.2% average since mid-2009, when the recovery officially began. It's what we call the Plow Horse economy and we expect it to continue plodding along, at least through this fall.

Still No QE3
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/27/12
The Federal Reserve is clearly ready to do something. In recently released minutes from the 7/31-8/1 meeting and a letter from Chairman Bernanke to Congressman Darrell Issa (R-CA), the Fed argued that its actions had helped the economy already and that the Fed was ready to do more.

Lengthen the Debt
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/20/12
The U.S. national debt has exploded, doubling over the past seven years. Everyone agrees that this is unsustainable. Meanwhile, interest rates have touched historic lows: the yield on the 10-year Treasury Note dropped as low as 1.4% back in July; the yield on the 30-year Bond as low as 2.5%. Under these circumstances, one would think the US Treasury Department would be turning lemons into lemonade.

The Romney-Ryan Achilles Heel
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/13/12
When Mitt Romney chose Rep. Paul Ryan as his running mate he guaranteed that the 2012 presidential race will be about two opposing economic philosophies. It will be clear to voters which side the candidates are on and, as a result, this election could determine the direction of the American economy for decades to come.

Why the Long Face?
by Brian Wesbury, Bob Stein of First Trust Advisors, 8/6/12
Back in early 2009, the University of Chicago Booth School of Business and the Northwestern University Kellogg School of Business teamed up to create the Financial Trust Index. The latest readings from July 2012 show that just 21% of Americans trust the financial system and only 15% trust the stock market. For many, this negativity is understandable.

Heads, I Win, Tails, You Lose
by Brian Wesbury, Robert Stein of First Trust Advisors, 7/30/12
Up, down, sideways...it's all bad, all the time. Take oil, for example. Between September 2011 and March 2012, oil prices rose about 20%. This generated all kinds of "sky-is-falling" stories about consumers having less money to spend. But, recently, as oil prices headed south in May and June, do you think the negativity went away? Not! The Pouting Pundits of Pessimism said falling oil was a bad sign, signaling weak global demand. It's all bad, all the time. The glass is always half empty.

Wesbury vs. Krugman
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/24/12
Today, on Bloomberg with Tom Keene, Brian Wesbury was asked about Paul Krugman. Wesbury said Krugman was wrong - government spending does not boost growth, if it did there would be no poverty in the world. This was reported on BusinessInsider...BusinessInsider then reported that Krugman fired back...quoting his New York Times blog. In it, he claims it all "depends on the situation."

Slow in Q2, But No Recession
by Brian Wesbury, Bob Stein of First Trust Advisors, 7/23/12
We estimate real GDP grew at only a 0.9% annual rate in Q2. The Plow Horse Economy hit a tough spot, but it hasn't hit the wall. In Q1-2011, real GDP grew at just 0.4% at an annual rate, but then accelerated again. In other words, this is not the end of the world. It's not a recession.

Stocks Are Really Cheap
by Brian Wesbury, Robert Stein, Strider Elass of First Trust Advisors, 7/16/12
America's equity markets have rallied sharply since last October, with the S&P 500 up 22%. Nonetheless, the stock market has been stuck in a range for 18 months, with the Dow Jones Industrial's Average trading between 10,650 and 13,280, well below the October 2007 high of 14,165. Financial markets have priced in all kinds of bad things a fiscal cliff, slower earnings growth, a potential recession, and big government. But, we think these markets are overly pessimistic.

Is Obama a Big Spender?
by Brian Wesbury, Robert Stein, Strider Elass of First Trust Advisors, 5/29/12
Last week, Rex Nutting, a reporter for MarketWatch, became famous when the White House used his analysis of government spending. He wrote that there has been no huge increase in spending under the current president. We like Rex Nutting. He seems like a fair-minded analyst. But we emphatically disagree. This is not personal, heck, its not even political. Data from the Congressional Budget Office (CBO) shows President Obama has been a huge spender.
Results 701–749 of 749 found.