Economic Analysis

The rise of the Internet has created an abundance of easily accessible economic information. Unfortunately, this has made it difficult for investors to understand, digest, and even evaluate. Where, then, can investors turn for objective economic analysis, market research, and breaking fiscal news that affects both Wall Street and Main Street?

Economic analysis means looking at the interconnected effects of global economic events. These events can be as major as geopolitical tensions, elections, corporate earnings, housing markets, consumer sentiment, and rising unemployment rates—to seemingly innocuous news stories, including mergers and acquisitions, crude oil inventories, auto loans, birth rates, and retiring Baby Boomers.

In 2001, Michael Lombardi started his famous daily economic newsletter Profit Confidential. Written by Lombardi Financial editors who have been offering stock market guidance to Lombardi customers for years, Profit Confidential provides a macro-picture on where the stock market is headed, what sectors are hot, and what sectors to avoid.

Over the years, Michael’s financial commentary and the accuracy of his economic predictions have garnered him global attention and the confidence of over one million investors in more than 140 countries.

When the U.S. economy was on the verge of collapse after the financial crisis of 2008, the Federal Reserve came to the rescue. The central bank provided the financial system with quantitative easing (QE)—it printed money and bought bad debt from the big banks. As a result, the Federal Reserve’s balance sheet has grown by almost $2.0 trillion—200% in less than five years. Where did the money come from, and how does it affect the buying power of the average American?

The eurozone is struggling to get out of a debt crisis that has been helping weigh down the global economy. Germany and France, the go-to countries for economic growth and stability in the eurozone, are beginning to experience retractions and may not be able to prevent the region from slipping into a recession. The eurozone unemployment rate reached a record high of 11.7% in October 2012, up from 11.6% in September. There are 18.7 million people unemployed in the region, with Spain and Greece’s unemployment rates both exceeding 25%. (Source: Eurostat, November 30, 2012.)

What does this mean for the eurozone? How will it impact the United States? Or, affect the Chinese economy?

At the same time, it’s important that economic analysis takes an ongoing look at domestic policies. For example, cities like Vallejo, Mammoth Lakes, Stockton, and San Bernardino have already defaulted on their municipal bonds. What caused them to declare bankruptcy, and how does it affect the everyday investor and the overall health of the U.S. economy?

The global economy is constantly going through changes. We currently live in a world where one country is connected with the other. It doesn’t really matter anymore how far or close economies are to each other.

That’s why in-depth macro- and micro-economic analysis is more important than ever. It helps investors see the world from different perspectives and helps uncover opportunities to balance, diversify, and grow stock portfolios.

China’s economic situation, the information age, an end to the 30-year down cycle in interest rates, the credit crisis , the coming debt crisis in America, the eurozone crisis—these are only a few of the economic events occurring in the global economy. That’s what drives Profit Confidential. We take the economic information churned out daily, analyze it, and deliver understandable, even fun-to-read, economic analysis to our readers each day.

Japan’s Debt Hits 245% of GDP…Why We’re Headed There Too

By Friday, December 5, 2014

Japan DebtMoody’s Investor Service has downgraded the debt of Japan—the third-biggest economy in the world.

The credit rating agency has provided three reasons for this downgrade: uncertainty over Japan’s ability to cut its deficit; uncertainty over the effectiveness of government growth policies; and the risk of yields on Japane… Read More

Economic Collapse Headed for U.S. in 2015

By Tuesday, December 2, 2014

U.S. Economic Collapse 2015The last thing Wall Street is thinking about is an economic collapse in 2015. After all, the stock markets are at record highs, unemployment is down, and inflation is in check. But the fact of the matter is that these same indicators were also in check before the markets crashed in 1987, 2000, and 2008/09.

Back in 2008/09, everyone on Wal… Read More

U.S. Dollar Collapse May Happen Any Day Now, Warren Buffett is Preparing For It

By Tuesday, October 1, 2013

Some of the biggest names in investing publicly stated months ago that the U.S. dollar would fall hard against other world currencies. Big investors, like Warren Buffett, have actually made investment bets the dollar would fall. Why hasn’t it happened?

Patience, my dear reader, patience. The financial markets rarely do wha… Read More

Why U.S. GDP Contracted for First Time in 3.5 Years

By Monday, February 4, 2013

U.S. GDP Contracted for First Time in 3.5 Years(Make sure to read my important comments today about the stock market in “Where the Market Stands; Where it’s Headed” below.)

The U.S. economy, as measured by gross domestic product (GDP), contracted in the fourth quarter of 2012 for the first time in three and a half years. According to the Bureau of Economic Analysis, U.S. GDP … Read More

Auto Sector Growth Slows in
China, but Market Still Massive

By Thursday, June 28, 2012

China’s Auto SectorThe key to China’s economic progress will be the rapid growth of the country’s middle class. In a research finding, Credit Suisse predicted that the household wealth in the country will double to $35.0 trillion by around 2015, based on achieving sustainable GDP growth at or near the current growth rate.

The economic analysis is s… Read More