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U.S. Treasuries

It’s widely expected that at the end of this month, the Federal Reserve will end its third round of quantitative easing (that began in September of 2012). This is QE3, where the Federal Reserve was printing $85.0 billion of new money every month and using it to buy…

The Bureau of Economic Analysis (BEA) surprised even the most optimistic of economists when it reported the U.S. economy grew at an annual rate of four percent in the second quarter of 2014. On the surface, the number—four percent growth—sounds great. But how serious should we take that…

Yesterday, the Dow Jones Industrial Average fell 317 points, while the NASDAQ Composite Index fell 93 points—respective losses of about two percent per index. This morning, stock market futures are down again. As a reader of Profit Confidential, this “rout” we are now in should come as no…

Something just doesn’t make sense here… In 2013, the U.S. budget deficit came down to $680 billion. Finally, after four consecutive years of annual budget deficits of more than $1.0 trillion, the government got its annual “hole” under the trillion-dollar level, and it seemed as though we were…

For a moment, consider yourself a loan officer at a major bank. Would you approve a loan for a customer who says they earn $1,000 a month, spend $1,300 a month, and don’t have a job? They also tell you they have unpaid debts of $17,000. I don’t…

When news first broke from the Federal Reserve that it would slow down the pace of its quantitative easing program, the consensus was that the U.S. dollar would start to rise in value as the Fed would be printing fewer new dollars and actually eliminating all new paper…

The bond market is in trouble. As we all know, the Federal Reserve has been the biggest driver of bonds since the financial crisis. The central bank lowered its benchmark interest rate to near zero, then started quantitative easing, all of which resulted in the bond market soaring…

Last Thursday, the CEO of DIRECTV (NASDAQ/DTV) said “…we are pleased to announce a share repurchase program of $3.5 billion. This repurchase program reflects our strong balance sheet and confidence in continued strong DIRECTV revenue, earnings and free cash flow growth, as well as our belief that our…

Last night started out like every other State of the Union address I’ve seen… The President told us all the good stuff about the U.S. economy, like how American corporate profits are at a record high, how the stock market is at record highs, how millions of new…

The deleveraging that’s taking place around the world is obviously echoed in tumultuous capital markets, but a retrenchment in the bond and stock markets has been overdue for ages. As is usually the case, several catalysts came together at the same time to produce an unsurprising stock market…

What a remarkable past 20 hours it’s been… Yesterday afternoon, the Federal Reserve announced it might cut back on its $85.0-billion-a-month money printing program later this year. The Dow Jones Industrial Average tanked 200 points following the news (and continues to fall this morning), European stock markets fell…

The bond market, dear reader, is becoming vulnerable. By keeping interest rates so low and by the Federal Reserve actually buying U.S. Treasuries, bond prices have climbed and climbed…and the low yields on U.S. Treasuries have sent investors to the stock market and junk bonds. Any tightening in…

By looking at the stock market’s recent performance, one might think the U.S. economy has turned the corner and the worst is behind us. This is far from reality! The U.S. economy is fundamentally damaged, and since the financial crisis of 2008–2009, there really hasn’t been any real…

One of the biggest debates amongst American economists these days is whether the Federal Reserve’s continued $85.0-billion-a-month expansion of the money supply is making the U.S. economy more vulnerable, as opposed to helping strengthen the economy. One of the main reasons the central bank took on quantitative easing…

The financial crisis of 2008-2009 crumbled the U.S. economy to a degree not seen since the great depression. Now another economic problem is emerging—a problem 46 times bigger than the gross domestic product (GDP) of the U.S. economy. It’s the financial crisis involving derivatives markets. Starting next year,…

There’s plenty of media focus on the annual symposium at Jackson Hole where central bankers and other market personalities meet. The common hope for further quantitative easing by the Federal Reserve is also looming in the air. What’s my take on what the Federal Reserve’s plan for quantitative…

Simple economics dictates that when consumer confidence in an economy increases, it leads to higher consumer spending; that’s how you get economic growth. This is especially true in the U.S. where consumer spending accounts for 70% of the gross domestic product (consumer spending). Consumer confidence this month dropped…

“Dumping more U.S dollars into the economy generates economic growth…” While this theory was famous during the credit crisis of 2008, four years later it has become obvious that troubling issues at hand suggest otherwise. What we all know: The devastating effects of the credit crisis dampened economic…

Last Friday’s U.S. jobs report was just terrible and we also got data from China showing a weakening in that country’s manufacturing sector. This put an already lackluster stock market into very negative territory, hurting investor sentiment significantly. At the same time that we got this economic news,…