Archive for October 25th, 2010

Stuck in a Liquidity Trap

Stuck in a Liquidity Trap

| October 25, 2010

In his latest weekly commentary, fund manager John Hussman discussed the liquidity trap facing the Federal Reserve as it prepares to engage in additional quantitative easing. The hallmark of a liquidity trap is that holdings of money become “infinitely elastic.” As the monetary base is increased, banks, corporations and individuals simply choose to hold onto [...]

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Existing Home Sales Rebound off of Recent Lows But Remain Weak

Existing Home Sales Rebound off of Recent Lows But Remain Weak

| October 25, 2010

The National Association of Realtors (NAR) reported that existing home sales increased to 4.53 million units in September from 4.12 million units in August. Although the increase was characterized as a “strong gain” by the NAR, the rebound was a typical “oversold” reaction following the sharp decline in the wake of the home buyer tax [...]

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Chicago Fed Reports Further Weakness in September

Chicago Fed Reports Further Weakness in September

| October 25, 2010

The Chicago Federal Reserve reported that their National Activity Index decreased slightly to -0.58 in September from -0.49 in August. The index’s three-month moving average, CFNAI-MA3, ticked down to –0.33 in September from –0.32 in August. September’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the [...]

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Short-term Forecast for October 25, 2010

Short-term Forecast for October 25, 2010

| October 25, 2010

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