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Economy

Prices Decline

by Luke Landes

The Consumer Price Index declined 0.1 percent last month but the core CPI (excluding food and energy costs) rose 0.2 percent. This seems to mean that while energy costs went down, perhaps rebounding from highs due to natural catastrophes last year, those costs didn’t decline enough to bring prices of other items down.

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Recession Prediction

by Luke Landes

Predicting recessions is fun for the whole family. Even George Soros is doing it. The billionaire believes the Federal Reserve will tighten monetary policy too much, resulting in a “hard landing” for the economy in 2007. Less famous people are predicting the same. James F. Smith, who served as an economist for the Fed in ... Continue reading this article…

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Mean National Prosperity

by Luke Landes

On Marketplace last night, Robert Reich talked about a cognitive disconnection regarding the American economy. While the country’s gross national product has been increasing, individuals (other than the top 20 percent) haven’t been seeing any benefits from the increased productivity. Usually increased productivity goes hand-in-hand with increased wealth. Rather than income and net worth increasing with ... Continue reading this article…

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Looking Ahead to 2006

by Luke Landes

Yahoo Finance is presenting a feature on the 2006 outlook. The intent of the numerous articles within the feature is thwarted by the first sentence in the first article: “Don’t believe anyone who claims to know.” We’ve reached a difficult and puzzling fork in the economic road. In one direction lies the ugly prospect of ... Continue reading this article…

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Yield Curve Flipped

by Luke Landes

Earlier today, the yield on long term Treasury notes was lower than that on short term Treasury notes, creating an “inverted yield curve.” This is a fairly popular economic indicator, and just about every time this has happened in the last thirty years, the U.S. economy headed into a recession. It’s likely not a cause-effect ... Continue reading this article…

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Federal Reserve Does What Is Expected

by Luke Landes

The Federal Reserve bumped up the short-term rate target to 4.25 percent, while hinting the increases may come to an end at some point. This activity practiced by the Federal Reserve Board at their meetings is a very strange ritual. If you think about what they do, you may come to the conclusion it’s more like ... Continue reading this article…

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The Elevator Economy

by Luke Landes

Home sales hit new record. Sales of new homes in the U.S. rose by 3.4 percent in October. Housing boom past its peak? The pace of new home building slowed sharply in October, the weakest month in 2005. Home builder sentiment falls. The National Association of Home Builders says November was a bad month. Consumer ... Continue reading this article…

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Will China Make Americans Better or Worse Off?

by Luke Landes

Due to increasing skills and knowledge worldwide as well as labor costs that are a fraction of costs in the United States, there is some fear that the competition will mean less prosperity for people of my generation and younger. The concern is the younger generation may not be able to live as “well off” ... Continue reading this article…

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Monday Morning News: Spending and Income Up

by Luke Landes

Hurricane repairs and insurance payments lift both personal spending and income; prices in check. This sounds like temporary relief to me. In fact, it’s not all good news. The saving rate is still negative at -0.4 percent. So while the move was in a good direction, we’re still spending more than we’re saving. I’ve tried ... Continue reading this article…

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Greenspan Influenced Rock and Roll

by Luke Landes

Marketplace is a program on National Public Radio, usually broadcast out of California. This week, they’ve been doing their shows from New York City and there was an interesting segment on last night’s edition. It caught my attention mainly because of my interest in music. The commentator, Ian Svenonius, described how trends in rock music ... Continue reading this article…

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Bernanke’s Portfolio

by Luke Landes

Ben Bernanke is the guy who, if confirmed, will be the most visible individual and listened-to voice in regards to the United States economy. So his portfolio should tell us a little about his market philosophies. Here’s his financial disclosure form from 2003. Henry Blodget analyzed his portfolio and discovered: * He’s rich, but not ... Continue reading this article…

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Fed News Flash

by Luke Landes

The president has nominated Ben S. Bernanke to replace Fed Chairman Alan Greenspan.

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Are You An Investor Or Speculator?

by Luke Landes

Mark Cuban has presented an editorial on the differences between investing and speculating. He proposes that investors no longer exist and the vast majority of those in the market are speculators. He concludes with his own opinion about how corporate profits distributed to shareholders should be taxed. True investors in businesses would not be taxed, ... Continue reading this article…

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What Are You Afraid Of?

by Luke Landes

CNN Money has an extensive feature on how general consensus is wrong again. The articles look at the biggest money fears, how they may be unreasonable, and what should worry the public instead. Here are the first three from the series. The remaining three appear in a follow-up post here at Consuermsim Commentary. While Americans ... Continue reading this article…

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Moving On Up

by Luke Landes

This just in: The Fed has raised rates another quarter point to 3.25 percent. The effect will ripple through the economy, which is good news for banks. I’m looking forward to some of the banks, such as ING Direct and Emigrant Direct (where I hold my savings) raising their rates as well.

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Master of Your Eminent Domain

by Luke Landes

Last week I talked about the Supreme Court decision regarding Eminent Domain. Hot on the heels of the decision, a town in Texas is preparing to seize 3 properties to make way for a marina. This time, businesses are involved rather than residences. The marina is expected to attract $60 million and create as much ... Continue reading this article…

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Eminent Domain Rules Officially Changed

by Luke Landes

Let’s say you own a home, like many people in this country do. Let’s go further and say that you own the property completely. Maybe you had a mortgage, but it’s completely paid off. The property is yours. Well… as Jon Stewart is fond of saying, not so much. If your state government decides that ... Continue reading this article…

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Sell Gold, Pay Off Debt

by Luke Landes

Mark Cuban from Blog Maverick believes the country should sell its gold reserves in order to pay down national debt. This plan assumes that the amount of held gold reported actually exists in storage. It’s a safe assumption unless you’re a conspiracy theorist. Fort Knox would be an expensive operation if it was protecting nothing. ... Continue reading this article…

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May the Economic Force Be With You

by Luke Landes

Those strange CNN photographers and graphics designers have been at it again, apparently. While the yields of treasury bonds were falling, CNN.com staffers were busy morphing Alan Greenspan into Yoda. The caption for the photo: “Conundrum, hmmm? Boost interest rates, I must.”

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Price Waves

by Luke Landes

Jim Jubak has published an important article about inflation. Jim, with support from The Great Wave by David Hackett Fischer, explains how the Federal Reserve Bank is ignoring long-term inflation while being concerned with shorter, cyclical events. There is historical precedence for the price inflation the world is currently going through. Jim picks out some ... Continue reading this article…

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