In today’s economic landscape, the option to exit from the gold standard for monetary adjustments is a relic of the past. With the gold standard now a historical concept, nations must navigate challenges through alternative means. Poland stands out in this regard, demonstrating significant growth while its regional counterparts struggle. A comparison with Ireland and Greece underscores this remarkable difference. The key question is: what accounts for Poland’s relative success? Although multiple factors contribute, one notable aspect is Poland’s decision to delay the adoption of the euro, providing them with a unique advantage at this time.
As we approach the end of the year and the decade, it’s natural to reflect on past events and evaluate what we anticipated versus what has unfolded. Some analysts label the last ten years as a “lost decade.” However, this viewpoint is somewhat misleading. While those who took significant risks may have struggled, many investors remained steady. On the whole, a well-diversified asset allocation across major classes has yielded modest gains, which, although not particularly exceptional, certainly does not warrant the “lost decade” label.
● The Power of Passive Investing: More Wealth with Less Work
By Richard A. Ferri
Watch Video of the author discussing his book, along with a summary provided by the publisher, John Wiley & Sons.
Many individual investors discover too late that actively selecting stocks is often a losing strategy. A more favorable alternative is to invest via index funds. This passive approach allows for market participation at a lower cost while keeping more of your earnings intact. Investment expert Richard Ferri’s latest work illustrates just how straightforward and beneficial index investing can be, detailing how to allocate your funds wisely across various asset classes, including stocks and bonds.
I will be speaking at the Superbowl of Indexing conference in Phoenix starting this Sunday, which means my blogging schedule might be light or non-existent for the next few days…
The labor market showed growth last month, yet the increase in private nonfarm payrolls was underwhelming, even by today’s softened expectations.
►Evaluating the Prospects of a Double-Dip Recession Amid Indicators and Slowdowns
Harvey Rosenblum and Tyler Atkinson/Dallas Fed/December
The steep rise of the yield curve suggests a minimal chance of a recession in the upcoming year. Despite this, several economists hesitate to fully trust this signal due to distortions caused by the Federal Reserve’s unconventional monetary policies, which include the near-zero federal funds rate and a quantitative-easing initiative that has suppressed intermediate- and long-term Treasury rates. With such low short-term rates, an inversion of the yield curve—where short-term rates exceed long-term rates—becomes nearly impossible.
There are signs that the unemployment rate could rise again, as claims for jobless benefits remain at levels typically linked to increasing unemployment. Even if the rate remains stable, it still hovers at a concerning level, posing challenges to the overall recovery.
While current oil prices don’t fit the criteria of a shock, they remain at levels unseen since the early 1980s and the 2006–08 period. An oil supply shock would pose significant risks to an already fragile recovery.
Most forecasters predict a growth rate between 2% to 3% over the next year, but this growth lacks the momentum needed to rise securely above stall speed. Until this issue is addressed, policymakers will continue to confront pressure to enact fiscal and monetary strategies that promote full employment and more vigorous growth.
We were on the verge of something meaningful. Last week’s initial jobless claims report encouraged some hope with a significant decrease in new filings, reaching the lowest number since July 2008. It seemed as if relief had finally arrived. However, a substantial portion of this drop vanished in today’s update from the Labor Department, which revealed an increase of 26,000 claims to a seasonally adjusted total of 436,000 last week. Have we been misled yet again? Not necessarily, at least not just yet.
Investing in consumer spending has proven to be a successful strategy in 2010. Up until December 1, the consumer discretionary sector of the S&P 500 has outperformed all others, showing a total return of 23.4%. This figure is more than double the broad market’s gain, which stands at 10.2% during the same period.
Mark Calabria, director of financial-regulation studies at the Cato Institute, responded to David Beckworth’s “conservative case for QE2” in National Review. Opinions will vary on this complex topic of economics and politics, and the definition of “evidence” may spark debate. That said, Calabria’s arguments do not appear to be entirely convincing.
According to the latest release of the ADP National Employment Report, private-sector payrolls increased by a net total of 93,000 last month. This marks the tenth consecutive month of growth and the largest monthly increase in three years for this series. This news comes just as a welcome reminder amidst concerning trends in yesterday’s housing market update for the third quarter.
The articles presented highlight a range of economic evaluations, from Poland’s resilient growth amidst regional challenges to reflections on the past decade for investors. Each piece elucidates the complexities of our current economic landscape, encouraging informed analysis and strategic investment considerations. As we progress into the new year, keeping a close eye on emerging trends will be essential for navigating future economic dynamics.
