Postings will be light to nonexistent for the rest of the week as I indulge in some mid-summer R&R. The usual editorial tricks resume on Monday, August 2. Meantime, stay cool, be well and watch out for falling economic numbers.

As rebounds in corporate profits go, recent history is probably about as good as it gets. That’s no surprise, considering that the hammering of corporate America just prior to the rebound was no less extraordinary. The implication: the best days are behind us. That doesn’t mean that corporate profits are destined for trouble, but recent history delivered a backdrop of nirvana for the stock market. If something less, and perhaps considerably less is coming, so too are attitude adjustments. The question is whether the crowd’s expectatiions are fully and fairly adjusted?

Continue reading →

Zero-coupon Treasuries with maturities of 20-plus years are reportedly the top-performing investment this year through July 22, posting a 21% return so far. Ok, so what’s going to dominate for the second half? A repeat performance with zeroes? Naw, it couldn’t be. Well, it’s not likely, right? On the other hand…

It’s more complicated than it appears. From today’s Wall Street Journal: “After studying more than a decade of deflation in Japan, economists have slowly realized they have no idea how it works.”

►VIX, volatility and ETFs/ETNs:
Vix and More blog: “While I was out of pocket for a few days, Barclays had the temerity to launch a new VIX ETN. Not only that, but this new volatility product is the first inverse VIX ETN to hit the market. It goes by the formal name of Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN and has a ticker of XXV.”

Continue reading →

Today’s New York Times has a story about Italian automaker Fiat and its efforts to “make its workers more productive.” What’s priceless is one of the accompanying photos (see below), which shows a Fiat employee wearing a T-shirt that may inspire something less than optimism when it comes to expectations about boosting productivity, a decidedly capitalistic notion. Namely, the worker is wearing a shirt with a hammer and sickle, the international symbol of communism. The story also quotes a factory worker who worries that the push to improve productivity will “impose American-style standards” on the workforce. Oh, no–not that! The worker concludes that ““too much work is going to kill our workers.” Yes, folks, things are tough all over.

A worker of the world unites

Yesterday’s post about the trendless trend in new jobless claims inspired one reader to complain that I wasn’t paying sufficient attention to the history for this data series and therefore drawing unnecessarily dark conclusions.

Continue reading →

Well, that didn’t last long. Today’s weekly update on new jobless claims dashed hopes for the moment that the previous downturn in this series was the start of something new in the way of positive momentum for the labor market. Indeed, the numbers were sufficiently encouraging a week ago to inspire asking: Is the dip real? We now have the first installement on an answer. It’s not necessarily the last word, but so far the response is discouraging.

Continue reading →

Fed Chairman Bernanke’s Senate testimony yesterday offered little reason to expect that the central bank was about to embark on a bold, new plan of monetary stimulus to offset the recent signs that deflationary pressures were bubbling anew. As Bloomberg News reported, “the Fed chief devoted a bigger portion of his prepared testimony to how the Fed would eventually withdraw its unprecedented credit expansion.”

Continue reading →

Misery loves company, but returns for the major asset classes show no sign of wear this month from the economic worries of late. If anything, the chatter about deflation and the potential for a double-dip recession has emboldened the bulls in July. Save for TIPS, prices are higher across the board, and by more than trivial amounts for most broadly defined asset classes

Continue reading →