Today’s updates on housing construction and industrial production for March bring mostly good news for growth, but with some caveats. First the good news: housing starts climbed more than expected, rising to the highest levels since 2008. Industrial production also increased last month, advancing 0.4% and beating expectations slightly. But the generally upbeat news was tempered by the downturn in new housing permits in March and a modest slide in the manufacturing component of industrial output. What’s going on? Let’s sort it all out with a closer look at the numbers.
Daily Archives: April 16, 2013
Another Golden Lesson For Asset Allocation & Rebalancing
Maybe it’s the sell recommendation from Goldman Sachs. Or perhaps the trigger is the general fear of a sharp slowdown in China’s economy that will take a toll on global GDP. Whatever the reason, the price of gold yesterday suffered it’s biggest drop in 30 years. For gold bugs who loaded up on the precious metal, it’s been a rough 24 hours. Of course, if you really believed the seers who say gold’s going to $5000, you’d be buying more after yesterday’s price crash. But that’s a tough call for the simple reason that estimating expected return for gold—and commodities generally—is unusually tough compared with stocks, bonds and real estate. Gold, after all, has no income, produces no earnings, and has no fundamental economic value beyond its limited industrial applications.