● Fate of the States: The New Geography of American Prosperity
By Meredith Whitney
Review via ChiefExecutive.net
In the course of U.S. economic cycles, geography played a key role in the rise and fall of regional economies. This is no longer true. In today’s economy where all most businesses need is access to high-speed data networks, proximity to airports, an interstate and a college-educated labor pool, there’s no physical reason why Boeing cannot build airplanes in South Carolina instead of Washington State. Financial analyst Meredith Whitney, who made a name for herself for spotting the subprime mortgage crisis a year before it happened, forecasts a major economic shift in her recent book, Fate of the States: The New Geography of American Prosperity. “Voters and communities are starting to realize just how closely tied their personal economic well-being is to their communities’ fiscal well-being,” she writes. “Voters in mismanaged states, the ones now flushing away jobs, are rising up and putting their feet down. Unemployed workers are packing up their families and relocating to low-tax, non-budget-crunched states like Texas and North Dakota in order to find work.”
Same Old, Same Old: Modest Growth For The Labor Market
If May is a tipping point that leads to nasty things for the business cycle, it’s not obvious in today’s payrolls report from the Labor Department. Although quite a lot of ink has been spilled in recent weeks about weak numbers from certain sectors in the economy, it appears to be business as usual with jobs creation. Slow growth, in short, continues to persist.
A Modest Drop In Last Week’s Unemployment Filings
Jobless claims fell for the week through June 1, slipping 11,000 to a seasonally adjusted 346,000. That leaves the number of claims close to middling relative to the range for the last several months. Although the new filings have been moving sideways lately, it’s still encouraging that this series isn’t moving higher in the wake of wobbly data in other economic news.
Asset Allocation & Rebalancing Review | 6 June 2013
In the previous edition of Asset Allocation & Rebalancing Review I noted that the great divergence in returns in 2013 rolled on. But gravity has since reasserted its authority. There’s still a wide range of returns on a year-to-date basis for the major asset classes, but the range has been squeezed recently.
US Nonfarm Private Payrolls: May 2013 Preview
Private nonfarm payrolls are expected to increase by 155,000 in tomorrow’s May update from the Labor Department, based on The Capital Spectator’s average econometric point forecast. The projected gain is moderately lower than the reported increase for April and below a pair of consensus forecasts for May, based on two surveys of economists.
ADP: Slow Growth In Payrolls Persists In May
The pace of growth in private-sector payrolls picked up a bit last month, according to today’s ADP Employment Report. The modest improvement is enough to assume that May’s full economic profile, once all the numbers are published, will reflect more of what we’ve seen lately: a sluggish but still positive rate of expansion. But expecting something better continues to require a level of confidence that’s not supported in the numbers.
The Rock, The Hill, & Every Investor’s Burden
What are the odds of getting it right? Tougher than it seems. Maybe that’s why there’s a widespread tendency to assume that asset allocation doesn’t require much analysis or monitoring. Some folks take this to the extreme and decide that asset allocation isn’t all that important after all (even if quite a lot of research tells us otherwise). But what you own and when you own it, and how much of it sits in your portfolio, counts for a lot, as my current profile of the major asset classes reminds. The problem is that there are a lot of moving parts to researching, building and maintaining a diversified portfolio and so getting it all right is, well, let’s just say it’s challenging.
Mr. Market’s Global Bond Market Allocations
Last week I sliced up the allocations for the global equity markets as of May 31, and today I do the same for fixed-income. But first, the standard caveat. Categorizing the global bond market’s components is tricky. Equities, by contrast, are relatively transparent. For simplicity, I’m streamlining the fixed-income analysis, although no one should confuse the numbers below as the last word on the global bond market mix. For instance, I’m leaving out US munis and collateralized debt.
Major Asset Classes | May 2013 | Performance Review
May was quite ugly for the capital markets around the globe. We haven’t seen anything like this in a while. The last time a single calendar month pinched so many asset classes so deeply: September 2011. Last month delivered a repeat performance, with prices sliding almost everywhere, in several cases by a lot. The one exception: US stocks. The Russell 3000 posted a healthy 2.4% total return last month, leaving US equities higher by a hefty 15.6% so far in 2013. But that’s where the good news ends.
Book Bits | 6.1.13
● Time No Longer: Americans After the American Century
By Patrick Smith
Summary via publisher, Yale University Press
Americans cherish their national myths, some of which predate the country’s founding. But the time for illusions, nostalgia, and grand ambition abroad has gone by, Patrick Smith observes in this original book. Americans are now faced with a choice between a mythical idea of themselves, their nation, and their global “mission,” on the one hand, and on the other an idea of America that is rooted in historical consciousness. To cling to old myths will ensure America’s decline, Smith warns. He demonstrates with deep historical insight why a fundamentally new perspective and self-image are essential if the United States is to find its place in the twenty-first century.
