Media distortion of GDP report

Posted by Jason Apollo Voss on Jan 29, 2010 in Blog | 0 comments First, if you haven’t read my GDP post below, do that first then come back here. The media are taking the 5.7% GDP growth figure and running with it. For example, CNN is saying, “Best economic growth in years.” Huh? Meanwhile the Wall Street Journal says, “The economy surged at the end of 2009…” Double huh? The New York Times business section is saying,...
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GDP figures misleading

Posted by Jason Apollo Voss on Jan 29, 2010 in Blog | 0 comments Friday saw the first pass at estimating U.S. GDP for the fourth quarter and the number looks outstanding. GDP grew 5.7% in the fourth quarter. Analysis: To put that 5.7% figure into perspective you need to know that on average GDP grows around 3% +/- 1.5%. That is, GDP usually ranges between 1.5% to 4.5% growth. So a figure of 5.7% is massive growth. However, that 5.7% growth is utterly bizarre...
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Clawbacks a step in the right direction

Posted by Jason Apollo Voss on Jan 27, 2010 in Blog | 0 comments Long have I decried that financial industry employees, especially its executives, are improperly compensated. Specifically the employees typically are incentivized in such a way that they can only breakeven or gain huge amounts of money. Very rarely are they punished for very poor, unnecessarily risky choices. Not only that, but the time scale is all screwed up. What good is it for shareholders...
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Emergence from recession?

Posted by Jason Apollo Voss on Jan 26, 2010 in Blog | 0 comments The economy of the United Kingdom has technically exited recession by posting fourth quarter 2009 economic growth of 0.1% over the third quarter of 2009. However, this result is far below the consensus expectation of 0.4% growth. Analysis: Growth of 0.1% in a quarter is like you handing someone $1,000 to invest at the beginning of the quarter and them handing you $1 at the end. Obviously...
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How Ukrainian presidential elections affect the markets

Posted by Jason Apollo Voss on Jan 25, 2010 in Blog | 1 comment Part of what makes it tough to earn consistently good investment returns is to understand the interconnections of events, as well as the importance of seemingly random news. Today’s post is an example of an event whose importance is potentially very large, yet not well covered by U.S. media. I am speaking about the Ukrainian presidential elections. To understand the importance of this...
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Plunge in existing home sales

Posted by Jason Apollo Voss on Jan 25, 2010 in Blog | 0 comments The month of December saw a huge month-to-month decline of 16.7% in the sales of existing homes. Analysis: While the magnitude of this decline surprised many economists, most of them had predicted a decline. Because many people had expected the U.S. government first time home-buyer tax credit to expire at the end of November, there was a huge increase in existing home sales in November. So the...
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Today we surrendered democracy to capitalism

Posted by Jason Apollo Voss on Jan 21, 2010 in Best of the Blog, Blog | 1 comment Today, in a decision that I am certain will go down in infamy, the U.S. Supreme Court voted 5-4 to overturn 20+ years worth of legislation that had limited the ability of corporations to spend money to win political influence. This is deeply disturbing to me and here’s why… We have two main institutional power structures operating in the U.S.: democracy and capitalism. Despite the...
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