Economy

Is the Economic Slowdown Over or Just Getting Started? Part 2 March 01, 2019

Posted by Bryce Coward, CFA in Economy

In Part 1 of this series we talked about the lagged effect of interest rates and money growth, AKA “financial conditions” broadly speaking, on economic growth. We noted that changes in interest rates tend to impact economic growth with about a 2 year lag and…

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Currency Markets & Knightian Uncertainty February 08, 2019

Posted by Steven Vannelli, CFA in Economy, Markets

Knightian uncertainty is named after University of Chicago economist Frank Knight (1885–1972), who distinguished risk and uncertainty in his work Risk, Uncertainty, and Profit: “Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated…. The essential fact is that ‘risk’ means…

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The Employment Report is Not All It’s Cracked up to Be February 01, 2019

Posted by Bryce Coward, CFA in Economy

Today’s “blowout” employment report, while strong in some respects, should be taken with a grain of salt. It’s important to remember that employment is a lagging indicator. Payroll employment often peaks either at the beginning or middle of recessions, so it provides virtually no warning…

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Is 2019 Going to be the Year of the Profit Margin Problem? December 12, 2018

Posted by Bryce Coward, CFA in Economy

2018 has been kind to corporate profit margins. In fact, the margin expansion we’ve seen so far in 2018 is unprecedented in a late cycle economic environment when wages are rising briskly, at least looking back over the last thirty years. What has been different…

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