Housing Double-Dip Likely

Double-dip housing recession is likely in U.S., experts say. Falling house prices in almost all U.S. markets could mean the housing market is slipping into a double-dip recession, analysts said. Standard & Poor's/Case-Shiller Home Price Indices show a year-on-year decline in 18 of 20 markets surveyed. "At worst, the feared double-dip recession may be materializing." said David Blitzer, chairman of the S&P Index Committee. The Washington Post (29 Mar.), SeattlePI.com (29 Mar.), The Arizona Republic (Phoenix) (29 Mar.)

Source:CFA Institute Financial NewsBrief 3-30-2011

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GDP Growth with No Employment Growth

Experts confounded by GDP growth that doesn't cut unemployment. Economists are getting worried that long-standing assumptions about how economic growth reduces unemployment don't apply to the U.S. recovery. Federal policy is based on the belief that 3% gross domestic product growth cuts unemployment by 1%, but that isn't happening. If how the economy works has changed, government policymakers, employers and workers are going to have to make big changes of their own, experts said. TheFiscalTimes.com (24 Mar.), 24/7 Wall St. (24 Mar.), CNNMoney.com (23 Mar.)

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Global Recovery

By Christian Menegatti and RGE’s Macroeconomics Team: The global multispeed recovery remains on a steady path, with most economies set to experience at- or near-potential growth in 2011, though measurable risk and immeasurable uncertainty continue to be present and contribute to new spikes in volatility.

Seven Immutalble Laws of Investing

1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand

By:James Montier

These are the tenants of Crew's investment philosophy. Two great books on the subject are Seth Klarman's "Margin of Safety" and Mary Buffett's "Buffetology..."

Mancession ???

What Does it Mean?

When the unemployment rate is substantially higher among men than women. The term mancession was coined during the financail crisis of 2008-2009, during which men bore the brunt of the job losses in the United States, at times at rates close to 50% higher than women.

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Wealth Grows - Debt Reduction Slows

Per the Fed: Household wealth grows, but debt reduction slows. The wealth of U.S. families increased 3.8% in the fourth quarter, according to the Federal Reserve. Rising stock prices accounted for most of the gain. Households paid down debt for the 11th quarter in a row but at a much slower rate. Corporations kept accumulating cash, holding $1.89 trillion, the most since 1952. USA TODAY/The Associated Press (10 Mar.), MarketWatch (10 Mar.), Bloomberg (10 Mar.)

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The Spending "White Elephant "

Entitlements are the key U.S. budget challenge. While Democrats and Republicans spar over discretionary spending in the U.S. budget, the real "elephant in the room" is entitlements, according to The Economist. As illustrated by the Daily Chart, the combined cost of entitlements and interest is on track to account for 100% of government spending by 2025. When the Congressional Budget Office made the same calculation 10 years ago, the critical point was predicted to arrive in 2060. "In short, the fiscal position is deteriorating rapidly," the magazine noted. The Economist/Daily Chart blog (07 Mar.)

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Spending Cuts Impact on Jobs

Moody's: GOP spending cuts would eliminate 700,000 U.S. jobs. Moody's Analytics said in a report that spending cuts proposed by Republicans would destroy 700,000 jobs in the U.S. through 2012. The GOP package would reduce the nation's gross domestic product by 0.5 percentage point this year and 0.2 percentage point next year, according to the report. The Washington Post (28 Feb.), The Atlanta Journal-Constitution/Jay Bookman blog (28 Feb.), Bloomberg (28 Feb.)

It looks like the 2012 election machine is starting.

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