Business

Submitted by Erico Matias Tavares of Sinclair & Co.

The US Economy: Still On Track?

Raw materials and goods need to be transported regardless of how modern or sophisticated an economy is.

Every week the Association of American Railways (“AAR”) posts a free report on rail volumes transported across North America by major category. This provides some decent clues on the condition of the US economy, almost in real time.

Let’s see what the latest report covering virtually all of 2015 is telling us.

It shouldn’t surprise anyone that after a period of relative quietness on the European front, something was bound to happen again. Even though it has been less than six months since Greece had to close its banks in an attempt to stop a bank run, it feels like it has been an eternity as the mainstream media chose not to spend too much attention on a fait-divers like a bank run.

Excerpted from JPMorgan CIO Michael Cembalest 2016 Outlook,

Something is wrong with this picture.  In the US and Japan, corporate profits sank during the global financial crisis.  In the US, the profit recovery was accompanied by a recovery in household income.  In Japan, however, corporate profits and household income moved in opposite directions, as dynamics that helped profits recover did not help consumers.  

A week before Mario Draghi disappointed a thoroughly spoiled market by “only” cutting the depo rate by 10 bps, “merely” extending QE by six months, and failing to boost the monthly rate of asset purchases under PSPP, we explained why the ECB is effectively chasing its own tail. 

Excerpted from Doug Noland's Credit Bubble Bulletin,

The year 2015 was extraordinary. Incredibly, despite powerful confirmation of the bursting global Bubble thesis, market optimism remained deeply entrenched. All leading strategists surveyed in December by Barron’s remained bullish – some were borderline crazy optimistic.