According to the classical economists David Ricardo, John Stuart Mill and others, there are three components of capitalistic economies: land, labor capital and financial capital. In this article we will focus on the second and the third. Here are two interesting graphics from chartoftheday.com which give two factoids: The inflation adjusted value of the S&P 500 …
The primary data point this week was the equities markets correction. This makes the richer half of the population poorer, and poorer people think twice when ordering their next yacht.
Weekly review of economic data with emphasis on trade imbalnces, gold and currency valuations.
The historically low yields on Treasury bonds are the hallmark of a bubble, according to some commentators. This article analyses the relationship between bond yields, the stock market, and inflation over the past 50 years. It finds that the riskiness of nominal bonds changes over time and that investors and policymakers can use the changing stock-bond correlation as a real-time measure of inflation expectations.
U.S. stocks appear to be overextended and analysis of fundamentals suggests that future returns from these levels are likely to be sub-par if past market performance is any indication.