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Interest Rates

How’s the Wealth Effect Really Doing?

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The wealth effect has been used as a justification for quantitative easing and a root cause of consistent overly optimistic growth expectations by the Federal Open Market Committee. The Fed’s over reliance on the so-called “wealth effect,” is a major cause of this optimism and consistently wrong projections. The wealth effect says that an increase in consumer wealth, through higher stock prices or home values will lead to increased consumer spending.

Research suggests that the concept of a wealth effect is in fact deeply flawed. It is unfortunate that the FOMC has relied on this flawed concept to experiment with over $3 trillion in asset purchases and continues to use it as the basis for what we believe are overly optimistic growth expectations.

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Current Trends in Asbestos Litigation

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Asbestos litigation has been a hot topic since asbestos was banned in 1977.  For more than 30 years new cases have continued to be diagnosed. As more and more cases of asbestos continue coming in, the trend in asbestos litigation in the United States is on the rise, with respect to average settlements, costs, attorney’s fees, and outside financing. Those who have been exposed to asbestos and suffered, as a result, may be entitled to compensation for pain and suffering, hospital bills, and lost wages.

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Iraqi Government Threatens Action Against Kurds as Oil Exports Set to Begin

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For two centuries the Kurdish people have been fighting for independence from their Arab neighbors. The Kurdish region is located along the border where Iran, Iraq, Turkey, and Syria meet. The Kurds have been subject to repression and often genocide but continue to fight for independence. Today we will look at the most recent economic skirmish between the new Iraqi government and the Kurds. At first, it may appear that it is simply a battle for Oil revenue but there is more to it than that.

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Choosing a Brokerage Firm

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If you’re ready to do some investing, you need a broker to be able to buy stocks, options, and pretty much anything else. Deciding on the right broker for you can be difficult. If you’ve made the rounds of the local brokerage firms you’ll notice a trend: they all charge a lot in commissions. If you start looking online you’ll notice the commissions are decidedly lower but are these brokers a good deal or just a good deal of trouble?

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Violence Threatens to Thwart Iraqi Oil Resurgence

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A wave of violence has swept parts of Iraq at the start of 2014 as the central government fights back against Al-Qaeda aligned militants in Anbar Province. The Islamic State of Iraq and the Levant (ISIL) reportedly took control of Ramadi and Fallujah, bombing police headquarters and killing dozens. On New Year’s Day Prime Minister Nouri al-Maliki sent in reinforcements to take back control of Anbar Province’s two largest cities. The clashes kick off 2014 in much the same way as 2013 ended – a return to violence in a country that had seen important security gains in recent years.

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Australia Startups

Two New Initiatives to Propel Australia’s Startup Scene

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Some say Australia is a great place for start-ups: Internet literacy levels are high among the population, emerging businesses have access to affordable serviced offices from a lead office rent agency and there are many accelerators and incubators for new companies to join. At the same time, others are decrying a lack of investors, as well as insufficient government policies for this field. Yet two new initiatives in this segment, one private and the other one public shine a ray of hope for the future of Australia’s IT and tech startups.

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Edgar Allen Poe vs. The FED

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Ladies and gentlemen, I give you (drumroll please) total outstanding credit versus GDP in the United States from 1929 to 2012: Source: St. Louis Fed
This one chart shows exactly WHY we are where we are, folks. From the moment Richard Nixon toppled the US dollar from its golden foundation and ushered in the era of pure fiat money (oxymoron though that may be) on August 15, 1971, there has been a ubiquitous and dangerous synonym for “growth”: credit. The world embarked upon a multi-decade credit-fueled binge and claimed the results as growth.

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Ukraine’s Two New Energy Deals

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If one was to believe the picture that most Western media outlets are painting, Ukraine has been lost to Russia. Though the country fought valiantly to sign an Association Agreement with the European Union in Vilnius, Lithuania last month, President Viktor Yanukovych suspended negotiations with the EU at the last possible moment, betraying Ukrainians everywhere. Two recent energy deals that Ukraine has reportedly made, one with Russia and the other with Slovakia, however, show that the reality of the situation is slightly more complex.

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