Since the onset of the credit crisis central banks around the globe have used extraordinary means to keep an over-levered global economy afloat. It may have worked best here in the United States but many market observers see signs of trouble. Here we present 10 reasons for their concerns.
This is a story about trust. About why many Americans have tuned out and lost hope in financial “experts.” It's about the insights, foresights, reckless predictions and lack of conviction from media outlets, Wall Street analysts and talking heads that monopolize today’s market dialogue.
The Federal Reserve has maintained its Fed Funds rate at 0% (the so-called Zero Interest Rate Policy or ZIRP) for fully six-and-a-half years in an effort to stimulate the economy and bring down the unemployment rate. The Fed Funds rate will be at the same level come this time tomorrow, despite encouraging signs of a “spring thaw” in economic activity.
Yesterday’s market weakness has been attributed to worse that expected economic numbers, particularly the extremely disappointing 0.2% GDP growth for the first quarter. This was much worse than the expected tepid growth of 1%.
We all know that the unemployment situation report that comes out on the first Friday of every month is the most important economic report for creating volatile swings in markets. There are some doubts about the validity of some reports produced by the government.