Tag Archives: wealth effects
Message to the Fed: Here Are a Few Things That You Can’t Do
[A]sset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of … Continue reading
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Tagged business fixed investment, capital expenditures, corporate cash, credit market liabilities, disposable personal income, financial obligation ratio, FOMC statement, household debt service, household financial obligations, housing boom, job creation, monetary intervention, mortgage demand, mortgage rate spread, net business debt, personal income, wealth effects
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Why Stock Prices Are More Stretched than You Think: A Tale of 3 P/E Multiples
Update: The charts below are based on reported earnings, which I converted to constant 2013 dollars using the CPI. Back in May, I suggested the stock market was showing some signs of froth, although “maybe in the same way that froth … Continue reading
Stock Prices Are Outrunning Corporate Profits: When Has This Happened Before?
In a recent article titled “Step Right Up and Test Your Central Banking Skills against the Scariest Economy of All,” I encouraged readers to: [Apply] your economic and policy beliefs to early 1928 conditions, and then [ask] how your decisions … Continue reading
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Tagged Ben Bernanke, Benjamin Strong, corporate profits, P/E multiples, wealth effects
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Step Right Up and Test Your Central Banking Skills against the Scariest Economy of All
I offer a chance to test yourself as King of the World. By that, I mean top dog at the Federal Reserve Bank. The test is based on two scenarios, one describing our circumstances today and I’ll explain the second … Continue reading
