Economy

Inflation does not reliably depend on employment so what other model could we depend on? Check out the model below that I have developed which strongly suggests core inflation has stabilized at around 2.2%.

Retail sales numbers for July came in at a disappointing 0.0% and, after backing out auto sales, retail sales actually declined by 0.3%. That's in spite of much lower gas prices and (supposedly) an improving job market so my guess is that American consumers are simply running into a brick wall of too much debt. This article suggests 9 companies that could prosper from such financially stressed-out consumers.

The Fed is considering raising its inflation target above 2% annually. This shift pushes the FOMC in a dovish direction and will reduce the market odds of interest rate hikes this year. It is positive news for the gold market.

Getting the inflation call right is one of the most important decisions an investor can make today. This article explains how the U.S. inflation outlook is becoming clearer with the use of a number of charts.

In a long-term strategy which employs both investments, there is a case for putting an over-weight on housing, and an under-weight on gold, given current relative price levels unless one is specifically investing for financial crisis.

With the Olympic Games underway, many eyes are on Rio...[and, as such,] investors...are...directing more attention to Brazil. While its stock market has had one of the world's best performances to date this year with the MSCI Brazil 25/50 Index up more than 50%...[and] the MSCI Brazil Small Cap Index...[up] over 60%, the question now is, can the rally continue? My take is that it could potentially, but investors need to be willing to accept significant risk. [Let me explain.]

According to the New York Federal Reserve, 14% of the U.S. population lives in households that have “negative” wealth. In other words, these are households that have more debts piled up than assets, which puts their net worth in minus territory. In today’s chart, we compare the data on negative wealth households with the data on their positive counterparts. There are some obvious and stark contrasts.

Italy has overtaken Spain to become the weakest link among the Eurozone’s largest economies, with a banking sector desperately in need of a bailout and, if Italy’s banking crisis is a rerun of Spain’s, we can certainly expect some troubles in the Eurozone and, consequently, for the Euro.

Stocks don't have to immediately melt down today or next week, but it does mean that there’s a lot of risk percolating just below the surface – and El-Erian is worried that when it does bubble up, it could be more like a volcano than a hot spring.

What follows is a modern day parable which, if it wasn't so true, would actually be funny. A Japanese company (Toyota) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. Below are the results.