Friday, 01 April 2016 00:00

Is Economic Growth in Its Final Innings?

  Guest Article From Frank Holmes Of U.S. Global Investors   The start of baseball season is still several days away, but a recent survey conducted by Bank of America Merrill Lynch found that 59 percent of U.S. fund managers believe the current stretch of economic growth is in its “final innings.” This is the highest reading since the financial…
Thursday, 31 March 2016 00:00

Expect The Fed To Cut Rates In 2016

Analysis Overview – The Fed is likely to cut interest rates in 2016 and this article discusses the factors for this view and the investment strategy in the current scenario. The Big Slump – When the fed increased rates in December 2015, there were economists talking about at least four rate increases in 2016. However, global economic activity has weakened…
I recently wrote that global non-financial sector debt has surged to $153 trillion as of 3Q15. Among individual countries, China has witnessed rapid leveraging since the financial crisis of 2008-09. In my view, the debt crisis is still to unfold for China and this article puts into perspective the scale of leveraging in the last few years. After the financial…
Be it the Great Depression of 1929 or the financial crisis of 2008-09, excess leverage has played the most important role in inducing the crisis. Several economists argue that lack of action in 1929 translated into depression, but the decade preceding the great depression was characterized by significant leveraging in the economic and financial system. Coming to present times, the…
In the recent past, I have discussed global slowdown and potential recession in several articles. I also discussed in one of my recent articles that the GDPNow indicator from the Federal Reserve Bank of Atlanta estimates GDP growth for 1Q16 at 1.4% (March 24, 2016 estimate). The Federal Reserve Bank of Atlanta has released new estimates (March 28, 2016) and…
Analysis Overview – Sunil Healthcare, a producer of empty hard gelatine capsules, is already a multibagger with 241% returns in the last 12 months. This article discusses why Sunil Healthcare still has immense growth and stock upside potential in the coming years. Company Overview – Sunil Healthcare is the second largest producer of empty hard gelatine capsules in India with…
In my last article, I discussed that we are dangerously close to global recession as the services sector activity slumped in February 2016. This article discusses the impact on US corporate sector profits if the rest of the world enters recession. The reason for this discussion is to underscore the point that even if US economic growth remains relatively resilient…
Going by the collapse in the Purchasing Managers Index for February 2016, it is entirely likely that the world is headed towards recession sooner than expected. The chart below gives the manufacturing, services and composite PMI for February 2016 and its clear that services sector activity has slumped.     Global manufacturing sector is unlikely to be the saviour through…
I recently discussed the point that the US economy is slowing down based on the yield spread. The GDPNow indicator from the Federal Reserve Bank of Atlanta further confirms that the US GDP growth for 1Q16 is likely to be weak. The chart below shows the GDP growth estimate as predicted by the GDPNow model at different times in March…
I recently discussed in an article that the per capita income for US population has stagnated or declined in the last 15 years. A direct implication is that living standards have also stagnated or declined for an average middle-class family. This article discusses the wealth inequality in one chart for the United States and the implications of the data when…