FORBES
February 22, 2012
Brian Domitrovic, Contributor

President Obama’s budget released last week naturally has lots of people agog. Its plan, outrageous on its face, is to take spending past $4 trillion and as much as double the income tax on high-earners, while supervising strong real-sector growth and a deficit cut down by two-thirds.

How could you possibly say that a state-sector expansion of that magnitude, with taxes on the capital pool to boot, will carry the economy forward to a promised land of growth and solvency? By having an in-house economic forecast that lets you, that’s how.

On Friday afternoon at...

HUSSMAN FUNDS
February 20, 2012
John P. Hussman, Ph.D.

In order to estimate likely returns and risks in the financial markets, our general approach is to identify a set of historical instances that match current conditions on a broad range of important dimensions (in practice, using an "ensemble approach" that randomizes over scores of subsets of historical data). We then look at various features of that cluster, including the average return that followed over various horizons, the deepest loss over various horizons, and the overall spread of those outcomes. In general, the clusters include a mix of both positive and...

BARRON'S
Economic Beat
February 19, 2012
By GENE EPSTEIN

An index based on joblessness and consumer spending isn't saying good things about the president's chances of re-election.

Will the economy (stupid) again determine the outcome of a presidential election? Based on two important economic measures that I've examined and their relationship to the presidential races since 1956, Obama supporters have cause to worry.

All but the most recent of those races featured an incumbent, whether it was a sitting president (nine races out of 13) or a vice president seeking to move into the Oval Office (four out of 13). Based on...

WALL STREET JOURNAL
February 21, 2012
By VICTORIA MCGRANE And JON HILSENRATH

The Federal Reserve has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system, a stark contrast with its push for transparency in its interest-rate policies and emergency-lending programs.

While many Americans may not realize it, the Fed has taken on a much larger regulatory role than at any time in history. Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. In the process it is reshaping...

ADVISOR PERSPECTIVES - DOUG SHORT
February 16, 2012


The two charts below offer clues for evaluating the risk of profit margin squeeze in the current economy. One is the ratio of crude to finished goods in the Producer Price Index. The other is an indicator constructed from two data series in the Philadelphia Fed's Business Outlook Survey through today's release. It is the spread between the Philly Fed's prices paid (input costs) and received (prices charged) data.

A major risk factor for margin squeeze had been the increase in commodity prices over the past several months with the price of oil and gasoline as the...

ZERO HEDGE
February 14, 2012
Tyler Durden


Earlier, you heard it from Jeff Gundlach, whom one can not accuse (at least not yet) of sleeping on his laurels and/or being a broken watch, who told his listeners to "reduce risk right now" especially in the frenzied momo stocks. Now, it is David Rosenberg's turn who tries to refute the presiding transitory dogma that 'things are ok" and that a Greek default will be contained (no, it won't be, and if nobody remembers what happened in 2008, here is a reminder of everything one needs to know ahead of the "controlled", whatever that is, Greek default). Alas, it will be to no...

THE STREET
February 13, 2012
Doug Kass, Seabreeze Partners


I believe that the stock market will do better in 2008 than it did in 2007, when it chalked up a 5.5% return, the fifth year in a row that the market went up. Year-ahead forecasts for the market are notoriously difficult, but I believe that a 10% to 12% gain is possible, on the heels of a recovering financial sector. Financial stocks plummeted about 20% last year, and this was the reason why the market had a mediocre year. Outside of financials, the S&P 500 Index had double digit returns. A revival of financial stocks would spur good market gains this year.

--...

BUSINESS SPECTATOR
February 14
Karen Maley


NOTE:  Felix Zulauf is truly one of the great investors of our time and it pays well to heed his advice.

Legendary Swiss investor Felix Zulauf believes that the current rally in risk assets is likely to last until at least the end of March, but that global sharemarkets will again succumb to downward pressure in the second half of the year.

In a wide-ranging interview with Business Spectator, Zulauf, who is president of Zulauf Asset Management and who has been a member of Barron's Roundtable for more than 20 years, paints a gloomy picture of debt-laden industrialised...

FORBES
February 12, 2012
Jim Powell, Contributor

President Obama claims to be on a moral crusade for "fairness." In one campaign speech after another, he suggests that his soak-the-rich class warfare will stop "millionaires and billionaires" from grabbing more than their fair share of wealth. But the most likely outcome is that he will end up grabbing more than his fair share of power, and everybody else will be poorer.

It would be hard to name a single case where class warfare appeals to envy and resentment are associated with faster growth rates, more private sector jobs and higher living standards for ordinary...

NEW YORK POST
February 12, 2012
William C. Beach


Skyrocketing food-stamp enrollments over the last few years have played a notable role in this year's presidential race, but it's not just food stamps that have exploded — it's entitlements, generally: housing subsidies, Medicaid rolls, college loans and much, much more.

And the trend is threatening to chip away at the very pillars that keep America's civil society functioning.

Today, one in five Americans — 67 million of us, all told — rely on federal aid in obtaining housing, food, income, health care or education.

The dependent population has been growing for...