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Monthly Archives: September 2012

Spain Reminds us that the Worst is Yet to Come in Europe

Published: Sep. 28, 2012

Spain, which has the 4th largest economy in Europe, is currently struggling with high unemployment (the highest unemployment rate in Europe), increased borrowing costs, a stressed banking system and rising tensions amongst its citizens as it relates to austerity measures being considered by Spanish Prime Minister Mariano Rajoy. Does this sound all too familiar? Take out the word “Spain” and insert the word “Greece” and the first sentence might have been the beginning of one of our market commentaries from several months ago.Read more

The Federal Reserve May Have to Raise Interest Rates Before 2015

Published: Sep. 27, 2012

While the headline of this commentary may come as a surprise to many, it was the exact sentiment conveyed by Federal Reserve Bank of Philadelphia President Charles Plosser on Tuesday, September 25. The statement runs afoul of the public comments made by Federal Reserve Chairman Ben Bernanke who recently stated that the Federal Reserve intends to extend its accommodative credit stance (i.e. keep interest rates at historic lows) through the middle of 2015 – at least. In providing the Federal Reserve rationale behind the extension, Bernanke cited a concern with future economic growth without improvements in the labor market. A correlation between job growth and economic growth certainly appears to be evident as economic growth has been sluggish, as have gains in job creations, during this recovery from the “Great Recession.”Read more