Will Resolution of the Fiscal Cliff Squelch Consumption?

The U.S. averted the Fiscal Cliff with passage of the “American Taxpayer Relief Act of 2012” on December 31. Economists think resolution of the Fiscal Cliff will lead to a fiscal drag of 1% on GDP and adversely affect the mainstay of the economy: the American Consumer.

We’re not convinced this will happen and believe tax increases overstate the related negative consumption impacts. While we expect some weakness in consumption, it is likely to be transitory and confined in the first half of 2013, before recovering above-trend in the second half. Continue reading

Quick Takes on the Investing Year Ahead

We covered a lot of market and investment topics at Pioneer’s National Sales and Marketing Meeting last week. Here are some summarizing notes on a few that were popular:

  • GDP Growth for the U.S.
  • Expectations for rates: Fed Funds Rate and the 10-year Treasury
  • EM equities favored over U.S. Equities?
  • Things that keep us up at night (outside of the debt ceiling, Europe, and Middle East tension) Continue reading

Taking Stock of the Greek Issue

After a lot of discussion about imposing strict provisions to obtain new funds, the EU disbursed another loan for Greece with a few strings attached. I spoke with Monica Defend, Pioneer’s Head of Global Asset Allocation Research, to get her opinion on some questions asked.

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Rescuing the Bond Deer from the Bond Bear – The Fixed Income Investor Part II

In my last “Bond Deer” installment the story of the investor caught in the risks of the bond market like a deer in the headlights I highlighted that a housing recovery might be responsible for pricking the “bond bubble.” But a self-sustaining recovery is still in its infancy and could easily be derailed.

Massive monetary accommodation averted a global financial collapse in 2008. Today, pundits are hotly debating whether Quantitative Easing (QE) in its various forms is still necessary. The pundits fall into three camps: Continue reading

The Deal is Done – Observations on the Cliff, the Ceiling and Your Investments

I’ve been saying that December 31 was a media deadline, not a real deadline for a fiscal cliff resolution, since Congress could act retroactively. However, I guess I underestimated the extent to which politicians dance to the media’s tune, instead of Wall Street’s or Main Street’s. Given how little turnover there was in Congress, it seemed there was little real pressure to get a deal done in the lame duck session (which ended last night) rather than in the new Congress. But, again, a deal was done – and, like most such negotiations, was done only at what the negotiators perceived to be the very last instant.

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