Bernard Baumohl Quotes (15 Quotes)

Bond traders are concerned that the economy may be growing too fast, given where we are in the business cycle.

The economy is generating plenty of jobs -- that's good news.

The sharp pullback in economic growth during the final three months of 2005 shows the law of gravity has not been repealed. When consumers are burdened with heavy debt loads, rising interest rates, higher energy costs, no personal savings and household income growth that falls below inflation, something had to give. This retrenchment in spending was generally foreseen, though economists weren't sure on the timing and magnitude.

With the housing sector now cooling and interest rates rising, the home equity cash faucet (which has been feeding consumer spending) is about to dry up.

The latest batch of economic news does not paint a very encouraging picture on the sustainability of consumer spending.

In March and April, interest rates were going up very gradually, and tech investors figured Greenspan would taper off, because this was an election year. Now, the inflation picture is getting worse, and Greenspan is getting serious. And they're feeling the effects of higher interest rates.

The current account deficit is a ticking time bomb. We don't know when it s going to explode, but it cannot continue the way the White House describes.

Our imports increase as long as the economy grows. But there's certainly a concern that our exports are down despite the fact that Asian and European economies have begun to rebound. Maintaining the high deficit is dangerous because that means a huge debt, and if our creditors lose confidence in the U. S. economy and begin selling dollars, which drives down the value of the currency, that could spark a serious inflation threat.

The central bank seems more worried than before that resources feeding the U. S. economic expansion are getting scarce.

( TIME.com ) -- Great news Unemployment is up. Wages are stagnant. Hiring by U.S. companies is down for the first time in more than four years. But there might be some help wanted on Wall Street soon, because Friday's unemployment report is the stuff rallies are made of. Just a half hour into the trading day, the Dow was up 175 and the NASDAQ almost 200 (with inflation-fearing bonds whooping it up right alongside them) as investors saw visions of the long season of economic overdrive, interest-rate hikes and neurotic markets drawing to a close. This is the latest sign that the economy is slowing down, and because these are labor numbers, they're going to have particular weight with the Fed, ... This is the kind of news that could take some of the uncertainty out of the markets and get stocks going up again.

People are going to be less inclined to drive to shopping centers. Instead, they're going to stay at home and if they carry on their usual holiday spending patterns then they will do it more likely online.

It's fairly safe to say that the trade deficit may have peaked now that oil prices are falling and the U.S. economy is showing signs of slowing down.

Housing prices in many communities will appreciate less rapidly --- and in some communities actually fall. This reduces the wealth effect from real estate assets, shrinks home equity borrowing, and increases pressure on households to replenish their savings.

With borrowing costs on the rise and the wealth effect from real estate assets diminishing, something has to give.

For investors, tech stocks have always been wobbly, with their stratospheric price-to-earnings ratios and fluid business plans -- now they're starting to careen, mostly downward, with regularity, and other bets are only getting better. The higher interest rates go, the more lucrative bonds and T-Bills are, ... When 30-year bond yields get over 7 percent, with absolutely no risk, money gets shifted out of the techs and put elsewhere.