Nobel laureate economist and mathematician John Nash and his wife Alicia Lopez-Harrison de Lardé died in a car crash this Saturday.
John Forbes Nash, Jr. was famous for revolutionizing game theory and partial differential equations; his insights into non-cooperative games expanded the field of economics and encouraged generations of economists to study how independent agents will behave within complex systems.
A Brilliant Dissertation
As this year’s crop of college graduates don their caps and gowns and listen to inspiring commencement addresses before embarking on uncertain futures, they’ll also hear a lot about the consequences of the large debts most of them amassed attaining a degree.
Such as: student loan debt is a drain on the economy. Debt prevents young adults from buying homes, starting families and saving for retirement. It is so high, recent graduates are discouraged from starting small businesses and gaining financial independence.
The US dollar’s recovery last week may not get the kind of fundamental support that medium and long-term investors would like to see to raise the confidence that the two-month correction has run its course.
After a long winter, strong dollar, and sagging oil prices led to a slower start to 2015 than many in the United States had hoped for, things appear to be taking a positive turn. A report by the Commerce Department indicates construction of new homes was higher in April than it had been since 2007. In fact, the jump was the biggest surge in home building in almost 24 years.
The US dollar extended its recent gains against the major currencies. The euro returned to its break out level near $1.1060 after approaching $1.15 at the end of last week. In three sessions, it has surrendered more than 38% of its bounce off the low set in mid-March. The 50% retracement comes in just below $1.10.
The dollar also traded above JPY121.00 for the first time since March 20. Rallying Nikkei and US 10-year bond yields near 2.30% provided the fuel.
A number of leading economists and investment banks in the United States are warning that American GDP growth is likely to disappoint, even after several downward revisions over the last six months.
Two large investment banks urged caution to clients in the last two weeks, citing the likelihood that the Federal Reserve will cut their forecast for GDP growth at their next monthly meeting. The Fed currently has a 2.5% midpoint estimate for annual growth, but economists are warning that actual growth is likely to fall much further.
GDPNow a Canary
Every year it seems financial analysts come up with new ways to rank investments. Bloomberg recently added to the list by ranking world economies by the financial “happiness” of the citizens in those nations.
Gas prices are rising in the United States and are expected to rise further, limiting the possibility that Americans will spend more on discretionary goods and services.
In late 2014, many economists expected a rise in discretionary consumer spending and thus higher revenues for the retail sector as cheaper energy costs gave Americans more purchasing power to spend on discretionary goods. Since then, retail sales have consistently disappointed expectations, remaining flat in April. This has left many scratching their heads and rethinking their economic models.
Disappointing US economic data and high volatility in the German bunds kept the dollar under pressure. Over the past week the greenback fell against all the major currencies, save the New Zealand dollar (where interest rate cut expectations have built for as soon as next month). Most currencies from the emerging markets rose against the dollar, except for a handful of Latam currencies, including Argentina, Brazil, Colombia, and Peru.
