March 28, 2014 Patrick Oliver-Kelley

Revised fourth quarter GDP numbers showing annualized rate of 2.7 percent may further erode doubts about the Fed ‘taper’ and boost yield attraction of the US dollar. Despite record profits and exceptionally high corporate cash levels, capital spending by U.S. businesses remains subdued. While companies have the means to invest, they lack the confidence in the face of nervous consumers and uncertain demand. However, there are reasons for optimism: The consumer is becoming more confident; There is clear evidence of improving US economic growth; Real interest rates are becoming more normal; Finally, companies have little choice to put their capital to work.


The Ukraine and Crimea are making all the headlines for now. The EU has mixed motivations in reacting belligerently. It gets much of its gas from Russia and the specter of 1914 and the first Crimean war of 1854 are being high lighted by military historians. Most recently we are told that Russia is amassing some 35,000 well armed troops on the eastern border of Ukraine. Obama administration officials are admitting to a shift in thinking that Russia may indeed make further incursions into Ukraine. Putin, says ‘not’. Many think he has driven a tank over the new world order and his engine is still running. Meanwhile, markets in Europe and in Russia seem to have stabilized, after early selloffs.

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