Sweeping tariffs and a shift away from strong dollar policy can have some of the broadest ramifications of any policies in decades, fundamentally reshaping the global trade and financial systems. There is a path by which these policies can be implemented without material adverse consequences, but it is narrow, and will require currency offset for tariffs and either gradualism or [...]
There wasn't a lot of economic news last week but it was largely as expected and seemed pretty good. Job openings rose, there was no rise in jobless claims even after the large layoffs in the government sector, and the inflation reports were better than expected. What's not to like? We didn't get any big moves in bonds or currencies [...]
Uncertainty around economic policy is near all-time highs with most of that focused on trade policy. Is the uncertainty part of President Trump’s plan? Or part of his negotiating strategy? I have no idea but the effects are obvious and negative, not just for the stock market, but for the economy as a whole. But how negative? I've been getting [...]
The meeting between President Trump and Volodymyr Zelenski last Friday dominated the news over the weekend but for investors the more important news came before that historic (or not) diplomatic faux pas (whose faux pas?). I am not an expert on the nuances of diplomacy (except to say there didn't appear to be much of it going on in that [...]
The stock market was having a good week until just around 10 am last Friday. Stocks rallied during the week as earnings reports were pretty good - with exceptions as always - and the economic news wasn't bad either. On earnings specifically, Q4 '24 is shaping up as the best quarter in the last three years with earnings so far [...]
For every complex problem there is an answer that is clear, simple, and wrong. H.L. Mencken By the time you read this we'll have a new President. Well, actually, he's an old President, but whatever we think we know about him from his first term may not be much help in the second. The group of people about to take [...]
As is my usual practice, this will be my last commentary for the year barring big news (and most "news" isn't, especially that of the market variety). While I won't be writing for the next month, that doesn't mean I won't be working. I use the month of December to catch up on my research reading (books and academic papers) [...]
I don't spend a lot of time trying to predict the future, mostly because, as I pointed out just last week, I'm not very good at it. There's no shame in that and it doesn't impair my ability to invest; the gift of prophecy is not necessary. A couple of weeks ago, right before the election I speculated on what [...]
To everything turn, turn, turn There is a season turn, turn, turn And a time to every purpose under Heaven A time to be born, a time to die A time to plant, a time to reap A time to kill, a time to heal A time to laugh, a time to weep To everything turn, turn, turn There is [...]
But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions... - Alan Greenspan, The Challenge of Central Banking in a Democratic Society, at the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C., December 5, 1996 Are investors too optimistic? [...]
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