In commodity markets there's an old saying that low prices cure low prices and high prices cure high prices. High prices lead to over-investment in new capacity which leads to gluts and low prices. Low prices restrain investment which leads to shortages and high prices. It's the boom and bust nature of commodity markets although the time it takes between [...]
Moody's Ratings downgrades United States ratings to Aa1 from Aaa; changes outlook to stable New York, May 16, 2025 -- Moody's Ratings (Moody's) has downgraded the Government of United States of America's (US) long-term issuer and senior unsecured ratings to Aa1 from Aaa and changed the outlook to stable from negative. This one-notch downgrade on our 21-notch rating scale reflects [...]
“Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his absolute mercy. And an authority directing the whole economic system of the country would be the most powerful monopolist conceivable…it would have complete power [...]
From The Burden of Bretton Woods, The Richard Nixon Foundation: ...by the 1960s, the expansion of global production and trade increased the amount of dollars circulated worldwide — so much so that dollar circulation far outstripped the U.S. gold supply. There simply was not enough gold to back excessive liquidity, making it evident that the U.S. dollar was overvalued. Because [...]
Stocks have rebounded over the last three weeks from the initial shock of the "liberation day" tariffs announced on April 8th. The S&P 500 is now down just 2.5% since the close on the day of the announcement (they were announced after the market close). There have been some changes to the initial tariff levels but even the reduced levels [...]
The US economy has been the envy of the world for a long time, especially after the 2008 financial crisis and the COVID pandemic. Our economy has grown faster than just about any other in the developed world thanks in large part to the extraordinary performance of our technology sector. Our markets for debt and equity are the largest and [...]
The stock market rallied last week, the S&P 500 up nearly 6%, spurred on by the suspension of some of the tariffs imposed on April 2nd. The "reciprocal" part of the new tariffs was suspended for 90 days while the 10% universal tariff was retained. Tariffs on China, however, were raised further after they retaliated against President Trump's previous retaliation [...]
You can't be serious! You cannot be serious! - John McEnroe, challenging a fault call at Wimbledon, 1981 That's what went through my head when President Trump unveiled his "reciprocal" tariffs on Wednesday last week. The tariffs unveiled on Trump's "Liberation Day": are the largest tax increase since at least 1968 and maybe in our entire history. impose an average [...]
Is it finally time for international stocks to shine? That question has been asked and answered negatively for 10 of the last 12 years if you compare the S&P 500 to the EAFE international stock index. The total return changes some but the results are similar if you compare the US to European stocks. This period of US outperformance is [...]
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 [...]
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