I spend a lot of time thinking about what "everyone" else believes about the economy and markets. If you've been reading my weekly scribblings for any time, you know I have little faith in the soothsayers of this industry. No one knows what the future holds, least of all that group of crystal ball gazers known as economic forecasters. Most [...]
No one could have possibly been surprised by the Fed's lack of action on Wednesday. They had signaled to anyone who would listen that they would pause (skip, take a hiatus, halt, or whatever you want to call it) at this meeting. And no one should have been surprised that Jerome Powell offered some tough talk about the future of [...]
The stock market surged last Friday after the employment report showed a gain of over 300k jobs while the year-over-year change in average hourly earnings fell to 4.3%. That was the popular explanation and it makes sense; continued economic growth and fading inflation pressures would certainly seem a big positive (although wages have little to do with the recent bout [...]
Every time we hear, watch, or read the news, we are reminded that liberty is a rare commodity in this world. - Ronald Reagan It is foolish and wrong to mourn the men who died. Rather we should thank God such men lived. - George S. Patton In the End, we will remember not the words of our [...]
What is long term? That's a question with many answers depending on your point of view. Some people might think a year is long term. I had a client tell me once that he was so old he didn't buy green bananas because he might not be around to eat them. Some might say 3 years is long term but [...]
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett Buy when there's blood in the streets, even if the blood is your own. -Nathan Rothschild Rothschild is said to have made a fortune buying assets in the wake of the Battle of Waterloo so in his case, he meant this literally. Another quote attributed [...]
A bank's assets triple over a few years when interest rates are low. The bank invests those assets in long-term, higher-yielding municipal bonds with little credit risk. Inflation flares up and interest rates rise, reducing the value of the municipal bonds and funding dries up. Regulators become concerned that the failure of this bank could damage public confidence in the [...]
With the 1-year Treasury bill paying 5%, why would anyone take the risk of owning stocks? - Everyone It is a good question and I can't tell you what investors will do this year or how stocks will perform, but history says it isn't the level of rates that matters for stock returns. Believe it or not, it isn't even [...]
Has the Fed's rate hiking campaign actually lowered inflation? Or would it have happened anyway? Jerome Powell has said that the rate hikes would involve "pain" but if that is the criteria I don't see it. Higher rates have hit the real estate market but almost nothing else. And even there, mortgage rates are now trending back down and activity [...]
Your cares and troubles are gone There'll be no more from now on! Happy days are here again! The skies above are clear again Let us sing a song of cheer again Happy days are here again! Lyrics: Jack Yellen, Music: Milton Ager That's certainly how it's felt since the turn of the new year with the NASDAQ up nearly [...]
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