Executive Summary The Federal Reserve Bank (Fed) has two mandates: maximum employment and stable prices. However, their addition of a third unwritten mandate – propping up financial markets – has paralyzed them from addressing the current exorbitant price instability – or inflation. From 1970 to present, the [...]

Executive Summary Last week U.S. Federal debt surpassed $30 trillion! While notable, the more alarming fact is the rate of change since 2007 when it was under $10 trillion. Government programs designed to save the U.S. economy from the 2008 Financial Crisis and the 2020 Covid Pandemic [...]

Executive Summary For the month-to-date period ending January 24, 2022, the stock market indices have retreated from their highs while the Vix has been increasing. In December of 2021 I wrote when the Vix is above 20 market risk is building, and when it crosses 30 volatility [...]

Executive Summary In 2008 to combat the Great Recession, the Fed instituted a new program called Quantitative Easing (QE) in which they purchased Treasury Securities and Agency mortgage-backed securities. To pay for the purchases of these debt securities, the Fed credited the reserve accounts of the sellers. [...]

Executive Summary Former chief stock market analyst at Merrill Lynch, Bob Farrell, developed 10 timeless rules for investing which are listed below. These are very pertinent given today’s market cycle. Some investors have forgotten the two 50+ percent corrections in the last 20 years. Interestingly enough, over [...]

Executive Summary In September 1981, the yield on the 10-year Treasury Note peaked at around 15.8%, and the annual inflation rate was about 10.8% resulting in a “real” (after inflation) rate of about 5%. Today, the 10-year Treasury is yielding about 1.40%, and inflation in November rose [...]

Executive Summary Corporate profit margins are being squeezed by upward wage pressure and downward productivity, all while stock prices are rising. The second graph below of the Wilshire 5000 Index divided by GDP shows bubble values which are almost 50% higher than the peak of the 2000 [...]

Executive Summary The Volatility Index, known as the Vix, is a projection of future volatility and fear in the market. Over the long run it averages about 18. A move above 20 means risk is building, and a move over 30 indicates higher daily volatility and downside [...]

Executive Summary The Friday after Thanksgiving was a short trading day which incurred steep losses in many asset classes. News outlets blamed the identification of the Omicron variant of Covid19 as the cause. However, last week’s update indicated many “red flags” are waving according to Dr. John [...]

Executive Summary In this week’s Update, I share important information published in an interim comment by economist Dr. John Hussman. He uses numerous market indicators to gauge market extremes, which all culminated last Friday, November 19. While claiming he is not “calling the market top,” the risk [...]