Executive Summary Everyone is paying more for groceries and gasoline, so inflation is the concern of the day. The Federal Government stimulus payments provided short-term boosts to demand for goods and services during the pandemic. However, now prices are being propped up by supply constraints rather than [...]
Executive Summary In January 1999 the Shiller P/E broke 40 and by December of 1999 peaked at 44. Having been in the business at that time, I recall many in the industry looking back in hindsight commenting those overvaluation levels would never be reached again. But what [...]
Executive Summary As the everything bubble remains in the “Blow off Phase” (first graph), the third quarter GDP number came in at only 2%. The negative COVID impact to GDP and the resulting stimulus positive impacts can be seen in the second graph below. Now the stimulus [...]
Executive Summary Drawing upon Dr. Lacy Hunt’s Quarterly Review and Outlook for the third quarter 2021, this week’s commentary looks at the relationship between debt and economic growth. The amount of new debt needed to produce a new dollar of GDP currently is near an all-time high. [...]
Executive Summary In the past China’s fast-growing economy was driven by production of exports for the West. However, post the Great Recession exports waned, so China turned to infrastructure spending for growth. This resulted in the over-development of buildings and entire ghost cities (never occupied). Now the [...]
Executive Summary The longer a bubble in stock prices expands, the more the word “valuation” becomes considered irrelevant. Valuation means determining what price is reasonable for a particular stock or stock index such as the S&P 500. A few months ago, I shared a valuation calculation chart, [...]
Executive Summary Is $28 trillion in United States government debt not enough? The answer is “no”, as the Congressionally approved deficit spending will require an increase in the U.S. debt limit. The debt has grown no matter which political party controls the White House (see first graph). [...]
Executive Summary Last week the stock market took a roller coaster ride while bonds took a hit. The 10-year Treasury Note yield rose to 1.46% based mainly on two factors: the Fed’s announcement of tapering their monthly bond purchases beginning late this year and the second is [...]
Executive Summary Monday’s stock market move may have seemed a bit extreme. Many financial pundits will speculate as to the cause; however, sometimes they are correct and other times it is just speculation. This move appears to have been the contagion effect from China’s Evergrande Group, whose [...]
Executive Summary Despite massive stimulus and extreme monetary policy, the “expansion” period between the Great Recession and the Covid19 recession experienced the weakest post-WWII growth rate, at 2.3% average annual growth (see second graph), on record. While the Fed keeps “printing” money (3rd graph), the Federal deficits [...]