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 [...]
Executive Summary This week’s update is brief, so a summary may seem unnecessary. The two main points are the disappointing 235,000 new jobs reported on Friday of the holiday weekend, and the Atlanta Fed’s revision lower of the third quarter GDP forecast. The jobs number was a [...]
Executive Summary Last week all the economic focus was on what Fed Chairman Powell would say at the Jackson Hole meeting. It seems the Fed, as usual, allowed itself enough wiggle room with no real time commitment, and investors decided to opt for a bullish interpretation. The [...]
Executive Summary The bond market is often considered a better indicator of the economy than the stock market. Currently the 30-year Treasury yield has fallen to 1.87%, and the 10-year Treasury Note yield is down to around 1.25%. (See the second graph illustrating the 10-year Treasury rates [...]
Executive Summary Benjamin Graham, the father of value investing and mentor to Warren Buffett, in December 1959 commented that at the peak of all bull markets, “past experience” only represents the “sunny side of the investment”. And he also indicated the sentiment that the market has always [...]
Executive Summary The Jobs Report released last week reported 943,000 new jobs, and the markets and media celebrated. What the headline did not reflect was the actual loss of 133,000 jobs, which then was seasonally adjusted (part of the calculation) to arrive at the nearly one million [...]
Executive Summary Most investors take a myopic view of economic growth. When viewed in isolation, second quarter real annualized GDP growth of 6.5% sounds outstanding. However, GDP growth per capita remains below trend (second graph below). For the economy to grow, there must be either productivity growth, [...]
Executive Summary Due to low mortgage rates and depressed inventory, the housing market is red hot. Investors have scooped up existing home inventory, while new single-family home sales are off their peak (see second graph). New-home prices are very high (third graph); however, if one takes a [...]
Executive Summary Since I am out of town taking a few days of R&R, I want to share an article written recently by economist Lance Roberts of Real Investment Advice. The S&P 500 Index closed at 4,327 down 0.97% for the week. The yield on the 10-year [...]
Executive Summary Long-term interest rates, while cycling up and down over the last 35 years, have remained in a downward channel (see first graph). During the pandemic and recession of 2020, yields dropped to .5% - however escaping going negative like Japan and Europe. Many suggested inflation [...]