Executive Summary Are investors being duped into believing that low interest rates justify higher stock valuations? Are they being told that high stock prices are the result of a strong economic recovery? In this week’s newsletter, I explain the fallacy of low interest rates, and how central [...]
Executive Summary Over the course of history, corporate fundamental performance and the resulting market cycle have mattered to investors. However, in the last ten years investors appear to have relied more on central bank policies and “hope” for their investment strategies. Central banks across the world have [...]
Executive Summary History shows economic cycles always have two parts: the bull and bear phases. In a little over the last twenty years alone, two economic cycles have demonstrated this fact. For investors, the bull phase is not the only important piece of the cycle. Long-term returns [...]
Executive Summary You may have heard the expression: “a picture is worth a thousand words”. Weekly I write much about the economy and the markets. This week I am taking a que from the above quote. Please take a look below at the charts and graphs with [...]
Executive Summary Recent stock market volatility has been impacted by headlines and tweets about trade wars and tariffs. However, digging deeper into the real data indicates the economy is approaching the end of its cycle. The temporarily juiced profits from the corporate tax cuts have evaporated. The [...]
Executive Summary What is an inverted yield curve, and what is the significance on the economy? A normal yield curve shows shorter-term bonds pay a lower interest rate than longer-term bonds. The graphic slopes upward from left to right. An inverted yield curve is the opposite and [...]
Executive Summary Historically, corporate earnings growth tends to track overall economic growth. However, for the past decade economic growth has stayed around 2% while the stock market has soared. This disconnect creates stock market bubbles, which means greater risk of loss for investors. And now, the stock [...]
Executive Summary Under normal circumstances banks pay depositors interest, and then charge interest on loaning money to borrowers. The difference between interest charged and paid represents net interest margin or net interest income for the bank. Traditional economic principles are being turned upside down in today's world. [...]
Executive Summary Does a lender paying a borrower to hold his money make any logical economic sense? In attempts to boost growth, central banks across the globe resorted to massive Quantitative Easing programs. These programs allowed the monetization of incredible amounts of government debt. As a result, [...]
Executive Summary The current economic expansion is the longest and weakest in history. Why is that? This "recovery" was sparked and maintained by unprecedented experimental monetary policy. This included printing $3.7 trillion in liquidity and dropping interest rates to zero. The result was massive expansion of debt [...]