Executive Summary Historically, when the yield curve un-inverts, a recession is soon to follow. In the first graph below one can see interest rates are behaving similar to previous recessions. Note, no recession has currently been declared. Additionally, the National Federation of Independent Business (NFIB) Small Business [...]

Executive Summary Election day is finally upon us! Everyone wants to know who is going to win, and what will happen to the economy and the stock market. I am here to give you the answers…just kidding. As a follow up to last week’s commentary, the Congressional [...]

Executive Summary As we near the end of an election season, I find it intriguing that neither party is highlighting the dangerous debt predicament facing the U.S. After the 2007-2009 Financial Crisis, the U.S. annual budget deficit soared to over $1 trillion (see first graph). The rapid [...]

Executive Summary Housing prices have perplexed many since mortgage rates rose in 2023. Since active home listings plummeted from 1.2 million in 2019 to 347,000 in 2022 (see first graph), prices stayed high. Now analyzing housing affordability, one can see it is more unaffordable than in 2007 [...]

Executive Summary A recent article in the Financial Times suggests that the Fed pushing interest rates higher has led to a windfall profit for large banks of almost $1 trillion at the expense of depositors. In this missive I will review changes in Fed policies, including growing [...]

Executive Summary Speculators have driven the stock market to extreme highs, along with the imbedded risks. The four graphs (included below) represent various valuation methodologies. Twelve-month trailing p/e (currently 30, long-term median is 15) Shiller P/E (currently 37, long-term median 16) The Buffet Indicator Hussman’s ratio of [...]

Executive Summary In this week’s Market Update, I share comments made by economists Dr. John Hussman and Jeremy Grantham as well as quotes from Benjamin Graham and David Dodd published after the 1929-1932 stock market crash. The first graph below from Dr. Hussman’s most recent Market Comment [...]

Executive Summary Last week the Federal Reserve surprised economists with a 0.50% decrease in the Federal Funds Rate, rather than the expected 0.25% decrease. There are two reasons the Fed cut rates more than expected: 1) the level of interest on the Federal debt is at crisis [...]

Executive Summary The Treasury yield curve typically refers to the difference between the yield on the 10-year and two-year Treasury Notes. In normal times long-term yields are higher than short-term yields. The Federal Reserve’s recent rate hiking cycle caused the yield curve to invert – meaning short-term [...]

Executive Summary Over the past year, the economy has weakened, but the “strength” in the labor force has kept us from recession. However, recent revisions in the Bureau of Labor Statistics’ “new jobs data” bring into question the reliability of the BLS data. Revisions showed that “new [...]