Executive Summary Asset classes of all types fell last year, leaving a traditional “buy-and-hold balanced portfolio” consisting of 60% S&P 500 and 40% cash and Treasuries, down about 17%. However, the declines were not straight down as evidenced by the S&P 500 (first graph below showing bear [...]

Executive Summary Last week’s Update discussed what could fuel a Santa Claus rally. While the CPI data provided  some fuel, Jerome Powell threw cold water extinguishing the hopes for a rally. The slightly  cooler CPI data resulted in hope for a Fed policy pivot and a market [...]

Executive Summary Talk by financial media for the always hoped-for Santa Claus rally is rampant. On December 13 the CPI for November will be released. If it is down, there will be hope of a Fed pivot. The Fed should state their interpretation at their meeting on [...]

Executive Summary After the pandemic, inflation hit in 2022 because of the massive government stimulus programs. The Fed began fighting inflation by reducing the balance sheet (first graph) and raising interest rates (second graph). The dollar also rose by around 19%, and after giving up some of [...]

Executive Summary Normally, long-term interest rates are higher than short-term rates, and the yield curve is an  upward sloping line. When short-term rates exceed long term rates, it is referred to as an  “inverted yield curve.” Visually seen in the first graph below, the inverted yield curve [...]

Executive Summary Many people in the U.S. have much to be thankful for; albeit inflation is not one of them. Since energy prices are up 17% over last year (see first graph), holiday travel may be negatively impacted. And Thanksgiving food staples are up significantly (second graph). [...]

Executive Summary Last week when the Consumer Price Index was released, the stock market reacted with a large one-day rally – capping off a volatile week of up, down, and way up. Historically, these types of one-day gains occur during bear markets (first graph). In the age [...]

Executive Summary How much do we need to save for retirement? This is the question most people ask and desire a specific numerical answer for planning. However, the number of assumptions in these analyses are too many and too variable to give a specific answer. What we [...]

Executive Summary A recent article in The Wall Street Journal claimed consumers were “in good shape.” The fact missing from the article is the rapid decline in consumer finances. In the second graph below, one can see household debt as a percentage of real disposable personal income [...]

Executive Summary Soaring mortgage interest rates and falling personal disposable incomes are putting pressure on the housing market. When mortgage rates bottomed out around 2.75% and COVID-19 stimulus programs provided cash to households, home prices skyrocketed (see second graph). With current loan rates around 7.5%, monthly loan [...]