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 [...]
Executive Summary The stock market has now become a destination for speculators. The most recent target of the market’s lure has been retail investors. Retail investors historically have been the last to arrive and depart the party; thereby, suffering the most damage during the speculative market’s reversion [...]
Executive Summary To understand the risk of inflation or stagflation, it is important to know how “money” is created and what is required of this new money in order to generate inflation. In this missive I review these concepts and show graphs of the money supply, Federal [...]
Executive Summary A relatively strong correlation exists between economic growth, inflation and 10-year Treasury yields as can be seen below (first graph). I believe the current leap in GDP growth is due to the economic reaction from reopening post pandemic; however, I think this is transitory. Take [...]
Executive Summary In this missive, I will review debt levels and growth of the following types of debt: Federal, nonfinancial corporate, and household and nonprofit organizations. I will examine the rate of growth of each of these categories of debt from 1980 to present. This rate of [...]
Executive Summary This week’s market update is relatively short in words and is composed mostly of charts and graphs of various stock market valuation methodologies. It is important to note that valuation methodologies are great indicators of long-term price movements; however, they are terrible short-term indicators. What [...]
Executive Summary Since the pandemic took charge of the economy, several stimulus plans have been enacted by Congress. Each round produced a short-term economic sugar boost before settling down to zero percent growth (see first graph). The stimulus created more Federal debt. Although Federal debt has been [...]