Is the Optimism Warranted?

2023-04-11T16:13:21+00:00April 11th, 2023|Categories: INVESTMENT|

Executive Summary Recently stock markets have appeared optimistic, even though financial data does not agree. In the first graph below, one can see banks are tightening lending standards, which is consistent with prior recessions. In a debt driven society, reduced lending results in lower demand and smaller [...]

Featuring Wolf Richter: Services Inflation Rages at Worst Rate since 1984, Keeps “Core PCE” in High Range. Energy & Goods Cool

2023-04-04T16:37:30+00:00April 4th, 2023|Categories: INVESTMENT|

Executive Summary This week I wanted to share a guest article from Wolf Richter. This article reflects on trends that we typically use to measure our economic position - services, goods, energy, or groceries - and how they pertain to consumers, and how their current positions can [...]

What Could Be the Next Shoe to Drop?

2023-03-28T17:47:08+00:00March 28th, 2023|Categories: INVESTMENT|

Executive Summary During the COVID pandemic, many companies implemented work-from-home strategies, resulting in the realization of needing less office space. The impact of reduced occupancy (see first graph) could be an issue for owners and financiers of commercial real estate. Much of which is highly leveraged with [...]

Is Your Bank Account Safe?

2023-03-21T16:21:11+00:00March 21st, 2023|Categories: INVESTMENT|

Executive Summary Last week saw the collapse of Silicon Valley Bank and Signature Bank. Over the weekend, regulators and government officials scrambled to forge a rescue deal for Credit Suisse, through a purchase by UBS. Credit Suisse shareholders will still suffer losses. The banking and financial system [...]

What Happened to Silicon Valley Bank?

2023-03-14T21:05:59+00:00March 14th, 2023|Categories: INVESTMENT|

Executive Summary Last week many heard about the Silicon Valley Bank failure. Over the weekend, a joint statement (included below in The Details) was released by Janet Yellen, Secretary of the Treasury, Jerome Powell, Federal Reserve Board Chair, and Martin Gruenberg, FDIC Chairman. This letter would also [...]

Is it Time to Return to GAAP?

2023-03-07T19:06:53+00:00March 7th, 2023|Categories: INVESTMENT|

Executive Summary Generally Accepted Accounting Principles (GAAP), the standards for financial reporting, used to be used in financial analysis. However, now the financial industry prefers “adjusted” or “forward” earnings as they allow for manipulations, justifying overpriced stocks. One can see in the second graph below the divergence [...]

Are Millennials Buying Homes?

2023-02-28T21:35:58+00:00February 28th, 2023|Categories: INVESTMENT|

Executive Summary For almost forty years mortgage interest rates were trending down (see first graph), until 2022 when the Federal Reserve Bank started raising the Fed Funds rate to fight inflation. In 2021 home prices skyrocketed (2nd graph) in part due to low rates and Federal COVID [...]

What Are 0dte Options?

2023-02-22T15:23:30+00:00February 21st, 2023|Categories: INVESTMENT|

Executive Summary While it is normal to have rallies during bear markets, volatility caused by options trading currently appears to be having a more profound effect. Options give the purchaser the right to buy or sell an underlying stock at a specific price. The use of shorter-term [...]

What Are the Results of 14 Years of Extreme Fed Actions?

2023-02-14T22:17:52+00:00February 14th, 2023|Categories: INVESTMENT|

Executive Summary In this week’s Update, I share thoughts from Dennis M. Kelleher, Cofounder, President and CEO  of Better Markets, “An independent, nonpartisan, nonprofit organization that promotes the  public interest in financial reform, financial markets and the economy.” Since I have shared  numerous thoughts on the Fed’s [...]

Are Policymakers Wearing Blindfolds?

2023-02-07T17:01:31+00:00February 7th, 2023|Categories: INVESTMENT|

Executive Summary The first graph below illustrates the massive increase in the national debt, which now totals over $31.5 trillion. With interest rates rising, the cost of carrying the U.S. debt skyrocketed 40% (see second graph). By ignoring the future costs of uncontrollable Federal debt, policymakers are [...]

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