Commentary

You Know It When You See It

While the Fed kept rates unchanged at today’s meeting, between the press conference and forecast updates, Powell and Co. gave plenty of ammo to keep the financial press busy speculating about what may come at the next FOMC meeting this Fall.

Commentary

Higher Rates & A Shutdown On The Menu

The University of Colorado Buffaloes are undefeated and suck up a lot of oxygen in the college football world.

Commentary

Our Stagflationary Future

Inflation averaged 1.8% in the ten years pre-COVID. Don’t expect inflation to average that low in the decade ahead. Not until the US finds a way to repeat the 1980s policy mix.

Commentary

Fiscal Madness

Back in the 1980s, President Reagan took enormous political heat (Sam Donaldson comes to mind) for being fiscally irresponsible. His offense? Presiding over a budget deficit that peaked at 5.9% of GDP in Fiscal Year 1983.

Commentary

Stocks Look Pricey

At the heart of our assessment of the stock market is our Capitalized Profits Model.

Commentary

Where is the Economy?

What’s going on with the markets and the economy? Long-term Treasury yields are up substantially since last Fall while the stock market, after a big rally, has stumbled so far this month. Meanwhile, the real economy appears to continue to chug along – even accelerating!

Commentary

An Age of Fiscal Limits

Wars cost money, and throughout history, countries have borrowed to fight them. There are plenty of examples of wars bankrupting countries, but the US was so dominant in the 1940s that at the end of World War II, its debt only cost about 1.8% of GDP to service.

Commentary

Here’s Something to “Fitch” About

What would you do if you won the Mega Millions? It’s now up to a record $1.55 billion! We would start a not-for-profit to educate people not to play the lottery.

Commentary

Not All Recession Theories Make Sense

Take the 2008 financial panic. Was it market failure and bad business models or was it using the government to subsidize housing plus mark-to-market accounting? We believe the latter…without the subsidies and bad accounting rules, the recession might not have happened at all.

Commentary

Still Growing

No one should be popping champagne when they see Thursday’s GDP report. The good news is that it won’t be negative.

Commentary

Has the Inflation Threat Passed?

The best news last week was that inflation came in below expectations for June. Consumer prices rose a moderate 0.2% for the month, while producer prices increased only 0.1%.

Commentary

Still Overvalued

Prior to 2008, when the Federal Reserve ran a “scarce reserve” monetary policy, just about every bank in the US had a federal funds trading desk. These trading desks lent and borrowed federal funds (reserves) amongst each other.

Commentary

The Red, White, and Blue Swan

In 1852, Karl Marx said, "Men make their own history, but they do not make it as they please; they do not make it under circumstances chosen by themselves but under circumstances directly encountered and transmitted from the past."

Commentary

Burns or Volcker?

We get a big bunch of data reports this week: GDP revisions and economy-wide corporate profits for the first quarter; durable goods, new home sales, personal income, and consumer spending for May; home prices for April.

Commentary

Is the Recession Threat Dead?

Lately, it’s been easy to see the optimism. As of the Friday close, the S&P 500 is up 15% so far this year (not including dividends) and up 23% (again, without dividends) versus the lowest bear-market close back in October.