Monthly Archives: April, 2017

Fiscal Policy Reform This Week

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The latest fiscal policy negotiations at hand are the debt ceiling, healthcare reform, and tax reform. A cursory analysis would tell you the GOP controls both branches of Congress and the presidency which would make you think it will be easy to pass legislation. The reality is far from that. The…CONTINUE READING

Are Stocks 20% Overvalued?

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The common mistake that is made by investors is the belief that markets are always right. If this were the case, no money could be made from participating in markets. The market is a pendulum that is always moving in search of fair value. There is a bias towards rationalizing…CONTINUE READING

Stock Valuations Are In The 99th Percentile

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Focusing on every economic data point with a magnifying glass can lead you in the wrong direction. Therefore, it’s best to take a step back and analyze the situation from afar before getting ‘into the weeds.’ It’s especially important in the current environment because the economy has been consistently weak.…CONTINUE READING

Declining Global Trade Signals Recession

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Economic growth is driven by growth in the labor force and growth in productivity in the long run. Short run gains can be had by credit growth. However, if the debt gets too large, there is a painful deleveraging process where the chickens come home to roost. The best lever…CONTINUE READING

IMF Warns Of Bankruptcies With Rising Rates

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The International Monetary Fund (IMF) released a few enlightening charts in its Global Financial Stability report. The fertilizer for a debt bubble is in place which is why it has grown so large. There is a toxic combination of low interest rates and low growth. Low interest rates encourage borrowing…CONTINUE READING

Fractional Reserve Banking: History & Risks

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The monetary system underlying economies in the West, and throughout much of the rest of the world as well, relies on what is known as fractional reserve banking. Understanding how this system works, its effects and tendencies, is important not only from an academic but also an investing perspective. This…CONTINUE READING

No Economic Stimulus, No Productivity Growth

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In the recent few weeks the reflation trade has unwound as the Russell 2000 is now negative for the year, the ten-year bond yield has plummeted to 2.2374%, and bank stocks have fallen about 9% since March 1st. To be clear, the Russell 2000 initially rallied after Trump’s election because…CONTINUE READING

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