Monthly Archives: December, 2017

What Could Go Wrong? Third Longest Expansion Since 1854

By
By

Reading Time: 5 minutes 2017 marked what could be considered a seemingly perfect time in history. Some of the primary factors that contributed to this goldilocks scenario has been record low interest rates and volatility, quantitative easing, high stock valuations, easiest financial conditions since 1993 based on the National Financial Conditions Index or from 1970…CONTINUE READING

Will There Be Real Wage Growth?

By
By

Reading Time: 5 minutes The economy has witnessed lower nominal wage growth than previous times in this phase of the business cycle when the unemployment rate was at current levels. Depending on how you calculate inflation and which type of industry and workers you look at, real wages have either grown modestly or have…CONTINUE READING

Italy Could Create Its Own Currency

By
By

Reading Time: 6 minutes Usually when the economy is performing poorly this creates turmoil in politics, which can even lead to war. Italy is the fourth largest economy in Europe, therefore its direction is an important driver for the Eurozone. At first glance the Italian economy is doing well. The chart below indicates that while…CONTINUE READING

The Labor Divide Between Cities & Rural

By
By

Reading Time: 5 minutes There is a lot of talk about the increased inequality between the rich and the poor, but there’s less attention paid to the differences between cities and rural areas. This divergence played a key role in President Trump’s victory as he carried states like Ohio with much wider margins than…CONTINUE READING

Natural Interest Rate: Yield Curve Inversion Is Near

By
By

Reading Time: 5 minutes Determining if the current Fed funds rate is too restrictive or expansionary is a critical endeavor because it helps explain what part of the economic cycle we are in. As we have discussed previously, there are many different ways to attempt to time the business cycle in an effort to…CONTINUE READING

Is Gold A Good Investment?

By
By

Reading Time: 6 minutes While some investors are intellectually brave to even ponder whether gold is a good investment, sadly most investors malign it for even being considered a plausible investment option. Gold is probably the most interesting and at the same time misunderstood asset in the world. Some investors believe that because gold doesn’t…CONTINUE READING

Are Stock Buybacks Good Or Bad?

By
By

Reading Time: 4 minutes There is an intellectual war ongoing over stock buybacks which continues to brew even as many clear-cut answers seem to exist. It’s difficult for bearish investors to cede any ground because they’ve been sold on the story that buybacks are the root of all manipulation in the stock market. Over…CONTINUE READING

Bull vs Bear Market: Historical Gains & Losses

By
By

Reading Time: 7 minutes Bear Market Definition: A bear market is defined as an event where asset prices decline in excess of 20% for at least 60 days. In contrast, if a decline in asset prices in excess of 20% occurs for less than 60 days this is referred to as a “market correction”.…CONTINUE READING

Student Loans Are Not Like Housing Bubble

By
By

Reading Time: 6 minutes It’s widely known that the financial sector has become more centralized because of the mergers between some of the banks and other financial institutions during the financial crisis something we discussed in depth in Are Too Big To Fail Banks Safe?. For example, Bank of America acquired Merrill Lynch and…CONTINUE READING

Tax Cuts: Short-Term & Long-Term Review

By
By

Reading Time: 5 minutes Throughout the expansion from about 2010 to 2016 the Federal Reserve told us it wanted to step back from its stimulative policies, which were QE and zero percent interest rates, but it couldn’t because fiscal stimulus wasn’t coming. Furthermore, there have been times in that period where fiscal policy hurt…CONTINUE READING

1 2 3