Monthly Archives: February, 2018

Best & Worst Real Historical Returns: Where To Invest?

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Reading Time: 5 minutes With the first stock market correction in over a year, having occurred in early February, there were many media narratives about what caused the selloff. We think it was driven by the unwind of the short VIX trade. Buying protection wasn’t considered important with the VIX at record lows in…CONTINUE READING

US Housing Is Becoming Unaffordable

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Reading Time: 5 minutes We’ve discussed the price to income ratio of housing in a previous article. This gave us an idea of how expensive housing has become. We’ll discuss some of best points why real estate is too expensive and then provide the counterpoint explaining why housing isn’t in a bubble. Housing Isn’t…CONTINUE READING

ECB Unwind Causes Monetary Conditions To Tighten

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Reading Time: 5 minutes In January, the ECB tapered its bond buying from €60 billion per month to €30 billion per month. Equally as important, the central bank is expected to stop its bond buying completely by September 2018. European economic growth has accelerated recently, but it’s unclear how much the economy was helped…CONTINUE READING

Gold vs Inflation: Not What You Expect

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Reading Time: 5 minutes We’ve had some readers question the Fed’s use of CPI as a measurement of price inflation. The chart below might satiate them as it shows the eight components of CPI. Medical costs have pushed inflation higher. Keep in mind, this is over a 17 year period. We’re not ignoring the…CONTINUE READING

Buying/Renting Home vs Investing In Stocks

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Reading Time: 6 minutes The conventional wisdom during the baby boom generation was that buying a house was a ticket to financial freedom. Because policy makers believed in this concept, since the late 90s there was an aggressive attempt to get people into homes they couldn’t afford. Obviously, over leveraging yourself with the purchase…CONTINUE READING

Consumer Prices Rise Highest Since 2007

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Reading Time: 5 minutes One of the major trends of 2018 is likely to be the acceleration of inflation growth, as we have discussed previously in the following articles: Why Inflation Will Increase In 2018 Long-Term Inflation Pressures The Fed has longed for inflation for years because it consistently has been below its goal…CONTINUE READING

Federal Reserve Dilemma Suggests Higher Inflation

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Reading Time: 5 minutes The economy looks like it has momentum as of the beginning of 2018 based on most indicators. For example, retail sales growth was 5.4% in December and 4.2% for all of 2017 which was up from the 3.2% growth in 2016. However, retail sales in January declined 0.3% compared with…CONTINUE READING

Delinquencies & Savings Rate: Truth In Details

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Reading Time: 5 minutes Delinquency rates on credit cards are important because GDP is mostly driven by the consumer. If the consumer can’t borrow money to buy goods and services, a recession is in the cards. This is probably why the chart below has gone viral among the bearish investors. The delinquency rate on…CONTINUE READING

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