For those who have seen the movie Great Gatsby, you have some appreciation of how sweltering the summer heat can be in New York City. For many decades, those who can afford to flee the city for the seashore have done so. The result is that there are fewer people doing anything on Wall Street. Therefore, it shouldn’t be surprising that the stock market just…
Libertarians rail against the Federal Reserve System. Both Ron & Rand Paul want the Fed audited as a predicate to eliminate the Fed, even though over 800 audits are performed on the Fed every year. This animus toward the Fed by Libertarians grows out of their belief that capitalism is supposed to be efficient, which means completely unfettered (forgetting that Karl Marx agreed with them…
Was it yesterday or even today? Maybe, it will be tomorrow. We know it will be any day now. In 2013, economists estimate the global GDP, for the entire world, was $101.8 trillion. The United States represented 16.5% of that total. China represented 15.9%. However, the size of their economy is expected to eclipse our economy this year. Does that really mean anything? Some argue…
The award for the most creative T-shirt seen at the 2015 annual convention of the Investment Management Consultants Association in Las Vegas goes to the young man whose T-shirt read: Financial Planning: It is NOT just for baby boomers anymore.
I attended a lecture entitled “The Age of Abundance” yesterday. That title reminded me of a book I read back in the 1970s called The Age of Leisure which argued that technology was making work unnecessary and that Americans were ill-equipped to deal with too much free time. It never said “idle hands are the devil’s tools” but it might have. I concluded this was just…
People who make their living by buying one currency and selling other currencies often have a stressful life. They make long-term bets but have to constantly and continually make course corrections. For example, most believed the euro was in a slow, downward trend, which reflects their economy. Then, the European Central Bank (ECB) announced a program of quantitative easing (QE), which would benefit the economy…
It is true that music can calm the savage beast. It can also bring peace to a tormented soul, at least temporarily. It is a type of medicine for most. I hate to see it suffer. For the first time, I ask for your support of the Virginia Symphony (VSO) in general and their patriotic July 4th performance in particular. Here is their request: You…
Somebody needs to call Central Casting in Hollywood and tell them the perfect stereotype for a kindly uncle is Dr. Jeremy Siegel of Wharton. However, his kindly demeanor hides his razor-sharp mind and legendary forecasting record. Here are some of his latest thoughts: Despite lower gas prices and improved consumer sentiment, consumer spending was disappointing during the first quarter. He thinks GDP estimates for Q1…
Part of your job as a concerned American is to visit this website frequently: http://www.usdebtclock.org/ In fairness to those who can sleep well after looking at this website, it should be pointed out that the website does not show the declining ratio of debt-to-GDP, which is improving, unless you consider the present value of entitlements like Social Security and Medicare, which are getting worse. Which…
Inside Business is the Hampton Roads Business Journal, and I write a column for them each quarter. Here it is: http://insidebiz.com/news/q1-still-shifting-gears
How can I promise the world will not end tomorrow? How can I promise the stock market will not drop 50% tomorrow? How can I disprove something negative? A friend in Europe sent me an interesting article titled “Damned if they raise, damned if they don’t: The Dilemma of U.S. Central Bank” by Stewart Richardson. It begins with a quote from well-known perma-bear Marc Faber,…
The research department of Goldman Sachs just did an excellent analysis of the oil industry. They explain that the $60/bbl decline in oil prices over the last year is due to three reasons — normal supply & demand fundamentals, cost deflation, and technological shifts. $25 of the $60 decline was due to increased supply, $10 was due to decreased demand, which explains $35 of the…
Imagine your boss telling you that he needed to cut your pay by 7% — you would probably survive, but you would not be happy, and that job would be a whole lot less valuable to you. Johnson & Johnson, the huge multi-national consumer staples company announced their quarterly earnings this week. Sparring you the many details, one item jumped out at me — their…
The four pieces of economic data released today confirmed what we already knew, i.e., that the first quarter was a disappointment — not a tragedy, just a disappointment. Today,we learned that retail sales increased less than expected. Expecting higher sales, retailers naturally increased their inventories. Not surprisingly, today we learned that inventories rose more than expected. Holding inventory is not without cost to retailers, suggesting…
I live in a fancy condo on the beach, where I can watch sunbathers, ships, and dolphin. I live with a lady who is lovely both inside and out. I even drive a fancy car. So, life is good! Except . . . I have bronchitis. Coughing myself awake at 2AM, I slipped into the guest room and turned on the TV, finding that the…
Checking into the Marriott World Center in Orlando for a conference some years ago, I noticed the quiet, unassuming guy in front of me was having trouble with the front desk. After displaying an unusual amount of patience, I finally stepped in front of him and said to the desk clerk “I’m sure if you called Mr. Marriott, he would be pleased to offer Dr.…
Some things, oddly enough, work better in practice than theory, such as quantitative easing. Most things, however, work better in theory than in practice, especially within the investment world. The hot debate within the investment world for the last decade has been the argument that index investing beats active management. In other words, you should just buy the S&P 500 index without trying to buy…
A rat is a small animal but can be vicious when cornered. Russia is a large nation but can also be vicious when cornered. That’s why I’ve so been worried about Russia’s ability to be rational over the past year. However, the latest economic data from that country is a little better than expected. Their GDP actually had a positive growth rate in Q4 of…
Why is it so much fun to watch intellectual titans clash? Ben Bernanke has been a lifelong Republican, who has been roundly criticized by Republicans for leading an activist Fed. Larry Summers has been a lifelong Democrat, whom Republicans prevented from getting Bernanke’s job at the Fed. Bernanke believes that interest rates don’t need to drop any further, as the economy is getting stronger, albeit…
Religion has done great good for mankind. Unfortunately, religion has also done great harm to mankind. In addition to being a river of condemnation, religion also helps us mark the seasons. All religions (that are based in temperate climates) mark the birth of winter with good cheer, like Christmas or Hanukkah. Arriving with first birds of Springtime, those religions mark the death of winter, like…
Before partisan redistricting gerrymandered Virginia into hardcore red districts and hardcore blue districts. the expression of “The Virginia Way” described our legislature in Richmond. It was a time when elected politicians forgot the heated rhetoric of campaigns and worked together across party lines to actually deal with issues. Honor and honesty were taken for granted. Today, heated rhetoric continues to the Chamber floors, making it…
Forgetting that GDP growth in the first quarter has averaged a miserable 0.5% since 2010, the market was still expecting a robust 248 thousand jobs to be created last month. However, today’s Jobs Report indicated a mere 126 thousand jobs were created. I guess all those people expecting the higher number of jobs spent the month of March on the beach in south Florida and…
If the stock market rose 20 points every single day, then investors would overreact on the one day it only rose 19 points. There are only two guaranties to investing. The first is that the stock market will always overreact to geopolitical news, and the second is that investors will always overreact to the stock market. Certainly, the stock market was forced to digest a…
