As we usher out 2016 and usher in 2017, my thoughts turn to difficult transitions.  Which is more difficult:  ushering a child into the world or ushering a parent out of it? The processes of ushering in versus ushering out are very different.  The first is largely a happy process, while the latter process is … Continue reading Ushering

It is always amusing to see which blog posts were most popular during the year.  For 2016, the third most popular was “The Lehman Line” on October 22nd, when I worried about the probability of Deutsche Bank posing a systemic risk to our financial system. The second most popular was “The Only Game in Town” … Continue reading Drum Roll,Please

If somebody said to you that you looked really great today, would you feel good or would you immediately panic that someday you will not look great? With the market hovering near all-time highs, you would think people would feel good.  Instead, “all-time high” must be some code word for immediate crash. The market has … Continue reading You Look Marvelous?

With the U.S. being the only nation that is actually raising its interest rates, it is not surprising that foreign savers are buying dollars, to move their savings and take advantage of the higher rates here.  However, the dollar has increased almost 5% over the last year, making dollars more expensive for foreigners to buy. … Continue reading Cost of a Strong Dollar

I have been a fan of Ayn Rand for a half century and think I have read everything she ever published.  She is the mother of Libertarians and their philosophy of the rugged, determined individual standing against the forces of conformity in general and government in particular.  That is not surprising considering she was a … Continue reading Better In Theory

The last week of each year is probably the most intellectually satisfying week of the year.  It forces introspection, because it is both retrospective and prospective – a retrospective look at the year-ending and a prospective look at the year-approaching.  It begs the question of what did you learn this year that will help next … Continue reading 2016 Lesson Learned

The under-appreciated research department in the over-appreciated investment house of Goldman Sachs list four themes or transitions during the next year.  They are  (1) globalization transitioning to populism, (2) monetary policy transitioning to fiscal policy, (3) regulation to deregulation, and (4) stagflation to inflation.  These are not minor transitions and will take longer than any … Continue reading 2017 Transitions

As we enter the brave new world of Donald Trump, it is useful to assess what still makes sense and what does not.  This graph shows the PE ratio since 1900. The PE is the market price of a share of stock divided by the earnings-per-share of that stock.  Stocks with a high PE ratio … Continue reading “It is different this time” . . . ?

When I got out of the Army, I was well-steeped in the core belief of Special Forces that “the ultimate weapon is not the atomic bomb but is a guerrilla fighter.”  It is the belief that isolated, unpredictable acts of savagery can bring down a nation more cheaply than a fleet of B-52’s. Also, when … Continue reading Paging Ronald Reagan . ..

Q. – What do these two numbers have in common?A. – Neither really matters! Yesterday, the Federal Open Market Committee of the Fed decided to raise short-term interest rates by a quarter of one percent.  That is the same thing they did in December of last year, when they incorrectly predicted three more rate increases … Continue reading 0.25 and 20,000

Traditionally, presidents receive more blame than they deserve for bad economic times and more credit than they deserve for good economic times.  While President George W. Bush can be fairly criticized for other things, he has received more blame than he deserves for the Great Recession of 2008.  After all, he had little to do … Continue reading Jumping Over Trump Tower

As EVERYBODY knows, the stock market is booming!  Some people think America has finally hit the Reset Button.  Some think this booming market is merely a result of the traditional good-feeling around a White House rotation to a new president.  Some think it is just a another “Santa Claus Rally” but one on Trump steroids. … Continue reading Chicken? Or Egg?

Why can’t dogs and cats just get along? I attended a viewing party for the classic Army-Navy football game yesterday.  That rivalry is far more than just another college game.  For the cadets of West Point and the midshipmen of Annapolis, it is the only match-up that really matters.  Either team would gladly lose every … Continue reading Limits of Rivalry

Gray-haired readers may remember the brilliant NBC show during 1964 and 1965, hosted by David Frost, with the clumsy name of That Was The Week That Was or TWTWTW or TW3.  Sometimes, a weekly perspective helps, so here goes . . . On Monday, we learned that the Institute of Supply Management’s closely-followed Non-Manufacturing Index … Continue reading TWTEWTW

Historically, the stock market rallies, following a presidential election, until the inauguration in January, when the dismal political reality arrives.  If Clinton had won the election, I suspect that rally would have been minor, as the market already expected her to win and had priced that into market prices.  If Trump won, I predicted the … Continue reading Enough Already !

It was President Harry Truman who famously begged for a “one-armed economist.”  He was desperate for economic advice that did not end with “on the other hand.”  He needed hard actionable advice, not polite intellectual advice.  I suspect he was seeking advice from academic economists, not business economists. Members of the National Association of Business … Continue reading Need Sunglasses ?

Some people are just wired to worry, and nothing worries them more than NOT knowing why they are worried.  Take a look at the recent U.S. economic data: 1.  The ISM data shows manufacturing, long thought dead, is actually “firming”.2.  Construction spending is also bouncing back.3.  Consumer Income, Consumer Confidence and Consumer Sentiment are all … Continue reading Weekend Worry Assignment