Most everybody knows that prices are determined by the “Law of Supply and Demand”.  If supply of a product decreases while demand increases, then buyers will “bid up” the price.  Likewise, if demand increases more than supply increases, buyers will again “bid up” the price.  However, if supply increases more than demand, buyers will not … Continue reading Supply and Demand

The stock market held a SALE today, with the Dow stocks getting over 800 points cheaper.  No, it is not the beginning of the end.  More likely, it is a normal bull market correction.  Here is what happened: The European markets closed down sharply.  They were understandably frightened of rising interest rates.  The impact of … Continue reading The End Is Near? Nope!

Most people hope to get old and die of natural causes, and most people do!  Bull markets don’t have that hope of a pleasant passage.  Bull markets never die of old age.  Like animals in nature, they get killed – by several different causes.  The most common is the Federal Reserve raising interest rates too … Continue reading Dying Of Old Age

It is the pain that keeps on giving and giving. I watched a movie entitled Last Flag Flying.  It was a story of three veterans from Vietnam.  Like most, their shared memories kept them apart after the war, and they went different ways.  Thirty years later, one lost his son in Iraq, and he sought out … Continue reading Memories That Divide Us

There are precious few Americans who respect Congress.  Respect for the Presidency varies depending on the President, but most everybody I know respects the Supreme Court. When President Trump nominated Judge Kavanaugh for the Supreme Court, I thought that was fine.  While Kavanaugh’s perspective on expansive executive power worried me, I felt he was reasonably … Continue reading Sad

Just when you think that hyper-partisanship could not get any worse, along comes the Kavanaugh confirmation hearings.  For a long time, I have believed that hyper-partisanship was due to two factors.  First, politics become more poisonous when moderates are excluded, which is the result of gerrymandering.  Reliably red districts are not likely to produce moderate … Continue reading Partisan-Paralysis

I applaud the President on the signing of “Nafta II” or the “U.S., Mexico, Canada Agreement” or USMCA, as he prefers to call it. Critics will cite the minor differences between this new agreement and the TPP, which the President rejected immediately after coming into office.  For example, TPP gave U.S. farmers 3.25% of the … Continue reading Kudos to Mr. Trump

There is a tiny crack in the Fortress Economy of the United States.  Corporate earnings per share (EPS) are slowing.  They have been increasing at a 25% annual rate so far this year, but that is obviously not a sustainable rate.  It has to slow down somewhat. Most companies try to manage expectations and provide … Continue reading Tiny Crack

The relentless flow of good economic data can become boring.  Indeed, the latest Consumer Confidence Index is the highest in eighteen years.  Remembering that a confident consumer will spend more money than a frightened consumer and that consumer spending is about two-thirds of GDP, this new data suggests continued strong economic growth and even stronger … Continue reading Confident and Cocky

It seems unnatural to applaud bureaucrats anywhere, but the bureaucrats of the European Union are doing more to protect the privacy of their citizens than the august Congress of the United States.  Europe now has the General Data Protection Regulations (GDPR).  Fortunately, the state of California has rushed in to fill the American vacuum left … Continue reading Thank you, California

Watching Will Ferrell reprise his impersonation of former President George W. Bush on Saturday Night Live, one is reminded of the first law of Political Economy.  His portrayal showed the formal President essentially saying “I know history says I was an awful President, but don’t I look pretty good now, compared to President Trump?”  Bush was blamed … Continue reading First Law of Political Economy

Economics is about the allocation of limited resources to satisfy unlimited needs. There are about 35 thousand gun deaths each year in the U.S.  Another 45 thousand die of strokes, and about 35 thousand die from opioid abuse.  That is every year!  Only a cumulative of 120 people have died from terrorism attacks in the … Continue reading The Budget Vacuum

Apparently, Mueller has “flipped” Manafort, who will now testify against Trump.  I would caution my Democratic friends to be less gleeful.  Impeachment is a terrible thing.  It is bad for the country.  I was opposed to the impeachment of Clinton, and I am opposed to the impeachment of Trump. With one exception! If Mueller finds … Continue reading THE High Crime

I listened to an interesting lecture yesterday.  Some laws of nature are immutable.  Water runs downhill.  Moths are attracted to lights, and poor people are attracted to wealth. Just as certain as death and taxes, there will be immigration.  Reflecting Paul Erlich’s iconic 1970’s The Population Bomb, the speaker predicted social chaos by 2030 or just … Continue reading Death, Taxes and ….

The bookstore at the University of Pennsylvania/Wharton has always been a favorite of mine.  It was always such a pleasure to leaf through the new books, but that bookstore has changed in two ways. First, there are fewer books.  Of course, many books are now electronic, on Kindles, etc.  In addition, information is now cheap. … Continue reading

Sitting on my balcony here on the beach, the weather is delightful – warm, gentle breezes with low humidity.  Yet, I am looking at white sea gulls but thinking about Black Swans.  You know, Black Swan events are those events that happen suddenly, with no warning but seem utterly predictable in hindsight.  Far offshore right … Continue reading Driving Away

On September 11th of each year, we stand and remember the almost three thousand people murdered by sick, crazed terrorists in New York and Washington.  Certainly, our hearts still go out to those victims and their families. But, I also think about the collaterally damaged people, like our next door neighbor, who worked in the … Continue reading Just A Red Shoe ?

President Trump is justifiably concerned about our nation’s ongoing trade deficits.  At first blush, the latest results are not encouraging.  For the first seven months of this year, the deficit is a whopping $22 billion more than last year.  It doesn’t appear that his worldwide trade war is making much progress. But, it is premature … Continue reading Too Soon To Know

News Flash:  Fox News is NOT “fair and balanced” . . . but neither are CNN nor MSNBC. Fox is more interested in complaining about “mainstream news” even though Fox has more viewers that CNN and MSNBC – combined. Doesn’t that make Fox the mainstream media that it criticizes? The other two have breathless coverage … Continue reading The Mainstream . . . Media(s)

Scratch any financial advisor, asking how much a person should save for retirement, and the answer is always “MORE”.  That is more than a flip response. Scratch most prospective retirees, asking how much of their income that they will need in retirement, and the answer is usually 70% of current income.  That is more than … Continue reading MORE!

Existentialists generally have a low regard for “pomp and circumstance” or ceremonies, finding them to be hollow exercises, all form and no substance.  They are unneeded constants in a fluid world.  We generally avoid them at all costs. Still, the 2 1/2 hour ordeal that was the funeral for John McCain seemed too short.  We … Continue reading Military Honor

Predicting an economic recession is difficult enough, even with tons of economic data.  For example, we learned this week that GDP grew at a 4.2% annualized rate during the second quarter (Q2).  This is very strong growth, indeed.  Consumer confidence is at a 17-year high.  Not surprisingly, Consumer Spending is robust.  The economic data tells … Continue reading Entirely Different Predictions

To those poor souls burning in Hell – Rejoice – Snow is coming. Long time readers know my strong feelings about Google (AKA Alphabet).  I have long thought they should be ashamed.  They did NOT say to Americans, in any understandable fashion:  “In return for giving you vast amounts of information on the internet, we … Continue reading Snowing in Hades

Some economic data points tell us how things are today, while others suggest how things will be in the future.  Consumer Confidence is the latter – it hints at the future.  The latest report is the best in seventeen years.  Because two-thirds of GDP is consumer spending, the latest Consumer Confidence report suggests consumer spending … Continue reading More Sunshine Ahead

I had an interesting conversation with a fellow retired banker.  He is quite the intellectual, as well as a devout Christian.  The conversation drifted into the difference between long-term and short-term thinking. He explained that his greatest long-term fear is going to Hell, and his short-term tactic to avoid this is to follow the teaching … Continue reading Wine Talk

While I did not always agree with the late Senator John McCain, I always respected him — more than any other elected official.  I knew that nobody in Washington loved this country more than John McCain loved it.  America is a better place because John McCain was here, and that was all he ever wanted! … Continue reading The Best American

It was July of 2015 that Donald Trump trashed John McCain the first time.  I was deeply offended at the time that Trump trashed a war hero, a national hero, as well as a personal hero to me.  That was the line in the sand for me — it was then crystal clear to me … Continue reading Decency Matters

Tax lawyers must never sleep! In January, the President unfolded his new tax code.  One of the provisions was that deductions for state and local taxes (SALT) became limited to a max of $10 thousand.  This shifted some of the tax burden from Red states to Blue states, as Blue states normally have higher SALT. … Continue reading NING Trusts

If it was wrong then, it is wrong now! I agreed with my Democratic friends that President Clinton didn’t deserve to be impeached for covering up a sexual dalliance between consenting adults. I agree with my Republican friends that President Trump doesn’t deserve to be impeached for covering up sexual dalliances between consenting adults. Yes, … Continue reading Consistent

The economy cannot read a calendar and does not own a watch.  Neither does the stock market! There is much gnashing of teeth now that the current bull market has become the longest or oldest one since World War II.  Does that mean a crash is imminent?  No!  The current bull market does not know … Continue reading Meaningless Milestone

Webster’s Dictionary has four definitions for the word – truth.  Apparently, there should be a fifth definition — that truth is the opposite of fake truth . . . huh? Rudy Giuliani tells us that “truth isn’t truth” if based on different facts.  Just like there is fake news and non-fake news, there must be … Continue reading Definitions Matter

Decades ago, television news began as a 30-minute segment in the early evening that simply recited the news of the day unemotionally.  As these programs were so profitable, more news programs appeared over time.  Then, channels developed with 100% news.  To gain viewers, and therefore advertisers, their coverage became increasingly breathless – creating a need … Continue reading A “Fair and Balanced” Diet

President Trump has made a serious proposal that deserves serious discussion.  Currently, companies traded on stock exchanges are required to report their financial condition and certain other changes every quarter or four times annually.  He has proposed that should be changed to every six months or semi-annually. The debate makes for strange bedfellows.  Agreeing with … Continue reading Kudos, Mr. President

Everybody remembers where they were, when Kennedy was murdered or when OJ led the famous white Bronco chase.  Investment strategists and economists have similar memories of the Thai baht and Russian ruble collapse of 1997-1998.  (Remember Long Term Capital Management?)  Their currency problems morphed into a worrisome systemic risk for the entire financial world.  The … Continue reading Baht –> Ruble –> Lira –> Nope

My favorite professor at Wharton was the affable but brilliant Dr. Jeremy Siegel.  His latest commentary said he “does not see this (the Turkey currency crisis) morphing into a world-wide currency crisis.”  I agree! The real significance of this crisis in Turkey is not economic.  It is only 1% of world economy.  There is some … Continue reading Hard-of-Hearing

Another Ponzi scheme was just been disclosed.  This time, it was in my home town of Virginia Beach.  While it was relatively small, less than $5 million, it is a very big problem for the poor investors. Many investors feel they have no way to protect themselves from a Ponzi scheme, but they do!  Find … Continue reading One More Time

If you are only 0.2% of a sector in the economy but contribute a whopping 40% of the lobbying dollars spent by that sector, does that make your voice a little louder?  Sugar is only 0.2% of the agricultural sector of the economy but produces 40% of the lobbying dollars.  That is obviously the reason … Continue reading Good News and Bad News

The word “inflation” causes people, who can remember the early 1980’s, to furrow their brow, look down and shake their head.  Those were the years of double-digit inflation.  Our government took several unsuccessful steps to curb inflation.  (Remember the WIN buttons for “Whip Inflation Now”?)  Inflation was high and scary – so scary that one … Continue reading Inflation = Economic Bogeyman

On Friday, the stock market dropped close to 1%.  Was that because corporate earnings had decreased by 1% – of course not.  It was due to a political shock.  Here is the short version:  Turkey has 80 million people but very few natural resources, except for its powerful geography as a bridge to Europe from … Continue reading A Collapsing Turkey

On February 27th of this year, one of my heroes, Warren Buffet, said he thought stock prices were “cheap.”   However, back in 2001, he said this (updated) chart was the “probably the best single measure of where valuations stand at any given moment.”  It shows that GDP is now 129.6% of all stocks, compared to the … Continue reading Good Enough for Warren

Republicans cause deficits by decreasing revenues.  Democrats cause deficits by increasing spending.  President Trump does both. Yesterday, the Treasury Department announced their plans to borrow 63% more in last half of this year, compared to last year. Nobody should be allowed to vote without seeing www.usdebtclock.org  

When I was doing graduate work at the University of Dallas in international trade, we had to also study cultural distinctions and how such distinctions impact business. For example, never prop your feet up in the presence of Arabs, as showing the sole of your feet is considered dis-respectable. Another example is the importance of … Continue reading When Worlds Collide

Blaming Bill and Newt I believe Bill Clinton and Newt Gingrich deserve a good portion of the blame for our poisonous political environment. They accepted the economic advice, from both Republican economists and from Democratic economists, that multi-lateral trade agreements improved the economy of all trading partners. Bill and Newt then ushered NAFTA into existence. … Continue reading Bill, Newt, and The Donald

Sara Grillo is one of my favorite financial writers. In her most recent, she discusses how convenient it is for commission-paid salesmen of life insurance, annuities and long-term care insurance to emphasize how much longer people can live. These salesmen prey upon the “worst-case” fear of not dying. She goes on to point out that … Continue reading Made Food Great Again

One important measure of how you are doing financially is the size of your pay check. That’s no different than economists looking at changes in the Gross Domestic Production or GDP. For the second quarter of this year, GDP grew at a 4.1% rate, which is good — real good, in fact. It was the … Continue reading Nervous Supply Siders