President Trump made improvement in manufacturing a campaign priority in 2016. For two years, that sector did improve but has started to falter. It would easy to say this is entirely due to the Trump’s trade war, but that doesn’t tell a fair story. Worldwide, manufacturing is slipping, for reasons unrelated to the trade war, and that worldwide slippage is weighing on our U.S. manufacturing…
Farmers have long been respected as tough and scrappy, working hard and facing constant hardship — true American heroes. Today, farming is just another industry, albeit an important one. I just read an analysis of the agricultural industry that is too dense to summarize. However, here are some of the factoids I found interesting: The industry is not hurting as much from the tariffs as…
If you loan me money and want repayment in one year, there are few things that can go wrong over that year, which would make me unable to pay. If you loan it to me for thirty years, there are many more things that can go wrong, making me unable to pay, especially inflation over such a long period. As the time to repayment increases,…
Sociologists have marveled about the increasing divorce rate for the over-60 age group. One consequence of our increased life span is that we’re out-living our marriages. As a financial planner, people come to me for hard numbers and are disappointed when I remind them there is more to retirement planning than finding “the magic number.” Men in particular are prone to think that the hard…
Not too many years ago, I listened to a native of Fort Worth, Texas, discussing food with a person from Liverpool, England. It was a good-natured discussion of who had the best food. Actually, it was hilarious, because they couldn’t understand each other. They were both speaking English, that is the English they are used to, and they still could not understand each other. Their…
I couldn’t bear watching more than 15 minutes of the Democratic debates. It was painful. While I’m sure they are all very nice people, this process morphs them into dancing monkeys, answering questions designed to entrap and defending proposals that will never be heard again. It is little different than the equally stupid process used by the 16 candidates for the Republican nomination in 2016. …
Yesterday, the Federal Reserve System of the United States of America did two things. First, they decreased interest rates by a quarter point (25 bps). The stock market however wanted a half point (50 bps), and the Dow promptly dropped 333 points. The market also wanted the Fed to promise that this was only the first decrease in a series but were disappointed by that…
To your Bucket List, be sure to add a visit to The National Museum of Peace and Justice in Montgomery, Alabama, which was one of the primary slave trading centers in the United States. (Please don’t call it the “Lynching Museum” as it is more commonly known.) As a non-racist Southern boy, I was certainly aware of the barbaric treatment of blacks by white people. …
No animal ever had an opinion on evolution. No plant was ever asked to vote on evolution. But, they changed over time — they evolved anyway. Originally, there was no study or discipline known as economics. It was a period of chaos, with extreme boom/bust and with harsh economic consequences during those inevitable downturns. Then, Austrian economics became the dominant economic philosophy, which said revenues…
No serious person thinks we should have zero border security – none! The political perspective is that (1) if you worship at the Republican altar, you must believe as instructed and (2) if you worship at the Democratic altar, you also must believe as instructed. Nonpartisan thinking cannot be tolerated! The religious perspective on immigration is . . . . . . . . .…
“Past performance is no guaranty of future performance” — how many times have we heard that? Standard & Poor’s just released a report on “persistence” or how long does a high performing mutual fund continue to perform so well. They looked at all 546 equity mutual funds that were in the top quartile (top 25%) of March 1st, 2017 and compared them to the same…
I had a roommate in college that was obsessed with women’s hair. If he met a nice girl in English class, he wouldn’t say that. He would say he met Brunette in English class. He never used their names. All women had just three names – Blond, Brunette, or Redhead. He was not interested in them as individuals. It was too easy for him to…
Years ago, my parents gave me a little “lockbox” with a key about the size of a loaf of bread, for my important papers and other treasures, like my collection of baseball cards. When I returned from the Army, the key was nowhere to be found. Drilling it open cost more than the original cost. The locksmith laughed at me, because thieves bring stolen lockboxes…
Raghuram Rajan recently wrote The Third Pillar: How Markets and the State Leave Community Behind, and I attended the lecture he gave in Las Vegas. He explained a healthy society needs three strong pillars, i.e., government, economy, and community. He argued that we have a strong government and strong economy but community no longer exists for mobile Americans, especially those who further self-segregate themselves via the…
For my inner economist, the first Friday of each month is the most interesting, as that is when the monthly “jobs report” is released by the Bureau of Labor Standards or BLS. This morning’s report (it is always released at precisely 8:30 AM.) showed a slight uptick in the unemployment rate to 3.7 percent. More importantly, the number of jobs created in June far exceeded…
When I went to Hong Kong in 1984, that city-state was still governed by the British but long-coveted by China. I found that city to be a vibrant, exciting international financial center, with heavy traffic, crowded sidewalks, and excitement in the air. One day, when I went on my morning run, the city was suddenly quiet and eerily empty. It seemed like a different city.…
For those who want to read my latest column in Inside Business before it hits the presses, you can find it here: https://pilotonline.com/inside-business/news/columns/article_9527f304-99ad-11e9-a8cc-c7a905cada61.html
There are many ways to spend time, without watching well-meaning windbags pretend to debate each other. Last night, when changing channels, I landed on such a “debate.” During the five seconds required to enter another channel number into my remote, I heard one windbag suggest that community college should be free. I remember thinking “fat chance” before that windbag was gone. Four or five commercials…
Sparing you the many details, the relentlessly positive economic data over the last few years has taken a turn during the second quarter (Q2). The first look at Q2 GDP growth will not be available for another three weeks, but I expect it to be substantially less than Q1 growth rate of 3.1 percent, which was skewed higher by inventory build-up ahead of the tariffs. …
So, you have searched your soul, looking for the real reason you think you want to retire . . . And, you have verbalized your thinking to a trusted loved one, giving airtime to both your thoughts and their thoughts . . . And, you have prepared a budget for a good economy and another for a bad economy . . . Now, you want…
It seems like a long time since December, which was the last time the Fed raised interest rates. The stock market promptly had a “hizzy-fit” (whatever that is?), and the President began threatening to fire the Chairman of the Fed. This week, the Fed had its normal policy meeting and strongly suggested it would cut interest rates at the July meeting. Wall Street loved it! …
You’ll recall the President’s famous boast that he could shoot somebody in the middle of Fifth Avenue and not lose a single member of his “base.” That was an interesting comment, and I started thinking about the origin of his base. At first, as a student of Hillbilly Elegy, I thought it was logical that the millions of people who were victimized by globalization and…
Ever since Lou Eisenberg wrote The Number in 2006, those thinking about retirement have focused on the one big magic number that will take care of them the rest of their lives. How big a “nest-egg” is big enough? Unfortunately that number is income-focused. You don’t know if any number is big enough, if you don’t really know your expenses. Your nest-egg is big enough only…
As people contemplate retirement, they often go to a bank broker to see if they will be prepared for it, financially. The broker will plug a few numbers into his laptop and tell you the odds or probability that you will be prepared, measured to two decimal places, such as a 72.84% probability, for example. This is called a Monte Carlo analysis, and it is…
Supply-side economists argue that tax revenues will increase if you cut tax rates. Since passage of the Trump tax cut, revenues have indeed increased . . . a whooping 2%. Unfortunately, expenses or spending increased 9%, primarily for federal retirement and health benefits, the military, and interest payments on the national debt. (Notice that only government workers received increased entitlements.) After some accounting adjustments, our…
Every profession has its crooks and charlatans, even doctors, lawyers and Indian chiefs. In financial planning, I trust nobody who deals with offshore asset protection trusts. Originally, they were used to protect assets from ex-wives or creditors or the IRS. Of course, the way to accomplish this was to transfer title or ownership of those assets to somebody else, who was then free to do…
There are many reasons to retire. You might retire for health reasons, or you might retire because you already have plenty of money. You might retire because you want to do charity-work. I think most people retire, because society expects us to WANT to retire. Why do you want to retire? Who told you that? Not all retirements are successful. How will you retire from…
Yesterday’s employment report was considered bad news, as only 75 thousand jobs were created in May, while 180 thousand had been expected. Bad News! So, why did the Dow rise 263 points? Because that increases the probability that the Fed will cut interest rates. Clearly, the market believes that short-term interest rates – the only interest rates directly controlled by the Fed – are too…
We recently noted the unusual under-performance of small-cap stocks, which were getting trounced by large-cap stocks this Spring. Now, we look at the two ISM Indexes and see continued growth in the services sector, as well as employment, but a sudden slowdown in manufacturing. It is still increasing but only barely. Obviously, the new tariffs are one cause, and other causes are not readily apparent. …
Did you notice? A little bi-partisanship has broken out in Congress! It can happen! Dogs and cats can get along, after all. Who knew? The cause is an interesting re-alignment going on. Historically, we have viewed our leaders as “right or left” or as Republicans or Democrats. That may be changing to globalists or nationalists. The new bi-partisan hearings are a joint effort of Republican…
When I was a boy, my parents forced me to wear nice clothes every Sunday morning to attend Sunday School and Church. They taught me the key to life is what you believe. When I was in college, my professors insisted that I learn more about things I care little about. They taught me that key to life is how much you know. When I…
Looking at the global markets this year, there is one anomaly worth pondering. Since the early 1990’s, the benefits of globalization have largely accrued to the large companies. Two years ago, 52% of total revenues for the large companies were derived from international sales. Therefore, one can assume large cap companies would be more sensitive global slowdowns and less sensitive to internal recessions. That ain’t…
Now that my hometown has joined the “Mass-Killing-of-the-Month” Club, I feel the need to comment, both as a native-son and as a “gun-lover”. First, we already have enough guns. We have less than 330 million people, including children and infants, but over 375 million guns. How many do we need anyway? Plus, we manufacture over a million new guns every year. Second, the Second Amendment…