Each month, the Department of Labor issues their “Jobs Report” on the first Friday. Most people just look at the number of jobs created and the rate of unemployment. In the latest, for example, it was 148 thousand and 4.1% respectively. Buried inside, there were other numbers of note. First, there was the U-6 level of unemployment, which measures the people “only marginally attached to…
There was a minor earthquake yesterday in San Francisco. It is NOT true that the earthquake was caused by the millions and millions of Millenials, who were rolling their eyes when they heard that Attorney General Jeff Sessions had given license to the U.S. Attorneys across the country to begin prosecuting marijuana cases again. Generally speaking, Millenials have as little respect for pot laws, as…
The bulls have been running on Wall Street for nine years. They should be tired, but they apparently are not. Generally speaking, as long as profits continue to increase, the stock market should continue to increase. Decreasing tax expense means increased profit (unless the money is allocated to other expenses like labor). In addition, the global economic recovery continues, further increasing profit. You’ll recall that…
Most Federal agencies are required to solicit feedback from the public before making any significant change in regulation. When the Federal Communications Commission (FCC) was preparing to eliminate net-neutrality, they first solicited public opinion. Afterwards, it was discovered that about a tenth of the opinions expressed were bogus. Many people were surprised to learn they had written a letter. Even dead people wrote letters to…
After telling my father about a minor “dust-up” with four black youths when I was about 12 years old, my father explained to me that “10% of black people are bad people.” After scratching my head, I asked what percentage of white people are bad people, and he told me . . . 10%. His point, obviously, was that 10% of all types of people…
2017 was a banner year. Stocks were up. Bonds were up. Commodities were up. It was a very good year indeed! The largest company stocks did best, with the Dow rising 28.11 percent. (Your portfolio probably didn’t rise nearly that much, unless you invested solely in the Dow without diversifying or invested very heavily in technology.) The merely huge companies in the S&P 500 index…
Point #1: Fox News argues 24/7 that Secretary Clinton leaked national secrets and abused email protocols. If so, the Secretary should be punished. Point #2: Non-Fox News argues 24/7 that President Trump colluded with Russia to influence our voting. If so, the President should be punished. Point #3: All U.S. intelligence agencies concluded that Russia interfered with our election process. If so, that country should…
In the early nineteenth century city of Nottingham in England, working conditions for working men and women were barely human. In a effort to gain negotiating strength for possible unionization talks with the textile industry, workers began destroying machinery. When violence broke out, the mill owners began shooting the workers, and the rebellion from 1811-1816 was finally put down by military force. The workers became…
During the past week alone, we have learned: 1. New home sales are surging, up 17.5% in November.2. Consumer Sentiment was the highest in 2017 since the year 2000.3. Personal Income is rising nicely, up 0.3% in November alone.4. Inflation is quiet. The PCE deflator is up on 1.8% year-over-year.5. Core inflation is up even less, only 1.5% year-over-year.6. Consumer spending rose twice as much…
Bill was my buddy. He was from Kentucky, and we were bunk-mates in Officer Candidate School, room-mates in Paratrooper School, and next door neighbors in the Special Forces Officer Course. In Vietnam, he commanded a platoon of “tunnel rats” – those guys with the terrifying duty of flushing the Vietcong out of tunnels. Accepting his immediate death, one Vietcong soldier bravely popped up from a…
Q. What’s the difference between Democratic economists and Republican economists? A. Democrats like Keynesian economics,while Republicans like Supply-side economics. Q. What’s the similarity between Democratic economists and Republican economists? A. Both love budget deficits but strongly deny it! Q. How do they justify such budget deficits? A. Republicans use deficits to make the economy better, while Democrats use deficits to keep the economy from getting…
Pacific Investment Management Company (PIMCO) is a giant, well-respected bond firm. However, their latest market commentary actually made me laugh. They see continued economic growth, unless there is a ZOMBIE APOCALYPSE. The flow of economic data in the U.S. is remarkably positive, and it has been joined by a flow of positive economic data around the world. This is an extremely rare situation, where most…
I believe the U.S. intelligence agencies, that the Russians meddled in our presidential campaign last year, and think it deserves further examination. Unfortunately, any discussion of this subject gets mixed into a discussion about potential involvement by the Trump campaign. Whether anybody from the campaign colluded is a separate issue from the Russian meddling. Forget collusion and stay focused on Russia trying to mold public…
Long ago, my father told me not to discuss politics or religion, because people take offense so easily. I cannot ignore politics in my profession, but I never write about religion. But, sometimes you read something so amusing that it has to be shared. During a recent sermon, I learned churches and synagogues have too many of the following individuals: Mrs. Eve Environmentalist, who tells…
Hillsdale College is a well-respected conservative think-tank in Michigan. A good friend gave me one of their recent policy opinions to read, which I did gladly. The gist of it was that the problem with Democrats is that they worship at the altar of identity politics, dividing America instead of unifying it. The writer argued Democrats are less patriotic than Republicans. That may be a…
When I was taught the “scientific method” long ago, I recall the arduous process of moving an idea from hypothesis to theory to principle. While I don’t have time to go through that lengthy process, I do have a hypothesis. While the stock market invariably over-reacts, it over-reacts to different news, depending on where it is in the cycle. During bear markets, the stock market…
After months of 24/7 saturation coverage, you can recall that certain exhaustion you feel the day before an election. You have hope, because the election is the next day. Still, you can barely tolerate coverage for another 24 hours. That’s the way I feel about bitcoin! In the business media, coverage has been bitcoin, bitcoin, and bitcoin. That one crypto-currency began trading in the futures…
Being a sports fan offers a fun opportunity for both competition and silliness. American football fans are no different. As a long-suffering fan of the Dallas Cowboys, I have a Cowboys jacket, a Cowboys sweatshirt, a Cowboys tee-shirt, a Cowboys watch, and even a pair of Cowboys underwear (TMI). But, the Cowboys’ reach for profits has reached new heights with the sale of drones, complete…
Absence makes the heart grow fonder, even for economic data. While the monthly jobs report is not the most instructive economic report, it has long been the most popular and has the most short-term impact on the stock market. Today’s report continued a long string of good reports, with 228 thousand new jobs being created last month, more than the 195 thousand that pundits expected. …
Arguably, the oldest living Libertarian is Alan Greenspan, who is more famously known as Chairman of the Federal Reserve immediately prior to the Global Financial Crisis of 2008/9, when he argued for loose governmental regulation, particularly of financial institutions. As any good Libertarian would, he believed that people would always act in their own best interest, and it is not in the best interest of…
Readers will recall that I predicted in March that President Trump would be impeached. Today’s news only makes me more confident that it is true. Only a resignation could preclude the impeachment. But, I mourn for the country, because impeachment is an agonizing experience and is bad for the country. It will not make us any less partisan. If it must be, then I pray…
When I was a young economics student, I was fascinated by economic cycles. Wouldn’t it be great to be an investor with full knowledge of the next recession? Those cycles ranged from 4 years to 52 years and had exotic names like Juglars and Kondratieff. However, regardless of the cycle you choose, we are late and should have already had a recession by now. In…
Consumer confidence has reached the highest level in seventeen years. The stock market has hit record highs. Is that a coincidence or a real relationship? Almost all economic data is related to other economic data. But c onsumer confidence is more closely related to the level of unemployment than the stock market. When jobs are plentiful, consumer confidence is higher. Likewise, plentiful jobs indicate the…
I am a Supply-side economist . . . some of the time. I am a Keynesian economist . . . some of the time. And, I am an Austrian economist . . . some of the time. There is a time and a place for each of the three major schools of economics. Supply-side economics and Keynesian economics are useful for “jump-starting” a moribund economy. …
News from Fox News is considered true-news by Republicans. Democrats consider most news from Fox News as fake-news. This is the partisan perspective, and it is unfortunate that we take such a binary view of news. It is far too multi-faceted for binary views. There are more than two perspectives. All the major news sources — Fox, CNN, MSNBC, networks, etc. — are overly U.S.…
I was not captain of my high school football team, nor did I ever date a cheerleader. Long ago, I accepted the reality that I would never be President of the United States, nor even an Army general. That was fine for me but is not fine for many other people, unfortunately. Wellschmerz is the German word for that emotional problem that develops when one realizes…
The S&P 500 has set 54 new all-time highs so far this year. Most believe the elevated level of the stock market is due to the flooding of cash into the economy by the Fed since 2009. That was an important factor but is decreasingly so, as the Fed reduces its balance sheet by selling off some of its bonds and raising interest rates.. More…
In his iconic 1970 book Future Shock, Alvin Toffler pointed out how the rate of change was increasing. At first, it seemed to elaborate the obvious. However, deeper analysis demonstrated that the rate of change was feeding on itself and would continue to increase at a faster and faster rate. He argued that we need to increase the speed of our decision-making to accommodate the…
There is a difference between trust and respect. For example, I have no trust for the giant investment house of Goldman Sachs but have great respect for them, especially their research. Their latest forecast is (1) that the stock market should be as strong in 2018 as in 2017 and (2) that, if Trump doesn’t get a “win” on tax reform, he will be too…
It started as a trickle and soon became a stream and now it is a river. The current news coverage on sexual harassment has focused our attention on a low profile but very real problem. This is a good thing! First, there can be no justification or excuse for sexual harassment, but a little perspective is always helpful. About 17 years ago, I worked with…
So, the central banks in the United States, Canada, and England have all started to raise interest rates, as part of their normalization after the global financial crisis. The ECB says they will also — someday. Rising interest rates push that country’s currency exchange rates up. Since the ECB declined to raise rates last month, the euro has declined 2% against the dollar. That’s a…
Economists often advise people who cannot follow all the economic data each month to simply follow the monthly “jobs report” issued by the Department of Labor on the first Friday of each month, because the economy must be strong if the job market is strong. It includes the normal monthly unemployment rate. Some economists prefer the U-6 unemployment rate, which measures the long term unemployed. …
If you are one of my Democratic friends, please stop reading now. You won’t understand it and will have that silly “deer-in-the-headlights” look on your face. If you are one of my Republican friends, I have long agreed that the news media has a Democratic bias, at least a 51% bias. (However, since Fox-world has a 30% share of the news market, the Democratic bias…