On the first Monday of each month, the Department of Labor releases its closely-watched “jobs report.” Democrats focus on the unemployment rate and advocate more help for the unemployed. Republicans focus on the labor force participation rate (LFPR) and complain people are obviously lazy. (The LFPR loosely measures what proportion of the population either works or wants to work, with the rest being too lazy…
I like guns. How many times have I started a blog with that simple statement? After each mass tragedy, I try to explain all gun owners are not gun nuts and not all gun nuts are “Area 51” Libertarians. There are degrees of madness. My father originally taught me about guns, when I was a little boy. They were tools, like hammers or saws. You…
Many times, my late mother cautioned me not to carry a grudge. She wisely said the weight of that grudge gets heavier over time. I’ve just finished watching the epic new documentary by Ken Burns on “The Vietnam War” and thought of her advice frequently. That film is a seminal and definitive work on a long-running national agony and is highly recommended. During the closing…
One of the few Wall Street firms I respect is McKinsey & Company, which is part think-tank and part strategic consultants. They have recently published a new strategic study, identifying four “super” trends, which will shape our civilization over the long-term. They expect these trends are so powerful that “we are in the midst of change 300 times more powerful and 10 times faster than…
There has never been a day in my life that some intelligent person was not predicting the “sky is falling” — the economy is crashing and you should buy gold. For many years, I just assumed a given percentage of any society is allocated to quacks. Now, I’m starting to see a common denominator between many of them, i.e., Ayn Rand. Make no mistake: I…
Some years ago, a friend said to me: “My stockbroker says I have a 92.4% probability of achieving my financial goals, so what can you do for me? He was referring to a favorite sales tool of stockbrokers, i.e., a Monte Carlo Analysis. I told him: ” Absolutely nothing, if you really believe that some canned program on a stockbroker’s laptop can analyse all the…
Colin Kaepernick was a quarterback for the San Francisco 49ers football team last year when he decided to remain seated or “take a knee” during the national anthem. I condemned that action by a wealthy player, whose only experience with uniforms was the sports-type. However, at no point have I questioned his right to free speech — but is no place safe from serious subjects? …
I have settled estates and administered many trusts, as well as doing the estate planning for maybe a thousand people, but I will now add a new rule to estate planning – the Duty to Discard. It is indeed a duty of each person. No parent wants their children to fight among themselves, much less over minor possessions. However, some of the kids will become…
I have a wonderful client who lives in a very high-end retirement facility. During our last meeting, she told me about her many friends who don’t have a financial advisor and try to manage their nest egg with certificates of deposit. They are just trying to reduce their expenses, as any financial advisor would recommend they do. They see investment management as the sole function…
In 2009, the economy was plummeting into another economic depression. At a time when we needed a government hand, Congress achieved perfect impotence and could do nothing. The only remaining defense was the Fed, which rose to meet the challenge, thankfully. Libertarians became unhinged at the new “activism” of the Fed. Of course, nobody was more upset about this than the Fed itself. How would…
Recently, I found myself in a class that was primarily stockbrokers. One of the speakers told the attendees that they had to be more than mere financial advisors. They must also become financial coaches, he told them. That jarred me slightly, thinking “doesn’t everybody know that?” Of course, I’m used to the world of Certified Financial Planner (R) professionals — not stockbrokers. In…
A well-trained investment advisor has been taught concepts like asset allocation, Modern Portfolio Theory, re-balancing, etc. Younger advisors tend to view these tools are revealed secrets of the investment gods. While older advisors respect these tools, especially the time-worn wisdom of the tools, some have become suspicious that these tools work better during the accumulation phase of a person’s life than the “decumulation” phase or…
The past is prologue to the future . . . except when it isn’t! What goes up must come down . . . except when it doesn’t! It has been 14 months since the stock market had a 5% drop, compared to an average of 6-9 months. It has been 20 months since it had a 10% correction, compared to an average of 12-14 months.…
Freakonomics author, Stephen Dubner, has an excellent podcast, coincidently named Freakomonics, that is quite enjoyable when I exercise. A recent podcast interviewed an economics professor from GWU in Washington. She was a native of Italy, whose accent made it difficult for me to understand her. She discussed how the economic behavior of different generations reflects the experience of each generation. The older generation worked at one…
Houston’s economy is huge. The GDP of its SMSA is $550 billion. That is about 3% of our national GDP but accounts for a disproportionate 6.6% of our growth. It is booming. Population increased by 824 thousand since 2010. That increase is bigger than the entire city of Charleston, South Carolina. Things have changed. The economic damage of Hurricane Harvey is staggering. The damage to…
Older people are usually surprised that the right to privacy was not in the Declaration of Independence nor the Bill of Rights — but millennials don’t care. That “right” was an outgrowth of a 1958 Supreme Court decision, NAACP vs Alabama. In that case, the state wanted the membership list of the NAACP, including home addresses. Visions of men wearing white sheets on the front…
So, there was a 26-year-old refugee from Bangladesh living outside London with his parents. Problem #1 is that he is a 26-year-old man without a girlfriend and living with his parents. On the morning of August 25th, he suddenly decides he will attack the guards at Windsor Castle, because they work for the Queen.Problem #2 is that he never heard of the “5-P Rule” of…
France is such a wonderful country. Unfortunately, their economy is not as wonderful. Unemployment in the U.S. is only 4.4%. Germany’s unemployment is about the same, but unemployment in France is a staggering 9.5%. GDP growth is slower in France than Greece right now. What is retarding the economy of such a wonderful country? One new statistic illustrates the problem. The percentage of workers with…
Let’s see . . . personal income rose more that expected at 0.4% in July, and spending rose a healthy 0.3%. Inflation rose only 0.1% in July, well below anything worrisome. Estimates of GDP growth in the second quarter (Q2) was revised higher from 2.6% to a whopping 3%. There has never been so many jobs available – 6,160,000. Now, what are you so worried…
A month ago, we were Democrats & Republicans, conservatives & liberals, blacks & whites, neo-Nazi’s and Black Panthers. Underneath all those pejorative labels, we are sometimes reminded that we’re all Americans. Watching the huge non-governmental response to Hurricane Harvey, we are reminded of that and should be proud of ourselves. I salute all those thousands of volunteers who are helping the victims of Harvey. We…
There is a nation that is considered wealthy, where workers earn good wages. There is another nation that is not wealthy, where workers earn lower wages. For some reason, workers earning low wages migrate to the wealthy nation, where they can earn a better living for their families. The leader of the wealthy nation becomes indignant, insisting these immigrants are taking jobs away from his…
It was a year after Katrina devastated New Orleans that we happened to attend a conference that was held in the French Quarter, which was almost untouched by the hurricane. My wife said that unique aroma of the French Quarter was stronger but otherwise the same. Knowing there was devastation all around us, we were offered a chance to extend our visit to spend a…
2,388 — That’s the number of American mothers who lost their sons in Afghanistan. One of the first things taught in the Special Forces Officers Course was that the ultimate weapon is not the atomic bomb. It is the guerilla — small, agile, and capable of a thousand pin-pricks. In order to win the war, conventional forces must win battles. In order to win the…
There are many pundits and thought leaders that I listen to, but I have a certain fondness for one in particular, i.e., Jeremy Siegel of Wharton. Unfortunately, he is having serious health issues, and he is in my prayers. During his treatments, he is visited weekly to capture a few thoughts for those of us who appreciate him. Here are two of his latest: “Professor…
I have been a member of the National Association of Business Economics (NABE) for many years. While it is strictly a non-partisan organization, it is on the more conservative end of the political spectrum, especially compared to the more liberal American Economics Association, which is favored by academic economics. NABE is a voice for working economists, outside of academia. In their latest quarterly review, only…
Sometimes, I feel like a nag. You don’t need to watch the news 24/7. It is unhealthy, especially now that the news has devolved from partisan bickering to complex investigations to the President’s moral compass. Like all things, moderation is the key. Take a 24-hour vacation from the news. Watch Netflix. Read a book. Take a walk. Take time to find out what your spouse…
I’ve been expecting a significant market correction since Spring and used a tripod to explain it. One leg supporting the market is economic data, which has been reliably good. That data has not been great — just good enough to be sustainable over a long period. We have examined the numerous economic cycles but concluded they are irrelevant in this economic environment, where normal market…
Many people believe that Amazon is consuming a larger and larger share of retail sales, leaving small retailers vulnerable. (The President is among those people.) Small retailers have long been an important part of the economy but are declining. Yesterday’s retail sales report seemed to confirm that, because it showed that online sales increased 1% in June, 1.3% in July and up 10.3% year-over-year. Online…
I truly miss . . . President George W. Bush and . . . President George Bush and . . . President Ronald Reagan and . . . President Gerald Ford and even . . . President Richard Nixon!
Long before JD Vance wrote the groundbreaking Hillbilly Elegy last year, my cousin referred to Social Security Disability Insurance (SSDI) program as the “hillbilly retirement system.” She noted her family relatives in the Appalachian region looked forward to “getting on disability” since there were so few jobs worth having. Sadly, she was right! In 1997, there were less than 4.5 million Americans receiving disability. In 2015,…
The Volatility Index or VIX is an option allowing investors to make bets (as opposed to investing) on the volatility of the stock market. It is often called the “Fear Index” – as fear rises, so does the VIX. The VIX has been low and boring since the November election. But, it suddenly spiked almost 50% last week — actually in just two days —…
Imagine a tsunami of corn, for example, being dumped on the market. The value of corn per bushel would plummet because supply greatly exceeded the demand for corn. That is one of the worries overhanging the bond market right now. The Fed could release a tsunami of government bonds on the bond market IF they suddenly reduced their balance sheet to a more normal level.…
6,160,000 Six million, one hundred-sixty thousand — think about that number a while. That’s the number of job openings in the United States. It is the highest in history. There has never been so many jobs available. It is no wonder that our unemployment rate is only 4.3%. In fact, hiring is decreasing only because the supply of available workers is shrinking. There would be…