The most important quote from the Financial Panic of 2008 came from President Bush: "I've abandoned free market principles to save the free market system." The quote came in defense of TARP, the $700 billion bailout of the banking system, which many still mistakenly believe prevented another Great Depression. Many also think Quantitative Easing, the [...]
Often, taking good advice is the most difficult at the time it’s most needed. This is certainly true of staying the course with your long-term investment strategy in the face of scary headlines. An additional challenge is that the opportunity to learn these lessons is spread out far enough that people tend to forget the [...]
Whatever happened to the recession calls? Seems like just a few weeks ago that the correction in the stock market as well as the partial government shutdown had convinced many analysts and investors the US was about to enter a recession. Fortunately, the data haven't cooperated. Ten days ago we got the employment report for [...]
We've written about it over and over, and while many advisors seem to understand, the media, politicians, and many analysts don't...or won't. So, we thought we'd try again to explain why so many people don't understand the nearly ten-year long bull market in U.S. equity values. Conventional Wisdom places the blame for the 2008 Financial [...]
The Doves won the day at the Federal Reserve today, which noted continued solid economic performance but removed longstanding language that further gradual increases will be warranted, and instead highlighted global developments – both economic and financial - and a moderation in inflation as reasons the Fed will be "patient" in determining the pace of [...]
When it comes to monetary policy, one thing looks certain for 2019 - journalists, pundits, investors, and analysts will pay it way more attention than it deserves. The spotlight is currently on Wednesday, when the Federal Reserve will issue their first statement of the new year. The consensus expects no changes in rates, and we [...]
Normally, the end of January sees the government's first estimate of real GDP growth for the fourth quarter. But with no end in sight for the shutdown, which has already seen numerous other data releases postponed – including figures on retail sales, international trade, inventories, construction, and durable goods - it's very unlikely the GDP [...]
Talk about destroying a narrative. On Friday, the Labor Department reported 312,000 new jobs in December, with an additional 58,000 from upward revisions to prior months. Recession talk got crushed. The Pouting Pundits of Pessimism claim jobs are a lagging indicator, but the pace of payroll growth starts declining well before a recession starts. In [...]
Early in 2018 we said the US economy has gone from being a Plow Horse to Kevlar. Nothing that has been thrown at the economy since – neither trade conflicts nor tweets, not higher short-term interest rates nor the correction in stocks – is likely to pierce that armor. A year ago the economic consensus [...]