We've always been skeptical that bond yields carry deep meaning about the future. Low Treasury bond yields in recent years were said to be a signal of slower growth, or possibly a recession, ahead. And the bond world said stocks were over-valued. Clearly, the forecasted recession never came. Not only is the economy accelerating, but [...]
For decades, investors have feared the national debt growing to unsustainable levels and destroying the US economy. Back in 1981, the public debt of the federal government was $1 trillion; today it's more than $21 trillion. At some point, their theory goes, additional debt is going to be the fiscal straw that breaks the camel's [...]
The US labor market has rarely been stronger. Recent figures from the Labor Department show US businesses had a total of 6.550 million job openings in March versus 6.585 million people who were unemployed. That's a gap of only 35,000 workers. By contrast, this gap never fell below 2 million in the previous economic expansion [...]
The bull market in U.S. stocks, which started on March 9, 2009, gets little respect. Those who have been bullish, and right, are mocked as "perma-bulls," while "perma-bears," who have been repeatedly wrong, are quoted endlessly. We don't have enough fingers and toes to count the number of times a recession has [...]
Just a few weeks ago, the Pouting Pundits of Pessimism were freaked out over the potential for the yield curve to invert. They've now completely reversed course and are freaked out over a 3% 10-year Treasury note yield. All this gnashing of teeth is driven by a belief that low interest rates and QE have [...]
From mid-2009 through early 2017, the US economy grew at a real average annual rate of 2.2%. Not a recession, but not robust growth either, which is why we called it a Plow Horse Economy. For the first quarter of 2018, we expect growth of 1.9% at an annualized rate, right in-line with a Plow [...]
An entire generation of investors has been misled about interest rates: where they come from, what they mean, how they're determined. Lots of this confusion has to do with the role of central banks. Many think central banks, like the Fed, control all interest rates. This isn't true. They can only control short-term rates. It's [...]
Stock market volatility scares people. But, volatility itself isn't necessarily bad. Only if there are fundamental economic problems, something that could cause a recession, would we think volatility itself is a warning sign. So, we watch the Four Pillars. These Pillars – monetary policy, tax policy, spending & regulatory policy, and trade policy – are [...]
In the history of the NCAA Basketball Tournament, a 16th seed has never, ever, beaten a one seed...until this year. But, on Friday, the University of Maryland, Baltimore County (UMBC) beat the University of Virginia – not just a number one seed, but the top ranked team in the USA. We don't expect the unexpected, [...]