Now that we have your attention, let’s take a look at uncertain times and certain times. In our decades of delivering financial guidance, we can’t recall any certain times, which could make you think it’s even more important to know how to react to uncertainty. Here’s some of the uncertainty we’ve witnessed in the last [...]
The consensus among economists puts the odds of a recession starting sometime in the next year at 30%, according to Bloomberg's most recent survey. No wonder the S&P 500 is deep in correction territory and flirting with an official bear market. We think the near-term pessimism is overdone. Yes, a recession is likely on the [...]
ntellectuals and politicians often try to verbally summarize or justify conventional thinking in pithy ways. Milton Friedman (in 1965) and Richard Nixon (in 1971) both said different versions of the phrase "we are all Keynesians now." John Maynard Keynes, one of the most famous economists of all time, supported deficit spending and government manipulation of [...]
Consumer prices rose 7.0% in 2021, the largest increase for any calendar year since 1981. As a result, politicians across the political spectrum are working overtime to find someone to blame and attack. Some politicians on the left are blaming "greedy" businesses for inflation. But we find this explanation completely ridiculous. Of course, businesses are [...]
Welcome to 2022! We can't imagine a more transformative year for America. After two years of unprecedented government actions, the winds of change are blowing hard. The economy has been buffeted by short-term factors since 2020; this year, long-term fundamentals should re-assert themselves as the most important drivers of economic and financial performance. First, the [...]
Keynesianism can temporarily giveth, but ultimately always taketh away...and then some. When the US fell into the COVID crisis, the federal government went on a massive spending binge. Pre-COVID, in the twelve months through March 2020, federal outlays were $4.6 trillion, or 21.4% of GDP. In the next twelve months outlays soared to $7.6 trillion, [...]
As we wrote last week, it's not possible to analyze the economy these days without focusing heavily on what government is doing. Between the Federal Reserve, fiscal policy, and COVID-related restrictions, little in our lives avoids governmental influences. The easiest way we can describe the current environment is that in the short-term, forecasting is easy. [...]
If the Wizard of Oz were written today about “Investing Crazes du Jour”, Dorothy’s famous repetitive line may well be: “Cryptos, SPACs and Robinhood/Reddit, Oh My!!” As I begin my 36th year dispensing investment advice, I marvel at the consistency of human behavior. Specifically, the consistent avoidance of the knowledge provided by history, and the [...]
The US economy is recovering rapidly from the COVID-19 disaster. The rollout of vaccines, the lifting of restrictions, loose monetary policy, and a massive increase in government spending are all playing their parts. The problem is that the massive government "stimulus" checks have put the economy in a strange position, where retail sales are far [...]