We are in the midst of a Coronavirus Contraction. The news keeps highlighting worst case scenarios. The markets are volatile. Data in the months ahead may get ugly. But this too shall pass. How do we navigate this storm until the clouds part? https://youtu.be/7pazQdPe2Ws
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 [...]
One of the most important questions we have about our country's future is whether prosperity itself will make the American people lose sight of where that prosperity comes from; whether we'll forget to cultivate the attitudes about freedom, property rights, and hard work that have made not only us great but also all the other [...]
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, [...]
The current recovery started in June 2009, 105 months ago, making it the third longest recovery in U.S. history. The longest – a 120-month recovery in the 1990s – saw real GDP expand an annual average of 3.6%. The current recovery has experienced just a 2.2% average annual growth rate – what we have referred [...]
The US doesn't face "secular stagnation" caused by outside or uncontrollable forces, like foreigners (and bad trade deals), technology that steals jobs, or Unions that are too weak. Growth is slow because government has grown too big. In 2000, non-defense government spending was just 14.7% of GDP. President Bush's "compassionate conservatism" - followed by TARP, [...]
Forgive us our incredulity. The bond vigilantes were certain that as the Federal Reserve hiked short-term rates, long-term interest rates would barely budge, the yield curve would invert, and the economy would fall into recession. That theory has been blown to smithereens, so now we hear that it's rising long-term rates that will cause a [...]