201801.02
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Bi-Weekly Economic Review: Housing Market Accelerates

The economy ended 2017 with current growth just slightly above trend. In general the reports of the last two weeks of the year were pretty good with housing a standout performer going into the new year. We are still trying to get past the impact – positive and negative – from the hurricanes a few…

201711.28
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Global Asset Allocation Update

There is no change to the risk budget this month. For the moderate risk investor the allocation to bonds is 50%, risk assets 45% and cash 5%. The extreme overbought condition of the US stock market did not correct since the last update and so I will continue to hold a modest amount of cash….

201711.07
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Bi-Weekly Economic Review: Gridlock & The Status Quo

The good news is that the economy just printed its second consecutive quarter of 3% growth, a feat not accomplished since Q2 and Q3 2014. The bad news is that the growth spurt in 2014 was better, quantitatively and qualitatively. Those two quarters produced gains of 4.6% and 5.2% (annualized) in GDP, much better than…

201710.25 1

Bond Kings and the Future(s)

Maybe there is hope for the media yet. The benchmark 10-year US Treasury bond yield has passed above 2.40% for the first time in several months. In the past any similar move or technical breakout of the like was met with uniform screeching about a BOND ROUT!!! This time, however, commentary appears at least to…

201709.24
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Bi-Weekly Economic Review: As Good As It Gets

The incoming economic data hasn’t changed its tone all that much in the last several years. The US economy is growing but more slowly than it once did and we hope it does again. It is frustrating for economic bulls and bears, never fully satisfying either. Probably more important is the frustration of the average…

201708.18
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Global Asset Allocation Update: No Upside To Credit

There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. There are other changes to the portfolio though so please read on. As I write this the stock market is in the process of taking a dive (well if…

201707.18 4

Questions

Why is inflation ex-food and energy considered core? Isn’t food and gas about as core as it gets for most people? Why do economists think it is important to stabilize the price of luxuries but not the price of needs? As a society shouldn’t we prefer a monetary policy that stabilizes food, energy and shelter…

201707.03 5

Questions

We often have discussions in the office that consist primarily of asking questions. Sometimes they are questions we don’t think people are asking enough, sometimes questions we are sick of hearing and most often questions which we can’t answer. Not questions that only we can’t answer but rather ones that no one can answer based…

201707.02
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Bi-Weekly Economic Review: Draghi Moves Markets

In my last update two weeks ago I commented on the continued weakness in the economic data. The economic surprises were overwhelmingly negative and our market based indicators confirmed that weakness. This week the surprises are not in the economic data but in the indicators. And surprising as well is the source of the outbreak…

201706.06
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The Same Crossroads

Writing earlier this year on the topic of the Fed’s future balance sheet reductions, Ben Bernanke had occasion to recount his experience from 2013. It was a stressful time for the Fed after they panicked into QE3 (and then QE4) and then almost panicked right out of it. The then-Fed Chairman stressed from his experience…