What is the Greenspan or Fed put? It is an idea, the legend that says the US central bank will only allow a little downside in stocks. The 1929 crash despite being so long ago has been indelibly imprinted upon the machinations of policymakers. Some say they can’t see a big slide without the Great Depression. Therefore, they will do [...]
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%. Despite the selloff of the last week I don't believe any portfolio action is warranted. While the overbought condition has largely been corrected now, the S&P 500 is far from the opposite condition, [...]
The year 1995 wasn’t exact a good year to remember. There was the Oklahoma City bombing, the San Diego tank rampage, the New Jersey Devils winning the Stanley Cup in a lockout shortened NHL season, and some former Buffalo Bills running back named OJ getting into trouble out in LA. Steve Forbes would announce his candidacy to challenge President Clinton [...]
A number of people have forwarded this Bloomberg article - Wall Street Banks Warn Downturn Is Coming - to me over the last couple of days. That fact alone is probably a good argument to ignore it but I can't help but read articles like this if for no other reason than to know what the crowd is thinking. The [...]
The payroll report for June 2017 was the first “good” one in some time. There are now a few indications that the “reflation” in the economy may be finally having positive effects on the labor market. The headline Establishment Survey gain was relatively solid at 222k, though it was above 200k for just the fourth time in the last nine [...]
(with additional contributions from Margie Fernandez; edited by Joe Calhoun) The Net Worth of Non-financial Corporate Business declined slightly in Q1 2017 according to the Federal Reserve’s Financial Accounts of the United States (Z1). The revised quarterly figures suggest that economic net worth eased to $23.62 trillion after a record high $23.69 trillion in Q4 2016. That likely relates to [...]
If you are a stock investor, you should be terrified. The most disconcerting words have been uttered by the one person capable of changing the whole dynamic. After spending so many years trying to recreate the magic of the “maestro”, Ben Bernanke in retirement is still at it. In an interview with Charles Schwab, the former Fed Chairman says not [...]
Economics is a pretty simple framework of understanding, at least in the small “e” sense. The big problem with Economics, capital “E”, is that the study is dedicated to other things beyond the economy. In the 21st century, it has become almost exclusive to those extraneous errands. It has morphed into a discipline dedicated to statistical regression of what relates [...]
The payroll report disappointed again, though it was deficient in ways other than are commonly described. The monthly change is never a solid indication, good or bad, as the BLS’ statistical processes can only get it down to a 90% confidence interval, and a wide one at that. It means that any particular month by itself specifies very little, except [...]
Personal Income growth in February 2017 was more mixed than it had been of recent months. Nominal Disposable Per Capita Income increased 3.73% year-over-year, while in real terms Per Capita Income was up 1.57%. For the former, that was among the better monthly results over the past year, while the latter was near the worst. The difference is still calculated [...]
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