I'm back! I took most of the month of December off, as I do every year, to do some thinking. Per the title of this essay, the purpose of these year-end musings is to gain some perspective. In the day-to-day, week-to-week, movements of the markets it is easy to forget that we are investing with a timeline measured in years, [...]
I spend a lot of time thinking about what "everyone" else believes about the economy and markets. If you've been reading my weekly scribblings for any time, you know I have little faith in the soothsayers of this industry. No one knows what the future holds, least of all that group of crystal ball gazers known as economic forecasters. Most [...]
Housing starts and permits for April are running at a level of right around 1.4M units down from around 1.8M last year. That's a drop of 22% in starts and 21% in permits. 1.4M units is roughly in line with the long term average. The level of starts and permits is not yet concerning, but the slow down continues to [...]
There has been a lot of angst over the last couple of weeks about a potential banking crisis. There have been 4 failures so far: Silvergate, Silicon Valley Bank, Signature Bank, and Credit Suisse. The first of these hasn't been mentioned much because it was primarily associated with lending in the crypto market and, as far as I know, there [...]
Where there is no hope it is incumbent on us to invent it. Albert Camus The economic data released last week was almost uniformly bad. We started the week with the NAHB Housing Index, a measure of builder sentiment, which fell from 67 to 55, much less than expected. Next up was more news on the housing market with starts [...]
The employment report released last Friday was better than expected but the response by bulls and bears alike was exactly as expected. Both found things in the report to support their preconceived notions about the state of the economy. I do think the bulls had the better case on this particular report but there have been plenty of others recently [...]
The SLR exemption is ending! The SLR exemption is ending! Doesn't exactly roll off the tongue, does it? There has been rampant speculation the last few weeks about the fate of the exemption the Fed provided banks a year ago with regard to the Supplemental Leverage Ratio that allowed them to ignore Treasuries and reserves. The banks themselves warned that [...]
The economic data over the last month continued to improve but the breadth of improvement has narrowed. Additionally, while most of the economic data series are still improving, the rate of change, as Jeff pointed out recently, has slowed. I guess that isn't that surprising as the initial phase of the recovery comes to an end. 2nd quarter was a [...]
It’s all somewhat confusing, once acclimated to this new paradigm. The highest in years can still be nearer the lowest in history. Given that apparent contradiction, it seems as if only one of those perspectives can apply. Which one you focus on often depends upon which way you already lean. Toward the end of last year, mortgage interest rates had [...]
The Census Bureau reported today New Home Sales remained at a better than 700k SAAR in September following the big jump over the previous few months. Though the number was slightly lower last month than the month before, it wasn’t meaningfully less. As discussed yesterday, while that might seem the Fed’s rate cut psychology combined with the bond market’s pessimism [...]
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