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The Fed’s New Bubble

“Most valuation parameters are either the richest ever or among the highest in history. In the past, levels like these were followed by downturns. Thus, a decision to invest today has to rely on the belief that ‘it’s different this time.’ I’m convinced the easy money has been made.” (Howard marks, Oaktree Capital, WSJ, 1/29/18). The legendary investor, Baron Rothschild famously said, “I got wealthy never waiting for the peak.” …Read More

When policies are anti-growth, sell the rallies and buy the dips

The equity markets are generally forward-looking. That’s why you have price movements that seem incompatible with the latest economic (backward-looking) data. The equity market today, as seen through the eyes of the S&P 500, has been flirting with all-time highs while the economic data indicate that the economy continues on feeble legs. So, just as the “forward-looking” market has predicted 25 of the last 8 recessions, so too, it can …Read More

The Fed puts rates on ice

After raising interest rates in December for the first time since the financial crisis and Great Recession, the Federal Reserve has gone into a January freeze. The central bank on Wednesday announced no change in interest rates, meaning the target for the Fed’s benchmark federal funds rate will remain between 0.25% and 0.50%, the range set last month. For consumers, the outcome of this week’s meeting means more of the …Read More

Market Correction, or Something More Sinister?

It was another ugly week in the equity markets, with most of the damage done on Friday, January 15th.  The S&P closed the week down 2.2% on top of its 6.0% fall on the first 5 trading days of the year.  According to Wall Street Economist David Rosenberg, of 51 global stock indexes, 19 are in “bear-market” mode (20%+ decline from prior peak) and 25 are in “corrective” phases (10%+ …Read More

Economic predictions for 2016

As the year ends, it is customary to write a column that attempts to forecast the major economic trends of the new year. Looking back, five of my six predictions last December were spot on (only missed the continuing weakness in manufacturing). I hope the forecasts that follow do as well. Jobs, jobs, jobs Jobs and the consumer have been the bright spots in the U.S. economy and it appears …Read More

After review, media’s take on retail is reversed

“There are lies, damn lies, and statistics” goes a saying popularized by Mark Twain which describes the persuasive power of numbers, particularly the use of statistics to bolster weak arguments. At dinner a couple of weeks ago with business colleagues and later repeated by another business acquaintance, comments were made about how poorly the retail sector was doing and that we should worry that holiday sales would be weak with …Read More