The “Excess Savings” Hypothesis vs. Economic Deceleration
There is some speculation that because only a little more than half of the buildup in savings from the stimulus checks and enhanced unemployment benefits was spent through July, Q4 economic activity will continue to show recovery as the “savings” continues to be spent. Call this the “Excess Savings” Hypothesis. Unfortunately, the incoming data makes […]
The Recovery Stalls; Fed Pledges “Lower for Longer;” Equity Markets Pause
With the Fed pledging to keep rates low even when (or if) inflation rises above its 2% target, it is hard to see why long-term Treasury yields (and those of other quality issuers) won’t move toward yields of similar debt in the world’s other industrial economies (i.e., Europe and Japan). The economic lull is now […]
On a Recession Watch
For the first time since the industrial revolution, the U.S. faces two significant growth issues: 1) a declining labor force; and 2) a job skills mismatch. The declining labor force is demographic in nature and is occurring in every industrial economy; likely a function of the long-term success of capitalism. The skills mismatch is a […]
The Trump Rally
For the third time in six months, markets reacted opposite to expectations. First, it was Brexit. Markets swooned after the unexpected vote. That lasted for two days before markets shook off the surprise and headed higher. Last month, when Trump won, the swoon lasted a whole 9 hours, and the tantrum ended just prior to […]
Investors, prepare for slower growth
From an investor’s standpoint, this has surely been a summer of discontent. All markets appear to be too high, there is no yield to be found, and there appears to be no place to hide, at least inside current investment standards as set forth by Wall Street. While the conventional wisdom looks at cash as […]
Quarterly Economic Outlook: Q3/2016
The “Brexit” caused market swoon on Wall Street turned out to be a nasty 5.3% two day dive (S&P 500) that was all but reversed in the next 4 trading sessions. The reason was clear early on – despite forecasts of immediate worldwide economic doom and gloom, the non-binding referendum was mostly a political statement […]