The Recovery Will Be Weaker And It Will Take Longer
While markets were slightly higher on the week (see table), there was a clear rotation back toward technology after several weeks of a lull for that sector. This is clearly shown by the week’s Nasdaq outperformance. January 22 January 15 % Change DJIA 30,997 30,814 +0.6% Nasdaq 13,543 12,999 +4.2% S&P 500 3,841 3,768 […]
The Fed’s Ill-Designed Inflation Policies
On Thursday, August 27, Fed Chair Jay Powell spoke at the Fed’s annual Jackson Hole symposium. His talk was much anticipated, as it was expected that the old 2% inflation objective would be updated. In fact, the Fed had telegraphed the change; and the Fed has been following the newly announced policy for several months. The policy […]
The Inflation Scare
Interest rates backed up last week. The 30-year T-Bond, which was 1.19% on August 4, closed at 1.44% on Friday (August 14). The 10-year T-Note closed at 0.71%. It was 0.52% on August 4. The CPI showed up with a +0.6% M/M rise (7.4% annual rate) for July. That pushed the Y/Y rate to +1.0% […]
Money Explodes; Gold Glitters; The Recovery Slows
I often get asked why the price of gold is rising, and, as a follow on, will it continue. The price of gold has always had a significant correlation (80%) with the Fed’s balance sheet (i.e., the “money supply”), especially during periods of significant balance sheet expansion (money printing). The table shows the Y/Y change […]
The Opposite: The Market Takes A Cue From Seinfeld
The Opposite In one of the 1990s Seinfeld episodes known as “The Opposite,” George Costanza decides to make decisions opposite of what his “normal” instincts would tell him to do. The results of his “opposite” actions were a beautiful girlfriend, a standing ovation, and a job with the N.Y. Yankees! Today’s equity market seems to be behaving […]
With GDP at 2.3 percent and gold prices low, should you buy?
The data on the economy has been mixed of late, and the price of gold has tanked again. In what follows, I try to analyze these trends. The U.S. Economy U.S. GDP growth of 2.3 percent in the second quarter appears, at first glance, disappointing. But given the very significant headwinds in the manufacturing sector […]