Hopes for a fade of the Covid-19 virus are rising. As vaccination rates increase and the Delta variant burns itself out, we may be able to see light in the tunnel. Markets are getting volatile as the steroids (zero interest rates and $120b of dollars added to the financial system monthly) of the Federal Reserve are being slowly reduced. The economic consequences of the pandemic would have been much worse without the financial doctoring that was administered by the Fed and its peers around the … [Read more...]
Market Comment Q2 2021
“The master-economist must possess a rare combination of gifts .... He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man's nature or his institutions must be entirely outside his regard. He must be purposeful … [Read more...]
Market Comment Q1 2021
I can prove anything I'll make you admit again and again That I can prove anything The way that it's read again and again… We are the angry mob We read the papers everyday We like who we like, we hate who we hate But we're also easily swayed “The Angry Mob” lyrics, by artist Kaiser Chiefs; Release date 8-20-2007 January 6, 2021 was an event that brought historic violence. The angry mob was as busy posting selfies, a blessing that likely stopped them from harming more … [Read more...]
Market Comment Q4 2020
...difference of opinion is not a difference of principle. - Thomas Jefferson, Inaugural Address 3/4/1801 We have two classes of forecasters: those who don’t know—and those who don’t know that they don’t know. - John Kenneth Galbraith The Great Disappointment is often referenced as March 21,1844 when it was erroneously predicted that Christ was to return and the world as we know it would end. In researching this moment of history, you discover that the prediction was … [Read more...]
Market Comment Q3 2020
BPS: Basis Points or units of a percentage point. A quick google search will define it as: A basis point represents the smallest unit of measurement for interest rates and other financial instruments. One basis point is equal to one-hundredth of 1 percent. The US 10 year bond new yields between 60 and 70 bps...you can lend money to the US Treasury for ten years and get a return of .7%. This low yield has been engineered via complex maneuvering by the Federal Reserve. The Fed works the … [Read more...]
Market Comment Q2 2020
“Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.” ― Karl Popper “... three critical goals: First, we must detect outbreaks that occur anywhere in the world; second, we must protect the American people by stockpiling vaccines and antiviral drugs, and improve our ability to rapidly produce new vaccines against a pandemic strain; and, third, we must be ready to respond at … [Read more...]
Market Comment Q1 2020
The Affect Heuristic The dominance of conclusions over arguments is most pronounced where emotions are involved. The psychologist Paul Slovic has proposed an affect heuristic in which people let their likes and dislikes determine their beliefs about the world. Your political preference determines the arguments that you find compelling. If you like the current health policy, you believe its benefits are substantial and its costs more manageable than the costs of alternatives. If you are a … [Read more...]
Market Comment Q4 2019
2019 has been a persistently positive year with a final move up in Q4. For the year, the Dow ended 22% higher, the S&P gained 29%, and the Nasdaq rose 35% For further market coverage, see https://markets.on.nytimes.com/research/markets/overview/overview.asp Long term investors have been rewarded with a significant upswing for 2019. For those that believe in “Get Invested, Stay Invested”, this feels pretty good. Holding diversified mutual funds long term sounds simple, but it may be … [Read more...]
Market Comment Q3 2019
Q3 2019 has been filled with noise and volatility signifying little. The S&P 500 has moved up about 1.2% in the last 90 days. In spite of the instability created by trade threats and rising trade barriers investors are up substantially since 1-1-19. Thru the first three quarters, the market is up nearly 20%. This is quite similar to last year, where gains turned to losses by an historic downswing in December … [Read more...]
Market Comment Q2 2019
The market has just completed the best 1st half performance since 1997. This is quite a rebound the downswing in December 2018. https://markets.on.nytimes.com/research/markets/overview/overview.asp The Fed has undergone a big reversal in posture and interest rate cuts are anticipated as trade conflicts are expected to begin slowing the US and global economies. With 30 year mortgages under 4% it is questionable how much room rates actually have to decrease or what impact these potential … [Read more...]
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