bonds

INFLATION NOTHING BURGER   Inflation is measured as a rate of change. It is also a lagging economic indicator because it uses backward looking data from the month before. I was suggesting the last two months that inflation had likely peaked, especially when we consider month-to-month trends, which had already been slowing.   Today’s July …

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BULL VS. BEAR   Prolonged asset price declines are called a Bear Market, whereas the continuous increase in price is known as a Bull Market. Besides higher prices, bull markets are characterized by extreme euphoria and often punctuated by an intense spike in price known as a “blow-off top”. Meanwhile, bear markets only reach their …

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THE DUAL MANDATE   The Federal Reserve, the US Central Bank, is as “federal” as Federal Express (FedEx).   They are a privately held bank, owned by many of the country’s largest banks. This seems like a conflict of interest, but that is a rabbit hole we can go down another time. Congress granted The …

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SLOW MOTION TRAIN WRECK   “How did you go bankrupt”, Bill asked. “Two ways”, Mike said. “Gradually, then suddenly”. This is a popular quote from the Hemingway novel, “The Sun Also Rises”. It describes well, the slow-motion train wreck that is the US economy.   The US economy has had a tough year. Each bear …

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I GOT A FEVER   …and the only prescription is more cowbell. This is a quote from a classic SNL skit featuring Will Ferrell and Christopher Walken.   Walken isn’t the only thing heating up, so is inflation, or at least that has been the story of 2022 … so far. In the SNL skit …

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SOFT LANDING   Since WWII there have been 14 Fed rate hiking cycles. 11 out of 14 have resulted in recession (two consecutive quarters of negative GDP). All hiking cycles that invert the curve have led to recessions (and lower rates) within 1 to 3 years.   The big concern is prior to even the …

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APRIL FOOL   So far 2022 has been a bad year to be an investor, and April was a month that added insult to injury. US stocks adjusted for inflation (real terms) are on pace for the worst annual drop since 1974.   Tech led the slide lower with the NASDAQ monthly change in April …

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I also shared a similar post on this topic via Instagram.   MONETARY POLICY TUG-OF-WAR The Fed’s preferred inflation metric (PCE) reported the highest year-over-year increase in 40 years today.   The Personal Consumption Expenditures data is the change in goods and services consumed by all households. However, the consumer doesn’t need Fed data to …

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I also shared a similar post on this topic via Instagram.   INFLATION … what is it good for? Absolutely nothing (say it again y’all).   Inflation is measured as a rate of change; the most recent year-over-year inflation numbers are the highest in decades. The Federal Reserve has a “dual mandate” – maximum employment …

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