November 7. 2023: The Fed may have paused its direct attack on the economy. The supply-side problems caused by the pandemic have cured themselves and only the money supply needed to be reduced. Selling off the Feds balance sheet would have done that and probably not have effected the economy as negatively. Moreover, long-term rates… Continue reading November Stock and Fund Picks
Category: Economic Policy
April 2023 Stock and Fund Picks
April 27: The Fed has achieved about one-half of its inflation fighting goal as the inflation rate has dropped from over 8% to around 5% today. Another 3% drop and it hits it’s 2% inflation rate target. Of course, the first 3% inflation decrease will be the easiest. The pandemic supply-side constraints have abated to… Continue reading April 2023 Stock and Fund Picks
March 2023 Stock and Fund Picks
March 12: In the 1930s bank runs occurred because a bank only had to keep a fraction of its total checking account deposits on hand for cash withdrawals and because bank deposits were not insured by the FDIC. Consequently, depositors could panic and try, in mass, to withdraw their funds up to the point the… Continue reading March 2023 Stock and Fund Picks
February Stock and Fund Picks
February 1, 2023: January was great, but . . . “Typically, as January goes so does the year.” Such is the rule of thumb and common belief. Stock prices went up while earnings and earnings expectations are going in the opposite direction. P/E ratios are going up as a consequence. So for how long can… Continue reading February Stock and Fund Picks
December 2022 Stock and Fund Picks
December 28: The best guess as to how far along the Fed is toward raising the Federal Funds Rate is that it is about 70% complete. The most vulnerable area is equities and associated company earnings, all of which appear to have an average of about 10-20 percent more to fall. If you are throwing… Continue reading December 2022 Stock and Fund Picks
November 2022 Stock and Fund Picks
State of the Economy: Best not to overpredict. Unexpected events can never be predicted and they are what cause markets to move the most in the short-run. We know that leading economic indicators are in recession territory but other factors such as labor market growth and earnings are merely slowing. Contradictory data tells us nothing… Continue reading November 2022 Stock and Fund Picks
Activist Monetary Policy Conundrum
Recently, many economic and FED commentators point out that if we have a recession we will need a tighter FED balance sheet and higher interest rates in order to fight the recession using stimulative monetary policy. At the same time, others have pointed out that if interest rates get to high it will cause a… Continue reading Activist Monetary Policy Conundrum
The Border Adjustment Tax (BAT) is really GREAT!
Economists seem less worried about it for several reasons. First, other countries we trade with use the same thing against us. Second, a BAT is not a trade restriction such as a tariff or quota that the World Trade Organization (WTO) can overturn as being in violation of a previous trade agreement. Third, a BAT is not a trade export subsidy that would lead… Continue reading The Border Adjustment Tax (BAT) is really GREAT!