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
September Stock and Fund Picks
Sept. 29, 2023: Let’s say I am the Fed and I want to protect the markets, consumers, and citizens from reality. So, I hide a T-Rex debt monster behind a curtain called the Fed’s balance sheet. I monetize or “feed” the T-Rex over-time by buying up newly issued IRS debt, and thereby increasing my balance… Continue reading September Stock and Fund Picks
August Stock and Fund Picks
August 14: In business cycle parlance, we are coming down from a peak towards a recessionary trough and appear to be nearly there. This trough is not likely to be an actual recession though as the economy is generally still too strong for that. Thus, a “soft landing” has become a common expectation. The more… Continue reading August Stock and Fund Picks
June Stock and Fund Picks
June 28, 2023: Because the Fed intends to carefully proceed by looking at downside (recession) risks versus inflationary risks, we can expect them to try to avoid causing a recession. But, recent strong economic activity in areas such as capital goods manufacturing, housing construction, strong service sector and a still fairly resilient labor market mean… Continue reading June Stock and Fund Picks
May 2023 Stock and Fund Picks
May 30, 2023: Assuming the debt ceiling FUBAR fades into the rearview mirror, the Treasury will have to rebuild the cash reserves it exhausted during the long period of “special measures.” This cash rebuilding process involves bond sales which will also be good for inflation because it will compete for excess money in the economy.… Continue reading May 2023 Stock and Fund Picks
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