Wednesday , October 16 2019
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Tag Archives: Recession

3 Tips To Avoid A “Save Taxes NOW!” Mentality

We scramble to do whatever we can to save on taxes. Unfortunately, there’s little firepower in the form of itemized deductions since the Tax Cuts and Jobs Act (TCJA) was initiated. The www.taxfoundation.org estimates that nearly 90% of taxpayers will continue to take the expanded standard deduction which has increased from $6,500 to $12,000 for single filers; $13,000 to $24,000 for those married filing jointly. If you recall, the income tax changes under TCJA expire at the end of 2025. CPAs,...

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Capitalism Is The Worst, Except For All The Rest – Part 3

Part 1 – How Wall Street Destroyed Capitalism Part 2 – The Myths Of “Broken Capitalism” In Part 1, we discussed how “Capitalism” was distorted by Wall Street. In Part 2, we reviewed some of the “myths” of capitalism, which are used to garner “votes” by politicians but are not really true. Most importantly, we discussed the fallacy that “more Government” is the answer in creating equality as it impairs economic opportunity. I want to conclude this series with a discussion on the fallacy of...

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Will Monetary or Fiscal Stimulus Turnaround the Next Recession?

A recession is emerging with interest rate curves inverted, the end of the business cycle at hand, world trade falling, and consumers and businesses beginning to pull back on spending.  The question is: will monetary or fiscal stimulus turn around a recession?  In this post, we find both stimulus alternatives likely to be too weak to have the necessary economic impact to lift the economy out of a recession. Finally, we will identify the key characteristics of a coming recession and the...

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The Inflation Check

After constantly running through what the FOMC gets (very) wrong, let’s give them some credit for what they got right. Though this will end up as a backhanded compliment, still. After having spent all of 2018 forecasting accelerating inflation indices, from around New Year’s Day forward policymakers notably changed their tune. Inflation pressures that were in December 2018 building underneath leading officials to fear a harmful breakout, by January 2019 they were suddenly “muted.” What’s...

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Never Attribute To Malice What Is Easily Explained By Those Attributing Anything To Term Premiums

There will be more opportunities ahead to talk about the not-QE, non-LSAP which as of today still doesn’t have a catchy title. In other words, don’t call it a QE because a QE is an LSAP not an SSAP. The former is a large scale asset purchase plan intended on stimulating the financial system therefore economy. That’s what it intends to do, leaving the issue of what it actually does an open question. The SSAP is what’s coming next. A small scale asset purchase plan whose intent is only to raise...

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Monthly Macro Monitor: Doom & Gloom, Good Grief

When I first got in this business oh-so-many years ago, my mentor told me that I shouldn’t waste my time worrying about the things everyone else was worrying about. As I’ve related in these missives before, he called those things “well-worried”. His point was that once everyone was aware of something it was priced into the market and not worth your time. That has proven to be valuable advice over the years and I think still relevant today. We continue to hear, on an...

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The Myths Of “Broken Capitalism” – Part 2

Read Part 1 – The Distortion Of Capitalism By Wall Street In the introduction to this series, we discussed the bit of the history leading us to the outcry against capitalism. As I concluded: “The important point is that ‘capitalism’ isn’t broken, but there is one aspect of the system which has morphed into something no one intended. As you hear candidates promising to ‘eat the rich,’ remember ‘political narratives’ designed to win votes is not always representative of what is best for you in...

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The Voice of the Market- The Millennial Perspective

“Those who cannot remember the past are condemned to repeat it.” – George Santayana Current investors must be at least 60 years old to have been of working age during a sustained bond bear market. The vast majority of investment professionals have only worked in an environment where yields generally decline and bond prices increase. For those with this perspective, the bond market has been very rewarding and seemingly risk-free and easy to trade. Investors in Europe are buying bonds...

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The Consequences Of ‘Transitory’

Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement. Other than that, and that wasn’t much, you wouldn’t have known QE is already back on the table. It barely registered, the massive program...

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How Wall Street Destroyed Capitalism – Part 1

Over the last decade, wealth inequality in America has become a political battleground. It started with #OccupyWallStreet early in President Obama’s term and has morphed into direct calls for socialistic reforms. Is there a problem with capitalism? Does it need reform? Or, is Bernie Sanders correct when he says: Billionaires should not exist. https://t.co/hgR6CeFvLa— Bernie Sanders (@BernieSanders) September 24, 2019In this three-part series, we will explore: How Capitalism Got Distorted By...

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