Thursday , July 18 2019
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Tag Archives: Risk

The Economy Left Millions Of Americans Behind

Remember “No Child Left Behind,” George W. Bush’s education reform plan? Congress passed it in 2001. Whether that law actually helped is subject to debate, but Bush picked a good name for it. Humans are social creatures. Our instincts tell us to make sure no one in our tribe gets “left behind,” economically or otherwise. That instinct breaks down sometimes. Or we disagree about who belongs in our tribe. It’s a big problem in either case. Hence, when people say even the poorest Americans live...

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Technically Speaking: Fed “Hopes” Spark Return Of Bullish Complacency

In this past weekend’s newsletter, I laid out the bull and bear case for the S&P 500 rising to 3300. In summary, the basic driver of the “bull market thesis” essentially boils down to Central Bank policy, as noted by the WSJ yesterday: “U.S. indices hit record highs last week on rate cut expectations. We’ve shifted from fiscal stimulus to monetary stimulus as the driver of the rally.” In other words, it is all about “rate cuts.” This reliance on the Fed has led to a marked rise in...

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The Problem With Keynesian Economics

In The General Theory of Employment, Interest and Money, John Maynard Keynes wrote: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” I think Lord Keynes himself would appreciate the irony that he has become the...

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Kahn: 6-Ways To Prepare For The Next Market Decline

This article was originally published at Kiplinger and submitted by Michael Kahn The U.S. economy is putting up some impressive numbers in GDP, jobs and wages, but many pundits fear that a slowdown is pending. Trade-war fears with China and the European Union remain front and center in the news. And the yield curve is threatening to invert, meaning short-term interest rates may be moving higher than long-term rates. That’s often a sign of pending recession on its own. By some measures, the...

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The Fed May Give Trump His Rate Cut, But It Won’t Help

Investors are in a buying mood despite many economic warning signs. Why? For some, it’s because they expect the Federal Reserve to cut interest rates and otherwise “stimulate” the economy. They believe (correctly) it would drive stock and real estate prices higher. At the risk of stating the obvious… higher asset prices mainly benefit those who own the assets. Which, in the stock market’s case, is not most Americans. The ordinary worker’s main asset is the income stream from their job. Lower...

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Technically Speaking: Monthly S&P 500 Chart Update & Review

With June now officially in the books, we can take a look at our long-term monthly indicators to see what they are telling us now. Does the recent breakout to “all-time highs” mean the bull market is finally back? Or, is this breakout doomed to failure as the previous breakouts have been? That’s the answer we all want to know. Each week on RIA PRO we provide an update on all of the major markets for trading purposes. (See an unlocked version here. We also do the same analysis for each S&P...

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Freight Slowdown Is A Terrible Sign For The Economy

Just as an army moves on its stomach, an economy moves on ships, trucks, and planes. They carry the goods whose purchase adds up to growth. Nowadays many goods are digital, delivered electronically. But we still need lots of physical stuff which must travel to the customer. Fewer goods in motion mean lower growth… and that’s exactly what is happening. With technology, businesses have grown adept at managing inventory. Goods don’t typically sit on store shelves very long. Retailers stop...

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Technically Speaking: The Bull Is Back, Bonds Say “No”

For the fifth time, since the end of 2017. the market hit an all-time high. Each previous all-time high has led an almost immediate sell-off.  Will this time be different? This was the question I asked last Tuesday: “Such is the belief currently which is being driven primarily by the ‘Pavlovian’ response of a more ‘accommodative’ Federal Reserve which is expected to cut rates sharply by the end of this year. It is also the ‘hope’ there will be a resolution to the ongoing ‘trade war’ with...

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One Man’s Treasure: The Perception Versus Reality Of Equities

Stocks have an almost mythical aura about them for many investors. Conceptually, stocks tend to produce higher returns than many other asset classes and therefore feature prominently in many retirement plans. Practically, stocks have provided terrific returns for many through their working years and into retirement. The proposition of investing in stocks, however, has changed over the years. In many cases, perceptions have not kept up with this reality. As a result, many investors still...

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