If you could go back to any time period in history to go live and raise a family, which would you pick? Ancient Rome? The renaissance? The 1950’s? Any of these choices would be terrible compared to the time period we are living in right now. That isn’t to say there aren’t some redeeming qualities[…]
The Fed continues to execute according to plan. The market had largely anticipated the recent move by the Fed to raise short-term rates by 0.25%. They liked the more the even-keeled and cautious tone that Fed chairwoman Janet Yellen conveyed in the press conference. Per Binyamin Appelbaum of the New York Times: Figure 1: Ebullient(adj.)[…]
In June, the chairwoman of the Federal Reserve, Janet Yellen, held a press conference after the two-day meeting of the Federal Open Market Committee (FOMC) meeting. The big announcement was that they left interest rates unchanged. The market yawned, fully expecting this. The talking heads, however, needing to fill air-time, arm chair quarterbacked it like true professional spectators. “What about this[…]
Donald Trump’s Economic Consequences The phenomenon of Donald Trump is something that we have not seen before in American politics – A professional promoter and reality television star who has enthralled a portion of the nation and gained more traction than anyone thought possible. While he makes headlines with some of his more outlandish statements,[…]
After another seven months on hiatus, I am attempting again to get back to a more regular writing schedule. I had intended to start writing again after my exam in June (I did pass, thank you for silently asking), however, as is often the case, life got in the way.
And, a lot has happened in that time (more on that later), but now I want to get into discussing what is going on in the world as it pertains to the economy and the markets. This will be a short (hopefully) account, focusing on translating the headlines and soundbites you may be hearing on the news, followed up by some personal developments just to get everyone up to speed.
The last few months of business news this year has been all about cliffs. The most popular one being the Fiscal Cliff. For those of you who may not know what this is, its a series of tax increases and government spending cuts scheduled to take place on the first of the year unless the President and Congress can agree to pass legislation which says otherwise. […]
We have all heard the range of opinions on the effects of the sovereign debt crisis in the European Union. Greece has gotten the most press as their crushing debt load and rapidly declining economy has their citizens up in arms. We have all seen the footage of peaceful protests on the Greek Parliament building turning suddenly violent and scary. Portugal and Ireland are the next worse off in terms of their balance sheets. Both have large overall debt loads and large current deficits that need to be addressed. The most recent fear is that of Italy and Spain who have each much larger economies and therefore pose a drastically greater threat to the global financial system.
The question then is how does this whole situation get resolved? To answer that question we look a little deeper into the situation and ask further questions. Who are making these decisions? What are their primary interests? Who are their constituents and what do they feel about it? All in all its a messy situation but one that I think has a logical outcome. One that is not nearly as scary as some people might think. […]
If you have been watching the markets these last few weeks, there is a strong possibility that you could be now suffering from Vertigo, or at the very least a mild nausea.
The volatility and dyslexic nature of the price movements (starting Monday, Aug 8th, the S&P500 was down 6.5%, up 4.7%, down 4.5%, up 4.6%, and up 0.5%), along with the historic rise in the price of gold (now at record highs over $1,800), illustrates the huge levels of anxiety and uncertainty that investors, still licking wounds from two years ago, are faced with.
This article is meant to serve as an explanation to what is happening with the markets, what is likely to happen in the near to middle term, and finally what investors should do about it. […]
The tag-line of many hard-line conservatives this year, as the economy continues to struggle, is that the stimulus package was a failure. They say “the Democrats promised that this stimulus spending would bring the unemployment rate down to 8%.” Since this did not come to pass, they say that it was “a colossal waste of money.” While the democrats may be guilty of bad forecasting, to say that the stimulus did not work shows a complete lack of basic economic understanding. You will also notice, if you pay attention, that none of these tag-line parroting hard-liners ever follow up this claim with what they feel would have been a better solution.
For those of you out there brave enough to take an economics course in college, and unfortunate enough to not have been able to sell back your textbook at the end of the semester, you can look back at a couple of equations that represent the most fundamental relationships for an economy. The first is as follows: […]
Being that it has been a very long time since my last post, I felt it appropriate to pick a fight. This time I am calling out both Democrats and Republicans for their apparent lack of even a modest amount of economic training. Unfortunately, members of both parties have little time, due to their full-time job of fund raising, in addition to their part-time job of fighting with the other side, to fully verse themselves on economic realities. Therefore, we see congressmen and congresswomen on the campaign trail pulling out sound-bites, statistics, and headlines that fit into their political party platform. Often this is to disastrous effects. See, the benefit of being an independent is that you have the ability to call out both parties without feeling like you are compromising any underlying loyalties. I try very hard not to get political, but at times, I suppose, its necessary. […]
It has a been a long time in between posts, and I fear it will be even longer from now until my next post. Life has a funny way of getting in the way of the more fun, interesting, and thoughtful pursuits. I did however, feel compelled to write a prediction piece, just so I[…]