Category: Economy

Beware of Political Math

Last week the U.S. Commerce Department reported that its estimate of the third quarter’s real gross domestic product (GDP) increase over Q2 was an annualized 33%. One immediate and unsurprising outcome was a slew of pre-election ads by Donald Trump touting his economic prowess. Putting aside the fact that it’s just an estimate that will…
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Why Is The Stock Market So Disconnected From The Economy?

Does it seem to you that the stock market is totally disconnected from the reality of the economy? Business news has been as bad as it gets. The number of unemployed workers has reached record-setting levels while GDP has declined to levels not seen since the 1930s. Federal debt has increased by over $3 trillion.…
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Should We Worry About The Massive Government Debt From COVID-19 Spending?

There are really two questions here. The first is whether or not the cost of the CARES Act and the other federal government rescue/stimulus spending packages could drive the U.S. government into bankruptcy. The second concerns the impact on our children and grandchildren of the mountain of federal debt that will be left to them.…
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The Wrong Kind Of Expert

It’s January and my email inbox is once again flooded with capital market predictions for 2020. Looking back at the “expert” predictions for 2019 made last January, the majority as usual turned out to be wrong. Rather than sharing those predictions that were most egregious (which would be more fun than educational), I thought this…
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Are Your Children Earning More Than You Did?

Per Wikipedia, James Truslow Adams defined the so-called American Dream as “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” This suggests that each generation of Americans should be experiencing a greater degree of success and prosperity than their predecessors. Is it happening? One way…
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Does Yesterday’s Market Drop Portend a Recession?

The Dow Jones Industrial Average (DJIA) experienced another jarring 800-point drop yesterday, roughly a 3% loss. The media attributes it to (1) the inversion of the yield curve and (2) the 0.1% decline in Germany’s GDP. Talk of an impending recession has ramped up. Most likely the questions on investors’ minds are “Is a recession…
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