• GDP Growth

    CY2018 US GDP growth should average 3.1%, led by rising employment, strong income gains, tax cuts, increased defense spending and very strong consumer and small business confidence. During CY2019, growth is likely to steadily slow, yet still average a solid 2.6% as tax cut impacts fade, trade wars … [Read More...]

  • Poor Promotions

    Research shows that high-performing sales representatives are more likely to be promoted into management. For example, a doubling of sales boosts the probability of promotion by 15% above baseline. But the new manager’s pre-promotion doubling of sales is also associated with a 7.5% reduction in the … [Read More...]

  • Largest Lingos

    The Friday File: Looking only at native speakers, the most spoken language in the world is Chinese with 1.3 billion first-language speakers. A distant second is Spanish with almost 440 million speakers. English is third with 372 million native speakers, and Arabic follows with 295 million. In fifth … [Read More...]

  • Facebook Failure

     Last Thursday Facebook lost $119 billion, 19% of its market value, after predicting slowing revenue growth in the remainder of 2018. It was the largest one-day dollar decline for a US company ever, ahead of Intel’s $90 drop in 4/00.  This decline was equal to the GDP of Kuwait or Morocco. The … [Read More...]

  • Trade Tariffs

    Already announced trade tariffs should reduce GDP by 0.1% at peak impact in mid-2019. If widened to include all proposed tariffs including autos, a 10% tariff on $400 billion of Chinese goods and equivalent retaliation, the temporary maximum hit to GDP would be 0.5% by summer 2019. The worst-case … [Read More...]


Tariffs Today

In 2017, federal government revenues were $3.316 trillion, of which 1%, or $34.6 billion, came from tariffs. While more money will come from tariffs, how much is unknown. Firms may import non-tariffed substitutes, they may buy the product from a US producer, or sales may be lost due to higher … [Read more...]


Great GDP

The US economy grew 4.1% in 18Q2, its fastest pace since 14Q3. Better yet, excluding volatile exports, inventories and government purchases, growth was a stellar 4.3%, and I see Q3 growth coming in at a strong 3%. Longer term, I’m apprehensive. In the two quarters following President George W. … [Read more...]


Perfect Pitch

The Friday File: With data showing pitcher performance declines considerably when facing opposing batters for a third time, innings pitched by starters is averaging just 5 1/3 innings. This makes relief pitching critical. And, because relievers on average pitch to just 4.5 batters/game because data … [Read more...]


Recession Recognition

An inverted yield curve, a situation where short-term rates are higher than long-term rates, has preceded each of the past seven recessions by 8 to 23 months. At present, the yield curve is very close to inverting. But, rarely have we had massive fiscal stimulus this late in a cycle, or a central … [Read more...]


Weak Wages

While wages are increasing very slowly in response to the remarkably low unemployment rate, regrettably inflation is also rising and is at a six-year high. Real wage growth, which has been slowing since late 2016, was flat Y-o-Y in May and declined by 0.2% in June. This is surprising as we’re late … [Read more...]


Chinese Choice

China’s economic growth slowed to 6.7% in 18Q2, from 6.8% the previous three quarters. Given government efforts to slow debt growth by reigning in risky lending, along with decelerations in investment growth, industrial output, and retail sales, 6.7%, if true, is good. However, add rising trade … [Read more...]


Crummy Comment

Last week President Trump said he hoped the Fed would stop raising rates. Bad comment. Markets value central bank independence, and Trump’s comment could easily backfire. The Fed may raise rates earlier than planned to assert independence, and if conditions weaken and the Fed slows its pace of rate … [Read more...]


Billboard Bonanza

 The Friday File: there are roughly 360,000 billboards in the USA. The most expensive is the largest billboard in New York’s Times Square, which measures 25,000 square feet and rents for $2.5 million/month. The largest billboard in the world is in Madrid and it’s 56,672 square feet; almost the size … [Read more...]


Mighty Moderation

While June housing starts and permits were disappointing, these data are very volatile, and YTD starts remain up 7.8%; good given the headwinds this sector faces. More interestingly, a key reason the current expansion is now in its tenth year is because housing starts were MIA the first few years of … [Read more...]



FICO scores are determined as follows: payment history is 35%, prompt is best; amount owed counts for 30%, less is best. Length of credit history is 15%, longer is better.  Credit mix is 10%, varied debt types are superior to one type. Lastly, new credit counts for 10% and applications lower your … [Read more...]