When the Fed last met, economic data was looking good. Now, not so much. Manufacturing is probably in recession, inflation is weakening, the yield curve is inverted, the dollar is strong, and trade concerns are elevated. However, equities are near records, unemployment is ridiculously low, and … [Read more...]

30 years ago today the Chinese government murdered hundreds, if not thousands, of student protestors across China, but particularly in Tiananmen Square, agitating for nothing more than freedom and democracy. In China, this event has been completely expunged. The Tiananmen Massacre was when the … [Read more...]

Existing tariffs on Chinese imports and Chinese retaliatory tariffs reduce US GDP by 0.15 of a point. Last week’s tariff increase from 10% to 25% on $200 billion of Chinese goods will decrease GDP by another 0.15. A further 25% tariff on another $325 billion of Chinese imports would lower GDP by … [Read more...]

There were 263,000 new jobs created in April, with all sectors but retail gaining. This strong growth is more proof of a solid economic rebound after a tough start to 2019. While pay rose 3.2% Y-o-Y, wage increases have been steady at 3.2% since 8/18, dampening inflation fears despite unemployment … [Read more...]

During the brief economic downturn late last year, bond yields fell along with equities because there was fear the economy was slowing, corporate profits were weakening, and inflation was expected to fade. Now, the stock market is at a record high while bond yields remain very low. This divergence … [Read more...]

GDP 19Q1 GDP came in at a remarkably strong 3.2%; don’t be deceived. Growth was pushed up by an unsustainable surge in inventories, a huge one-time jump in state and local government spending, and a drop in imports precipitated by a rise in 18Q4 imports in advance of Chinese tariffs that never … [Read more...]

In 2018, a volatile year for markets, just 38% of actively managed US stock funds outperformed their passively managed (indexed) counterparts, down from 46% in 2017, a placid year. Over the past decade, just 26% of actively managed funds beat their index benchmarks. Unsurprisingly, managed funds are … [Read more...]

In an amazing turn of events, the US petroleum trade deficit in 11/18, the latest month for which we have data, was just $625 million. As recently as mid-2008 it was a record-high $40 billion/month. What happened? Lower oil prices, down from almost $150/bbl to just $53/bbl, and the fracking … [Read more...]

With San Francisco Bay Area housing prices in the stratosphere, the private sector is now planning to raise $500 million for affordable housing. Assuming affordable housing costs $400,000/unit, this will create just 1,250 units! The real problem: since 2010 the region has gained 700,000 jobs and … [Read more...]

While wages of men and women with at least a HS diploma are similar early in life, they diverge dramatically with age. The gap peaks at about age 50 with men earning about $76,000/year and women earning about $49,000/year. However, at all ages there is no gap between single women, single men and … [Read more...]