In a speech last Thursday, Fed Governor Christopher Waller showed how even the most hawkish Fed members are turning dovish. The transformation from a hawkish to a dovish Fed began last October. In late summer and early fall of 2023, the Fed talked about rate increases and was steadfast about beating inflation. At the November […]
As shown on the left, from 1979 until 2000, the correlation between small cap returns (Russell 2000) and the U.S. Treasury ten-year yield was often highly negatively correlated. As circled in the graph on the right, the U.S. experienced its highest yields in history during this period. Due to their high debt loads, small cap […]
Yesterday’s Commentary discussed the fall of EV maker Fisker. After posting the article, Fisker shares were suspended from trading on the NYSE. Tesla, the world’s largest producer of EVs, has fared much better than Fisker, but it, too, is having problems. For example, Tesla’s revenue growth was only 3.5% in the fourth quarter. Competition from […]
Over the last few weeks, we have shared information about the troubles facing the commercial real estate (CRE) market and the regional banks that made CRE loans (CRE Pain & CRE Loans). The problem for CRE investors and lenders stems from overbuilding over the last ten years and high vacancy rates due to the work-from-home […]
The vacancy rate of commercial real estate is higher today than at any point in the 2008 global financial crisis, per the Wall Street Journal. Yet, the CRE industry isn’t experiencing the pain one might expect to see with such high vacancy rates. CRE deals involving distressed sellers are still surprisingly low, at just 3.5% […]
With inflation remaining sticky well above the Fed’s 2% target and the economy showing few signs of weakness, the Fed will find it difficult to cut rates meaningfully. Furthermore, ending QT and re-starting QE is much less likely in this environment. The problem with the Fed’s anti-inflationary stance is that it forces the government to […]
The last release of the Fed’s quarterly Summary of Economic Projections, aka dot plots, was in December. At the time, the median 2024 GDP projection of the 19 Fed members was a relatively slow 1.4% growth. Further, they expected PCE prices to decline to 2.4% by year-end. Both estimates were slightly lower than their September […]
The Bank of Japan (BOJ) has finally ended its eight-year run of negative interest rates. On Tuesday morning, the BOJ boosted their overnight rate from -.10% to a range of 0% to 0.10%. Furthermore, the BOJ discontinued its Yield Curve Control (YCC) operations and stopped purchasing equity and corporate bond ETFs and REITs. However, their […]
In Spruce Pine, North Carolina, one small area supplies the world with high-purity quartz. Spruce Pine Quartz ranks among the world’s most important economic minerals. The following description is courtesy of a Wired article entitled- The Ultra pure, super-secret sand that makes your phone possible. “Spruce Pine, it turns out, is the source of the […]