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The chart below showing delinquent consumer loans is concerning but misleading. At first blush, the number of delinquent consumer loans is nearing the peak of the 2008 recession. That stat should be very worrisome on its own. However, the amount of consumer loans has more than doubled since 2008. Therefore, the percentage of delinquent consumer […]
Over the last twelve months, the Fed has been tightening policy at its most aggressive pace in over 40 years. The Fed’s tightening actions include raising the Fed Funds rate by 4.50% in twelve months and performing $95 billion monthly QT. As the graph below shows, the increase in Fed Funds occurred at nearly double […]
Financial Planning
In Five Ways to Raise Money-Smart Kids: Part One, I explore practical methods and teachable moments to help young children and teens build their fiscal muscles with ongoing help from mom and dad. First, financial literacy is fair or average across the globe. Per insights from the recent Standard & Poor’s Global Financial Literacy Survey: […]
The graph below shows that a sub-45 reading on the ISM manufacturing survey index has accompanied nine of the last ten recessions. The only outlier, and by a very slim margin, was 2020. The never-seen-before economic shutdown and the massive stimulus made that recession non-comparable to more typical economic slowdowns. The latest ISM survey rose […]
Invest
A recent Wall Street Journal article discussed how retail traders that made millions during the pandemic trading the market are now mostly wiped out. “Amateur trader Omar Ghias says he amassed roughly $1.5 million as stocks surged during the early part of the pandemic, gripped by a speculative fervor that cascaded across all markets. As […]
Invest
By owning gold, investors are not necessarily hedging against a government default but ironically betting the Fed will increasingly misuse monetary policy to help the government avoid defaulting. That may not be the exact thesis gold investors signed up for, but there is ample evidence linking gold prices to Fed behaviors, as we will share. […]
Invest
Economically speaking, bullish bets are mounting on a “no landing” scenario, which suggests the economy will avoid a recession entirely. As noted by Yahoo Finance last Friday: “The newly-coined ‘no landing’ outcome considers a scenario in which inflation doesn’t actually cool while economic growth continues, even as interest rates remain elevated amid the Federal Reserve’s […]
Invest
We recently discussed the recession signals from the NFIB (National Federation Of Independent Business) and the inverted yield curve. “As in 2019, we see many of the same recession signals from the NFIB survey again combined with a high percentage of yield curve inversions. Notably, out of the ten yield spreads we track, which are […]
Invest
The market correction has started. The question we have repeatedly discussed over the last several weeks is the ongoing battle between bullish technical improvements and bearish fundamentals. On January 27th, we discussed the bullish signals the market was giving despite the Fed’s continued hawkish stance on monetary policy. The market surge continued last week but […]