Commentary There is a scene in a Fred Astaire and Ginger Rogers film in which the boss of a law firm leaves for vacation and puts his intellectually limited Cousin Egbert in charge. The note adds “don’t do anything.” This is exactly the note that the Fed needs now. Just stop doing things. Its record-breaking…
Is the Fed Done Messing Up Everything?
May 4, 2023
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AnalysisBusiness & MarketsBusiness ColumnistsFederal Reserveinflationinterest ratesOpinionrecessionU.S. economy
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What Does Money Say About Recession?
Commentary Both the Federal Reserve and the European Central Bank should have just raised their policy rates while the recession is coming near to the brink. According to a model prediction from a ten-year less three-month tenor Treasury yield gap, the implied U.S. recession probability by yearend already stands at 65 percent, reaching the second…
Commercial Real Estate Could Trigger the Next Big Bank Shock
May 4, 2023
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american banksBusiness & MarketsBusiness Columnistscommercial real estateeconomic policieseconomyFederal ReserveInvestmentOpinionreal estateUSUS Real EstateViewpoints
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Commentary Charlie Munger, believed by some to be the real “brains” behind Berkshire-Hathaway, the multinational investment leviathon helmed by Warren Buffet, recently told The Financial Times, “We have a lot of troubled office buildings, a lot of troubled shopping centres, a lot of troubled other properties. There’s a lot of agony out there” in real…
China Shows Strength, But Questions Remain
May 2, 2023
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Business & MarketsBusiness ColumnistsChinaeconomic growthfirst quartergross domestic product (GDP)OpinionThinking About China
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Commentary Beijing reported that the country’s real gross domestic product (GDP) grew in this year’s first quarter by 4.5 percent over the first quarter of 2022. That is a vast improvement over the 2.9 percent growth reported for the fourth quarter of last year. Because Beijing rescinded its draconian zero-COVID policy last January, most forecasters…
This Is a Bailout, Not a Market-Based Acquisition
Commentary The weekend brought us the news that JPMorgan bought the failing First Republic bank, with numbers that are truly mind-boggling and further shore up JPMorgan’s megabank status. For many readers, this came across as fancy high finance and nothing much to concern us, especially since the numbers are essentially incomprehensible to the regular person….
The Unreported Tucker Carlson Story
Commentary The business of cable news and commentary isn’t just business; it goes to the core of how the First Amendment operates in the 21st century. Fox’s most popular primetime host, Tucker Carlson, was shown the door a week after Fox settled with Dominion Voting Systems for $787.5 million in a defamation suit. Texts from…
Why Future Market Returns Could Approach Zero
What if I told you that future market returns could approach zero? This seems hard to believe, considering young investors piling back into the markets since the beginning of the year. As I discussed previously, this behavior follows the clubbing many received in 2022. A recent Wall Street Journal article discussed how retail traders that…
A Cost to Climate Virtue
Commentary All over the developed world, voters identify inflation as a significant concern. They do so for good reason. Inflation is stubborn and brings hardships at all levels of society. If left unchecked, it will stifle growth prospects. As is always the case, today’s inflation stems primarily from faulty monetary policies. But if monetary mismanagement…
Productivity Slows to a Crawl as Recession Sets In
Commentary For reasons I cannot explain, there was widespread shock at the new GDP numbers for the first quarter. They revealed a 1.1 percent growth rate, which is a crawl and much lower than the experts anticipated. And the new data points to an inexorable reality. Certainly the recession will be obvious by the summer…
The Facts Behind China’s De-dollarization
April 27, 2023
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Business & MarketsBusiness ColumnistsChinaDe-DollarizationeconomyHong KongOpinionThinking About ChinaUS-China relationsViewpoints
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Commentary The divide of the world reignites the discussion of de-dollarization. As the U.S. dollar index depreciated from 115 to 101 or nearly 12 percent, anyone, including foreign governments, that held too much U.S. dollar would try to underweight it. While the existing holders of Treasuries would be subject to mark-to-market loss when bond yields…
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