This term emerged because of the huge shift in the workforce since the pandemic began in March 2020. The initial shock to the world of work was massive layoffs as businesses shut down across America. Massive federal government intervention held back some of the economic disruptions in households and businesses. “Quits” as the labor department calls them, are rising in almost every industry. The Quits surged in April and exceeded that number this past July...
So many twists and turns, unintended consequences, mysteries, successes, and failures in the course of the pandemic. We know that massive monetary and fiscal intervention reversed a steep decline in the stock market and economic paralysis. In some senses, that was one of the easiest parts of decisive government decisions. As the pandemic has dragged on, the unified efforts of the government have become mired in politics and the vicissitudes of human behavior. One highly...
Yes, this has been seriously suggested as a solution to raising the debt limit. This would not be just any coin-not even a gold coin-but a Platinum coin. The way it would work is the President would order the US mint to create a Trillion $ coin and deposit it at the US Treasury. This Trillion $ could then be used to pay US government obligations. The reason it would be platinum is that legislation...
We talked to a prospect this week about investing in the stock market and he said that he is very nervous about all the uncertainty and lack of confidence in the markets. My response was “when did you not feel nervous about the stock market?” He laughed, agreeing that we are always worried about markets. It always feels like today is the worst it gets, forgetting the last time we felt this way. I hope...
Advice for this week is to take a deep breath and drink lots of water! So many converging crises that it is challenging to pick just one! It seems that the crises are never ending since the financial meltdown. The difference this week is the stock market is taking note. The decline from average highs is only about 3%, but pockets of the market have declined more significantly. Analysts are predicting declines of 20%. No...
Headlines last week discussed the change in the financial outlook of Social Security. The link below digs deeper into the methodology and impact of this analysis. Here is a link to the Center for Retirement Research at Boston College, one of the most objective think tanks focusing on Retirement. We recommend taking a look at their website if you are interested in this topic. The stock market stalled last week after week after week of...
With interest rates staying so low throughout the world, the attraction of riskier assets such as stocks remains high. An example of this attraction to risk is in the European markets where junk bond yields are lower than current inflation rates of 3%. There is no end to bond purchases by central banks in Europe so interest rates remain bearing mostly negative yield, including the 10 year benchmark German Bund with a -.32% yield. The...
Opportunity always lurks in bad events. Example, buying stock both in 2009 and 2020 during bear markets has paid off and is still paying off today. It was not easy to buck the crowd because one of our behavioral biases is that whatever is happening now feels like it will happen forever. During the beginning of Covid, it was hard to see us emerging from the pandemic. It still is, but the impact of the...
This week opened with the NASDAQ index hitting a new high in a rebound from the previous week's decline. Last week, economic growth was called into doubt by the Delta variant as well as economic estimates that fell short. The sentiment has changed this week with a lower fear of Delta having a long term impact, but just shifting demand. The Federal Reserve has a big conference this week that was moved from in person...
A new week, a new set of crises. Rising to the top is Afghanistan and American troop withdrawal. In addition, we have the Covid-19 Delta surge and its impact on health, travel, and the economy. This displaced Andrew Cuomo, the Governor of New York and the January 6th Congressional investigation. Unfortunately, one lesson that is evident is if you are in the news in a bad way, just wait and you will be replaced by...
Infrastructure Spending This week the Senate passed a bipartisan infrastructure bill with a cost of $1T. The amount stems from left over Covid-19 American Rescue Plan funds coupled with a proposal to report and tax cryptocurrency transactions. The Congressional Budget Office reports it will add $250B to the existing budget deficit. Half the bill is new spending and not part of any other legislation or previous spending program. Some non-traditional infrastructure items are being funded...
As the Delta variant spreads more aggressively than the original infection, America’s reaction consists of more separation- vaccinated from unvaccinated. The surge is happening among the unvaccinated accompanied by a low rate of breakthrough cases in the vaccinated. Our political leaders are hesitant to declare mask mandates because Americans thought and acted like the pandemic had ended. Even Dr. Fauci says there is no need for mandatory mask wearing. One hope is that the news...
