Painkillers Are Not Cures

Last week the Federal Reserve announced it would cut interest rates by 0.25%. This is major news because it signals the end of the “tightening” cycle and is the first rate cut since the Great Recession fallout. I wrote about the stock market’s action during rate cutting cycles a few weeks back here.

Here’s another great chart showing market performance during the last two rate cutting cycles.

Continue reading “Painkillers Are Not Cures”

The True National Budget Deficit

We recently found out that the U.S. government’s official estimate of the national budget deficit for fiscal year that ended September 30th was $779 billion. Yet, when I look at the change in the national debt for the same period I see an increase of $1.25 trillion. 

So if the official deficit was $779 billion, how did the national debt grow by over $1.2 trillion? Sounds like questionable accounting practices to me. Continue reading “The True National Budget Deficit”

Household Debt

Household and Nonprofit Organizations Debt exceeds prior peak set in Q3 of 2008 during heart of the financial crisis. Although, it remains lower than the prior peak when measured in terms of GDP.

Both student loans and auto loans are sharply higher than Q3 of 2008.

 

 

 

A New President, A New Baseline

With the inauguration of a new President, it seems appropriate to identify a new economic and market baseline as a fresh starting point for the incoming administration.

First, the conditions President Trump is inheriting then we’ll see how those conditions stack up to his five immediate predecessors’.

All data as of 12/31 of year prior to inauguration unless indicated otherwise.

There are many observations to be made, but I’ll focus on a few I find particularly interesting.

Continue reading “A New President, A New Baseline”