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Gun Control & How To Play Upcoming Debt Battles
Ever since the tragedy on December 14 at Sandy Hook Elementary School in Newtown, Connecticut occurred when Adam Lanza senselessly murdered 26 people (20 children and six staff) and then himself there has been a growing cry from millions of Americans for some kind of new gun controls. And the current occupant of the White House is all too happy to oblige. Last week, the president unveiled the most sweeping new gun control laws since the so-called Brady Bill was passed in 1993, requiring background checks on firearm purchasers in the US. Obama's proposals go much further as I will discuss.
Obama Claims We Don't Have A Spending Problem
There's a lot to talk about this week. A lot of my contemporaries are offering their predictions for the New Year. But with our nation now over $16 trillion in debt and annual budget deficits over $1 trillion, I don't think there is any way to accurately predict what will happen this year. Another financial crisis could rear its ugly head just about any time.
Finally, a Solution to the Income Investing Dilemma
There's an endangered species in the investment industry today and it goes by the name of "yield." With continued downward pressure from the Federal Reserve, both short-term and long-term interest rates have been held to artificially low levels. And each new announcement from the Fed seems to extend the outlook for low interest rates farther into the future.
Fed Announces QE4 Starting Next Year
I continue to believe that President Obama is willing to let the economy go over the cliff and blame the Republicans. Obama is hell-bent on raising taxes on those in the top two brackets; he campaigned on it; and I dont think he will back off. It remains to be seen if the Republicans will cave.
...'Til Debt (Limit) Do Us Part
Last week I discussed the "fiscal cliff" and the political battle that entails. If lawmakers cant come together for a solution before the end of the year, the economy is almost certainly headed for a recession or worse in 2013 and beyond. But there's a potentially even bigger battle coming up in the next couple of months.
Weekly Commentary & Outlook
Obviously, I am very discouraged with the outcome of the election. The main mistake Spencer and I made (and others including Gallup, Rasmussen, Pew, Rove, Morris, etc., etc.) in our pre-election analysis was to significantly underestimate the turnout rates among Democrats. The widely-held view that Democrats were unenthused and wouldn't turn out to vote, as suggested by numerous pollsters, was simply wrong. Obama won both the popular vote and the Electoral College comfortably.
Forecasts & Trends
Last Friday's unemployment report for October had the headline rate rising from 7.8% to 7.9%, in line with expectations. However, the pleasant surprise was that the economy created 171,000 new jobs last month, well above the pre-report consensus of 125,000 and above the average monthly increase of 157,000 jobs this year. That's the good news.
What Really Happened in Benghazi on Sept. 11
I've been taking a lot of flak from the Obama supporters in this audience over the past few weeks. Some are demanding that I stick to economic and investment issues and stop criticizing the president. Sorry liberals, but I have long maintained that who we elect to run the country has a big impact on the economy and therefore investment trends.
The Supreme Court Hangs in the Balance
The airwaves are overflowing with intense discussions about President Obama's and Governor Romney's positions on a variety of issues. What we don't hear much talk about is the likelihood that our next president will get to appoint at least a couple of justices to the Supreme Court. Depending on the outcome of the election, the balance in the High Court could shift significantly. With that in mind, let's focus today on what's at stake for the highest Court in the land, and therefore all of us.
Understanding How "Debt Deleveraging" Works
For many years, I have warned that our massive explosion in federal debt (up 50% just since Obama took office) would one day stifle economic growth. Obviously economic growth is currently stifled, what with the weakest post-recession recovery in decades. But the question remains as to whether our massive national debt and trillion-dollar budget deficits are the main reason for the disappointing recovery.
Will America Be Greece in Four Years?
The US national debt topped $16 trillion last week, and it was almost as if no one paid attention. At the rate we are going, the national debt will top $20 trillion just four years from now in 2016. In my August 21 E-Letter, I pointed out just how mind-boggling a trillion dollars is. Lets revisit that analogy of a trillion in terms of time.
September: A Rough Month for the Markets?
September is often a bad month for the stock markets, historically speaking, and this year it could be especially turbulent. In addition to all the uncertainty about the weak US economy, there is uncertainty about what the Fed may do just ahead and what, if anything, will be done to address Europe's recession and debt crisis. In addition, there is the looming presidential election which no doubt will go hyperbolic this month.
"Curiosity" - Return of American Exceptionalism
The IRS regularly issues something called Individual Tax Identification Numbers to people living in the US, but who are not eligible for a Social Security number. These illegal aliens working in the US received $6.8 billion in tax refunds last year by filing. A number of IRS employees recognized that this is/was tax fraud. We could end $2.5 billion in government waste like paying almost three times that much in tax refunds to illegal aliens to pay for invaluable missions like Curiosity.
GDP Report: "Good News" - You've Got to be Kidding!
We dissect last Fridays controversial 2Q GDP report, which most found disappointing but some in the mainstream media found encouraging (ie at least were not in a recession). From there, well discuss the Feds latest monetary policy meeting that ends tomorrow. The stock markets rallied strongly last week, partly on perceived good news from Europe, and partly because of renewed expectations that the GDP report would be weak enough to move the Fed to enact QE3.
Bond Investing - Its the Short Side, Stupid
As you are probably aware, I am an avowed political junkie but this article isnt about politics. Instead, I want to borrow a phrase from the 1992 presidential election as an analogy to highlight what I believe bond investors should be concentrating on right now - the short side.
Shocking Fed Survey on Consumer Finances
Today we focus on a new Fed study which found that Americans net worth plunged almost 39% in the period from 2007 to 2010. That period included the so-called Great Recession, a financial crisis and a severe bear market in stocks. There are lots of interesting statistics to look at in this new Fed study.
The
Today we revisit the subject of the so-called fiscal cliff that our country faces at the end of this year if a Lame Duck Congress fails to pass a number of new laws by December 31. (I last wrote about this subject on March 27.) Some analysts are arguing that nothing really bad will happen if the Lame Duck Congress fails to get the job done. I disagree and I will tell you why below.
Spain & Weak US Economy Dominate Markets
Stock markets around the world have been pummeled in recent weeks amidst the growing reality that were in a global recession, especially in Europe. Fears that the US will also fall into recession have intensified, particularly in light of last weeks very disappointing economic reports. At the same time, the European debt crisis has once again raised its ugly head, this time with the spotlight on Spain. Spains own Prime Minister has admitted that the country is in a state of emergency, and money is gushing out of Spanish banks.
CBO Warns of Recession in 2013
The non-partisan Congressional Budget Office (CBO) has calculated the expected negative effects on the US economy if the Bush tax cuts expire at the end of this year. Their numbers just released last week are eye-opening! To give us some perspective, US Gross Domestic Product rose by 2.2% (annual rate) in the 1Q of this year.
Greece Poised to Default & Exit the Euro
Weve all heard horror stories about the global financial crisis that could unfold if tiny Greece defaults on its debts later this year. There are genuine fears that if Greece defaults, that leaves the door open to similar defaults by Portugal, Ireland and possibly even Spain. Some fear, in this nightmare scenario, that even Italy could default (although I doubt it). Will the ECB pony up even more taxpayer money for Greece this time around? Most agree that this will be decided largely by Germany.
Will The Bond Mania End Ugly?
Mass migrations of the investment public from one asset class to another have often ended very badly. We can all remember the late 2000-2002 bear market in stocks when the S&P 500 plunged almost 50% and the Nasdaq over 70%. Investors had been in a mania for stocks during the late 1990s. I believe what were seeing today qualifies as a mania for Treasury bonds. Im not predicting that the current bond bubble will end the way the dot.com mania ended, but it wont take a huge increase in interest rates to put a lot of bond fund investors who came late to the party underwater.
Is The Economic Recovery Stalling?
The US economic recovery is facing some stiff headwinds. Those include high gasoline prices, the recession and higher interest rates in Europe and the recent disappointing unemployment numbers in the US, just to name a few. The apparent slowdown in the recovery recently is in part due to the unusually warm winter, which served to pull economic activity forward in January and February, thus making March and April so far look softer. Some in the mainstream media concluded that we dont have a problem with the economy. Maybe so, but the recovery has had an uneasy feeling about it recently.
European Debt Crisis Never Went Away
US stocks are having a big day today, with the Dow up just over 200 points. But there are problems lurking in Europe that could be quite negative for global equities over the next several weeks. There are fears that Spain and perhaps Italy will need more bailout loans in the weeks just ahead. Thats our topic for today. In December and January the ECB took the unprecedented step of loaning apprx. 1 trillion euros to European money center banks in an effort to buy some time for the banks to recapitalize. The loans had three year maturities, and the interest rate was an incredibly low 1%.
Will Baby Boomers Wreck the Market? (The Sequel)
The basic premise behind the idea that Baby Boomers might lay waste to the stock market makes sense intuitively. The idea is that as Boomers retire, they will shift assets away from stocks to less risky alternatives such as bonds, annuities, CDs, etc. and begin living on the interest. All of this selling activity, the story goes, will put downward pressure on stock prices and lead to a major selloff.
Our National Debt Is Scarier Than You Think
The US national debt stands at just over $15.6 trillion as compared to the $15.1 trillion gross domestic product in 2011. This means that our national debt is now 103.3% of GDP, a feat which has not happened in the Post-WWII era. To put $15.6 trillion into perspective, this means that every man, woman and child in America owes just over $50,000 toward the national debt. If we use an estimated budget deficit of $1.1 trillion for 2012, the national debt will have grown by just over $5 trillion in the last four years.
Why Convertible Bonds Should Be Part of Your Asset Allocation
Im going to let you hear from Greg Miller about convertible bonds. Not only will Greg tell you how they work, but also why they can be an important diversification technique in your portfolio even now when other types of bonds are falling out of favor. I believe that many of you will want to have convertible bonds in your portfolio before long. The interest rate increases weve seen over the last couple of weeks may be a sign that the long bull market in traditional bonds is rolling over to the downside. Convertible bonds offer opportunity even during periods of rising interest rates!
The Truth Behind High Gasoline Prices
While the latest report on 4Q GDP came in a bit better than expected, most economists agree that growth in 2012 will not be as good as the 4Q of last year. Following that, we look at some remarks from Fed Chairman Ben Bernanke in his recent Senate testimony. While he defended quantitative easing, it doesnt sound like the Fed is going to do QE3 anytime soon.
Will the Bond Bubble Burst This Year?
I dont know who first uttered this classic line The trend is your friend (until its not) but it is timeless. It seems especially appropriate today in light of the massive shift weve seen from stocks to bonds since the financial crisis and bear market of 2008-early 2009. Millions of investors have moved from stocks to bonds and consider themselves safe. Today, there are more people invested in US bonds (of all types) than ever before.
On the Fed, Stocks, the Election & More on the 1%
We look at the Feds latest Beige Book report that came out last week, which showed that the economy improved in all 12 Fed Districts. We also ponder the question of whether the Fed is ramping up to do a QE3. Next, with everyone wondering if were facing another roller coaster ride in the stock market this year, I will bring you some interesting facts about what stocks have historically done in presidential election years. Finally, I dug a little deeper over the last week to find some fascinating information on the so-called Top 1% of wealthiest Americans.
The Fed: Is QE3 Coming in January?
For most of this year, rumors have continually swirled that the Fed was about to embark on yet a third round of Quantitative Easing. The rumors suggested, that the Fed would announce another $600 billion in asset purchases, primarily of long-dated Treasury bonds. While many of us argue that the first two rounds of QE have had little positive effect, the Obama administration and many others are urging the Fed to do more. The argument is that Europe is heading into a recession, and this cant help but weaken the US economy just ahead.
72% Say US Headed in the Wrong Direction
We begin with some new Associated Press polls released. Lead among them is the poll which found that 72% of Americans now believe that the US is headed in the wrong direction. Then summarize the latest economic reports, most disappointing, but there were a few bright spots. Finally, I will address a political issue that is just beginning to make the rounds in the media. That the Republican presidential hopefuls are gravitating to a flat tax and jobs growth agenda that could stand up very well against President Obamas tax-and-spend, punish- success policies in the 2012 election.
Is the Debt Super Committee Doomed to Fail?
The Super Committee has been meeting behind closed doors for over a month, but the members have thus far said very little about any progress being made. The Committee is back in the news now because last Friday was the deadline for submitting ideas or plans for trimming at least $1.2 trillion from federal spending over the next 10 years. In other words, its now time for the Super Committee to get down to some real work.
Obamas Jobs Speech, The Economy & The Fed
Once again this week, there is a lot of news to cover. We begin with my thoughts on President Obamas latest jobs speech in which he asked for yet another almost $450 billion in stimulus which he said is paid for. That all depends on Congress passing a litany of new tax increases that Obama announced yesterday. Following that discussion, we will look at the latest economic reports, including the dreadful August unemployment report. Next, we will move on to the latest news from the Fed and what the FOMC may be up to at its upcoming monetary policy meeting on September 20-21.
Results 351–385
of 385 found.
