Here’s Why Investors are Paying Record Prices for Stocks

The bulls are breaking out the party hats today as the S&P500 crosses 2000 for the first time in history.  As discussed last week, the bears sit huddled in a corner, dumping buckets of ice on their heads. If you … Continue reading

Here’s How Market Crashes Resemble Car Crashes

The financial media’s favorite pastime is throwing the word “crash” around as if it’s a seasonal occurrence. Their job, as journalists, is to keep you worrying about your investments as worried investors consume more TV. However, have you ever really … Continue reading

The Bears and Their Buckets of Ice Water

A few bears started off the last week by dumping buckets of ice water on their heads and then nominating three of their friends to do the same.  By Wednesday, the short squeeze was in full-effect as the bear community … Continue reading

The Problem with Europe that Investors are Missing

Europe is struggling, and trade sanctions with Russia are making a bad situation even worse. Confidence in Germany (as measured by the ZEW index) plunged today to 44.3 in August from 61.8 a month ago. This was dreadful compared to … Continue reading

The Fed’s Fischer Just Admitted QE Isn’t Working, and the Market is Rallying

If you want to understand macroeconomics, start by thinking of yourself. The big picture of the economy is a summation of millions of “yous”. The decisions you make whether to buy or rent a house, or to purchase a new … Continue reading

S&P Down 4%: Is This the Market’s Inflection Point

In calculus, an inflection point is a point on a curve where the curvature changes from convex to concave, or vice versa. It represents the point where the behavior of the function changes direction. Inflection points may also refer to … Continue reading

Obama’s Debt and Oedipus Rex

“History never repeats itself but it rhymes.” – Mark Twain “History repeats itself, first as tragedy, second as farce.” – Karl Marx All financial crises follow a recognizable pattern of boom and bust. They may not repeat themselves, but they … Continue reading

The 5-Year Bull Market is Showing Signs of Change

Markets are going through an adjustment process. I alluded to this last week when I wrote about how the narrative is starting to shift. People and markets need change to evolve, and in the long-run, this is a healthy process. … Continue reading

1!…2!… This is How the Fed Influences the Economy

One!… Two!… If you are a parent or had parents that used the dreaded count, you never want to experience “Three!” In order for the count to effectively stop Little Johnny from climbing the tree and return to the house … Continue reading

Macroeconomics of Millennials

This is the first part of a multi-part series dedicated to explaining the underlying macroeconomic forces shaping the economy of the 21st Century. People are, and will always be, self-interested. Whatever you do, you do for your own personal gain. … Continue reading

Jobless Claims are Lowest Since 2006: Commence Awkward Teen Years

The economy is picking up steam. That’s the conclusion drawn from Thursday’s unexpected decline in jobless claims of 284k. This weekly indicator of workers searching for employment dropped to its lowest reading since 2006. One data point doesn’t make a … Continue reading

How Financial Crises Start, Part 3

Let’s recap what we know so far about the most recent financial crisis.  You can view the first two parts here and here: First, in the last three decades, low interest rates and increases in productivity are mostly responsible for … Continue reading