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Insights

The Fed’s Ex-Lax Rate Strategy

Date Posted: October 18, 2017
More Hawkish Fed—Surprises Some Our past commentaries suggested that the Federal Open Market Committee (FOMC) would move with greater regularity in raising the federal funds rate. If correct, we expected that would surprise many investors. In fact, many investors did react with surprise to the more hawkish statements by the FOMC following its S…

Highlights of the Tax Reform Framework with Brief Comments

Date Posted: September 27, 2017
The following briefly outlines the proposed tax reforms. To do it quickly, I pasted the outline from the Congressional web page and added my comments with my emphasis in bold and in red. From Speaker of the House Paul Ryan’s webpage: Lowers Rates for Individuals and Families The framework shrinks the current seven tax brackets into three – 12…

The Fed on Q.T.

Date Posted: September 19, 2017
The Federal Open Market Committee (F.O.M.C.) meets this week (Sept. 19 – 20) and will likely signal it will begin to shrink the size of the Fed’s balance sheet.  It will do so by reversing the results of quantitative easing using what many call quantitative tightening (Q.T.). Recent Financial Conditions Eased Surprisingly perhaps, despite the t…

Kicking the Tax Legislation Can up the Congressional Road – the President’s Surprise Deal – back to the Trump Bump?

Date Posted: September 11, 2017
Clearing the Path for Congressional Consideration of Tax Legislation President Trump’s unexpected deal with Democratic leaders postpones the debate over spending and raising the debt limit until December. It extends government spending authority and the debt limit to December 15. That clears the September Congressional calendar and brings consid…

Retail First Sign of the Holiday Season Activity A Positive Indicator

Date Posted: September 2, 2017
Container Port Volumes Give a Positive Sign for the Holiday Shopping Season The first signs as to how this year’s important holiday shoppingseason may go comes from the strength of container volumes at U.S. ports. Container shipments at this time of the year reflect inventory building by retailers in preparation for the holiday season. The Nati…

Sears And Amazon Clash of Titans

Date Posted: August 31, 2017
Sears and Amazon – Bricks and Mortar Came Later In 1894, Richard Sears issued Sears’ first catalog—later known as “The Big Book”– and started its mail order business. One hundred years later, in 1994, Jeff Bezos founded Amazon. However, it was not until 1925, that Sears opened its first retail store. Now we see Amazon testing a bricks and mort…

The “What Me Worry” Financial Markets – Nuked?

Date Posted: August 17, 2017
Measuring the “What Me Worry” Markets Many baby boomers will recall mad magazine and its iconic cover boy—Alfred E. Neumann. His philosophy of life, “what me worry,” seems to apply to this year’s financial markets—so far. Admittedly, the recent North Korean nuclear threat upset that calmness for a short period. Assuming that issue returns to it…

Washington Reality Impacts Investment Focus

Date Posted: August 2, 2017
Political Warfare and U.S. Economic Growth For many developing countries, investors will haircut their market capitalizations to reflect their political instability. While the U.S. market will not likely see such a haircut, it would not be surprising to see the U.S. economy ultimately hurt by political warfare in Washington. This may prove to b…

The Implications for Tax Reform from the Death of Obamacare Reform

Date Posted: July 20, 2017
Republicans Give Little Confidence for Enacting Major Legislation The failure of the senate to pass legislation to reform Obamacare may lead to important implications for future success of tax reform efforts. Clearly, the Republican Party shows little ability to unite behind most important legislation. In a past commentary, I referred to a quo…

Second Quarter GDP Outlook — Declining Expectations

Date Posted: July 18, 2017
The bureau of economic analysis will release the advance estimate of second quarter GDP on July 28. What do the expectations for the quarter currently show? The next two graphs picture the dichotomy of forecasts between two of the Federal Reserve Banks — the Atlanta and New York. More importantly, as the graphs show, their second quarter forecas…