Inflating the Future?

By |2019-10-02T07:37:56-04:00September 25th, 2019|Global Market Update|

Is inflation too low? Photo: Pedro Lasta. Source: Fancycrave Recently, Fed Chairman Jerome Powell referred to an obscure measure of inflation, one computed by the Federal Reserve staff of the 11th Fed District at their Dallas headquarters. That sent reporters scurrying to find out what they were measuring. But what is inflation, anyhow? Inflation is a general increase in the prices of good and services. It can be hard to deal with. It’s hard enough to balance a budget without prices going up. In [...]

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Flower Power Investors

By |2019-03-15T11:33:46-04:00March 15th, 2019|Global Market Update|

Remember the “Flower Children”? Photo: Rex Boggs. Source: Flikr. CC-BY-2.0 “Flower Power” was a movement in the mid and late ‘60s, part of the anti-Vietnam War movement. It was rooted in nonviolent ideology to transform war protests into peaceful spectacles. Young people embraced the flower-symbol by dressing in flowery clothes and decorating their vehicles with flowers and vibrant colors, wearing and singing about flowers in their hair, and distributing flowers in all kinds of situations, sometimes as a way to respond to potentially violent [...]

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No Pain, No Gain?

By |2018-10-22T07:34:23-04:00October 22nd, 2018|Global Market Update|

Have you ever gotten a “runner’s high”? Photo: AFC Clayton Lenhardt. Source: USAF I have. It’s that euphoric feeling we get when we “push through the pain” of long-term, rhythmic exercise, like jogging or rowing or swimming. It’s not running, specifically, that gives us those feelings of elation and relaxation. It’s the duration. Studies show that moderate, repetitive exercise that lasts 30 minutes or more has psychological as well as physical benefits. After exercising, people tend to be more relaxed and more upbeat throughout [...]

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Balancing the Books

By |2018-09-12T06:07:26-04:00September 12th, 2018|Global Market Update|

Is inflation headed higher? Public Domain. Source: Pxhere One of the most challenging financial pressures on all of us is inflation. It’s hard enough to balance our household budgets without prices going up all the time. When I was growing up in the ‘70s, our family was roiled by rising prices for groceries, clothing, and just about everything else. It was hard for businesses to plan, too, as managers couldn’t tell if what they could charge for their goods could keep up with the [...]

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Inflation Liftoff?

By |2018-01-30T07:26:17-04:00January 30th, 2018|Global Market Update|

What’s up with inflation? Photo: Eric Ward. Source: Wikimedia The short answer is, nothing. The latest inflation numbers show that the Consumer Price Index grew 2.1% last year, the same as the year before. Core prices grew slightly less. Inflation has averaged around 2% for the last 20 years. In fact, the last time we had a significant increase in inflation was the late 1980s, when core inflation moved up from 4% to 6%. That prompted the Fed to raise rates from 6% to [...]

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On the Horizon

By |2017-12-29T07:46:32-04:00December 29th, 2017|Global Market Update|

What does 2018 look like? Photo: Dave Meier. Source: Picography On its face, next year looks a lot like this year, just starting from a higher level. The economy – already growing well – should accelerate. A coordinated global expansion is currently underway. This will lead unemployment to fall and wages to rise. That will push inflation marginally higher, but not too high. The Fed will respond with a couple of rate hikes, but new Fed Chair Jerome Powell will have his hands full. [...]

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Northern Light

By |2017-09-21T06:13:49-04:00September 21st, 2017|Global Market Update|

Do we still live in a material world? Photo: Brocken Inaglory. Source: Wikipedia Not so much. Think about how we buy stuff: Americans are famous for “retail therapy.” When the going gets tough, the tough go shopping. That’s why we have so many malls. Only, with Amazon, we don’t need to go to the mall. There’s no need to schlep to the store: retail therapy is just a click away. Or think about lawyers: law firms used to need 1200 square feet of storage [...]

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Inflation Station

By |2017-09-14T07:28:36-04:00September 14th, 2017|Global Market Update|

What’s going on with inflation? Dallas Fed “Trimmed Mean” PCE, Year-Over-Year. Source: St. Louis Fed Figuring out inflation is like asking about ice cream: there are a million flavors and variations. The Consumer Price Index uses a fixed basket of some 40,000 prices, surveyed monthly. The Commerce Department determines a deflator that shifts as the economy shifts. If the price of beef doubles and everyone switches to chicken, the index takes changing consumer tastes into account. And then there’s core inflation, regional inflation, and [...]

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The Signal and the Noise (Part 5)

By |2017-07-17T12:21:17-04:00June 16th, 2017|Global Market Update|

So how do you decide? Photo: Sebastian Lühnsdorf. Source: Morguefile When a news event occurs, is it a new signal, or is it just noise? The European Central Bank is maintaining a negative inter-bank rate – is it signal or noise? The Consumer Price Index just came out flat from the month before – was that signal or noise? It’s tempting to label all these interim economic reports financial static. And a lot of them are. So much data comes at us from so [...]

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Alice and the White Queen

By |2017-07-17T12:21:17-04:00June 9th, 2017|Global Market Update|

Is the market trying to believe impossible things? Illustration: John Teniel. Source: Wikipedia A classic “children’s” book – that isn’t really for children – is Lewis Carrol’s Through the Looking Glass, his sequel to Alice in Wonderland. In the book, Alice and the White Queen have this exchange: “There’s no use trying,” Alice said. “One can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, [...]

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