Blog Archives

Interest Rates: Lower for How Much Longer?

variable interest rates

“We’re not thinking about raising rates — 

we’re not even thinking about thinking about raising rates,” 

Jerome Powell during 6/10/20 press conference

With interest rates at record lows, this is a time when many people are strongly considering locking in long-term,

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The Positives of Being Negative

LIBOR Variable Interest Rates F

Ok, let’s get this out of the way first since this blog has a subliminal purpose of being a diary for major economic and financial milestones so this is one I can’t ignore.

April Unemployment Rate Rose to a Record 14.7 2020

Now to the subject at hand.

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Where Do We Go from Here?

stay at home

As states start to open up, economic activity will undoubtedly increase. The S&P 500 is up approximately 26% from its March 23rd low, perhaps suggesting the worst is behind us for now. Of course, the question on everyone’s mind is whether there will be a second wave as more people congregate at work,

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O(y) IL VEY

oil vey

Yet again we have witnessed something unprecedented. As the following two charts show, we have never had negative oil prices until last week. Oil has never been cheaper on an inflation-adjusted basis than it is today.

Cost of a barrel of oil in nominal terms 1870 - 2020

Cost of a barrel of oil in real USD terms 1870 - 2020

Source: Marketwatch

And while under “normal” circumstances this would be great for the consumer,

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I Have Nothing To Add

Warren Buffett Charlie Munger I have nothing to add

Charlie Munger can be extremely loquacious as he is one who loves to pontificate and definitely has something to say. He also knows when to stay quiet. When he and Warren Buffett hold court at Berkshire Hathaway’s annual meeting and a question is asked of Buffett and after answering it he turns to Charlie and asks him if he has anything to add.

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Follow the Herd: Why COVID19 End Game Needs Herd Immunity

Herd COVID_19

I’m not one to typically advocate following the herd but in the case of the coronavirus, I am having a hard time seeing an end game that doesn’t have herd immunity as the ultimate goal. And this could take a long time and lead to a lengthier economic contraction (to put it mildly) and even more massive federal intervention through government spending and Federal Reserve support of financial markets.

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A Leap Over Normality - Our New Abnormal

COVID-19 Abnormal

Last week was a crazy week preparing for rent collections this week as well as going through in great detail the safety precautions we are taking to do our best to keep our employees and residents safe. That is why this blog is shorter than normal.

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This Ain't No Party. This Ain't No Disco. This Ain't No Fooling Around

Quarantine

The title of this blog is from the Talking Heads song Life During Wartime. Maybe I should have called it Life During Quarantine instead but we are definitely on a wartime footing. If you don’t think so then maybe these charts might help convince you as financial markets are the most real-time indicator of investor sentiment and discounting the future to ascertain how investors react to key events.

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Seeing Victoria Falls while the World Is Going Over the Financial Falls

Gary Carmell Rainbow Victoria Falls

My international travels were scheduled to come to an end yesterday. I’m writing this prior to my arrival and assuming that there will be no delays in my return. It was a packed adventure that ended in Israel after visiting Dubai, Abu Dhabi, and Zambia via Lusaka,

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In Zambia Honoring Roneet With an Agricultural Training Center

Zambia Gary Carmell

Overnight, The Saudis decided to ignite a price war which was the catalyst for oil prices crashing, stock futures imploding, and bond yields going through the floor, as reported by Bloomberg, Sunday, March 8, 2020. This was on top of last weeks dramatic drop in interest rates as exemplified by the 10-year Treasury yield dropping below 0.5% for the first time and 30-day Libor collapsing to below 1%,

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