Blog Archives

What Is Top of Mind? Housing or Inflation?

Housing Inflation

The answer? See for yourself, is it inflation or housing or both?

If Google Trends are any indication then inflation has been a top-of-mind topic.

Inflation

CPI – Consumer Price Index

This is not surprising as one has to be a survivalist living far away from civilization and fully self-sufficient to have not been impacted by rising prices and slower delivery and service times.

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Labor Market Inflection Point

unemployment

Last week was my 34th anniversary at CWS. I have been so fortunate to have had the opportunity to work with so many wonderful people over all of these years and to be blessed with my amazing partners Steve and Mike.

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Keep your Eyes on the Road but Never Lose Sight of the Destination

Interest Rates Keep your Eyes on the Road

Investing has some parallels with driving. It’s important to have a destination that keeps you on course. I think of the destination as financial goals rooted in thoughtful consideration of powerful trends upon which to capitalize such that the wind can be put at your back while also being fully cognizant of what exposures you may have that can lead to a permanent loss of capital based on shorter-term issues arising.

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You Can't Divorce the Observer from the Observed

separating the observed from the observer

I keep focusing my blog posts on economic data via chart representation because we’re in one of those times that needs to be monitored closely for trend reversals (disinflation to inflation) and a change in the Fed’s reaction function (supporting Main Street vs Wall Street).

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Housing - No Bubble but Hitting a Wall?

no bubble housing

Given how hot the housing market is there are understandable concerns as to whether we are in a bubble. Bloomberg Businessweek had a good article addressing some of these concerns that included some interesting charts.

This first one shows how the cumulative appreciation over the last five years has matched that of the bubble years of 2002-7.

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D(ata)-Day

Data D(ata)

I have been turning to charts more regularly for my weekly blog posts than I have in the past. Like most people, I see many of the challenges and price pressures resulting from the massively disrupted global supply chain. It shows up in terribly unreliable contractors (I’m having a pool built so I am experiencing this first hand) and the significant increase in the cost of materials that are leading to the rationing of some goods like plywood and even chlorine.

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Transitioning to Transitory Inflation?

Transitory Inflation

The multi-trillion dollar question is whether inflation is transitory. The Fed and other central bankers believe it is as this chart depicts.

Fed Still Declaring Transitory Inflation Z-Scored Rolling 1-year Average 2000 - 2020

As I’ve written about before, the Fed’s reaction function has switched from a forecasting-based approach to one that is now outcomes-focused in terms of needing to see tangible improvements occurring on Main Street even if it leads to speculation and large rewards on Wall Street.

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Get A Grip

get a grip Gary Tennis

33 days after my heart surgery I resumed playing tennis. Of course, it was not at the same level or intensity as it was prior to my surgery but it was great to get back on the court nonetheless.

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A Muddled Approach to Guesstimating Libor's Next Peak

LIBOR Guesstimating Libor's Next Peak

Although I’m in the camp that the Fed will stick to its word and not raise short-term interest rates until after 2023 at the earliest, the market is betting differently. Rather than focusing on when the Fed will start raising rates, let’s assume that they will.

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Sayonara Bonds

Japanese Bond Treasuries

The first quarter was incredibly ugly for bond investors, particularly those with exposure to longer-maturity ones. Bond investors were not happy as Treasuries generated the worst quarterly return since 1980.

A Bad Quarter for Bonds - Bloomberg Barclays treasury index fell 4% 1973 - 2020

So who were the big sellers of Treasuries?

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