Category: Economy

Fraud – A Sign of The Times

Fraud – A Sign of The Times

Fraud always spikes during frothy markets. If it feels like we are beating you over the head as it relates to Quality CEOs and CEO Integrity it is because we are. High Quality, High Integrity CEOs are the best preventive measure against getting burned by fraudulent companies. 2020 has delivered massive equity market valuation froth … Continue reading Fraud – A Sign of The Times

Muted GDP Will Force Investors to Become More Selective

Muted GDP Will Force Investors to Become More Selective

"There is nothing more permanent than a temporary government program" - Milton Friedman. First is was the financial crisis of 2008 that "forced" the Fed to perform unnatural acts. It was at this time that the Fed introduced Quantitative Easing ("QE"). QE was to be a "one-and-done" program. That program remains part of the Fed's … Continue reading Muted GDP Will Force Investors to Become More Selective

Poor Executive Management Must Be Held Accountable

Poor Executive Management Must Be Held Accountable

The airlines knowingly placed themselves between a rock and a hard place when they decided to gorge on cheap debt for the purpose of funding share buyback plans designed to boost executive compensation. The lack of financial wiggle room is of their own doing. It's time for the airlines to restructure, to shrink capacity to … Continue reading Poor Executive Management Must Be Held Accountable

A Nation in Decline: Total Federal Debt Is 136% of GDP

A Nation in Decline: Total Federal Debt Is 136% of GDP

U.S. policymakers have increasingly utilized debt to fund various spending initiatives without a thought as to the consequences (reminiscent of the last days of the Roman Empire). U.S. reserve currency status and endless monetary expansion have supported this debt addiction. At this rate U.S. reserve currency status is in jeopardy. The chart below depicts total … Continue reading A Nation in Decline: Total Federal Debt Is 136% of GDP

U.S. Debt to Reach 195% of GDP by 2050

U.S. Debt to Reach 195% of GDP by 2050

Icarus flew too close to the sun and the United States' fascination with debt may prove to be equally destructive. Yesterday the CBO published its long-term Debt-to-GDP estimates. Those figures show U.S. debt steadily increasing as a percentage of GDP ramping-up to 195% of GDP by 2050. If debt-funded stimulus, zero interest rates and expansionary … Continue reading U.S. Debt to Reach 195% of GDP by 2050

China Is Not Bullish On The U.S. Economy

China Is Not Bullish On The U.S. Economy

Mainland China is not bullish on the U.S. Economy. China's U.S. Treasury holdings have generally declined since 2013 from a peak of approximately $1.32 Trillion (Nov-2013) to $1.07 Trillion as of Jul-2020. Charts and graphs are at the article's end Both the U.S. and China have interventionist fiscal and monetary policy. The difference is that … Continue reading China Is Not Bullish On The U.S. Economy

The Tech Stock Speculation Era

The Tech Stock Speculation Era

When it comes to Technology stocks we are firmly in the Speculation Era. It is likely to stay that way for the near-term. October earnings calls may provide a bump in the road. Looming corporate tax increases will likely put an end to the bubble. The combination of Trump tax cuts and the recent fiscal … Continue reading The Tech Stock Speculation Era

Competing for Employees in the WFH Era

Competing for Employees in the WFH Era

Tickers mentioned: AAPL, AMZN, FB, GOOG, MSFT, VMW, TWTR Deep-pocketed companies such as Alphabet, Amazon, Apple, Facebook and Microsoft have a competitive advantage in the Talent War - especially during the Work-From-Home era. On that front, VMWare and Twitter just shot themselves in the foot. VMWare and Twitter said they will adjust compensation downward for … Continue reading Competing for Employees in the WFH Era

Equities Continue to Experience Fund Outflows as Technology Stocks Slide

Equities Continue to Experience Fund Outflows as Technology Stocks Slide

Equity funds continue to experience fund outflows as taxable bond funds enjoy fund inflows. (see table & chart below). A modicum of sanity has crept into the equity markets insofar as Technology names are concerned. High multiple growth names that were driven primarily by speculation and momentum have finally started to pull back over the … Continue reading Equities Continue to Experience Fund Outflows as Technology Stocks Slide