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December recession entry point

This week the CFNAI for September was posted. CFNAI is a national economic indicator from the Chicago Fed that is correlated to GDP growth. Here’s what the 3mo avg looks like -along with my forecast through year end….   Based on the CFNAI and other data, I suspect Q1 saw a small contraction in GDP, and Q3 saw a strong bounce back into positive growth. […] Read the rest of this entry »

What happens when the music stops?

Central banks have been stopping stock market crashes and crash initiations repeatedly over the past 18 years. You’re probably only aware of the crash of 2000-2003 and 2007-2009 –and that both were stopped by the biggest fiscal and monetary policy support actions ever.  My proprietary algorithms show there have been 9 major attempts and 3 minor attempts from the top 4 central banks to […] Read the rest of this entry »

How to run an economy

If you have not seen Richard Koo’s video about how banks and regulators acted in a previous existential crisis, you should.  It is very instructive. Here it is. Based on my observations over the past decade and Koo’s comments, here is my playbook for fiscal & monetary policy. I call it   How to run an economy.   Banks: Bankers should act responsibly. They […] Read the rest of this entry »

Ding

Four weeks ago when the SPX was flirting with 2100 I began putting an ad together for my market timing newsletter service.  It ran May 8th in the local paper and was a half page ad. I thought it was provocative.  Here it is …  I see no reason to change my view.

CFNAI: U.S. Recession 2-3 months away

First, the punchline: a case is slowly being built for the U.S. economy to begin contracting in July. This of course supposes there are no new central bank sugar bombs to delay things. We’ll see. The Chicago Fed National Activity Index (CFNAI) captures data from 85 inputs spanning the national economy and including income, employment, consumption, housing, sales, orders, and inventories. It’s a monthly […] Read the rest of this entry »

SPX CAPE at 27. Should we heed the warning this time? Yes.

The cyclically adjusted price-earnings ratio (CAPE) is an input parameter to the Greedometer® because it is a reasonable indicator of whether current stock prices are expensive or cheap.  On it’s own, the CAPE is not terribly useful as a market timing tool because the value may remain high for prolonged periods. Over the past century, the S&P500 rarely had a CAPE of 25 or […] Read the rest of this entry »

Client Letter. Don’t Panic. Profit.

This morning I sent this letter to my asset management clients….       Hello folks. The next few weeks are going to be unnerving to a lot of investors (not us though).  There are going to be days with very ugly market headlines.  Let me take this opportunity to remind you that we’re up almost 6% year to date and it’s been as […] Read the rest of this entry »

Horse meets water

Despite my efforts to engage with equity fund managers and convince them of the dire situation in global equities, I continue to be amazed at the garbage put out as research from long-only fund mgmt companies.  Guess what?  The future is bright and it’s a good time to buy my equity fund because prices have pulled back.  Never mind that they’re going to fall […] Read the rest of this entry »

2011 Deja Vu

When was the last time the SPX was flirting with a 20% drop –as it likely will be in the next 1-2 weeks? Answer: August 2011. Before that happened, I put this ad in the Wall St Journal on July 25th 2011. Let’s rewind to April & May 2011. I tried every news organization that mattered (and some that didn’t) to run a story […] Read the rest of this entry »

What crash?

The last time the Greedometer and mini Greedometer were showing similar readings to what they were 1 week ago (before last week’s stock market drop) was the week ending August 14 2015.  On Aug 18 2015 at 9:30am I posted this warning:  here The SPX was in free fall for 2 weeks and had to be stopped by NY Fed Prez Dudley. Granted we […] Read the rest of this entry »