Fee-Only Financial Planning in North Carolina

Contact Us at: (919) 228-6312

S&P500 and Industrial Production. Biggest gap ever.

The SPX has opened up a gap above industrial production -the economy- that is now exactly twice the previous largest spread.  These two data streams spend most of the time being close to one another. So either the economy is about to see its strongest growth in many years (while the dollar is extremely high in price and climbing higher thanks to rate hikes) […] Read the rest of this entry »

1929, 2000, 2007, now

With the S&P500 closing last week at 2259 (new all time highs), here’s how that’s valued…. Now -and throughout 2016, the S&P500 has been trading at the highest price to sales ever. The runner ups are 2007, 2000, 1929. All were launch points for the largest stock market crashes in the past 130+ years. The highest S&P500 cyclically adjusted P/E (CAPE for short) over […] 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 »

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 »

Next Fed & ECB sugar bombs

The Fed and ECB will get the most bank (sorry, I mean bang) for their buck if they wait until after the BEA’s overestimated GDP report on January 29, and the BLS overestimated January jobs report on February 5th. If I were pulling the levers, I’d have the ECB announce a 30B euro/month increase in QE in the second week of February.  This might […] Read the rest of this entry »

BEA GDP: The Big Lie

Since this morning has the BEA providing its 3rd estimate of Q3 real GDP growth, I thought it would be time again to shed some light on what the BEA has been doing for the past 15 years.  The BEA has been over-estimating real GDP growth by an average of 1.16% on their 3rd estimates of Q3 real GDP growth. This is based on their own […] Read the rest of this entry »

The Non Event

Yesterday the Fed announced its first interest rate hike since June 2006. Result: stocks soared. Yawn. Is that supposed to happen?  No, well, yes of course…..   Sorry for doing a Draghi.  The answer is yes — when there is this much at stake.  The Fed -and by extension the other major central banks- cannot afford to have the great unwashed (hold mirror up […] Read the rest of this entry »