How Have Real Personal Consumption Expenditures Declined Ahead Of Every Recession? Consumer spending drives the US economy. Historically, Real Personal Consumption Expenditures, which accounts for about 70% of GDP, decline before a recession. That’s not the case today. So, a recession may not be imminent in this late-cycle expansion.
“Hedge Funds Are Shorting the VIX at a Rate Never Seen Before” -Bloomberg This certainly won’t not end well. Why do we never learn some lessons and repeat the same mistakes? Image: Hedgeye Risk Management LLC
Why Do Eurozone Bond Investors Accept Zero Long-Term Interest Rates? Because they have a deflationary view of the euro area economy. Now, investors are losing so much money just by holding German bonds in real terms (adjusted for inflation). Today, the Germany 10-Year bond yield hits 0% again. Keep in mind that raising interest rates in…
China trade deal could spark a big rally, says Jeremy Siegel Jeremy Siegel is the Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania in Philadelphia. He comments on China trade talks and the effects on the stock market. He’s worry that the dollar has been very strong. https://www.youtube.com/watch?v=_7Y1id-I88I
Was the US Stock Market Crash on October 19, 1987, a “Black Swan” Event? A “Black Swan” is a metaphor that describes an event that comes as a surprise with a major effect, which is extremely difficult to predict. The theory was developed by Nassim Nicholas Taleb. The US stock market on October 19, 1987,…
Howard Marks on market’s record highs, potential risks Howard Marks speaks about market’s record highs and doesn’t see a lot of euphoria. However, we are in a Fed-induced bubble due to ultra low rates.
What are the Average Interest Rates for Fixed-Rate Mortgages Since the Great Recession? Keep in mind that mortgage lending is down, because there aren’t enough houses on the market to meet demand and the increase in rates does not help either since 2017. However, the decline in interest rates since the end of 2018, helps…
Why Buying Stocks At All-Time Highs Has Been Successful Over the Long Term? The S&P 500 hits all-time high. If history help us to predict the future, buying stocks at all-time highs has been successful over the long term. Image: LPL Research
Visualizing How Americans Spend Their Money The Consumer Expenditure Survey is a Bureau of Labor Statistics (BLS) survey that collects information on the buying habits of U.S. consumers. Image: howmuch.net
Does Berkshire Hathaway Still Have a Market-Beating Advantage Over the Long Run? We can ask ourselves if Berkshire Hathaway does still have a market-beating advantage over the long run, because Warren Buffett expects a very modest outperformance vs. the market over the next decade. But he can’t guarantee that, of course. Image: Financial Times
Can History Help Us Predict the Future of the S&P 500? When the S&P 500 hits all-time high and AAII Investor Sentiment Survey bulls is below 35%, then 88% of the time the S&P 500 is positive one year later (1986-2019). Image: SentimenTrader