Retail investors are in love with dividends more than they should be with significant fan followings and discussion forums online dedicated to the worship of dividend stocks. Clearly, dividends are seen as important because public companies love to brag about how consistent their dividend payments have been and how much they’ve raised them. Dividends are
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The Fed funds rate is a hotly debated topic because it’s the main policy tool the Fed uses. There is economic data which can be interpreted to support every argument. Furthermore, after the metrics are taken into account, the goals are subject to interpretation. Just because the core inflation rate goes above 2%, doesn’t mean
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President Trump deserves applause for boosting the prospects for this county’s forgotten manufacturing workers, notably in steel and aluminum. Democrats lately have neglected these Americans. Hillary Clinton barely campaigned among them in Michigan in fall 2016, and she thoroughly ignored them in Wisconsin. Alas, Trump is doing this all wrong. He likely will hurt the very
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President Donald Trump announced last week that he plans on slapping a 25 percent tariff on steel and a 10 percent tariff on aluminum. Everyone seemingly lost their minds in response. Republicans and Democrats, conservatives and liberals, and the mainstream media all had the same reaction: they universally opposed it. Where’s the other side to
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In the financial media, it’s easy to see what the economists and analysts think about the current economy because usually they propose more of the same when asked about the future. It’s simple to extend the current trend indefinitely, but that’s not always a good idea, nor is it realistic. Even during economic expansions, there
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The purpose of this article is to objectively examine trade policy and its impact on the economy. While there will be discussion of government policy, our review is not negatively nor positively inclined towards any particular administration. During the presidential campaign trail, then Candidate Trump stated that he’d renegotiate trade deals to stop other countries
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One of the biggest generational differences which causes a disconnect between baby boomers and millennials is student debt. Many baby boomers are confused why college graduates don’t immediately move out of their parents’ house like baby boomers did. The issue is that once a student graduates, they become debtors. It’s a vicious cycle which turns
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Investors are trying to get a reading on where inflation will go in the next 12 months because it’s a key variable for forecasting asset prices and the Fed funds rate. As you can see from the chart below, the year over year core CPI will hit near 2.5% in late 2018 if the month
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According to the usual news sources, Donald Trump’s new budget proposal “envisions steep cuts to America’s social safety net” and will “gut social programs.” Most of the cuts were proposed to pave the way for more Pentagon spending. In truth, Trump’s proposal doesn’t matter, and Congress will set to work piling on more deficit spending for both social
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We’re going to dedicate another article to re-discovering the relationship between the 10 year bond and the stock market. With bond yields skyrocketing in the 4th quarter of 2017 and the first 2 months of 2018, it’s more important now than ever to understand the relationship. The confusing aspect, which started during the correction in
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Some analysts speculated if the Fed would try to keep rates low to support the government’s spending binge. However, instead of worrying about the debt, the $400 billion spending plan and the tax cuts are being used as an excuse to raise interest rates and let the government bonds on the Fed’s balance sheet expire.
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With the first stock market correction in over a year, having occurred in early February, there were many media narratives about what caused the selloff. We think it was driven by the unwind of the short VIX trade. Buying protection wasn’t considered important with the VIX at record lows in 2017. However, when nobody thinks
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We’ve discussed the price to income ratio of housing in a previous article. This gave us an idea of how expensive housing has become. We’ll discuss some of best points why real estate is too expensive and then provide the counterpoint explaining why housing isn’t in a bubble.
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In January, the ECB tapered its bond buying from €60 billion per month to €30 billion per month. Equally as important, the central bank is expected to stop its bond buying completely by September 2018. European economic growth has accelerated recently, but it’s unclear how much the economy was helped by the QE and how
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Thanks to the Tax Cuts and Jobs Act, Republicans are on a roll. So, why is President Donald Trump praising a gas-tax hike to finance his infrastructure plan? Despite House Democrat leader Nancy Pelosi’s complaints that the GOP tax-rate reductions are “Armageddon, “crumbs,” and — as of Tuesday — “unpatriotic,” Americans are growing fond of tax reform. Tax-relief promises
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Siemens CEO Joe Kaeser believes that President Trump’s tax overhaul could bring positive changes to the country, particularly for the job sector. Kaeser asserts that more jobs will be created from the tax cuts due to companies having more money to spend on innovation and expansion. “That’s why I’ve been congratulating the American president for
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There’s plenty to hate about last week’s GOP surrender on the federal budget. According to Citizens Against Government Waste, this nearly $300 billion extravaganza is “a 14 percent annual spending increase over current levels.” This exceeds 2017’s 2.1 percent inflation rate nearly seven-fold. Even worse, this spend-o-rama avoids structural reforms to limit, or even reverse, the
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President Trump’s long-awaited infrastructure plan requires selling off federal government interests in the two main Washington, DC, area airports. Ronald Reagan Washington National and Dulles International airports have been targeted for potential divestiture under the plan released Monday. “The Federal Government owns and operates certain infrastructure that would be more appropriately owned by State, local,
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The drama and tension surrounding the future of healthcare in the United States give House of Cards a run for its money. To say that the Affordable Care Act (ACA, nicknamed Obamacare) is falling apart would be a great understatement. Like many issues facing our country, the disaster that is the ACA is a clear
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The government shutdown wasn’t long enough to delay the nomination hearing for an economist who could be considered to be one of the “worst Fed nominees of all time.” While most of the headlines generated from Marvin Goodfriend’s testimony before the Senate today focused on the grilling he received from Senate Dems, there is one curious part of
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In 1962, the first version of Spacewar! was completed. Technically, this wasn’t the first video game ever created, but it was probably the first one that really mattered, as it serves as the beginning of the long line of advances in video game technology that continues into the present day. The invention of the game is generally
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Earlier this week, the LA Times reminded its readers that California has the highest poverty rate in the nation. Specifically, when using the Census Bureau’s most recent” Supplemental Poverty Measure” (SPM), California clocks in with a poverty rate of 20 percent, which places it as worst in the nation. To be sure, California is running quite closely with
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On December 19, an Amtrak train in Washington State killed three people and injured 100 others when it derailed and crashed into traffic lanes on a nearby highway. The day before, Atlanta’s international airport suffered a disastrous power outage: the whole airport, the world’s busiest, went dark for 11 hours. Thousands of flights were disrupted. For
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There are a plethora of reasons why education in America is mediocre. We can argue that teacher unions care more about personal benefits than teaching kids, that the information taught in America is far less advanced than the information taught in other nations, or even that America is not fostering a culture where the youth
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It was a little over a year ago that I wrote my first article for the Liberty Conservative, “The Authors of Prosperity.” Published on the 20th of November, 2016, it expounds on the promise of then-candidate Donald Trump’s intent to slash taxes for individuals, couples, and businesses, and in so doing, usher in an epoch
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There are many ways to measure market cycles and the business cycle, however economics is not an exact science. One of the methods that can be used alongside measuring of the yield curve is the output gap. The output gap is the difference between actual and potential economic production. It allows economists and investors to
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If there is anything that gets demagogic politicians and pundits riled up, it’s the closing of tax loopholes, and the tax-hike demagogues might just be getting one of their wishes come December. Bloomberg reports that most online consumers will pay sales taxes in some shape or form in the next few months. Currently, consumers pay
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Former Lieutenant Governor Betsy McCaughey (R – New York) has discovered the formula for delivering a 20 percent corporate-tax rate in 2018 — as the U.S. House wishes — not 2019, as the Senate voted, thus flirting with GOP political suicide. McCaughey, a senior fellow with the London Center for Policy Research (as am I), offered a delightfully simple plan in Wednesday’s New York
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Yesterday Donald Trump nominated Marvin Goodfriend to the Federal Reserve Board of Governors, one of the numerous vacanciesthat have emerged over the course of the past year. While his prior nominations of Jay Powell as Chairman and Randal Quarles as Vice Chair represented a disappointing commitment to the status quo, his selection of Goodfriend is a
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The tax “reform” currently being discussed in Washington is mostly a political exercise for politicians who can use the process to extract more campaign contributions from supporters, and punish non-supporters. The actual tax burden imposed on Americans overall will change little. The proposed elimination of the deduction for state and local taxes (SALT) is an excellent
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Washington, DC is currently in the middle of a the “tax reform” process, which as Jeff Deist, points out, is ” a con, and a shell game.” Tax reform proposals, Deist continues “always evade and obscure the real issue, which is the total cost — financial, compliance, and human — taxes impose on society.” Tax reform is really about which interest
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In the end Donald Trump gets what he wanted, a “low interest rate person” who also happens to be a “Republican.” Jerome Powell will replace Janet Yellen. This means Trump will ensure that, while the stationary at the Eccles Building will change, the monetary policy guiding it likely will not. The fact that, in naming Powell, Trump is picking an
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One of the most devastating consequences of the Obama Administration has been that Americans who don’t have the luxury of large bank accounts are continuing to be treated like second-class citizens by the US financial system. The Wall Street Journal this week offered another example this week in an article noting that banks are now paying higher interest
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In a 2011 piece for the New York Times, leftist billionaire Warren Buffett claimed that investment managers are getting “extraordinary tax breaks,” due to the classification of income from managing others’ money as “capital gains.” “Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as ‘carried
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Recently, Russia announced that it will be unleashing a CryptoRuble, just a week after Vladimir Putin strongly criticized Bitcoin and other private cryptocurrencies. When announcing the move, Minister of Communications Nikolay Nikiforov acknowledged that it was in part inspired by the aim of getting ahead of other governments: I confidently declare that we run CryptoRuble for one simple
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Gary Cohn, chief economic adviser to the President, voiced concern over the weekend about risk posed by Wall Street clearinghouses that became systemically important following the 2008 financial crisis.
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Earnings are the biggest driver of stock prices and valuation. This doesn’t imply companies are the sole determinants of their stock prices. Issues like geopolitics, the weather, and the economy get filed under systematic risk factors. These are the factors that are talked about in the news so much because they apply to all companies.
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The biggest winner of the Trump presidency is also the most surprising: Federal Reserve Chairman Janet Yellen. After all, Yellen was a constant target for criticism by Candidate Trump, going so far as to accuse her of being “more political than Hillary Clinton.” Beyond Mr. Trump’s barbed rhetoric, pundits such as Paul Krugman predicted that Trump’s
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The twelfth conference of the Property and Freedom Society took place last month, in the usual place and with the usual enjoyments. The Hotel Karia Princess was about the same as ever, and I believe I was put up in the same room as last year. Bodrum itself was somewhat busier than last year, which
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Valuation is the method of determining what an asset is worth. The price, on any given day of a stock, is how the market is valuing that asset. Your ability to look at various metrics when coming up with a valuation will determine if you can do a better job than the market at determining
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Federal Reserve Chair Janet Yellen this week cast doubt on the Fed’s announced plan to continue Fed rate hikes and reverse its years of “unconventional” monetary policy. “My colleagues and I may have misjudged the strength of the labor market,” Yellen announced on Tuesday, adding that they’d also misjudged “the degree to which longer-run inflation
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For five years, billionaire hedge fund manager Bill Ackman has attempted to bring Herbalife, a global nutrition and weight management company, to the brink of financial ruin—all for his personal financial gain. Fortune reported that, back in 2012, Ackman’s Pershing Square Capital Management took a $1 billion short position in Herbalife’s stock, expressing his belief
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As with seemingly every election cycle, tax reform is a hot topic, as though a carrot that dangles in front of the horse. Whether you’re in favor of larger or smaller taxes, its a discussion that is important to have. The goal of this preliminary tax discussion is to separate the narrative from the reality. With
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Almost two weeks have passed since Hurricane Irma made landfall in South Florida, yet tens of thousands remain without power. With temperatures regularly eclipsing over 90 degrees, these outages are not only a grave inconvenience for Floridians cleaning up after the storm, but have proved to be deadly. Given the power of Irma, it is
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In the wake of hurricane Harvey, disaster experts were shocked by how few deaths resulted from the storm: ““It was astounding that we didn’t have a much larger loss of life,” said Phil Bedient, co-director of a Rice University effort to research severe storms and evacuations. A recent count puts total storm-related deaths at 82,
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Under the Consumer Financial Protection Bureau’s (CFPB) new rule, private companies would be banned from fully utilizing mandatory arbitration clauses. Pertaining mainly to financial products such as credit cards and bank accounts, these clauses currently prevent consumers from joining together in class action lawsuits to sue their banks. While the rule wouldn’t ban these clauses
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We’ve long been told that gentrification is the scourge of many communities, and we’ve become very familiar with the scenario: a stable middle-class community is destroyed when wealthy (usually white) people move in, drive up home prices, and force out the “diverse” population that had been there previously. There are problems with this narrative of
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A few weeks ago, Maine Governor Paul LePage signed a Food Sovereignty Bill into law, guaranteeing the rights of Maine towns to regulate food production locally, rather than submitting to federal regulation. Although the press is avoiding describing the bill as such, this is a nullification of federal food regulations. The movement for food sovereignty
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Today Stanley Fischer submitted his letter of resignation from the Federal Reserve’s Board of Governors, effective next month, the second such resignation of Donald Trump’s presidency. While Fischer’s term as Vice Chairman of the Fed was set to end next year, he had the ability to serve as a governor through 2020. Along with Trump’s
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Baseball may still identify as America’s pastime, but every year consumers prove that football is the country’s true love. In fact, the intertwining of national identity and the NFL can often be troublesome, such as when the Pentagon pays the league to promote the military — or the large subsidies governments grant to help billionaires
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