The Fed and the Phillips Curve

According to Wikipedia, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation.  Theoretically, reductions in the unemployment rate should cause prospective employers to offer higher wages which, under some circumstances, can have an inflationary effect. Clearly, the Fed looks at a wide range of metrics in determining … Continued

The UAW’s Dilemma

The UAW and the Detroit based auto manufacturers are currently in the process of negotiating a new four year agreement. UAW members generally resent the two tier wage system and long-time employees feel that they have been left behind as the industry recovers from the bailout/bankruptcy era.  It should be noted that UAW auto workers … Continued

Pick Your Poison

I was recently having a conversation about the capital markets with an attorney friend (non-client) who is exceptionally risk averse.  Plain and simple, he intimated that he just could not stomach the constant ups and downs of stock prices and the potential for loss of principal.  He is not unusual in this respect.  Many, if not … Continued

Should You Use Your Home as an ATM?

Here we go again.  According to Black Knight Financial Services, cash-out residential refinances jumped 68% in the second quarter from a year ago, the highest volume of this type of refinancing in five years. As home values increase, homeowners are seeing paper increases in equity, which, when combined with unusually low mortgage rates, creates an … Continued

Walter, You’re Right and I Raise You One

My colleague Walter Kirchberger wrote a very compelling blog on the impact of competent leadership for an organization and cited one of the two premiere college football teams in the state of Michigan in his comments.  His commingling of sports and business when speaking of leadership was not unique.  In many business management books, pages … Continued

Management Matters

While athletics and business are not completely synonymous, both tend to require effective leadership.  Witness the University of Michigan football team.  A once great power had clearly fallen on hard times and the prospects for the 2015 season were not generally considered to be much better.  At this writing the team is ranked 12th or … Continued

The New Normal?

Over the last several months we have seen substantial short term volatility in the major market averages, but on a year-to-date basis, very little net change.  Commodity prices have been under pressure, interest rates have remained at historically low levels and unemployment data, while appearing to be positive, has not resulted in any significant increase … Continued

Fed Watching – The Employment Debate

Speculation regarding the Fed’s next meeting and the possibility of higher interest rates remains at the forefront of financial news reporting. As a reminder, the Fed’s three key objectives are: maximum employment, stable prices and moderate long-term interest rates.  The first two objectives are often referred to as the Fed’s dual mandate. Currently, there is … Continued

Someone Likes Every Shot

This is an old adage, generally applicable to golf, in that if you have a good shot, you like it, if you have a bad shot, your opponent likes it. This concept tends to be just as true away from the game of golf.  For example, lower oil prices are good for motorists and other … Continued


These three words, while all different, are all applicable to the near term outlook for the stock and bond markets.  It seems that the equity markets are being buffeted by more frequent and larger percentage changes than in recent memory.  Commodity prices have sustained large price changes with major declines in the price of oil … Continued

The Fed’s Interest Rate Decision

In his blog on Fed watching, my colleague Walter does an excellent job of explaining and summarizing the Fed’s reasons for not raising interest rates last week.  Many market participants seem frustrated by the lack of action by the Fed.  Admittedly, as the Fed continues down the road less traveled, the lack of an interest … Continued

Fed Watching – A Follow-up

The comments below are a follow-up to our blog of September 1, 2015. At the recent September meeting the Fed chose to not raise interest rates and provided guidance that might suggest that a rate increase may be a little further down the road than previously thought. In remarks following the Fed meeting, Chairman Yellen … Continued