Interest Rate Head Fakes

We have seen significant sell-off in the bond market over the past few weeks as the markets try to get their arms around future Fed actions.  These sharp moves in yields can cause one to be uneasy about what could happen.  The fear is that interest rates project upward causing large losses in bond portfolios.  … Continued

Interest Rates as a Shock Absorber

The US Federal Reserve Board (Fed), headed by Chair Janet Yellen, significantly influences interest rates in the US.  As the economy has steadily improved over the past several quarters, the Fed has been signaling that interest rates would be allowed to rise.  That is, until Gross Domestic Product statistics were released several weeks ago.  The … Continued

It Is Important to Understand Cycles

Recently, The Wall Street Journal published an excerpt by John Steinbeck, who wrote about California’s Salinas Valley, where he grew up, in the novel “East of Eden” (1952). “I have spoken of the rich years when rainfall was plentiful.  But there were dry years too, and then they put terror on the valley.  The water … Continued

Things Change

From Time Magazine, June 24, 1974: “As they review the bizarre and unpredictable weather pattern of the past several years, a growing number of scientists are beginning to suspect that many seemingly contradictory meteorological fluctuations are actually part of a global climate upheaval.  However widely the weather varies from place to place and time to … Continued

Consumer Sentiment Increasing Higher Than Expected

The University of Michigan recently reported its consumer sentiment survey numbers.  They were the second highest level since 2007, only below the January 2015 level.  This survey asks people questions about their current financial situation and how they feel it will change over the next twelve months, along with questions about their feelings on the … Continued

The Greek Dilemma

The problem, in short, is that Greece cannot meet its financial obligations in a timely manner and, perhaps, not at all.  Negotiations with Greece’s creditors are at an impasse and both sides are engaged in a high stakes game of chicken. Neil Irwin, a senior economic correspondent of The New York Times, recently commented on … Continued

Financial Tips for New Parents

Starting a family is a huge time and financial commitment.  The greatest gifts you can give your children are love, a happy and safe home, and security.  We all strive for financial security and to achieve that goal requires diligence, planning, and common sense.   Obviously, the earlier you start planning the greater chance for success … Continued

Managing Fluctuation

Fluctuation is the norm.  Markets fluctuate.  Rainfall fluctuates.  Tax collections fluctuate.  Fluctuation is real but can be managed if recognized and dealt with in a disciplined manner. It is obvious that discipline is the problem.  Many public sector pension funds are still distributing so called “13th checks”, reflecting the manager’s willingness to distribute the results … Continued

S&P 500 First Quarter Earnings Decline?

Consensus estimates for first quarter 2015 S&P 500 earnings suggest that we are likely to experience the first negative quarter since 2009.  Price/earnings ratios are often material in projecting future stock prices.  Should we be worried? Perhaps, but the outlook over the next 12 months may be more encouraging, and many investors put more weight … Continued


On April 8, 2015, Stratfor, a geopolitical research institution, reported the April 7th dispatch of the U.S. State Department Counselor, Dr. Thomas A. Shannon, Jr., to Caracas, Venezuela, following Venezuelan President, Nicolas Maduro’s public request for a meeting between ambassadors of the two countries. This meeting directly preceded the Seventh Summit of the Americas, hosted … Continued

Whiskey’s for Drinking, Water’s for Fighting

Generally attributed to Mark Twain, this is just as true to day as it was in the 1800s.  Consider California and its increasingly onerous restrictions on water usage. Water is an essential ingredient of life, and businesses require reliable and economic supplies of water in order to operate. California’s apparent inability to effectively manage its … Continued

Assumptions: Fact or Fancy?

Merriam Webster defines assumption as follows:  “when planning, a fact or statement taken for granted.”  My major in college was economics, but if you had told me it would be my major as a college freshman I would have scoffed.  In my first economics class, Macro-Economics 101, I was disturbed that every formula contained one … Continued