The Case for Negative-Yielding Debt

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The idea that you can make a case for negative-yielding debt would seem to be counterintuitive at best and irrational at worst.  Never-the-less, there are some rational reasons for an investment decision that seems to defy logic. Perhaps the primary value of negative-yielding debt is safety.  The typical investor might conclude that a federally insured … Continued

The Housing Pinch

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Two recent headlines summarize some of today’s housing issues:  1. Big company owners of single-family homes are raising rents at the fastest rate since the last decade’s foreclosure crisis, and 2. First-time home sales currently account for the lowest market share since 1987. Corporate landlords that own single family homes are raising rents at the fastest … Continued

Markets Go Up?

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According to Investopedia, “all stocks around the world tend to rise in the long term.”  They cite as evidence the performance of major common stock averages for a wide range of developed countries over the last 100 years.  For example, selected data for U.S. markets point to a 10.2% average return for the S&P 500 … Continued

Jobs!

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Nearly everyone agrees that job growth is essential to economic progress.  Those who want something, from voters (votes) and/or government (tax breaks and other subsidies), tend to buttress their arguments with the promise of new jobs. Be careful, new jobs aren’t always “net” new jobs. Investors and taxpayers might want to take a closer look … Continued

The Minimum Wage Debate

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A minimum wage is the lowest remuneration that employers can legally pay workers, a concept that remains controversial.  Proponents tend to argue that increasing the minimum wage reduces poverty, while opponents believe that increases in the minimum wage reduce employment opportunities. This debate continues and is unlikely to be resolved.  The federal minimum wage of … Continued

Demand Begets Demand

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This concept was the basis for the statement “a rising tide lifts all boats” which, according to Wikipedia, is the idea that an improving economy will benefit all participants, and that economic policy, particularly government economic policy, should focus on broad economic efforts. The phrase is commonly attributed to John F. Kennedy, who used it … Continued

Avoiding Risk is Not a Proper Strategy

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The day after the election, the S&P 500 index rallied about 2.2%.  If you had $100,000 invested in the S&P 500 index, your portfolio would have appreciated $2,200 on that day.  On the other hand, the yield for a current 5-year brokerage CD is 0.5%. If you invest $100,000 in this CD, the total return … Continued

We Have A Population Problem

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In our blog of 9 Oct 2020, (Productivity: The Key to Economic Growth), we commented on the importance of productivity, defined as economic benefit per worker.  Historically, the U.S. has done a relatively good job regarding productivity.  Moreover the increasing adoption of direct human/robotic interaction, as discussed in our blog of 15 Oct 2020, (Cobots), … Continued

Shovel Ready Meets NIMBY

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It is generally accepted that the U.S. has a significant infrastructure problem.  Addressing this problem has the potential to provide a significant number of jobs and be an important part of an economic recovery.  Politicians on both sides of the aisle have periodically called for supporting infrastructure projects, particularly those that are “shovel ready”.  Investopedia … Continued

When They Make It, Will We Take It

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It is clear that the world is racing to develop coronavirus vaccines.  While pinpointing a date is speculative, it is likely that substantial progress, and perhaps FDA approval, will come during the first half of 2021, with widespread availability before the end of 2021.  The big unknown is, to what extent people will step up … Continued

Herd Immunity

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As the world struggles to identify potential solutions to Covid-19, herd immunity appears to be the most promising opportunity to mitigate some of the worst effects of the pandemic.  According to Wikipedia, “herd immunity is a form of indirect protection from infectious disease that occurs when a large percentage of a population has become immune … Continued