Week of February 19, 2024 The January 2024 PPI and CPI both came in hotter than expected, and the CPI gains were led by the 6% rise in shelter costs.  Paradoxically, the rise in interest rates engineered by the Fed to quell inflationary pressures, had the opposite effect as higher interest costs on mortgages of … Continued

According to Wikipedia, this is an aphorism which means insistence on perfection often prevents the implementation of good improvements.  It might seem that the administration’s pause on approvals of new LNG exporting projects, if not eventually withdrawn, may prove to be a good example of this. The pause, implemented under pressure from the climate lobby, … Continued

Week of February 12, 2024 We have changed our China Signal from Yellow to Red. The Shanghai Composite stock index is down by about 50% over the last three years. Geopolitical Futures, a global forecasting service, recently wrote that “Beijing will have to address … a much more potent challenge that affects its long-term economic … Continued

In light of the heightened interest in threats to international navigation, you might be interested in our blog “Freedom of the Seas” from May 2013. All comments and suggestions are welcome. Tamika Hall & Walter Kirchberger, CFA

Week of February 5, 2024 As US encounters with Iranian proxy militias – Hamas, Yemeni Houthis, and Hezbollah to name a few – have become more frequent, so too has the likelihood of a direct conflict with Iran, something the Biden Administration is trying to avoid.  The Houthis have made it more difficult and much more … Continued

The issue of how to find and encourage enough potential workers to actively seek employment, as part of an effort to reduce the historically unusual number of job vacancies, appears to be gaining traction in Washington.  We have previously commented on the problem of the below average labor force participation rate, most recently in our … Continued

Week of January 29, 2024 In an effort of self-assessment, we note that our “out-of-the-mainstream” yellow Signal characterization of the US economy has proven accurate as fourth-quarter US GDP showed a respectable 3.3% gain.  But, in late September we thought valuations on the SP500 were starting to look rich, moving from green to yellow and … Continued

Week of January 22, 2024 On a recent stay in Pasadena for the Rose Bowl college football classic, I endeavored to find a way to block out the New Year’s Day midnight firecrackers while staying at the hotel. I noted a new feature on the sleep app on my iPhone that provided a “brown noise” … Continued

PITI (principal, interest, taxes and insurance).  These four outlays, together with the down payment, constitute the key financial components of buying residential or commercial real estate.  Over the last several years, these costs have seen significant increases, making homeownership less affordable for more Americans. However, there may be some relief in sight for new buyers, … Continued

Week of January 16, 2024 Tensions are heating up in the Middle East again as the US and Britain recently joined forces to dissuade Yemeni Houthi’s from interfering with commercial shipping in the Red Sea. In an historical parallel decades ago, Ronald Reagan flexed muscle by staging a military intervention in Libya that quickly changed … Continued

According to a recent report published by S&P Global Commodity Insights, the US is currently producing more oil than any country in history. This spike in US output has been driven by smarter and more efficient operations in the oil industry.  Part of the gain is due to the industry’s ability to squeeze more oil out … Continued

Week of January 8, 2024 The pause that refreshes?  So it appears from the price action in the capital markets last week.  There were a few sideshow New Years fireworks largely on the political stage (Trump on the ballot?; Unemployed Ivy League college Presidents) but, otherwise, a quiet week.  Our Signals remain unchanged. Bob Bilkie, … Continued