I’ve been struggling lately to get a feel for what the market participants are focusing on. Sometimes it’s easy to see the theme, other times it’s not.
Over the weekend I went through every link on my links page (now called
June 02, 2021
We find it surprising that so many people trust what the Fed says about the economy. They have had a less than stellar track record at both predicting the recession and the severity of that recession, yet for some reason the markets continue to have faith in both their ability
“Stocks are more attractive than bonds.”
The S&P 500 dividend yield is 2.03% compared to the 10-Year Treasury Yield of 1.51%.
This type of comparison drives me crazy. Stocks & bonds are completely different investments with completely different characteristics and roles in
Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when&
GDP = G + C + I + X – M
That’s the model we were all taught in school. What can we learn about today’s economy from this simple equation?
Our economic growth model essentially comes down to:
Government Spending + Consumer Spending + Investment