Commentary

Not Locking Down

A resurgence of new Coronavirus cases around the country has created uncertainty for investors. Stock markets fell last week, not because of the virus, but because investors fear another round of economy-killing, government-mandated lockdowns. We don't expect that to happen, but when the government is involved, risks are definitely higher.

Commentary

Saving and the Shutdown

Turning off the global economic light-switch, and then turning it partially back on, has sent shockwaves through economic data that, while anticipated, have been jaw-dropping in both directions.

Commentary

The Fed is Committed to Low Rates

The one key takeaway from last week's Fed meeting is that monetary policymakers are set to keep short-term interest rates near zero for as far as the eye can see. Not forever, but at least until 2023. Keep this in mind in the week ahead, as we get more reports confirming the economic recovery started back in May.

Commentary

Loose and Staying Loose

The most important takeaway from today's Fed meeting is that policymakers don't expect to raise short-term interest rates until at least 2023.

Commentary

The Recession is Over

The recession that started in March is the sharpest downturn since the Great Depression. As it turns out, it was also the shortest.

Commentary

More Green Shoots

A full recovery from the COVID-19/Shutdown Crisis is going to take a long time. We don't anticipate reaching a new peak for real GDP until the end of 2021; we don't anticipate a 4% unemployment rate until 2024.

Commentary

Signs of Economic Life

This year's experiment with government-imposed lockdowns has been a fiasco. We should have been focused on sealing-off nursing homes and limiting mass indoor events, while the vast majority of businesses that were shutdown could have kept operating, with natural social distancing.

Commentary

Miscalculating Risk: Confusing Scary With Dangerous

The coronavirus kills, everyone knows it. But this isn't the first deadly virus the world has seen, so what happened? Why did we react the way we did? One answer is that this is the first social media pandemic. News and narratives travel in real-time right into our hands.

Commentary

How Are We Going To Pay For All This?

The largest federal budget deficit since World War II came back in 2009, as slower growth and increased government spending during the subprime-mortgage financial panic pushed the deficit to 9.8% of GDP. This year's the budget deficit will, quite simply, blow that record out of the water.

Commentary

S&P 3100, Dow 25750

In December 2018 with the S&P 500 at 2,500, we forecast it would hit 3,100 by the end of 2019 and then pushed our forecast to 3,250 as stocks soared. The S&P 500 rose 28.9% in 2019 and hit that revised target on the first day of trading in 2020.

Commentary

QE Infinity and Beyond

The Federal Reserve has been extremely aggressive since the Coronavirus and related shutdowns hit the US economy and made it clear today that it will continue to be so until the US economy has gotten back on its feet.

Commentary

GDP: Bad, And Getting Worse

Before the Coronavirus, the US economy was cruising for what looked like 3% annualized growth in real GDP in the first quarter. But the effects of both natural social distancing and government-mandated lockdowns crushed economic growth in March.

Commentary

The Economy, Inflation, and Interest Rates

With each passing week, the economic damage wrought by the Coronavirus and the resulting shutdowns grows larger. It's not just businesses, both small to large, feeling the pain. Educational institutions, hospitals, churches, not-for-profits, and state and local governments are all finding it hard to remain financially viable.

Commentary

Job Destruction

Normally, we're not big fans of enhanced unemployment benefits. But the current severe economic contraction brought about by the Coronavirus and the government-mandated shutdowns of businesses meant to stop the disease is a completely different animal from a normal recession.

Commentary

Do the Least Harm

Doctors think differently than economists. They put patients with a potential for brain damage in an artificial coma to stop swelling, and when it stops, they bring them out. This fits with the Hippocratic Oath all doctors take, which states "First, do no harm." The idea is to "limit" damage and then "restart" a more normal body with fewer problems.