Fed: Don’t Prematurely End the Economic Boom
In light of last Friday’s better than expected jobs report for August, the odds are near 100% that the Fed will hike short-term interest rates by another 25 basis points at its next policy meeting near the end of this month.
The Middle Class is Exploding Around the World
If you listen to the media, you probably think the “middle class” is declining rapidly, not just here but around the world. It’s true, the middle class is declining in America, but not for the reasons the media would have us believe. It’s actually a good thing, and I’ll explain why as we go along today.
This Bull Market in Stocks is Longest in US History
The current bull market in US stocks began on March 9, 2009 and tomorrow it will become the longest bull market in America’s history. The S&P 500 Index has advanced over 320% since its low in 2009. And most forecasters believe the market has further to run.
Public Companies Disappearing - Investors Lose Opportunities
Most investors are not aware of this but the number of publicly-traded companies listed on US stock exchanges has plunged almost 50% since the peak in 1996. This phenomenon is not limited to the United States.
Republicans Outspend Democrats On Earmarks, Set Record
Republicans claim to be fiscal conservatives but they're governing like out-of-control swamp creatures. Not only has the federal budget gone up every year the Republicans have been in control, new data show they will outspend Democrats on so-called “earmarks” this year and will set a new record. It's time for a permanent ban on wasteful pork-barrel earmarks.
Many Americans Not Benefitting From Strong Economy
The US economy continues to gain momentum. More and more forecasters are predicting GDP growth of 4% or better for the second half of this year. Yet while the economy is strengthening, many Americans are not fully benefitting from the improvement. Today, we’ll take a look at some of the reasons why.
National Debt No Problem - We Owe It To Ourselves - WRONG!
Our national debt has swelled to a record $21.16 trillion as of this writing. That includes debt held by the public ($15.4 trillion) and intra-governmental debt ($5.7 trillion). At $21+ trillion, our national debt is well above 100% of our Gross Domestic Product of $19.97 trillion.
Social Security & Medicare Annual Reports: What You Need to Know
Once each year, the Trustees of the Social Security and Medicare trust funds are required to provide a detailed status report to Congress, including financial projections well into the future. The latest reports were provided to Congress last week. There was good news and bad news, as usual.
U.S. Moves Back To #1 In Global Competitiveness Ranking
A surprising new report from a respected independent research group in Switzerland concluded that the United States has regained its position as the #1 nation in its global competitiveness ranking. This accomplishment was not expected and has not been widely reported in the mainstream media – no surprise there.
US Birthrate At 30-Year Low, Fertility Rate At Record Low
The government reported earlier this month that the US birthrate fell to the lowest level since 1987 last year, despite an increase in the number of child-bearing age women in the population since then. The government also reported that the “fertility rate” – the number of births per 1,000 women – fell to the lowest level in almost a century in 2017.
Why Trade Deficits Are Not Necessarily a Bad Thing
Today, I want to disagree with a widely-held view by the mainstream media and President Trump that trade deficits are always a bad thing. I also want to disagree with the idea that trade deficits with the US mean that our trading partners are taking advantage of us.
US National Debt Spiraling Out of Control, New Record
The Treasury Department announced last week that the government borrowed a record $488 billion in the January-March quarter. The Treasury said that actual borrowing in the 1Q exceeded the old record of $483 billion set in the first quarter of 2010 – the period when the country was struggling to pull out of a deep recession and prop-up the financial system following the 2008 financial crisis.
How Washington Will Spend Your Taxes in 2018
Today we’re going to look at how Washington spends our tax dollars. Specifically, we’ll look at a new report which shows how the federal government spends the income tax paid by the average family – and how they spend even more than what’s collected to create massive budget deficits year after year after year.
Why US Healthcare Costs Are Highest in the World
While the final figures are not out yet, it is widely estimated that Americans spent well over $3.5 trillion (17% of GDP) on healthcare last year, and that figure is estimated to rise to $5.7 trillion (20% of GDP) by 2026, if not sooner.
China & Japan Are Reducing US Dollar Holdings - Why?
We’ll touch on several bases today which should make for an interesting E-Letter. We start with the fact that China and Japan are reducing their holdings of US Treasury debt. As the two foreign countries holding the largest amount of our debt by far, should we be concerned? Maybe yes, maybe no.
Tariffs Hurt All Americans, Tax Cuts Gain Popularity
The White House announced late last week that President Trump will enact new protectionist tariffs of 25% on imported steel and 10% on aluminum. This move set off fears of a new trade war as foreign trading partners most affected by the new tariffs are expected to retaliate with new tariffs of their own that will hurt US industries.
Our Scary Return To Trillion-Dollar Budget Deficits
With Congress’ passage of an additional $368 billion in federal spending over the next two years on February 9, our government budget deficits could approach, and perhaps exceed, $1 trillion annually for the next several years. That’s very scary!
The Worst Week In A Decade For US Stocks
Last week’s carnage in the US stock markets was one of the worst meltdowns I have witnessed in my 40+ years in the investment business. Most US stock indexes plunged over 10% in value from Friday, February 2 to the lows on Friday, February 9 – complete with two days where the Dow Jones Industrial Average lost over 1,000 points in one session.
Savings Rate Lowest In A Decade, Credit Card Balances Soar
Over the last several months, I have written often about how the US economy has strengthened significantly since the disappointing 1Q of last year. This time last year, most forecasters felt the economy would do well to grow by 2% in 2017.
Stocks Definitely Overvalued - Government Shutdown Looms
I don’t make market predictions very often. Normally, I leave those decisions to the professional money managers we recommend at Halbert Wealth Management. However, some recent developments have made me very concerned that the US equity markets are at high risk for a serious downward correction just ahead.
Will Our Strong Economy Spike Inflation in 2018?
As you know, a lot of predictions are made this time of year – about the economy, the markets, interest rates, inflation, etc. Some forecasters are predicting that 2018 will finally be the year when inflation takes off and returns to higher levels. However, some of these same prognosticators have been saying the same thing for the last several years.
China Not To Overtake US Economy Until 2032
Our stable of investment strategies at HWM has never been more diversified than it is today. In the last few years, we have significantly expanded the scope of the investments we recommend, including several successful strategies that do not involve stocks or bonds.
The Economy: Holiday Spending Strongest in Years
There’s so much to talk about in this week before Christmas it’s hard to know where to start. The economy continues to gain momentum. Last week, the Atlanta Fed revised its GDPNow forecast from 2.9% to 3.2% for the 4Q.
Lots of Good News in the November Jobs Report
The Fed Open Market Committee (FOMC), which sets interest rate policy, is meeting today and tomorrow. It is widely expected that the FOMC will hike its Fed Funds rate by another quarter-point when it releases its policy statement. In fact, the only surprise will be if it doesn’t.
Thoughts on GOP Tax Cuts & China's Faltering Economy
I veer from our usual roster of topics this week to bring you an update on China and its prospects for continued hot economic growth, or lack thereof. China is the second largest economy on the planet, behind the US, and many (if not most) Americans believe that it won’t be too long before China overtakes the US as the largest economy in the world.
Household Debt Rises to New Record of $13 Trillion
A new report from the Federal Reserve Bank of New York last week found that US household debt hit another record high in the 3Q of almost $13 trillion. The largest increases came in student loans, auto debt and credit cards. I’ll share the details with you just below.
Can the US Economy Sustain 3% Growth? The Answer is Yes
The US economy just turned in its second consecutive quarter of 3% growth in Gross Domestic Product, to the surprise of most forecasters and the mainstream media. This despite the negative effects of two major hurricanes hitting the southern US late this summer.
Why We Need New Leadership at the Federal Reserve
President Trump is finalizing his decision on who will head-up the Federal Reserve when current Fed Chair Janet Yellen’s term is up in February. He also needs to appoint another person to fill the now vacant Fed Vice Chairman spot due to the resignation of Stanley Fischer earlier this month.
Trump Packing Federal Courts With Conservative Judges
While the mainstream media remains obsessed with President Trump’s tweets and other controversial statements, the Commander-in-Chief is quietly packing the federal courts with conservative, originalist judges who are not only very smart but also relatively young.
War With North Korea Could Spark New Bear Market
The United States is increasingly being provoked toward a war with North Korea by its seemingly insane young leader Kim Jong-un. Not only has Jong-un acquired nuclear bomb capabilities much faster than US intelligence sources had estimated for years, he has also recently developed intercontinental ballistic missiles (ICBMs) capable of reaching US soil.
America's Middle Class is Making a Strong Comeback
For most of this year, I’ve had a sense that the American middle class is increasingly growing, and that wages/incomes are increasing more than the Labor Department reports. I have been saving articles upon articles on this subject and was planning to extract the highlights and summarize them for you in the next week or two in these pages.
Fed in a Real Quandary - No Good Policy Options Now
The Fed remains committed to raising short-term interest rates at least one more time this year, most likely at the September policy meeting as I will discuss below. The Fed also wants to start reducing its massive $4.5 trillion balance sheet this year, but doing so in the past has almost always led to a recession.
Imagine A World Without Cash - A "Cashless Society"
On July 12, credit card giant VISA announced that it will soon offer selected retailers $10,000 to stop accepting cash. No one seemed to pay much attention. The announcement received relatively little coverage in the press. Should it have? Yes!
More & More Americans Having to Work Past Age 70
Nearly one-fifth (19%) of Americans age 70 to 74 were still in the workforce as of the end of June, according to the latest jobs report from the Labor Department on July 7. Some are working because they are healthy and enjoy their work. Most, however, are still working because they haven’t saved nearly enough for retirement.
Federal Spending to Top a Record $4 Trillion in FY2017
Both the Congressional Budget Office and the White House Office of Management and Budget announced last week that federal spending will top $4 trillion for the first time ever in fiscal 2017, which began on October 1, 2016 and ends on September 30.
Record Six Million Unfilled Jobs in US-What's the Problem?
The US Department of Labor told us in June that there were apprx. 6.0 million open (unfilled) jobs in America, a record high. The Labor Department also told us that there are apprx. 6.8 million unemployed Americans who are actively looking for work.
One-Third of Millennials Are Living With Parents
As the father of two Millennials (ages 27 and 25), I pay a great deal of attention to articles and studies on this largest generation of 75.4 million Americans. Given the sheer size of this generation and its vast effect on the economy for decades to come, we should all be paying attention to trends within this massive group.
Fed Plans To Trim Its Massive $4.5 Trillion Balance Sheet
Most investors understand the implications of the Fed raising (or lowering) interest rates. After lowering short-term interest rates to near zero in late 2008, and keeping them there for eight years, the Fed is now committed to “normalizing” short-term rates by raising the key Fed Funds rate multiple times over the next couple of years.
Odds Rise For "Inverted Yield Curve" & New Recession
The Fed policy committee will almost certainly raise the key Fed Funds rate by another 0.25% tomorrow. Minutes from the early May Fed meeting indicate that the Fed sees the 1Q economic weakness as temporary, and the odds for a rate hike tomorrow are above 90%.
Household Debt Hits New Record High, Stocks Stumble
The Federal Reserve Bank of New York reported last week that US household debt reached a new all-time high in the 1Q of this year. The new report also included some troubling internal metrics, not only on the overall household debt levels but also with regard to the level of delinquencies.
The Fed/Central Banks' $13 Trillion Gorilla in the Room
The US Federal Reserve, the European Central Bank and the Bank of Japan alone have over $13 trillion in quantitative easing assets on their balance sheets. The Fed recently hinted that it would like to start reducing its QE assets this year if possible.
44% of US Households Don't Pay Any Federal Income Tax
Income Tax Day came and went last week without a great deal of fanfare. Most Americans who owed income tax to the government for 2016 either filed their tax returns and paid their bill to Uncle Sam last week, or filed for an extension and paid their estimated tax, as many do each year. Nothing new there.
Big Retailers Closing Stores At Record Pace In 2017 - Why?
Big Box retailers and many other popular chain stores – including Sears, JC Penney, Macy’s, Payless, Sports Authority, American Eagle, Radio Shack and many others – are closing their stores at a record pace so far this year.