What happened in the first quarter, Lassie? Most economic data indicates the economy is experiencing strong growth. GDP and earnings growth have been very positive, yet there are troubling signs beneath the surface of the markets and economy. Here are some of the indicators which show all is not well. First, President Biden passed a $1.9 trillion stimulus bill in the first quarter that put a lot of cash into the hands of consumers. Second, interest rates rose dramatically fro

Upset about the price of your food, rent and health care? Too bad. This of course is the attitude of our fearless leaders at the Fed and the politicians in Washington. The last time core inflation was this high, the US 10yr yield was ~8% and short term interest rates were 5.5% (see attached chart). The policy of allowing inflation to run hot is called "Financial Repression" by many market analysts. Believe it or not, it wasn't until the pandemic unleashed massive stimulus spe

Yet, it IS possible to grasp the big picture and try to understand the policy decisions our fearless leaders are making. For example, you can look at snapshots of budget plans today, last year or a few years ago to get a sense for how things changed. I've attached very simple summaries of actual spending and budget forecasts for FY2021 and FY2022. Look at the spending changes for 2022 and 2023. The emergency spending caused by the pandemic and the spending goals of our curren

Sometimes it feels like we are living through a giant experiment. Oh wait; we are! Most experiments happen in a lab setting. Typically, a control group is isolated from the test group, so a comparison of results will prove the hypothesis true or false. It is almost impossible to do this with economics and government policy, because there is no “lab” with a control group to test a thesis. We are both the test and control group. Our leaders change policy and hope it turns out o

Just in case you forgot, our taxes are probably going higher. We don't hear much about this in the news, but here our take on the major proposals. You should probably plan for a worst case with these proposals. Sen Manchin is asking that the $3.5 trillion stimulus be "paid" for. That can mean only one thing. We are not accountants and don’t provide tax advice. However, as investment advisers, I must warn you that a plan to raise long term capital gains rates may incentivize

These tragic investment stories have all happened before in 2000, 1987, 1929 and other times of euphoria. Great article from Institutional Investor. https://www.institutionalinvestor.com/article/b1t353k8yyfr5w/How-Millennial-Investors-Lost-Millions-on-Bill-Ackman-s-SPAC There is a reason most investment professionals are party poopers. Everybody loves a pooper that's why we invited you, party pooper! (I can hear that song from my childhood.) Don't let yourself succumb to the

In a sea of liquidity and inflation, some hold their breath and park their money at the Federal Reserve. $1 trillion dollars worth. I've seen some interesting technical explanations for why this doesn't matter, but I can't help but wonder. $1 trillion is a lot of dough. Maybe: 1. Stocks investments are unattractive. 2. Bond investments are unattractive. 3. The banking system may not provide liquidity in a pinch as in October 2019. Besides, the banks don't want the cash either

The S&P 500 is putting up one of the most AMAZING year-to-date, 1-year, and 10-year records in stock market history (as of 8.6.2021). SPY year-to-date +19.0% SPY trailing 1-year +34.1% SPY trailing 10-year +16.4% This is a great time to check your portfolio for problems. Do you know what to look for? Robert Lloyd, CFA® Chief Investment Officer Lloyds Intrepid Wealth Management Lloyds Intrepid LLC is doing business as Lloyds Intrepid Wealth Management. Lloyds Intrepid LLC offe

Have you ever seen a hot-pepper eating contest? Sometimes it seems like the Fed is trying to win the "hot-pepper" award for eating the most inflation reports without flinching. The real problems for the Fed will come if this higher inflation becomes more than "transitory". The medicine to stop that kind of indigestion will be extremely painful. Like eating a Giant Reaper painful. New inflation readings due tomorrow morning. Brace yourselves. For fun, here is the Giant Reaper

For those that missed it, Senator Manchin wrote an open letter in the WSJ to the Fed. "Dear Fed. Stop. Just stop. Inflation is hurting voters, correction I mean people!" And yet, it was a fairly quiet day for everyone except the Treasury bond traders. The market knows where the real power lies and is waiting for him to speak. WSJ letter: http://ow.ly/kyrJ50FMdvn Fun history: The Riot Act https://lnkd.in/eCrnSW5X What is the bond market saying? If Congress and the White House