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US Savings Level Lowest Recorded Since 1970

The graph speaks for itself. All of the savings accrued due to fiscal stimulus after COVID is being eaten away by higher prices and slower growing wages. We can speak about the job market being strong, but you cannot ignore the fact that the majority of Americans are living paycheck to paycheck to credit card…

Posted in Economics, Markets, Personal Finance.

The Never-Ending Central Bank Experiment?

To say that I have been on a hiatus is an understatement, but that does not mean that the events of the past year have been lost on me.

The truth is that quantitative easing has not and will not work.  In fact, I believe that it will cause more pain than the sum of the total past benefits.  Given the situation that we found ourselves in during the Great Financial Crisis, it is fair to say that quantitative easing and the actions of central banks made the immediate blow softer than it would have been.  Unfortunately, the actions have also borrowed from the future and created instabilities that cannot last.

Did you know that the top .1% own as much as the bottom 90%:

Share of Total US Wealth


Did you know that workers are not retiring because they can’t afford it:

Retiring by 65


Did you know that median income levels are below those set back in 1997:

Median IncomeDid you know that the labor force participation rate is as low as it was in 1977 when less than 40% of eligible women worked:

Labor Force Participation

The reality is that the US economy is sick, yet financial markets show extremely optimistic valuations with interest rates the lowest in 5,000 years:

Lowest Interest Rate in 5000 years

and corporate bonds at peak valuations:

Record Corporate Bond Prices

At this point we should probably mention that equity valuations are above the levels that were achieved before historic drawdowns:

Equity Valuations

And that this bull market is 28 months older than the average bull market:

Bull Market Duration

I am not sure when this grand experiment will end, but I am confident that there will be blood in the streets.


Posted in Markets, Politics.

Noteworthy News – March 30, 2015


Income inequality: poverty falling faster than ever but the 1% are racing ahead – Guardian

Slow economy could prompt Iran to take nuclear deal – Washington Post

Economists Fear Oil-Price ‘Contagion’ Has Hit Canada’s Economy – Huffington Post


Stock market rigging is no longer a ‘conspiracy theory’ – New York Post

Fears of a new global crash as debts and dollar’s value rise – Guardian

Deflation Danger Rings Wake-Up Call to East Europe Central Banks – Bloomberg


Eurozone can’t survive in current form, says PIMCO – Telegraph

The ECB’s put – explained by Draghi – CNBC


Investment banks eye potential trading boost from ECB stimulus – Reuters


Posted in Economics, Markets, Media, Politics.

Noteworthy News – March 23, 2015


Wages Haven’t Been This Crucial to U.S. Economy in Half Century – Bloomberg

To move beyond boom and bust, we need a new theory of capitalism – The Guardian

The Coming China Crisis – Naked Capitalism


It depends what you study, not where – Economist

Bank of Japan research shows failing bond market liquidity – ForexLive

Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them? –


Fed statement doesn’t rule out lengthy stay at zero, Evans says – MarketWatch

A coming crackdown on Federal Reserve power? – Politico

Vladimir Putin calls for ‘Eurasia’ currency union – Telegraph


Banks Keep Loans Close to Home – Wall Street Journal

Tax Bracketology

Posted in Economics, Markets, Media, Politics.

Noteworthy News – March 9, 2015


Here Come the Employment Truthers – New York Times(Paul Krugman)

Obesity Is Hurting the U.S. Economy in Surprising Ways – Bloomberg

Economists’ Biggest Failure – Bloomberg

The Fed Knew the Economy Was a Disaster in 2009. Here’s What They Talked About Instead – New York Times


S&P 500 companies have bought back $2.1 trillion worth of themselves since the financial crisis – Business Insider

Map: The salary you need to buy a home in 27 U.S. cities – Washington Post

Japanese shares down on revised growth data – BBC


US monetary policy and the saving glut – VOX

Impacts of Obamacare insurance coverage expansion for young adults – VOX

Germany Sets Gender Quota in Boardrooms – New York Times

China, central banks are key risks this week – CNBC


European banks’ profitability gap shows big cost cuts needed – Reuters


Posted in Economics, Markets, Media, Politics.

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