DRUNKENOMICS

Welcome to probably the last big week of the year in terms of economic data being reported. With CPI and another Fed meeting coming out this week, we decided to remain cheery as we head into our holiday season. All that being said, we remain in the camp that a lot of economic troubles are easing due to economic and consumer resilience; which means the Fed will most likely not waver in terms of the...

First off, hope you all had a great week off; also, we had to amend some things we said after a few drinks last episode. Something about IRA's being tax-sheltered. Anyways, with all the doom news going on, we had to provide some good news to talk people on the consumer level off the ledge. However, there are things to be concerned about. Although, for the most part, the economy is in pretty de...

It's Thanksgiving already?? I guess with time flying so fast, we all could probably have a dram to retirement plans and ways we can make sure we're financially stable when we get to that point in our lives where we think about how time flew by so fast. Therefore, we had some gravy backs to the three pillars of retirement along with the current state of Social Security. No need to repeat th...

There you have it; CPI came in slightly lower than expected, but Fed posturing still implores the economy to put up with a "higher for longer" environment. With that, a shower thought I had recently made me think about the millennial plight; being that we are by far the most indebted generation with not only our own debt to service, but also the debt of the extremely fiscally irresponsib...

Happy week after Fed week everyone! Hope you were all able to recover swiftly from your hangovers this last weekend because this US Government balance sheet is nothing but sobering. Upon viewing the Fed day interview with Jeff Gundlach on CNBC last week, it looks like the US consumer along with the US Government has a serious debt problem that a "higher for longer" attitude will only add...

Well, the Fed decision is out now; looks like the tone and stance of the Fed is still pretty hawkish pending some sort of major economic catastrophe. But the main question now becomes: when does the Fed their terminal rate? Also, when will the Fed officially begin lowering their effective rate? Seems like money managers all over the world are trying to get a pulse on this. That and the UAW strike....

Well...at the time this episode was being recorded, there was still a 'speakerless House.' Of course, in an uncharacteristic fashion, they managed to elect a speaker in Mike Johnson within a day of this being recorded; but congrats on getting something done finally. Most of our drams this week, however, was consumed to the discussion of which broad asset class might outperform in the next...

I guess...having a 'speaker-less' house is pretty fun. It's at least funny to observe the kind of clown show we have at our nation's capitol. In case you missed it, Kevin McCarthy was ousted a couple weeks ago from his speakership position and Jim Jordan was the front-runner to fill the void. But somehow, even his political weight can't get him voted in. Then of course, we had...

CPI data, Fed forecasts, Job Numbers, those are all important figures to pay attention to in terms of global macroeconomics, but it pales in comparison in total importance at times. In case you missed it, there was a very tragic war that broke out in Israel this weekend. Although there are some economic implications, it pales in comparison to the human cost taking place and the human right violati...

Welp...we've officially made it to the last quarter of the year; and what a year it's been. Because we're all awake now that September has ended, we can expect to see CPI data come in similar to the way energy stocks performed last month. If you were asleep for the month like Billie Joe of Green Day, I'll fill you in and let you know that energy, particularly oil, had quite a run;...

As the Fed President has mentioned in his presser today, the economy still has yet to see the affects of the tightening monetary policy from last year. Pair that with employment and inflation data that just came in, it shows that the Fed potentially still has room to enact further tightening. Granted, equities and especially fixed income markets are begging for some relief; which means this tug of...

I'm beating myself up for not coming up with the question earlier...but why is the Fed so obsessed the the 2% inflation rate? Historically, inflation has seen an average rate of about 4%. Granted, that does include some difficult cycles of price increases; but that accounted for, is that 2% target rate worth achieving even if it does crater the economy and wage growth? Also, what's this I...

It seems like the weeks spend digesting the Jackson Hole Symposium turned out to be a real bummer. The Street pretty much decided to focus on the Fed's commitment to that 2% target inflation rate and could see plenty of hurdles we need to navigate to get there. Additionally, we also wanted to talk a little about Treasury Inflation-Protection Securities aka TIPS. It's kind of a foreign subj...

Well so much for that market euphoria. A lot of market observationists were really expecting a Fed victory lap at the Jackson Hole symposium after CPI came in under the Fed Funds rate for multiple consecutive months. However, Jerome Powell expressed a much different sentiment, saying in his speech that their job is far from over and that they're still aiming for that 2% inflation target. Not t...

As we continue to harp on China for producing less than promising economic data, we also need to observe some promising economic data here in the U.S. With CPI coming in at below 4%, the idea of a soft landing achieved is certainly not off the table. Granted, the idea of a looming rolling recession still hovers over this economic environment, but there's certainly less reason to be scared. How...

Some very surprising economic data overseas came in earlier this week; but for sake of continuity, lets start with last week. Tech earnings coming in strong (for the most part) furthered echoed the resiliency of the U.S. consumer base. From there, JOLTS and non-farm payrolls came in weaker than expected giving way for the Fed to potentially pivot; combine that with credit card debt reaching all ti...

It finally happened (again). U.S. Government long term debt has been downgraded from AAA to AA+, meaning the ratings agency are at least suggesting some sort of default risk for U.S. Treasuries. In case you're thinking that it's a byproduct of aggressive interest rate hikes, Fitch cited poor governance, political polarization, and a spine chilling (my word choice) government deficit. On th...

Yeah...I know I flipped the classic quote from the brilliant French Economist, Jean-Baptiste Say; but in many cases, this is also true. When supply shocks in an economy take place, they offer producers or consumers the opportunity to take advantage of advantageous price points. However, those price levels eventually spearhead the return to a good price equilibrium. With Russian disrupting Ukrainia...

I know debt that is about to default (or is already in default) is certainly less attractive that a damsel, but it is certainly distressing. Which is why we decided to pour one out this week to the corporate bankruptcy surge we saw in the month of June. However, we did spend some time at the beginning answering some questions in our discord about various asset classes and unionization. Speaking of...

So the S&P almost breached 4500 last week and it's still hanging out around it's 52-week highs. On top of that, a lot of market 'experts' on CNBC and Bloomberg have suggested that the price action isn't euphoric and that there is substance to this kind of equity valuation. A lot of the optimism, however, doesn't seem to want to remove any blinders to the fact that the F...

If you think you had a tough week, check out what happened in the UK. Nothing like an Inflation print that constantly and stubbornly surprises to the upside leading their central bank to declare a 50 bps emergency rate hike. Additionally, the Russian paramilitary organization, The Wagner Group has led a pretty solid resistance against their motherland. Although ironic, it does create some uncertai...

So we're taking a trip across the Pacific this week and drinking Japanese whiskey to toast Antony Blinken's visit to China. With that, the presence of the U.S. Secretary of State to the People's Republic doesn't solve a lot of their issues; but there could be some optimism (hopefully) to come of this. Also, hope you all had a happy Fed day last Wednesday along with a very happy CPI...

From a case study standpoint, we're fairly certain that economists are going to look back on this time frame 5 years from now and call 2022-2023 a long and shallow recession. Even if you turn on any financial news outlet now, you'll hear 'experts' saying that a 'recession' is really just hitting different parts of the economy at different times. Currently, manufacturing see...

So the Government has officially kicked the Debt Ceiling can two years down the road to 2025, which provides more significance to the Fed meeting next week. Conveniently, the next inflation print comes out the day before the rate decision is announced; so we have plenty of economic events to look forward to next week. Additionally, has anybody seen the most recent jobs/employment numbers?? Find us...

Well at least we can now finally put the debt ceiling thing behind us. Who would've thought that the representatives that the good people of the United States would actually choose to compromise a few budget constraints over the alternative; which is complete economic catastrophe. Nonetheless, there are certain contingencies in the bill that might affect the economy moving forward and essentia...