Notes on the Week Ahead

The Slowdown is Coming -Take Two

Despite a better than expected outcome from earnings season, the economy once again appears set for a slowdown with second quarter economic growth potentially coming in at less than 1% annualized. Numbers due out in the week ahead should help clarify whether the slowdown is for real this time.

Adjusting to Demographic Reality

I ran in a local 5K race over the weekend. As the assorted participants milled around at the start, I noticed just how many of them looked on the young side. But this happens more often these days –every year there are more runners younger than me and fewer that are older. And so I huffed and puffed my way around the course, breathing in the dust kicked up by the heels of some young teenager in front of me.

Tariffs and the Lessons of History

One of the great lessons of history is to avoid slavishly applying the lessons of history. A particularly tragic example of this relates to the First and Second Gulf Wars. The relative ease with which U.S. and Allied forces dislodged Saddam Hussein from Kuwait in 1991 emboldened the U.S. to undertake the far more difficult task of overthrowing Hussein altogether and occupying Iraq 12 years later. Apart from its terrible human toll, the negative results of that second conflict are still being felt today, both in the U.S. and throughout the Middle East.

The hierarchy of monetary mistakes

The U.S. economy of 2019 is, for the most part, a very healthy one and this is fully reflected in the valuations of stocks and bonds. However, it is a complex environment for the implementation of monetary policy. 

Investment implications of 'All systems go'

The week ahead will see a flood of data which will amount to an all-systems check on the investment environment. The numbers are likely to be positive. However, for investors this should not be seen as a "go for market launch" but rather as a cautious OK for a more pedestrian advance.

Slowdown is coming

Just over eight years ago, HBO launched its very successful series, "Game of Thrones," set in the mythical medieval kingdom of Westeros. The first episode was entitled "Winter is Coming," and we were warned that winters in Westeros were particularly harsh and could last for years.

Federal credit card day

For most of the United States, April 15 is the day when annual tax returns are due and every year, at around this time, the Tax Foundation announces "Tax Freedom Day." The idea behind Tax Freedom Day is to recognize that every year a sizable chunk of Americans' income goes to pay federal, state and local taxes.

Down the middle of a narrowing road

In a narrowing road, it is best to stick to the middle. And in the spring of 2019, the U.S. economy is moving steadily down the middle of a narrowing road.

Water stops

After a downhill cascade in the fourth quarter, global risk assets have staged a steep assent in the first quarter of 2019 and, this being the case, as we move into the second quarter, it seems like a good time for investors to think about the outlook.

Framing the Fed

In the golden age of Hollywood, before the era of special effects, the success of a movie depended to a large extent on the storyline. One frequently used construct was the wrongful arrest of an innocent person.