Are We Experiencing Another Tech Bubble?

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Reading Time: 4 minutes The current bull market is one of the biggest and longest in history. Although the rally started with a broad base of support, the latest movement in the rally has been concentrated in the top 5 tech stocks. At the end of bull markets, indexes are pushed higher by leaders,…CONTINUE READING

The American Dream Is Now Tiny

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Reading Time: 4 minutes The experiment where policy makers tried to get as many people as possible to purchase a house because it was the “American dream” ended up being a nightmare. It artificially boosted the homeownership rate for a few years. The chart below shows the effects of the bubble popping as homeownership…CONTINUE READING

Small Business Is Getting Crushed

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Reading Time: 4 minutes This year the S&P 500 (large cap index) is up 10.39% year to date, while the Russell 2000 (small cap index) is only up 3.16%. As you can see in the chart below, the profit margins of the S&P 600 have been falling since 2014. The S&P 600 is the…CONTINUE READING

Central Banks Are Starting To Worry Investors

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Reading Time: 4 minutes In previous articles (here and here), we’ve discussed how central banks are going to halt adding liquidity into the financial system which could cause a correction in the stock market. Many people scoff at that idea because they look at the current market and say, “what could possibly go wrong?” This…CONTINUE READING

Most Overlooked Risk: Complacency Bias

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Reading Time: 4 minutes On July 26th, the VIX hit a record low which was 8.84. The VIX is the 30-day volatility index which is based on the S&P 500’s option prices. The low VIX implies investors expect the least amount of downside in the next 30 days of trading ever. That situation has…CONTINUE READING

China’s Credit Bubble, Empty Cities & OBOR

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Reading Time: 4 minutes Emerging Markets Rally Without Commodities For U.S. based investors witnessing the great stock performance domestically in 2017 it’s easy to overlook events abroad. The emerging markets have actually been more than doubling US performance year-to-date (YTD) as the MSCI Emerging Markets index is up 25.49%. If the year ended on July…CONTINUE READING

Government Subsides Account For 26% Of Personal Income

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Reading Time: 4 minutes The advantage of hard economic data over surveys is that it isn’t manipulated. It is raw data which tells you what happened. Data can be manipulated to prove whatever point the creator wants. This makes some people skeptical of seasonal adjustments. A healthy dose of skepticism is fine, but sometimes…CONTINUE READING

Global QE Ends In 2018

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Reading Time: 4 minutes The biggest story in the financial markets in the next 12 months is the shift in global monetary policy away from being accommodative as central bankers taper and, in the Fed’s case, shrink their balance sheet. The chart below shows an estimate of central bank liquidity as a percentage of…CONTINUE READING

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