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What Sowed The Seeds Of The Bitcoin Mania?

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Reading Time: 4 minutes Financial Conditions Ripe For Speculation 2017 was an unusual year where financial conditions actually eased despite the Federal Reserve raising rates. The financial tightness in 2015 and 2016 was catalyzed by weakness in the energy market. With the help of central banks, as we have previously stated, the economy narrowly…CONTINUE READING

50% Of Households Own No Stocks

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Reading Time: 4 minutes When the Fed implemented QE, one of the benefits of it was said to be the wealth effect. The wealth effect is the benefit the economy gets from stock price appreciation. In theory, people who make money in the stock market are supposed to spend more money which helps the…CONTINUE READING

What Could Go Wrong? Third Longest Expansion Since 1854

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Reading Time: 4 minutes 2017 marked what could be considered a seemingly perfect time in history. Some of the primary factors that contributed to this goldilocks scenario has been record low interest rates and volatility, quantitative easing, high stock valuations, easiest financial conditions since 1993 based on the National Financial Conditions Index or from 1970…CONTINUE READING

Output Gap: A Recession Timing Indicator

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Reading Time: 4 minutes Output Gap Explained The output gap is the difference between actual and potential economic output and is used by economists to understand the health of the economy. There will never be a metric which tells us how the economy will perform with absolute certainty. Not only is it difficult to…CONTINUE READING

Tax Cuts: Short-Term & Long-Term Review

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Reading Time: 4 minutes Throughout the expansion from about 2010 to 2016 the Federal Reserve told us it wanted to step back from its stimulative policies, which were QE and zero percent interest rates, but it couldn’t because fiscal stimulus wasn’t coming. Furthermore, there have been times in that period where fiscal policy hurt…CONTINUE READING

Quantitative Tightening Could Accelerate In 2018

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Reading Time: 4 minutes Although Yellen is a ‘lame duck’ central banker now that Jerome Powell was selected to take the helm in February, she’s still making headlines for unorthodox statements. As you should be well aware, the yield curve is one of the best recession warnings that exist, something we’ve discussed previously in…CONTINUE READING

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