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Current Commentary

Signs of Economic Life Thumbnail

Signs of Economic Life

In order to tell whether the overall economy is starting to recover, we're looking for confirmation from unemployment claims and federal tax receipts. The bad news is that new claims for unemployment insurance remain at extremely elevated levels. However, new claims are down substantially from the 6.9 million filed in the last full week of March...

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How Are We Going to Pay For All This? Thumbnail

How Are We Going to Pay For All This?

Yes, the debt is a burden on future taxpayers... Right or wrong, our government - and society in general - has taken enormous measures to contain the virus to save the lives of our elderly population, and these moves have imposed enormous costs disproportionately borne by the younger generations who are out of jobs, school, and business opportunities.

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S&P 3100, Dow 25,750 Thumbnail

S&P 3100, Dow 25,750

S&P 3100, Dow 25,750... the world took a detour into the Coronavirus Contraction. As a result, we are adjusting our year-end 2020 target down to 3,100, with the Dow Jones Industrials average finishing at 25,750.

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Light at the End of the Tunnel Thumbnail

Light at the End of the Tunnel

We already see some light at the end of the tunnel. During the week ending Saturday, May 2, 939,790 passengers went through TSA checkpoints at airports. That’s up 26% from the prior week and up 40% from two weeks ago. The amount of motor gasoline supplied has grown three weeks in a row, and...

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GDP: Bad and Getting Worse Thumbnail

GDP: Bad and Getting Worse

GDP: Bad and Getting Worse. The key for investors to remember is that none of this is going to shock anyone; the markets already know it’s going to be awful. Instead, investors need to focus on...

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The Economy, Inflation, and Interest Rates Thumbnail

The Economy, Inflation, and Interest Rates

The Economy, Inflation, and Interest Rates. We've never seen an economic shutdown like this before. The ability of people and the government to panic like this changes nearly every economic calculation. For inflation, there are forces going both ways. Only time will ultimately tell.

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Job Destruction Thumbnail

Job Destruction

Job Destruction. The problem is that the boost to unemployment benefits enacted by Congress is over-kill for many workers, leading to perverse incentives.

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Do the Least Harm Thumbnail

Do the Least Harm

Do the Least Harm. Simply put, shutting down the economy has serious consequences.  If the economy were to reopen by Easter, which seems impossible now, it would probably open with, at most, 97% of its original capacity.  It's like a muscle, without use,  it atrophies.  And when it does, it needs physical therapy to recover.  The longer it's sedentary, the worse the atrophy, the more difficult (and painful) the recovery

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The Coronavirus Threat Thumbnail

The Coronavirus Threat

The Coronavirus Threat. Policymakers have reacted to the economic damage with massive measures.  The Federal Reserve has reduced interest rates to nearly zero, has begged banks to use the discount window, embarked on unlimited quantitative easing, and is backstopping an unprecedented array of markets, including commercial paper, money markets, commercial mortgages, and municipal securities.

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