Washington’s Latest Match Made In Hell

Posted on January 11, 2019 by MN Gordon

One of the more enticing things about financial markets is not that they’re predictable.  Or that they’re not predictable.  It’s that they’re almost predictable…or at least they seem they should be.

The economy, like financial markets, ebb and flow in rhythmic cycles; though, they never quite repeat with perfection.  A shortage of wheat one year should compel production and an abundant harvest the next year.  You can darn near count on it, so long as there’s not a late season frost, a mite infestation, or some other act of God that wipes out the crop yield.

Indeed, the economy’s dynamic.  It expands.  It contracts.  But it does more than that.  For it’s more biotic than abiotic.  It changes.  It evolves.  It continuously reshapes and readjusts to the countless and ever changing inputs, innovations, and interactions of the people and resources that compose it.

The economy also adjusts to government intervention and the conceit of central planners.  An economy with a soft government touch is lively, energetic, and innovative.  Conversely, a heavy handed government calibrates an economy to be slow moving, lethargic, and predictable. Continue reading →

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The Downside of Mindless Investing

Posted on January 4, 2019 by MN Gordon

High inflection points in life, like high inflection points in the stock market, are both humbling and instructive.  One moment you think you’ve got the world by the tail.  The next moment the rug’s yanked right out from under you.

Where the stock market’s concerned, several critical factors are revealed following a high inflection point.  These factors are not always obvious at first.  But they become apparent over time.  Most notably, it’s revealed that the period leading up to the high inflection point was more suspect than previously understood.

The stock market, as represented by the S&P 500, became a sort of money minting machine over the last decade.  Quarter after quarter, year after year, investors opened their brokerage statements to the delight of an inflating portfolio.  Investing was fun – and easy.

Without much interruption, investors got more out of the market than they put in.  They also got more out of the market than the underlying economy warranted.  The stock market delivered an illusion of prosperity that many investors mistook for the real thing. Continue reading →

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The Recline and Flail of Western Civilization and Other 2019 Predicitions

Posted on December 28, 2018 by MN Gordon

“I think it’s a tremendous opportunity to buy.  Really a great opportunity to buy.” – President Donald Trump, Christmas Day 2018

Today, as we prepare to close out the old, we offer a vast array of tidings.  We  bring words of doom and despair.  We bring words of contemplation and reflection.  And we also bring words of hope and sunshine.

After all, the New Year’s nearly here.  What better time than now to turn over a new leaf?  New dreams, new directions, and new delusions, are all before us like a patch of ripe strawberries.  Today’s the day to make a double fisted grab for all of them – and more.

Rest assured, 2019 will be the year that everything happens precisely as it should.  Some good.  Some bad.  Indeed, each day shall unfold before you in symbiotic disharmony.  You can count on it.

But what else?  What are the essential anticipations as we embark on a new voyage around the sun?  What about stocks, the 10-Year Treasury note, gold, and everything else?  Are we fated for complete societal breakdown?  Will this be the year the Fed put finally bites the dust? Continue reading →

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Merry Christmas Eddie Lampert!

Posted on December 21, 2018 by MN Gordon

Heading into the final weekend before Christmas we’ll take a brief hiatus from the economy and markets.  We do so, however, with intent and purpose.  Our principal objective is to offer peace and joy as you go about your merry way.

Who wants to contemplate the unemployment rate or the consumer price index while singing Silent Night at a candlelight Christmas Eve service?  Who wants to chat about Fed policy or what exactly composes a high yield ETF over an Old Fashioned with their father-in-law?

A word to the wise: politics and religion at the dinner table should always be eschewed for NCAA football and new fishing gear.  You may dislike Nick Saban.  But everyone can agree that Tua Tagovailoa was outright robbed of the Heisman Trophy.  Similarly, everyone can agree that freshwater fishing takes much greater skill than deep sea fishing.

But we won’t stop with just two innocuous conversation topics.  We’ll go several steps further and do you a grand favor.  For everyone likes a story about bigtime blunders involving possible improprieties.  This is especially so when the characters travel within select inner circles, and the lines between heroes and villains are blurred beyond all recognition. Continue reading →

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