Shrewd Financial Analysis in the Year 2016

Posted on September 2, 2016 by MN Gordon

Shrewd Financial Analysis in the Year 2016“Markets make opinions,” says the old Wall Street adage.  Perhaps what this means is that when stocks are going up, many consider the economy to be going great.  Conversely, when stocks tank it must be because the economic sky is falling.

For both scenarios the opinions range far and wide.  A rising NASDAQ may compel a tech aficionado to proclaim we’re on the cusp of a new digital revolution.  Falling manufacturing stocks may compel a protectionist to proclaim it is NAFTA’s fault.

So if markets make opinions, do opinions make markets?

Over the last decade or so, Fed dithering has midwifed a new opinion based form of market forecasting.  From what we can tell, it involves taking economic data reports, interpreting how this will impact Fed policy, and then projecting out how this will influence the stock market.  If we’ve pieced it all together correctly, the relationship between economic reports and markets goes something like this:

Good news is bad news.  So, too, bad news is good news. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | 1 Comment

The Number One Factor Influencing Fed Monetary Policy

Posted on August 26, 2016 by MN Gordon

A brief scan of the financial and economic landscape – both in the U.S. and abroad – offers ample confirmation that we are in the midst of a great reset.  From a feint tickle at the turn of the new millennium to a persistent itch a decade ago, the preponderance of evidence in this regard is now much too painful to ignore.  There’s no denying that things ain’t right.

Debt is increasing while GDP’s stagnating.  Stocks are rising while earnings are declining.  Incomes are flat-lining for the majority of workers while growing by leaps and bounds for the 1 percent.  Plus there’s over $13 trillion of negative-yielding debt.

With all this going on, what’s become lucidly clear is the frank understanding that there’s nothing that can really be done to reverse it.  No executive order.  No monetary policy adjustment.  No congressional stimulus package.  No presidential candidate.

None of these, or any other conceivable command and control options, can really do a thing about it.  In fact, at this point, even the most well-intentioned of government programs will likely make the ultimate breakdown and dissolution much, much worse.  The hole’s already been dug far too deep to climb out of. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 8 Comments

Yarns, Mysteries, and the CPI

Posted on August 19, 2016 by MN Gordon

Several ill-defined economic waypoints were unveiled this week.  Namely, the Labor Department’s July consumer price index report.  According to the government data, on whole, consumer prices for the month didn’t change one iota.

Reportedly, energy prices went down, food prices were unchanged, and all other items slightly increased.  So when the official number crunchers tallied them all up, the subtractions washed out with the additions.  Thus, the reported CPI came in at exactly 0.0 percent.

This number is strictly scientific, of course.  Independent teams of research grunts could easily replicate it with precision.  No guess work.  No fudge factors.  All seasonal adjustments and hedonic regression estimates would align with complete accuracy.

All kidding aside, what does a CPI reading of 0.0 mean?  What does it tell us?  How can we use this information to our advantage?

Should we short treasuries and go long gold?  Should we acquire bags of pre 1965 junk silver coins? Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , | Leave a comment

The Great Stock Market Swindle

Posted on August 12, 2016 by MN Gordon

Finding and filling gaps in the market is one avenue for entrepreneurial success.  Obviously, the first to tap into an unmet consumer demand can unlock massive profits.  But unless there’s some comparative advantage, competition will quickly commoditize the market and profit margins will decline to just above breakeven.

Unfortunately, finding and filling gaps in the market is much easier said than done.  Even the most successful serial entrepreneurs fail more than they succeed.  What’s more, success in one endeavor doesn’t guarantee success in another.

Anyone who has ever developed and marketed a new product from concept through sale knows how difficult it is to achieve profitability.  For every good idea there must be a hundred bad ones.  Yet the only way to really know the difference between a profit generating idea and a cash hemorrhaging fiasco is through trial and error.

Success and failure provide real feedback.  They deliver information – at a profit or loss – to businessmen and investors.  What’s working?  What isn’t?  What adjustments can be made to help eke out a profit? Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , , | 1 Comment