What Can Go Wrong?

The market is hyperbolic in its bullishness which has no basis in anything tangible other than optimism that Trump’s presidency will bring GDP growth and reignite corporate profit growth. It’s natural to want to be optimistic, but this rally is too powerful. At some point, early in Trump’s term, speculators will recognize the obvious: Trump…

Inflation Could End the EU

In a recent article, I had the wrong tone about future European monetary policy. I reflected what Draghi would like to do, not what is likely to happen. Draghi is in favor of extending the bond buying program, but the Germans are against it. This disagreement will cause fireworks which threatens the survival of the…

The Budget Deficit Is Dire

The budget deficit for the first two months has been released. It is the dire situation the country finds itself in. It represents the lack of wiggle room Trump will have to get his agenda passed. There have been questions about the possibility of the government trying to spend money to boost growth to help…

Cost Cutter In Chief

President Trump has shown the type of leader he will be over the next 4 years in his recent actions as President elect. He has been shown to be what I am coining ‘the cost-cutter in chief.’ I have been skeptical of Trump’s campaign line that he would get rid of “waste, fraud, and abuse”…

Skepticism About The Rally

The market is in the irrational exuberance stage at the moment as even the Italian bank stocks have been rallying this week. As I mentioned in my last post, the indicators in the economy have improved. However, the market was already priced as if they were improving, so it shouldn’t be rallying as much as…

Up, Up & Away

The optimism is quite high in the market and in business as the anticipation of Trump bringing changes in government which are pro-business is causing a ‘risk on’ trade to be put in place. I heard Trump say in an interview on NBC that he would cut 80% to 90% of regulations. This would be…

Fake News Shouldn’t Worry Facebook

Businesses have a life cycle. They have their inventive period, their growth period, their maturity period and their decline period. When a business is in the growth and mature period, investors believe the company can keep going forever, but that usually doesn’t happen. Sometimes businesses get a second life like Apple got with the iPhone,…

Draghi Continues Bond Buying

The current European Central Bank’s asset purchasing program had it buying $80 billion in bonds per month until April 2017. No one expected this to be the end of the program, but the specifics of the new program would determine how markets would react. The media likes to put every central bank movement into a…

The Bubble Gets Bigger

Today the market extended its gains to extraordinary levels. Goldman Sachs has been behind much of the latest Dow gains as its stock is 6% off its all-time high it set in October of 2007. The Dow is price weighted so each move in Goldman Sachs matters a great deal since the stock is in…

Snapchat Taking On Facebook

According an article on CNBC, ad experts do not think Snapchat poses a threat to Facebook anytime soon. Facebook must disagree with these experts because it tried to copy Snapchat’s stories feature with Instagram and Messenger adopting it. I think Snapchat’s growth is sustainable over the long term because it is centered upon creating content…