What Will Cause The Next Recession – Jim O’Neill On The World Economy What will cause the next recession when “Wall Street indexes predicted nine out of the last five recessions! and its mistakes were beauties.” — Paul Samuelson, 1966 When will the next recession happen? Jim O’Neill, former chief economist at Goldman Sachs, says…
St. Louis Fed Financial Stress Index Before a coming recession, also watch the St. Louis Fed Financial Stress Index for forecasting the future. It uses 18 weekly data series to measure financial stress in the market: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress.…
US Stock Market since 1900 “For 240 years, it’s been a terrible mistake to bet against America” — Warren BuffettThis great chart of the US stock market since 1900, is a very good illustration of that fact. Source: J.P. Morgan Asset Management “Guide to the Markets” for Q2 2019
When Do Recessions Occur in the US? Since 1948, recessions occur in the US after the unemployment rate is lower than the natural rate of unemployment (long-term), with a very high degree of confidence.
“I never attempt to make money on the stock market…”–Warren Buffett “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for ten years.” –Warren Buffett
2 Secrets to Beating the Market. Great Value Investor Joel Greenblatt Explains For a long-term diversified portfolio, Joel Greenblatt, great value investor and CIO of Gotham Asset management, would stick with the Vanguard Value ETF (VTV) because it underperformed for a long time and is a relative bargain to the S&P 500.
Real GDP vs. Real Fed Funds Rate One of our most favorite charts is the real GDP vs. the real Fed funds rate (adjusted for inflation). Historically, recessions begin when the real Fed Funds rate exceeds GDP growth. We are far from that today. So, this cycle should not end any time soon. Real Fed…
Real Fed Funds Rate Real Fed funds rate is a key indicative factor, because it’s a very good measure of how tight or loose monetary policy is. Real Fed funds rate is the “true cost” of borrowing money. Recessions have always been preceded by a substantial tightening of monetary policy, which, in real terms, matter…
The stock market vs. the economy explained Josh Brown, CEO of Ritholtz Wealth Management, explains the relationship between the stock market and the economy. His analogy is quite simple: the dog is the stock market and the man walking the dog is the economy. https://www.youtube.com/watch?v=59im9CtR9YI
“An investment in knowledge pays the best interest.” –Benjamin Franklin Knowledge helps you make much better decisions. As Albert Einstein said, “Once you stop learning, you start dying.”
Dalio Says U.S. Two Years From Downturn as Tax Cut Benefit Fades Hedge fund manager Ray Dalio speaks with Erik Schatzker about the next downturn and the impact of tax cuts. He also discusses debt cycles and the fact that central banks should control the level of debt and take responsibility for bubbles. https://www.youtube.com/watch?v=X1xcQKIl850