Blog

Infrastructure Spending

This week the Senate passed a bipartisan infrastructure bill with a cost of $1T. The amount stems from left over Covid-19 American Rescue Plan funds coupled with a proposal to report and tax cryptocurrency transactions.

As the Delta variant spreads more aggressively than the original infection, America’s reaction consists of more separation- vaccinated from unvaccinated. The surge is happening among the unvaccinated accompanied by a low rate of breakthrough cases in the vaccinated.

Market Analysis

Market analysts use facts to justify their outlook for future performance. There are many facts at their disposal and selecting only the facts that confirm their outlook is part of the game.  

Market Update

It’s official; the shortest recession in US history has been officially declared- 2 months! It was also one of the steepest. Does anyone remember the fear, paralysis and unknown of a public health emergency? The recovery in asset values has also set records. Stock prices, housing values, price and wages increased as well as record low interest rates.

Earlier in my career I worked in health care. The Foundation for Shared Medical Decision-Making was my employer. They created video programs to assist patients who had been diagnosed with certain conditions for which the patient had decision options for treatment.

At the most recent G-7 conference finance ministers agreed on a minimum corporate tax rate of 15%. There are actually 2 pieces to the proposal: one piece taxes corporations in line with the country they operate in by taxing profits over 15%, and the second establishes a minimum corporate tax rate among the G-7 of 15%.

In the News

Two major issues in the news this week and they are related.

The Federal Reserve made its decision to keep short term interest rates at their current levels. The statement also shortened the time to expect an increase in short term rates. The Fed states that inflation is transitory as the economy returns from the pandemic induced recession. Sure enough, market reaction was a sell-off resulting in the worst performance of the major averages this year.

As we began this week’s newsletter we were awaiting the dissemination of the results from the Federal Reserve June meeting. As usual, economic data is mixed in many regards and depending on what you want to conclude about asset values. 

JoBeth and I took our first post-Covid-19 airplane flight this past week. We visited my children in Taos, NM, and stopped in Santa Fe, NM for a couple of nights. There was a distinct contrast in mask and social distancing between San Francisco and New Mexico. NM has a high vaccination rate but compliance with public health measures was notably less stringent than SF.