In the News Two major issues in the news this week and they are related. The collapse of the Florida shoreline condo building and a tentative agreement on an infrastructure bill by a group of Democratic and Republican Senators and the Biden administration. With the unclear source of the collapse but much speculation, there is a significant possibility that construction that was up to code in 1980 did not consider the impact of climate change...
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. The one day drop last Friday shook markets. The impact on...
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. Inflation , the latest area of investor concern, seems to have stabilized , with mortgage rates headed lower this week along with otherwise stable interest rates that have fallen further this month. Concern in regard...
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. It was a bit shocking to us and we still made...
Decision-making, especially when faced with too many decisions, can present a challenge in any environment. During the Pandemic, most aspects of life have been turned upside down including general decision making. Upside down means what was formerly up is down and vice versa. It was easier to decide to practice social distance, mask-wearing, and washing hands. Harder decisions seemed to be revealed on the back end, such as whether to return to an in-person office...
Tax day happened Monday, May 17th officially marking the close to the calendar year 2020. What a year! Inflation or not inflation. Try buying a used car and notice that the shortage of supply and steady demand combined are pushing prices to record levels. Look at rental car prices and you will see a similar trend. It is possible to find both sides of this story in the same issue of the same newspaper on...
Stock market behavior and the divergent performance between the Dow Jones Industrial Average and the NASDAQ market index. It has not been uncommon for the correlation between the two to be -1 or to move in the opposite direction. The NASDAQ consists of mostly technology, biotech, and other "growth" stocks whereas the DJ industrial average consists of manufacturing, industrial, energy, consumer non-durables, pharmaceutical companies, or more in the "value" silo. As the economy revs up...
Bipartisanship has been a stated and restated goal for President Biden. This past week, Republicans have offered a package focusing on traditional infrastructure projects and finances the improvement with fees on users like an increased gas tax hike . Biden will be meeting with Republicans to see if there is any room to work. Is it possible to pass a bipartisan traditional infrastructure plan and then a subsequently expanded infrastructure plan focused on human infrastructure...
This week President Biden delivers his first almost State of the Union address focusing on his first 100 days accomplishments and proposing his next steps. Going “Big” seems to be the overriding assessment of his proposals. A new, much larger role for government is a critical part of the changes to the American political landscape. Link to video: " target="_blank">https://www.youtube.com/watch?v=rgLfDD9hbx8 Reform and Stimulus $6 trillion proposed, $2 trillion passed, $4 trillion to go. Federal government...
Central Bank Digital Currency or CBDC. Have you seen this acronym “CBDC;” what is it? Think of Apple pay on an iPhone that is a “digital wallet” linking credit cards and bank accounts issued by a bank and cleared through Visa, MasterCard, American Express, or Discover. Those credit card transactions completed with the Apple pay app earn the bank and Visa/MasterCard etc., a fee of around 3%. Additionally, the purchaser may also earn you points...
Wednesday, April 14th this week was the direct listing of an SF company in the business of storing/trading/managing cryptocurrencies mainly Bitcoin. Coinbase (COIN) went public this week. We have been trying to understand what cryptocurrencies are and if and how they fit into portfolios. Although we have read a great deal, I have to admit that it is a hard reality for me to grasp. I know certain information: Blockchain computing is the mechanism used...
The butterfly emerging from the caterpillar cocoon. The butterfly spreads its wings and flies off-no transition. After over 1 year of quarantine, lockdown, and social distancing we are not as easily finding the transition to what comes next. As we meet with clients, each person is finding their own way forward. One trend in the news is looking back on the challenging year that introduced a whole new vocabulary of behaviors into daily practice. What...
