What Are the Odds?
Weekly Blog #13 “We should be at least two to three points lower—if things later change to the negative, increase the rate.” President Donald Trump It’s no secret that President Trump has been extremely unhappy with Federal Reserve Chair Jerome Powell and his reluctance to lower interest rates. Trump, a businessman, understands how rates affect […]
You’re Fired!
Blog #12 “The Federal Reserve is like universal basic income for PhD’s”—Scott Bessant The Federal Reserve is the most powerful institution in the global economy—and one of the least understood. Created by Congress in 1913, the Fed was originally tasked with maintaining financial stability. That mission later expanded to a dual mandate: promoting maximum employment […]
Too Big to Succeed
Weekly Blog #11 They (Freddie Mac & Fannie Mae) are one half fish, one half fowl—Ben Bernanke There are few institutions more misunderstood—or more influential—in the housing industry than Freddie Mac and Fannie Mae. Most people know the names, but haven’t a clue as to what they do. They aren’t lenders. They don’t make home […]
The Affordable Housing Myth
Weekly Blog #10 “There is no such thing as a free house.” Milton Friedman paraphrase “There’s no such thing as a free house; someone always pays the mortgage.” Milton Friedman’s warning may pre-date our current housing debates, but the lesson is timeless. Lately the rallying cry has been, “eliminate greedy developers and let government build […]
Is Isaac Fair?
Weekly Blog #9 “There is nothing either good or bad, but thinking makes it so.” William Shakespeare Let’s start with a question: What does your credit score really say about you? If you’re like most people, you might assume that it measures financial responsibility, discipline, or even moral worth. After all, banks, insurance companies, landlords, […]
What’s it Worth?
Weekly Blog #8 “Price is what you pay. Value is what you get.” Warren Buffett Adam Smith’s invisible hand tells us that in a free market, prices are set by what a buyer is willing to pay and a seller is willing to accept. And for many goods and services, that’s true enough. But real […]
Creative Accounting
Weekly Blog #7 “I’d gladly pay you Tuesday for a hamburger today.” Wimpy Washington bureaucrats would like the rest of us to believe that government accounting is somehow different—and more complicated—than personal or corporate accounting. They suggest that managing the federal coffers requires the knowledge and expertise of the managerial class. Nothing could be further […]
Return of the Fed Put?
Weekly Blog #6 “Markets can remain irrational longer than you can remain solvent.” John Maynard Keynes If it seems like markets are backward, sideways, and upside down these days, you’re not imagining things. We’ve officially reentered the realm of the Fed Put—that bizarre world where bad news is interpreted as good news because it might […]
Tariffs: Friend or Foe?
Weekly Blog #5 “Trade protection accumulates riches for a few while the many grow poorer.” Adam Smith A tariff is, at its core, a tax on imported goods. While taxes on income and property are familiar to most people, tariffs tend to operate more quietly in the background, much like Europe’s ubiquitous VAT tax, hidden […]
Risky Business
Weekly Blog #4 “The price of admission to higher returns is volatility.” Morgan Housel Every investor wants to make money. But making money is not the same thing as making money wisely. The difference? Risk. More specifically, the risk premium—the extra return an investor demands for taking on uncertainty. If you don’t demand a sufficient […]
