The W-Shaped Recovery For U.S. Stocks

The notion that the bear market for U.S. stocks has ended is fanciful. For example, is it really the case that financial firms are on the mend? They’re restricting access to credit, increasing reserves for loan losses and showing few signs of resilience beyond a...

The Most Expensive Stock Market Ever

Many describe the U.S. as a consumer-oriented economy. That is because consumer spending, not manufacturing, accounts for two-thirds to three-fourths of economic growth. It follows that consumers need to spend for the economy to do well. Yet, at the moment, one-third...

Stock Bubble Ignores Consumer Discomfort

Correlation may not be causation. Nevertheless, there has often been a high correlation between the movement of the Consumer Comfort Index and the stock market (S&P 500). Until now. Despite Consumer Comfort plummeting more than 50%, the S&P 500 has rallied...

Buffett and the Optionality of Cash

Can trillions of Fed liquidity overcome the probability of a deluge in corporate insolvencies? Fed Chairman Jerome Powell just acknowledged that additional government fiscal stimulus, not Fed stimulus, may be the only way to lessen this pain. “The passage of time is...

The Stock Bubble’s Price-to-Book

In 2016, oil prices fell dramatically, sending shivers down and up the spines of energy bondholders. Investors worried that a slew of energy companies would go belly up. In 2020, weak demand for oil is only part of the economic concern. Fragile demand across a wide...