Tag Archives: Money

Post-Election Circus

The Economy: The U.S. economy appears to be accelerating while the global economy turns in mixed numbers. If this divergence continues, it may be the U.S. that serves as the engine of growth that keeps a global recession at bay. While the U.S. anticipates continued acceleration due to Trump tax cuts and fiscal stimulus, the EU faces more economic uncertainty as Italeave and Irexit appear to be set for a vote. Uncertainty is the bane of financial markets as participants postpone decisions until there is greater clarity. The feedback loop can create a self-fulling prophecy. The upheaval in Washington was reflected in a bond market route that is unlike anything we’ve seen in years. Rapidly rising rates would negatively impact large sectors of our economy such as housing and autos. Uncertainty also surrounds the Fed meeting in December. Though financial markets have supposedly priced-in a ¼ percent interest rate hike, animosity between Fed Chair Yellen and President Elect Trump means that all bets are off. I sent you a letter this week in which I discussed protecting your assets in this environment. Please let me know if I can help you with your money.

Food for Thought: To put a fine point on it, it’s been a week of over-the-tops: First Up, Cornell University hosts a “Cry-In” for students traumatized by the Trump victory. Not a Sit-In. Not a Laugh-In. Not a Love-In. A Cry-In. While 300,000 teenagers serve in our military, the Cornell Masters of The Universe huddle with their barista supplied hot chocolates and bawl. Our take: All you overweened please decamp for Canada immediately. Second Up, Numerous people who were too preoccupied to vote have taken to the streets to protest the “Not My President” Trump election. Our take: You’ve successfully auditioned for The Kardashians. Third Up: This week a San Diego hi-tech entrepreneur threatened Donald Tump in a Facebook post. Facebook! Our take: The Peter Principal confirmed and the Wrath of The Secret Service, Homeland Security and the NSA shall rain down upon you. Kiss any more Venture Capital goodbye forever. The President of the U.S. has an annual salary of $400,000. Trump has announced that he will forgo the salary. Not a word from the mainstream media. The Greatest Show On Earth continues its unprecedented run! … and like you, I patiently wait for common sense and social grace to return to our Great Land. Thanks for reading More Money. If I can help you in any way please contact me at raymond.higgins@higginscapital.com. We Quarterback Money®.

Music of the Week: Tina Turner’s “Twenty Four Seven”

Chaos in the Stock Market

The Economy: At some point, news on the economy will focus on the fundamentals of data rather on the whims of Central Bankers. But we’re not there yet. So with the Fed meeting next week, life is on hold while we await more dissembling opacity. There is a growing sense that 7-years of monetary policy have failed and that continuing down the same path is a mistake. How this plays out is anyone’s guess. But one thing is certain, markets don’t like uncertainty. Talking heads and other blithering, blathering idiots are having a field day in front of the last Fed meeting prior to the election. Our call remains that the highly politicized Fed will do nothing to diminish the chances of a Clinton victory. So we say, “No Change; Lower for Longer” on interest rates. … continue to kick the can down the road and hope that somehow, the bubble of extreme asset inflation, can be pricked and deflated without an implosion. Tellingly, former Fed Chair Greenspan has said, that this, “… is the worst economic and political environment …” he’s ever seen.

Food for Thought: The equity markets have demonstrated how chaotic and fragile they truly are. Simply the whisper of a ¼ percent rate hike sent markets down over 2% on Friday. On Monday, the whisper that the ¼ percent hike was off the table sent markets up over 1%. On Tuesday, markets dropped again. We don’t think this is a healthy investing environment. We are focused on protecting assets. We continue to sell positions that are at a profit and put the proceeds into the money markets. You want to have funds available for investing when the opportunity presents itself. We’re not doom and gloomers. Rather we’re veterans of several market sell-offs, crashes and bear markets. At this type of inflection point, investments can often be reallocated to take advantage of opportunity or to make up significant losses.

Music of the Week: Big Mountain’s “Resistance”