Fun word to say out loud



Consumers’ Holiday Spending Plans

Consumer holiday spending intentions (and by proxy consumer confidence?) at highest since 2007, pre-crash

A duo of charts – Hedge Funds not commanding the same premium they once did

This is the Small Cap Secret No One Ever Told You

“Small Stock Premium” – the idea that small stocks outperform large stocks, over time. Reason why? the additional premium compensates you for decreased liquidity & additional volatility.

But the out-performance isn’t as dramatic as some data/charts would lead you to believe. The reason is that the NYSE only recorded a small sample of small stocks before 1972. The sample was small and stocks chosen were beaten down large stocks, one which were more likely to outperform during a bounce back. The data is skewed.

Having said that, Small Cap portfolios (e.g., Dimensional Funds US Small Cap Portfolio) still out-perform large ones in more recent years:

Washington’s blockbuster budget deal could be the end of an era

Huge new gov’t budget deal extends the debt ceiling through 2017. After previous partisan fighting and showdowns over the budget, does this smooth-sailing signal the end of austerity? Is the tea party party and their influence waning?

[Or is this simply because Boehner is leaving office and he is conducting business in FU mode?]

Six Key Signals for the U.S. Economy

Economic recession/downturn is now unlikely. Why? Periods of recession follows periods of excesses, but in the current economy, no such excesses exist (except in the federal gov’t).

  • Bullish indicators:
    • Housing is improving. Both real estate prices and Housing Starts have both risen moderately.
    • Businesses have lots of cash. [But is this because they don’t have anywhere attractive to spend/invest in?]
    • State & local gov’ts are doing well. Their finances are improving, have ceased laying off employees, and are hiring again.
    • Households are doing better. Mortgage debt has been shed, net worth is up, average factory work week is up.

But, economic acceleration is also unlikely.

  • Bearish factors:
    • People are still scarred from the 2007-2009 crash.
    • Federal Gov’t has passed sweeping laws that are confusing and disruptive. Including Obamacare & Dodd-Frank Financial Reform.



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