The US Federal Reserve hiked interest rates four times in 2018, raising the Federal Funds Rate to 2.5%. This has raised yields on money market funds and Certificates of Deposit which adjust their yields based on changes in interest rates. Many banks have raised the interest that they pay on checking and savings accounts, although …
Whipsaw
I am not sure why, but when I think of the word "whipsaw*" I think of a crazy amusement park ride that spins you around every which way - sort of like the one pictured below. When the ride is over, you either throw up or come very close to throwing up. That definition is …
2019 Recession Outlook
As we enter 2019 and the 10th year of the economic expansion here in the United States, many end-of-year research reports will address the big question: is the US economy headed into a recession* sometime in 2019? There are dozens of indicators that have a history of correctly predicting recessions. Those same indicators also have …
Skin In The Game
I recently finished reading Nassim Taleb's newest book: "Skin In The Game: Hidden Asymmetries In Everyday Life". The phrase "skin in the game" refers to having a personal stake in something (a decision, policy, advice given, etc...). That "stake" can be monetary, reputation or something else, but Taleb believes that people should be exposed to …
Easy Money
"The easy money has been made" is a very dangerous sentence. It implies that whatever gains you have now, were easy to achieve - whereas any future gains are going to be much harder to come by. I love this chart from Morgan Housel* that shows various financial news outlets and the date when they …
