Corporate Yield Spreads Start To Widen
2025-04-08
Is a recession coming? That is the billion-dollar question investors now face. One gauge to help us answer the question is corporate bond yield spreads. When the yield differential between corporate bond yields and risk-free Treasury bonds widens significantly, it signals that bond investors are taking a risk-averse stance. Simply, they are pricing higher odds …
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Trumps Puzzle
2025-04-02
We are big fans of Sunday crossword puzzles, which tend to be bigger and more challenging than the weekday format. Adding to their allure, most Sunday puzzles have a clever theme, typically three or four clues whose answers stretch across the puzzle. Solving the theme often makes a complex puzzle a little easier. Like a …
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The Wealth Dissipation Effect
2025-03-27
Ben Bernanke popularized the wealth effect theory during the financial crisis in 2008. In his words, “higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.” Moreover, he argued this would create a “virtuous circle” of increased spending, higher incomes, and further economic growth. Since then, the Fed has …
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Do Money Supply, Deficit And QE Create Inflation?
2025-01-24
I recently debated with Michael Pento, who made an interesting statement that increases in the money supply, the deficit, and a return to quantitative easing (QE) will lead to 1970s-style inflation. The recent experience of inflation in 2021 and 2022 would seem to justify such a view. However, is that historically the case, or was …
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