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The U.S. economy is showing signs of weakness. The latest job numbers for February had a loss of 92,000 jobs and the unemployment rate ticked up to 4.4%. Trump’s on again, off again tariff policy could have put new hirings on hold. Trump’s new 15% tariff could add to inflation depending upon whether companies absorb some of the extra costs or pass them on to their customers. Unfortunately,…

The US and Canada have had deep economic ties for well over 150 years. A big turning point was the 1965 Auto Pack. This integrated the auto industry across the border allowing cars and parts to cross multiple times during production tariff free. The Auto pack was followed by the 1989 U.S . free trade agreement which turned into NAFA, adding Mexico in 1994. It was renegotiated by Trump, replacing…

There has been a lot of talk in the news media about the possibility of future job losses due to AI. According to a study just published by MIT, AI will replace 11.7% of the labour force. The study was conducted using a labor simulation tool called the Iceberg Index, which was created by MIT and Oak Ridge National Laboratory. The index simulates how 151 million U.S. workers interact across the…

Chairman Powell of the Federal Reserve should have raised interest rates when inflation hit 4%. He believed that inflation was temporary due to the pandemic of 2020. By delaying raising interest rates, Powell was forced to catch up and raise rates much higher. In addition, Powell had to maintain higher interest rates for a longer period of time to curb inflation. President Biden passed the…

Stock Market is often disconnected from the real economy

For years, I have seen many stock market bubbles form and then burst. Stock market experts seem to sing the same old tune. They are looking beyond present conditions toward what they believe will happen in the future. Bubbles usually form when there is too much optimism and tend to burst when the economic reality sets in.

The basic human suffering from Covid-19 gets more and more insane by the…

Wall Street ignoring the economic pain on Main Street

Are you mystified that the S&P 500 is only down 13% from its February high and the NASDAQ is slightly positive year to date? You would think that all the bad economic numbers would dampen investor’s confidence in owning stocks. However, publicly trading companies on Wall Street have a number of advantages over Main Street.

When it comes to government bailouts and subsidies, large public…

Some investing ideas to endure this recession

The latest economic numbers seem to confirm my view that this recession is going to be worse than the last great recession. The U.S. first-quarter gross domestic product report of -4.8% underscores the economic devastation of the Covid 19 virus.  The contraction in GDP was the largest drop since late 2008. Keep in mind that shelter in place and social distancing was only started in March in…

  The last time we had zero interest rates was during the great recession of 2008-09. If you are a movie buff, that was one scary horror movie. Unfortunately, the sequel maybe even scarier. The plot, so far, is similar in many ways. The world faces a major crisis with high unemployment, massive government spending (bailouts), zero interest rates and central banks printing money.

How do you make…

It is difficult to write a financial blog when the death count from Corvid -19 keeps going up every day. However, the big question is when we will get back to normal? I think you have to look back in history at the Spanish flu of 1918 for some clues.

Policies used to reduce the spread of Corvid -19 are similar to what was done to reduce the spread of the Spanish flu. Unfortunately, isolation,…

If I was a U.S. prosecutor, I would charge Trump with involuntary manslaughter. In case you don’t know what that is; charges of involuntary manslaughter is defined as an unintentional killing that results either from negligence or recklessness. An example is a motorist driving under the influence of alcohol or drugs resulting in a deadly car crash killing another individual.

Trump realized that…

Why interest rate cuts won’t save the economy or the stock market

This week, after an emergency call with central bank leaders around the world, the Federal Reserve cut interest rates. A somewhat surprising move coming about two weeks before its next scheduled meeting. It was the first emergency rate cut by the Fed since the financial crisis in 2008 and a strong signal that the central bank is taking the threat of the virus seriously.

The problem is that…

Is your emergency fund ready for the next recession?

Around this time last year, a U.S. government shutdown forced many  government workers to go into debt to pay bills and some even had to go to food banks to make ends meet. They eventually got back pay but it is a good example of why you need an emergency fund. According to a recent survey from Charles Schwab, 59% of Americans say that they are living paycheck to paycheck, despite the fact that…

How to keep your New Year’s financial resolutions for 2020

  Nearly 70% of Americans are making a money-related New Year’s resolutions and more than half of those making one are prioritizing saving more, according to Fidelity Investments’ 2020 New Year Financial Resolutions study.

As well-meaning as we may be, around half of us failed to keep the financial resolutions we made this year. Change doesn’t come about because people want change so badly. It…

Some recommendations for new investors with not allot of capital

    One Size Doesn’t Fit All

  It has been a long time since one of my readers posed a question that could be answered in a blog post.

Do you have any recommendations for new investors with not allot of capital to start with? $5000 – $10000. Just wondering if there are any things you wish you knew when you started or good resources you would recommend for learning some important basics. Maybe…

Fall is a good time to do some tax planning

Being a retire senior, reducing income taxes is key when living on a fixed income. I usually joke with my friends that I fix my own income each year. I do my best to minimize my quarterly installment payments to the tax department.

With holiday season coming soon, you are going to be busy visiting with family & friends and Christmas shopping. You will be glad during tax filing season that you…

Is it time to switch from Bonds to dividend paying stocks?

What are the risks facing us in the next year or two? The inversion of the yield curve which has happen on three separate occasions has me worried. It signals more stock market volatility, it is a sign that the bond market fears subpar economic growth and that a trade war could cause a global recession.

Historically an inverted yield curve has been a reliable, though not perfect, predictor of a…