If I have sounded like a broken record these past months, it is because these developments in American public health are as important as they are horrifying.
My concern is that the Fed will begin to gain comfort in the functioning of short-term interest rates, then decide to reduce the balance sheet just before a shock coincides with less liquidity and super-high stock valuations.
The U.S. produces about 13 million barrels per day and consumes 21 million, so higher oil prices could depress economic growth. But I’m not worried about that yet.
The market is going to move slower or faster toward fair value for a whole host of reasons, and to think it’ll get there on some exact day is just dumb.
My daughter’s life is very different. She is scheduled within an inch of her life, and while she is reaping benefits from her activities, it certainly comes at a cost.
Our shift from growth to value throughout last year has been small in magnitude and snail-slow. We didn’t want to get too defensive and lose out on the upside, and value stocks allow for the possibility of participating on the upside.
When it comes to the movement of stock prices and how those prices reflect fundamental data, good vs. bad is largely irrelevant. What matters is not good vs. bad, but better vs. worse.
Where the economy might go from here is another conversation, but we do know that defaults on existing debt are relatively tame, meaning that consumers are not yet feeling overwhelmed.
The chairman appeared to be sending a message to the White House that its trade war is pushing the U.S. toward a recession, and that the Fed may not have the tools to bail us out if that happens.
