The Morning Call--Fed study shows easy money leads to financial crisis

 

The Morning Call

 

3/7/23

 

The Market

         

    Technical

 

Monday in the charts.

https://www.zerohedge.com/markets/big-tech-trounces-small-caps-rates-rip-ahead-powell

 

A perspective on bull and bear markets.

https://www.advisorperspectives.com/dshort/updates/2023/03/06/february-2023-a-perspective-on-secular-bull-and-bear-markets

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Month to date retail chain store sales grew at a much slower rate than in the prior week.

 

January factory orders fell 1.6% versus expectations of -1.8%; ex transportation, they rose 1.2% versus +0.6%.

 

                        International

 

                          January German factory orders were up 1.0% versus estimates of -0.9%.

 

                        Other

 

                          Drive inefficient producers out of business.

                          https://www.adamsmith.org/blog/no-we-want-to-drive-inefficient-producers-out-of-business

 

            The Fed

 

              Fed study shows easy monetary policy leads to financial crisis (must read).

              https://www.zerohedge.com/markets/fed-study-shows-loose-monetary-policy-leads-disaster-and-financial-crisis

 

              It is not nice to fool Mother Nature.

              https://www.advisorperspectives.com/commentaries/2023/03/04/how-it-started-how-its-going

 

Powell appears before congress this week and will testify that more monetary tightening is need to curb inflation.

https://www.financialexpress.com/investing-abroad/featured-stories/federal-reserve-submits-monetary-policy-report-to-congress-testimony-next-week/3000226/

 

              Another argument for moving the goalpost.

              https://www.ft.com/content/7a996a63-6502-4bd7-927d-ebe8118f7132

 

            Fiscal Policy

 

              Republicans aren’t blameless in the runup of the national debt.

              https://www.nytimes.com/2023/03/06/us/politics/federal-debt-republicans-democrats.html

 

            Inflation

 

              The price of oil is likely headed higher.

              https://www.realclearmarkets.com/articles/2023/03/06/norm_reversion_for_oil_indicates_less-than-transitory_inflation_885256.html

 

              Housing prices declined in January.

              https://www.calculatedriskblog.com/2023/03/black-knight-mortgage-monitor-home.html

 

              Framing lumber prices down 72% YoY.

              https://www.calculatedriskblog.com/2023/03/update-framing-lumber-prices-down-72.html

 

            Recession

 

              The output gap.

              https://econbrowser.com/archives/2023/03/output-where-weve-been-and-where-we-are-relative-to-potential

 

              Fed rate moves put manufacturing sector at risk.

  https://www.wsj.com/articles/feds-rate-moves-put-manufacturing-sector-at-risk-da82b85b?mod=hp_lead_pos1&utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=248945264&_hsenc=p2ANqtz-9gss5MhrAZPyznBK9RbziBXTwwzBBaaVPQZ52MNslc47LilyfVkSoBP5yyyzjLG3MhKp9D5nYAjonf5Y8BHgR3COfQuw&utm_content=248945264&utm_source=hs_email

 

    Bottom line

 

            Update on Buffett valuation indicator.

            https://www.advisorperspectives.com/dshort/updates/2023/03/06/buffett-valuation-indicator-february-2023-update

 

            This is about as contrarian a position as anything I have seen.

            https://www.morningstar.com/articles/1142093/the-us-stock-market-is-undervalued-but-it-looks-like-a-rough-road-ahead

 

            Credit/stock yield spread sending alert signal.

            https://www.zerohedge.com/markets/credit-stock-spread-sends-flashing-alert-signal

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Life among the ruins (must read).

            https://www.zerohedge.com/political/victor-davis-hanson-life-among-ruins

 

            How the brain ages across a lifespan.

            https://www.washingtonpost.com/wellness/2023/02/28/brain-aging-childhood-teens-adults/

 

            Our schools are unbelievably bad.

            https://www.powerlineblog.com/archives/2023/03/our-schools-are-unbelievably-bad.php

 

            The value of a successful relationship.

            https://traderfeed.blogspot.com/2023/03/the-most-important-factor-in-successful.html

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.