Tax Reform 2017

Equifax Data Breach

genevity

Economic Growth and the American Dream

There has been much talk about the increasing disparity of wealth in our country and there are few facts that explain this dynamic better than a comparison of wage growth and the growth of financial market value. As we know, wage growth is particularly germane to the vast majority of the population and there are a number of metrics that demonstrate a lack of real growth in wages. According to FRED (Federal Reserve Economic Data) the inflation adjusted real median household income in the US in 1981 was $46,205. According to Sentier Research (FRED only has numbers through 2013) the 2015 real median household income was $54,203. This amounts to less than 0.5% of annual wage growth over the past 35 years! In contrast, financial assets, which are more germane to a small fraction of the population, have grown 15 times since 1981. According to the Fed’s flow-of-funds calculations the sum of credit market debt outstanding plus the market value of equities has increased from $7.2 trillion (2015 constant dollars) in 1981 to $95 trillion in 2015, about 7.7% annual growth. Left to market forces this circumstance would have corrected itself long ago. However, Fed policy, particularly in the past 30 years, and more particularly in the past 10 years, has created “asset inflation” that has accrued to the benefit of asset owners, while wage earners have been left behind. This dynamic must change for the American dream to stay alive.

Organizational Leadership

A worldwide sell-off in government bonds deepened today, buoyed by rising German Bund yields that recently hit record highs and narrowed their gap with U.S. Treasuries. Benchmark 10-year Bunds now trade at 0.53%, having hit a record low of 0.05% last month when many expected them to turn negative. The brutal meltdown in the bond market is also raising pressing questions for investors – is this a correction or merely a trend change?1 Keep an eye out over the next several months as the release of economic data will help answer that question.

1 http://seekingalpha.com/news/2491466-the-bond-rout-continues?ifp=0

Bracket Boom or Bust?

March Madness is officially upon us as the 2015 NCAA Basketball Tournament started yesterday evening in Dayton, OH.   With more than an estimated 40 million Americans filling out more than 70 million brackets, which resulted in more brackets than ballots cast for either President Obama or Mitt Romney in the 2012 election, most of America’s eyes will be focused on their standings within their respective office pools rather than on their portfolios.[1] According to market data provided by Kensho, over the past 10 years between March 17 and April 6, every single stock in the Dow Jones average has had a positive return. Broadening our scope to include the S&P 500 and only those companies that were around for the past 10 years, Kensho also found that only 12 of the 445 stocks included in the analysis experienced a negative average return.   Provided with this information, where will you spend more time focusing – on your brackets or on the markets?

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Bracket Boom or Bust?

March Madness is officially upon us as the 2015 NCAA Basketball Tournament started yesterday evening in Dayton, OH.   With more than an estimated 40 million Americans filling out more than 70 million brackets, which resulted in more brackets than ballots cast for either President Obama or Mitt Romney in the 2012 election, most of America’s eyes will be focused on their standings within their respective office pools rather than on their portfolios.[1] According to market data provided by Kensho, over the past 10 years between March 17 and April 6, every single stock in the Dow Jones average has had a positive return. Broadening our scope to include the S&P 500 and only those companies that were around for the past 10 years, Kensho also found that only 12 of the 445 stocks included in the analysis experienced a negative average return.   Provided with this information, where will you spend more time focusing – on your brackets or on the markets?

[1] http://www.americangaming.org/newsroom/press-releases/americans-to-bet-2-billion-on-70-million-march-madness-brackets-this-year