Category Archives: Money

No Leverage = Higher Costs

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We hear all the time that medical costs are too high in the U.S., and that Medicare is going to go bankrupt in the future.  The President-Elect recently told us in a press conference that drug companies are “getting away with murder.”  So how high are drug prices, and are those prices contributing at all to the high medical costs in the U.S.?

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Investments to Avoid

morningstar

Every year, the Morningstar mutual fund tracking organization releases a list of the worst new ETF investments—and generally, these tend to be trendy new offerings that are designed to catch the eye of investors who are responding to yesterday’s  headlines rather than their long-term economic future.

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2016 Year End Report

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You know you’re deep into a longstanding bull market when you see things like average pedestrians keeping one eye on the market tickers outside of brokerage houses to see when the Dow Jones Industrial Average has finally breached the 20,000 mark.  Who would have imagined record market highs at this point last year, when the indices ended the year in negative territory?  Or when new year 2016 got off to such a rocky start, tumbling 10% in the first two weeks—the worst start to a year since 1930?

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Higher Rates: The Tempest in the Teapot

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Anybody who was surprised that the Federal Reserve Board decided to raise its benchmark interest rate this week probably wasn’t paying attention.  The U.S. economy is humming along, the stock market is booming and the unemployment rate has fallen faster than anybody expected.  The incoming administration has promised lower taxes and a stimulative $550 billion infrastructure investment.  The question on the minds of most observers is: what were they waiting for?

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Is OPEC Back?

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It was initially considered something of a big deal when, on November 30, the Organization of Petroleum Exporting Countries (OPEC) ended years of squabbling and mutual frustration by announcing that their members would cut oil production in the coming year by 2 million barrels a day.  If the deal holds, it will represent the first reduction on the global markets in eight years.

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Black Money in India

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Surely one of the most curious–and potentially costly–monetary experiments is taking place right now in India, where Prime Minister Narendra Modi abruptly decided—without warning—that the 500- and 1,000-rupee notes in circulation were no longer valid currency, effectively turning 86% of his country’s paper currency into colorful scratch pads.  The Reserve Bank of India is printing new replacement bills to restock its banking system, but reports say it will take five or six months before the money removed from circulation can be replaced—in a country where cash represents 98% of all transactions by volume, and 68% by value.  Sales across the country have fallen by 20-30%, reducing estimates of India’s GDP growth this year.

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The Employed and the Drop-Outs

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Headlines told us that the U.S. economy added 178,000 jobs in November, dropping the unemployment rate to 4.6%—the lowest level since August 2007, and surely an improvement over the 10% rates of the Great Recession.  Those numbers represent great news, and indicate that the country is in strong shape as President-elect Trump takes office.

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