Lowered Expectations for Economic Recovery May Be a Good Thing

In the early days of the Covid-19 lockdowns, many held out hope that the temporary pause to economic activity would give way to a robust recovery in the second half of the year. It was common to hear talk of a “v-shaped” recovery. As the weeks drag on and negative economic data continues to flood […]

Will This Recession Become Another Great Depression?

Many readers have probably seen the headlines and stories claiming this recession could be as bad – or worse – than the Great Depression. To that I say, don’t take the bait. The Great Depression was a slow, long, grinding downturn for the U.S. economy. From 1929 to 1933, the economy shrank for 43 consecutive […]

Why Are Stocks Rallying When the Economy is Stalled?

By April 18th, a record 12.4% of the US workforce was receiving unemployment benefits, with over 30 million submitting jobless claims. Estimates suggest that in the coming weeks, the unemployment rate could approach 20%, which would bring the economy closer to levels seen during the Great Depression. U.S. factory activity in April, as measured by […]

US Industry Responds to Covid-19 with Innovation

During World War II, the US economy adapted into what was termed an “Arsenal of Democracy,” mobilizing industry to turn car factories into assembly lines for Liberator bombers and shipyards into production facilities for Liberty freight ships. The US economy – and all of the great innovators and leaders within it – evolved to meet […]

Why Active Management is Key Right Now

During the S&P 500’s -34% plunge followed by its sharp “v-shaped” rally, it became apparent to me that almost every sector of the US economy had varying levels of exposure to this crisis. We have never seen an induced recession in the name of public health like we’re seeing now, with government-mandated shutdowns and social […]

A Post-Crisis Vision for the Economy

The Covid-19 global pandemic is wreaking havoc on many (but not all) parts of the U.S. economy. It remains to be seen how quickly the economy can ramp back up once the virus is contained and restrictions are lifted. For investors, I think it’s important not to wait for positive news as a signal that […]

Comparing Fed and Congress Stimulus to 2008

Many readers may not recall this detail specifically, but when the financial crisis first took hold in the fall of 2007, the Federal Reserve and Congress’s initial response was to do very little and nothing, respectively. The Fed made modest rate cuts in late 2007 and into 2008, but the full force of quantitative easing […]

How Long Will This Bear Market Last?

Generally speaking, there are three types of bear markets: structural, cyclical, and event-driven. Every bear market has a unique set of drivers, of course, but throughout history most of them fall into one of these three categories: Structural – These are bear markets like the 2008-2009 downturn, which are driven by financial bubbles, too much […]

Are the Fed and Congress Doing Enough?

We are entering the phase of a bear market where pessimism starts to evolve into extreme doubt, where investors watch the stock market sell-off, as the Federal Reserve announces massive liquidity measures, and think, “Maybe this is it. Maybe the Fed can’t save us this time.”1 This is the phase of a bear market where […]

It’s Time to Hunker Down with Your Investments, Too

The whirlwind of market volatility persists, with the stock market posting dramatic single-day moves that are frequently drawing comparisons to Black Monday (1987), the Great Depression, and the 2008 financial crisis. It took some time, but the global response to the crisis is accelerating and strengthening. From a public health standpoint, countries are ramping up […]