Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

Blog Subscription Form

  • Email Notifications


  • September Jobs & Manufacturing Reports Disappoint Again

    As is becoming increasingly frequent, we will touch on several bases today, given that there’s so much going on these days. (Speaking of bases, How ‘bout them Texas Rangers!!) Hitting several topics in a single E-Letter makes it more interesting and fast-paced for me, and I hope the same is true for you. After all, YOU are what this is all about. That’s why I always value your input, positive or negative, so much.

    Today, we’ll start with the latest economic reports. I wish I could tell you they were encouraging – most were not. There was last Friday’s disappointing unemployment report for September – which was below expectations for the second month in a row. Then there was last Thursday’s decidedly downbeat report on US manufacturing, which was yet another big disappointment.

    These two negative reports have most Fed-watchers very confident now that there will not be a rate hike this year. Most now believe that “lift-off” won’t happen until early 2016. Yet the Fed may fear it will lose its credibility if it doesn’t make at least one move this year. So expect this debate to continue at least until December 17 when we will know for sure.

    Last Wednesday, the head of the International Monetary Fund warned that there are new reasons to be concerned about the global economy, and emerging economies in particular. IMF Managing Director Christine Lagarde issued the latest warning, along with another call for the US Fed to delay the first rate hike until next year. But does the Fed care what she thinks? Probably not.

    Finally, I have just completed a new SPECIAL REPORT: Seven Risk Factors That Could Drive the Markets Lower. Back in March and April, I saw the storm clouds gathering on the horizon and warned my readers to reduce their long-only (buy-and-hold) positions in stocks and equity funds.

    Still, most investors don’t understand why this six year-old bull market seems to have run off the tracks. In this new Special Report, I discuss in detail the unique combination of risk factors that are weighing on the markets today and may continue to do so.

    Best of all, I offer advice on what you can do to protect yourself should the latest market downturn continue. If you are looking for some clarity in this crazy market and some advice on how to protect your portfolio, be sure to download my latest FREE SPECIAL REPORT at the end of today’s E-Letter.

  • The Economy Surges Higher, But Is It For Real?

    Today we look at last Friday’s better than expected final report on 2Q GDP, which was revised from 3.7% to 3.9%. Best of all, this increase was largely due to increased consumer spending which accounts for almost 70% of GDP. Following the paltry 0.6% increase in GDP in the 1Q, this means the economy grew by 2.25% in the first half of this year.

    While a 3.9% jump in economic growth in the 2Q was welcome news, there is a growing consensus that such reports from the government may not be remotely accurate. The problem is, many agree, that the government’s “seasonal adjustments” to the monthly and quarterly data have gotten out of control, and the numbers reported are no longer reliable. We’ll talk about this below.

    Next, we’ll look into what many are calling a “flip-flop” on the part of Fed Chair Janet Yellen in the last two weeks on the subject of when short-term interest rates are likely to be raised. At the Fed’s latest policy meeting on September 17, they decided to postpone the first rate hike in nearly a decade, seemingly indefinitely. But then last Thursday, Yellen said lift-off will happen before the end of this year, and this sparked the latest selloff in the equity markets. So, what gives?

    I will close today with a few thoughts about the SuperMoon, BloodMoon and lunar eclipse we saw on Sunday night. I hope you got to view it.

    And finally, our latest WEBINAR with ZEGA Financial is now available for viewing on our website. ZEGA’s strategy for using options is one of the most interesting I have ever seen.

    Filed under: , , ,
  • On The Fed, Deflation, Government Shutdown & The Moon

    Once again this week, we touch on a variety of topics that piqued my interest over the last week. We begin with some further analysis of the Fed’s controversial decision to hold interest rates near zero last Thursday. While this was the topic of my Blog last Thursday, I have more analysis today that I think you’ll find interesting.

    One thing I conclude from the Fed’s decision last week is that Fed Chair Janet Yellen and a growing number of her colleagues are worried about deflation spreading to the US. Since most Americans living today have never experienced a prolonged period of deflation, we should talk about it at least briefly to understand why falling prices are bad for the economy.

    Next, as much as I hate to bring it up, we could be facing yet another government shutdown at the end of this month. Fiscal Year 2015 ends one week from tomorrow, and Congress has not passed a budget for FY2016. As a result, the government could effectively shut down starting on October 1. Here we go again.

    From there, we look at a new report which finds that the $13 trillion in government “debt held by the public” equals a record $107,000 per US household. Yet if we include all of our national debt of $18.4 trillion, that number goes up to over $150,000 per household.

    Finally, a rare combination of celestial events will grace the night sky later this month. NASA says a SuperMoon, a BloodMoon and a lunar eclipse will take place on the night of September 27, this coming Sunday. This rare event has happened only five times since 1900, most recently in 1982, and there won't be another one until 2033. Read about it at the end of today’s E-Letter so that you won’t miss it this Sunday night.

    Filed under: ,
  • Why More & More Americans Are Working In Retirement

    In my Blog last Thursday, I wrote about the astounding number of seniors 65 years and older who have not paid off their home mortgages. As a follow-up to that topic, a new report finds that more Americans than ever are working well into retirement. That’s where we will start today with a review of the latest numbers on those working beyond age 65.

    Following that, I will reprint the most interesting article I have read in some time. It is an article which discusses President Obama’s most likely legacy – one he will definitely be unhappy about. Interestingly, this article was written by Jeff Greenfield, the award-winning TV journalist, best-selling author and a Democrat. You will not believe what he has to say about Obama’s legacy. Let’s get started.

  • On The Economy, Inflation, China & Odds For Fed Liftoff

    The investment markets remain fixated on whether the Fed will hike interest rates for the first time in almost a decade on September 17. Stock market volatility spiked in late August and so far this month, with most global equity markets in “correction” territory. It remains to be seen if the latest stock market chaos will cause the Fed to delay lift-off until December or later.

    Other than global equity market weakness and below target inflation, other factors that would lead the Fed to tighten are in-line, although last Friday’s unemployment report for August could have been stronger. Today, we will examine the August jobs report, the strength of the US economy in general, inflation trends and the outlook for the US dollar. We’ll also take a look at the latest disappointing economic news out of China.

    We’ll end today with a look at the Fed Funds rate futures market to see what the probability is for a rate hike next week. At the end of last week, Fed Funds futures indicated an 81% chance of a rate hike on September 17, up from a 74% chance in August.

    It’s a lot to pack into one E-Letter, so let’s get started.

  • Stocks Fell Off A Cliff in Late August - What To Do Now

    What an absolutely CRAZY couple of weeks we’ve just been through! The collapse of stock prices around the world has stunned investors. By some measures, the plunge in the Dow and the S&P 500 in August was the worst in 75 years, even worse than the Crash of 1987. While I advised readers to reduce long-only equity exposure significantly in April and May, I was not expecting a 15% spike down in just a few trading sessions.

    Later in today’s E-Letter, I will introduce you to the latest money manager to make it on to our recommended list. This money manager specializes in buying and selling options on stock index contracts. This is one of the more unusual strategies I have seen over the years, but when you see the results, you’ll understand why I’m so excited to add ZEGA Financial to our stable of recommended Advisors.

    Before we get to the above issues, let me briefly comment on last Thursday’s better than expected report on 2Q Gross Domestic Product.

  • Population Growth & Productivity Headed in Wrong Direction

    Today we’ll focus on some longer-term economic data which shows, unfortunately, that the US economy is in a multi-decade slide that will be very difficult to reverse. Population growth and worker productivity – the keys to sustained economic growth – are both in decline, trends that are not likely to change anytime soon.

    US Gross Domestic Product averaged 3.74% annual growth from 1950 to 1990, but has since  slowed dramatically to average only 2.21% from 2010 to 2014. Even worse, worker productivity that averaged 2.5% annual growth from 1948 to 2007 has been slashed by over 50% to only 1.2% annually from 2010 to 2014.

    Throughout its history, the US has been a productivity powerhouse. US worker productivity growth averaged around 3% annually during the period 1996-2004, but fell to 1.5% in 2005-2012, and more recently has slipped even further to just above 1%.

    What’s at stake is the very future of America. Without faster growth, the US can’t create enough jobs for those who want them, and Americans will have to get used to much smaller increases in their paychecks. The middle class will likely shrink even more, and the poor would be even worse off. Are we doomed to a dimmer future?

    The question is, what can be done to reverse these troubling trends? The answers are not simple, nor politically correct in most cases. Another question is, do any of the politicians running today have the knowledge and/or conviction to tackle these critical problems?

    That’s what we will talk about today. But before we get to that discussion, let’s look at the Fed’s latest prediction for the economy in the 3Q. The latest GDPNow forecast will surprise you.

    Filed under: , ,
  • Global Economic Slowdown - Implications For US Stocks

    The global economy is rolling over to the downside for the most part. The question is, will this global slowdown take the US economy down with it? While no one knows for sure, that possibility simply cannot be ruled out. If the softening in the global economy leads to a slowdown in the US, that will almost certainly result in a weakening of our stock markets.

    In my March 17 E-Letter, I recommended that investors in traditional “buy-and-hold” equity funds reduce stock market exposure (or hedge long positions partially or fully) due to increasing global risks at that time. I repeated that recommendation twice since then.

    Since March 17, the S&P 500 Index has moved sideways to lower as of this writing. Could the US equity markets be setting up for a significant downward correction? It would be unwise in my opinion to rule it out.

    The slowdown in the global economy and the implications for the US economy and our stock markets will be our main topic for today, but before we get to that, let’s take a quick look at last Friday’s unemployment report for July.

    At the end of today’s letter, I will briefly comment on Obama’s new Clean Energy Plan which will raise electricity costs significantly, if enacted, and give you a link to the full story. I will also comment further on the Dodd-Frank law I wrote about in my Blog last Thursday.

    Filed under: , ,
  • "Renter Nation" - US Homeownership Hits 48-Year Low

    The government’s Census Bureau reported last week that the US homeownership rate fell to the lowest level in the last 48 years. It is indeed a sad awakening that the level of home ownership is now the lowest since 1967.

    Along this same line, the Census Bureau found that more Millennials (18 to 34 year-olds) are living with their parents today than at the worst point in the Great Recession. This is despite the fact that the economy and labor market conditions have improved in recent years.

    The issue is not that we aren’t forming more households. We are. The problem is that fewer and fewer households can afford to buy a house – despite record low interest rates – and more and more are renting rather than buying, whether by choice or by necessity.

    The fact that more and more Americans are choosing to rent their homes and apartments has resulted in rents going through the roof. It’s supply and demand, of course. But the fact that Americans are spending more and more on rent means that they have less and less to spend on buying other goods and services to spur the economy.

    The bottom line is that the American Dream of owning your own home is fading fast. This fact is affecting younger Americans the hardest. Way too many have given up the dream of owning their own home, as a recent Gallup poll has found.

    Today, we’ll look at this disturbing trend and try to discern why it is happening.

  • Thursday’s GDP Report May Hold Big Surprises

    The next few days should be an interesting time in the markets. The Fed Open Market Committee (FOMC) is meeting today and tomorrow and will release its latest policy statement at the conclusion of the meeting. While it is not expected that the Committee will vote to raise the Fed Funds rate at tomorrow’s meeting, Fed Chair Janet Yellen has been talking hawkishly about a rate hike of late.

    Friends, business associates and clients increasingly ask me: Why is the Fed so intent on raising interest rates? The US economy is not that great, the global economy is slowing down, inflation is practically nonexistent and commodity prices are signaling deflation. So why on earth is the Fed hell-bent on raising rates when much of the world is doing just the opposite? I’ll tell you why as we go along today.

    Then on Thursday, we get the first estimate of 2Q GDP from the Commerce Department, and there is an unusually wide range of pre-report estimates. While there is broad agreement that the economy bounced back after the disappointing 1Q rate of -0.2%, some forecasters believe the 2Q estimate will be less than 1%, while others believe it will be north of 3%. That’s a huge spread! The Atlanta Fed’s rolling “GDPNow” indicates 2Q growth of 2.4%.

    Yet perhaps the most important news of this week will be the Commerce Department’s annual revisions to its GDP numbers going back several years on Thursday. While such revisions happen every year, this year’s revisions and changes are expected to be more significant than usual as the government tries to smooth-out “seasonal adjustments.” Many expect that the 1Q GDP estimate of -0.2% could be revised to a slightly positive number. This will be big news.

    Filed under: ,
  • Halbert Wealth Celebrates 20 Years, I Celebrate 40 Years

    This year marks the 20th anniversary of Halbert Wealth Management. 2015 also marks my 40th year in the investment business. Since many of my readers don’t know my career history, I thought I would devote this mid-summer issue of Forecasts & Trends to telling my story going back to 1975 when I first got into the investment business.

    I also want to revisit how and why I came to found Halbert Wealth Management and began searching for professional money managers in 1995, and have continued to do so ever since. If you’re an investor, I think you’ll find this story interesting.

    I’ll finish out today’s E-Letter by highlighting two of my favorite money managers, each with 19 and 20-year performance records. These two should be strong candidates for almost any well-diversified portfolio.

    Filed under:
  • The National Debt Is Over $18 Trillion, Not $13 Trillion

    In June, the non-partisan Congressional Budget Office (CBO) released its annual “Long-Term Budget Outlook” which concluded yet again that the trajectory of US federal debt is “unsustainable” and will lead to an unprecedented debt crisis in the years ahead.

    After running $1+ trillion annual budget deficits in fiscal years 2009-2012, the deficits have come down significantly in the last few years, to $483 billion in FY2014, down from $1.3 trillion in 2011. However, the CBO warns in its latest report that the debt will start to ratchet significantly higher in a few more years if major changes are not made soon.

    The CBO estimates that “debt held by the public” will rise to 78% of Gross Domestic Product by 2025 and 103% of GDP by 2040 – assuming its long-term assumptions hold true. Several of those assumptions are dubious in my opinion. The CBO admits as much and offers an alternative fiscal scenario which shows the debt rising to over 100% of GDP much sooner.

    The problem I have always had with the CBO’s debt numbers is that they only consider the debt held by the public, which is currently apprx. $13.1 trillion. The CBO does not include the additional apprx. $5.2 trillion of so-called “intra-governmental debt” which is owed by various governmental agencies including Social Security.

    If we add the intra-governmental debt, then our national debt leaps to apprx. $18.3 trillion today, which is actually larger than our GDP of $17.7 trillion at the end of 2014. So our real debt-to-GDP ratio is already above 100%! That’s what we will talk about today. All Americans should understand what follows.

    Finally, it is widely agreed that the latest nuclear agreement with Iran is a victory for the Iranians and a dangerous setback for the West, thanks to President Obama. While I don’t have space to address it today, be sure to read the first link in SPECIAL ARTICLES below which points out 16 reasons why this was a very bad deal.

    This is just another example that illustrates how our president does not have America’s best interest at heart.

    Filed under: ,
  • China’s Stock Markets Imploded In June - Why?

    While the mainstream media has been obsessed with Greece over the last month or so, there has been scant attention paid to the fact that China’s high-flying stock markets unexpectedly have plummeted in June and were down around 30% through the end of last week.

    China’s exploding economy in recent years has made it the hotspot for global investors. Mutual fund families and ETFs have rushed to add exposure to the Chinese markets. China’s two major stock exchanges have seen their share indexes surge over 100% in the last year, drawing ever more investors to jump in. This includes many middle class Chinese who have never invested in anything before (many of whom have borrowed money to invest).

    Yet as noted above, in the last month, share prices on China’s stock exchanges have plummeted by around 30% as of the end of last week, to the surprise of just about everyone. The decline continued overnight (Tuesday).  Many investors don’t even know it yet since they have not seen their June account statements.

    With the world’s attention focused on Greece over the last couple of weeks, the China story has not made its way onto the media’s radars for the most part. For that reason, I will focus on the latest disturbing developments in the China story today.

    But before we get to the troubling news on China, let’s take a look at a few of the latest US economic reports – including the June unemployment report, the big jump in consumer confidence last month and the Gallup Job Creation Index which is at a new record high.

  • Roberts’ Supreme Court Overstepped Its Bounds, Again

    Last week the Supreme Court rendered two controversial landmark decisions, one on Obamacare subsidies and another on same-sex marriage. Both went in favor of the liberals on the Court, and many conservatives cried foul.

    While neither decision came as a surprise to me, Supreme Court observers on both the right and the left were surprised by the way the court went about making them. In both cases, there was a great deal of liberal “interpretation” of the law, and in the same-sex marriage case, states’ rights were trampled.

    Today, I will share a few of my thoughts on the landmark decisions last week. More importantly, I will share with you summaries of the “dissents” written by conservative Justice Antonin Scalia, one of my long-time favorites on the Court. He had some powerful thoughts on last week’s decisions that I think you will appreciate.

    There was one other troubling Supreme Court decision last week that you probably didn’t hear about, but you should have. The ruling cracks down on housing discrimination, which sounds like a good thing. Yet this decision could lead to a new housing bubble and the next financial crisis, so you need to know about it. This story appears as the first link in SPECIAL ARTICLES.

    Before we jump into the Supreme Court discussion, let’s take a look at a couple of important economic reports released over the last week.

  • The Hot Debate Over 4% Growth In The Economy

    On June 15, former Florida governor and GOP presidential hopeful Jeb Bush formally announced his campaign with a promise that, if elected president, he would return the nation to 4% economic growth and create 19 million new jobs over the next decade.

    That’s a huge promise, especially with the economy stuck at around 2% growth, and one he may regret if he indeed becomes our next president (which I doubt). In any event, Bush’s 4% promise has sparked a spirited debate on the right and the left.

    Pundits on the left almost unanimously agree that 4% growth is a pipe dream and believe we should be satisfied with 2-2½% GDP growth. Some on the right believe that 4% growth is indeed possible and some even offered specific steps to get there. Today, I will try to summarize both positions and draw some conclusions.

    Filed under: ,

1 2 3 4 5 Next > ... Last »