Guild’s Basic Needs Index
Blistering Small Business Formation Bodes Well For Creative Destruction
Unexpectedly poor job numbers for April caused a moment of consternation that the economic recovery was stalling. May and June’s reports were also misses, coming in below analyst estimates, although less sharply than for April. The concern served to highlight a topic of enduring interest for us — new business
Market Summary — 8 July 2021
Tightening By Any Other Name Two weeks ago, we observed that peak liquidity growth had already passed: “There is an important sense in which the taper already began in the first quarter. The Fed may not be withdrawing liquidity from the system, but the rate at which liquidity is increasing (that is, the ‘second
Pandemic Dividends: Growth Driven By Digitization (and the Beneficiaries)
The extraordinary pandemic support measures enacted last year by the Federal Reserve and the Treasury were a critical component of the U.S.’ so-far successful navigation of pandemic disruption. Still, those support measures would have had little to work with if the U.S. economy had not already undergone substantial digitization in
Rising Employment and the Coming Taper
As many states have now ended the additional pandemic unemployment benefits provided by the Federal government, we are seeing in real time that those benefits were in fact serving to suppress employment and encourage workers to stay home; unemployment is falling faster there than in states that have maintained the
Entitlements and Economic Growth
Electorates, Be Careful What You Wish For The chaotic wake of the pandemic and the ever-more-bitter partisan spirit that has taken hold in Washington has made the neutral examination of policy proposals increasingly difficult for analysts. Yet it remains a particularly critical exercise to contextualize the nearer-term dynamics of the
Market Summary — 1 July 2021
July 1 marks the start of the third quarter, which is traditionally the worst quarter for the U.S. and other global stock markets. Of course we don’t know what this year will bring, but as we noted above, we see some reason for caution when we look forward to fall,
Peak Liquidity and a Strong Economy Augur Volatility, Not Disaster
Since the initial supernova of Federal Reserve and Treasury pandemic support for financial markets occurred last April, we have argued that this description-beggaring liquidity explosion was the single most important phenomenon for market participants to see and understand. Correct views and analysis of economic recovery trends and market theme and
Guild Basic Needs Index — Update
With May data complete, the Guild Basic Needs Index (GBNI), our proprietary real-world inflation gauge measuring the price of a basket of four essential consumer goods, has backed slightly off April’s 25% year-over-year pace. (You can click here for a more detailed description of how we compile this measure of
Market Summary — 24 June 2021
Without getting technical, let’s just say that because of its impact on markets and pricing, liquidity measures (whether from the Fed, China, or other central banks) must be monitored. Much has been reported in the past week about recent Federal Reserve operations, such as increasing interest rates offered on excess
Guild Basic Needs Index — Still Hitting Record Highs
About the Guild Basic Needs Index Guild Investment Management has long believed that the existing indices used to measure cost of living changes in the United States are inadequate and misleading. For instance, the widely quoted inflation index, the Consumer Price Index, is currently based on data collected from spending
Professional Money Managers, Retail Traders, and Everybody In Between Needs a Plan
Having a strategy for each outcome is the key to getting through the confusion. In one environment, “Cash is king.” Yet, in a different (and quite possible) environment where the purchasing power of the currency is declining, cash provides the opposite of security. High growth at a high multiple has
Climate Change Debate Rages — The Investment Climate, That Is
A big debate is raging about the type of inflationary cycle the world is experiencing. How much higher? For how long? Have we peaked? Is the Fed right? Will the purchasing power of retirement savings collapse? In general, markets prefer clarity to uncertainty and confusion. Markets look for leadership, trends,
Market Summary — 17 June 2021
Post Fed Meeting Unwind of Many Crowded Inflation/Commodity Trades Yesterday, the Federal Reserve meeting concluded with a message that they are monitoring many of the rising costs and the inflation pressures in parts of the economy, and that there is a plan to reduce accommodative asset purchases and raise interest
How Inflation Can Crush Your Portfolio During a “Lost Decade” — Unless You Adapt
Last week, we noted that the typical 60/40 stock/bond portfolio allocation that has become an investing commonplace in the past several decades has historically produced many “lost decades” — periods of ten years or more that saw little to no advance in the portfolio’s real value. Source: GMO Capital Of
Market Summary — 10 June
The week saw interesting developments on the cryptography and cryptocurrency fronts. A massive international sting operation was revealed in which U.S. and Australian law enforcement had marketed compromised smartphones to sophisticated criminal users through an informant on the Dark Web, advertising them as cryptographically secure for communications. The allegedly secure
Hedging Inflation With Commodities: What Decades of Experience Have Taught Us
The current investment environment suggests one critical lesson to us: the future into which we are moving is going to be very different from the immediate past. Therefore, investment strategies which have become standard-issue conventional wisdom over the past few decades are going to fail. Investors will have to reach
