Bruce Bartlett is a former Republican who served as a domestic policy adviser to Ronald Reagan and as a Treasury official under George H. W. Bush. A longtime observer and commenter on economic and political affairs in Washington, D.C.
I know, actually reading a piece before commenting on it is asking a lot these days. -- but can we at least figure out who wrote it, who they are, ad what their qualifications are ?
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FOMC seems 2b always behind the curve, historically, going back to the 1990s under Greenspan.
They are a big + boring conservative institution & are fearful of error. They tend to be less aggressive when making decisions, with significant ramifications.
Consider the errors of just the past 2 decades and you can see the biggest mistake they make is either arriving way too late to the party or once they are there, overstaying their welcome:
1. Only 5 stocks driving markets 2. Recession is inevitable 3. Breadth is terrible 4. AI is a bubble 5. Debt ceiling = disaster 6. Problematic new lows 7. Consumers running out of money 8. Earnings will fail THIS Q 9. HH Debt! 10. Rally faltering
Let's see if I can find something to undercut each of those 10 items:
Only 5 stocks driving markets?
Then why are Equal-weighted indices doing so well?
What drives market returns? These rolling 10-year total returns going back to 1909 (via Crestmont Research) show an average ~10% annual total return over any 10-year long period.
Ed Easterling (of Crestmont) breaks down those returns into these components: EPS, Dividend Yield, and P/E Increase (or decrease).
Note how cyclical P/E expansion/contraction is...
This is why it is important to include whether P/Es are expanding or contracting in any definition of a bull or bear market.
It takes the Earth 365 days, 6 hours, 9 minutes + 9.76 seconds to complete 1 orbit – to return to the exact same place relative to the sun. Our planet has done this about 4.54 billion times.
What does this unit of time have to do with investing?
Alas, utterly nothing...
This is an example of the irrelevant nature of the calendar - I'd be curious to see what the data looks like for successive rolling 12-month periods rather than calendar years; it might also be more useful than using January - December periods