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Stock Markets Continue to Reach Records

Stock markets continued to reach record levels on Friday as investor sentiment was buoyed by reports that tax reform proposals had passed their first hurdle in the Senate. Investors also were cheered by reports that President Trump is leaning towards picking Federal Reserve Board Governor Jerome Powell as the next Chairman of the Fed’s Board of Governors. Markets undoubtedly hope that Powell will continue the easy money policies that were enacted by Ben Bernanke and Janet Yellen. More easy [...]

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Dow Jones

30 Years After Black Monday: Can It Happen Again?

Thirty years ago today, the Dow Jones Industrial Average suffered its largest single-day drop in history, losing 508 points, nearly 23% of its value. With the Dow currently hitting new records and standing at over 23,000 points, are we poised for a repeat of Black Monday? It seems as though stock market growth won’t ever end. It was only in February of 2016 that stock markets were dipping below 16,000 points. Now, at over 23,000 points, the Dow is up [...]

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saving for retirement

It’s Never Been Easier to Save for Retirement

Most Americans understand that saving for retirement is important. Over the past several years, increased amounts of education and understanding have helped Americans save up more and more money for retirement. Total retirements assets have risen from $11.6 trillion in 2000 to nearly $27 trillion today. Thanks to the increased focus on the importance of retirement savings, the increased array of retirement savings options, and new techniques and strategies for investment, it has never been easier to save for [...]

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person carrying debt

Americans Getting Comfortable With Debt Again

In another sign of the growing economic bubble, Moody’s has flagged growing debt levels among Americans as a rising risk for financial institutions. Households considered to have high debt levels are those whose debt ratio is greater than 40%. Those households in the lowest income quintile have the highest percentage of high debt burdens, with over 20% facing high debt. While most households have decreased their debt burdens in recent years, those are in the 80th to 90th percentile actually [...]

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IMF

Nine Global Banking Giants Face Challenges to Profitability, IMF Says

The safety of global systemically important banks (GSIBs) has improved significantly since the Great Recession, according to the latest Global Financial Stability Report from the International Monetary Fund (IMF), issued earlier this week. However, roughly a third of them, representing about $17 trillion in asset size, could “struggle to achieve sustainable profitability, underscoring ongoing challenges and medium-term vulnerabilities.” The IMF’s profitability threshold was 8 percent cost of equity. There were nine systemically significantly institutions identified whose 2019 profitability was projected [...]

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income tax

Tax Reform Could Benefit American Taxpayers and Investors

One of the Trump Administration’s most highly-awaited proposals is the one for tax reform. As with any reform proposal, the devil is in the details, but some of the first proposals sound good on their face. As anyone who has ever had to file taxes understands, the tax code is in serious need of reform. And while previous proposals may have had severe drawbacks, the latest proposal has many features that could end up benefiting taxpayers and investors. Eliminating Itemized [...]

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interest rates

Most Informed Americans Don’t Want Fed Setting Interest Rates

Most Americans with an opinion on the subject think the free market should set interest rates, not the US Federal Reserve, according to a recent survey from the Cato Institute. “Unsurprisingly, a plurality (44 percent) of Americans have not thought much about whether Federal Reserve officials or the free-market system should primarily determine interest rates,” the report stated. “However, if we confine the analysis to those who have an opinion, 58 percent believe that free-market forces should determine interest [...]

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money in a safe

After Recent Cyberattacks, Are Your Investments Safe?

News reports recently have been full of tales of cyber attacks against financial institutions. From credit reporting bureau Equifax to the Securities and Exchange Commission, to accounting giant Deloitte, no institution seems to be safe from hackers. With a society that does an increasing amount of business online, that potential vulnerability could wreak havoc on savers and investors. More and More Banking Done Online As the Internet continues to mature, more and more people engage in financial transactions online. In 2013, [...]

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financial bubble

Bubbles as Far as the Eye Can See

Most sane investors have an inkling that financial markets are in a bubble. But just having a general sense that things aren’t right sometimes isn’t enough. Looking at actual statistics can put into perspective just how large some of these bubbles have grown. Housing Bubbles The Case-Shiller 20-City Composite Home Price Index has moved past its pre-crisis levels and has increased over 50% since 2012. The United States isn’t the only country that’s been affected, as Canadian home prices are up [...]

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federal reserve system

Even a Central Banker Admits: No Proof Fed’s Massive Intervention Succeeded

Stephen Williamson, an economist at the Federal Reserve Bank of St. Louis, joined critics of the US central bank last week by conceding there is no proof that massive intervention in the credit markets such as the Fed’s quantitative easing program has worked. “There appears to be no evidence that QE works either to increase inflation, if we look at the Japanese case, or to increase real GDP  if we compare Canada with the US,” Williamson said in an analysis [...]

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