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I kind of like this week's Dividend Cafe.  We are going to do a very quick look into how the Fed fuels Japanification, but more specifically, how low-interest rates hurt growth.  It is one thing (and a more severe one at that) that monetary policymakers generally view artificially low rates as a really good thing to fuel economic growth, but at this stage in my life and career, there is little I can do about that.  It is another thing altogether that so many investors think is a great thing.  Today I want to do a quick lesson on why it is not just wrong but a dangerous fallacy, that is, wait for it, undermining economic growth. Speaking of growth, many want to know when the Emerging Markets will deliver it.  I think you will benefit from that lesson today as well.  Unfortunately, the EM gain is likely to be Europe's pain, so get ready for a case of hot-cold. And finally, I want to add to last week's talk about "gross domestic product" in how we think about economic growth.  You may find it illuminating. Jump on into the Dividend Cafe. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

One of the hardest things about being an economic commentator in this day and age is that economic commentary requires nuance, and this day and age requires narratives.  There is to be a single narrative about X, and any variation around, above, beneath, or of the exact X narrative is heretical or at least unappreciated. It is a tough way for society to function, but it is an especially tough way to do economic analysis. I do not merely refer to the inevitable complexity involved in topics like these that are, well, complex.  You are smart readers, and I do my very best (sometimes better than others) to make complex topics a bit more comprehensible in my writing and speaking.  Readers and listeners can judge how effective I am there, but I do try.  No, this is not about complexity, but nuance, which basically can be quite simple at times; it is just that it doesn't fit into the script of a narrative.  It isn't binary.  The nuances of proper economic analysis aren't always fit for a forced narrative. Such is the moment we are in, and today I want to answer your questions about the state of the economy.  If I do my job right, everyone will be mad at me when all is said and done (I should fail at landing in either of the primary narratives of the day).  Such is the plight of an economic truth-teller in 2022 ... Jump on into the Dividend Cafe! Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I really did mean to write this entire piece last week but simply ran out of time and space. I will give you a recap today of last week’s takeaways but then make sure this week’s wraps a bow around our updated point of view on inflation. This is not merely a philosophical exercise. There is an abundance of empirical support provided for my position, and I think you will find a lot of the information about the present state of affairs surprising. You may draw a different conclusion on the matter than I do, but my conclusions on what this means for the decade ahead have profound implications for citizens and investors alike. Again, this can’t be armchair stuff for a real asset allocator; this is what we call fiduciary responsibility. So grab a cup of coffee and get comfortable. This is one of those truly Dividend Cafe editions. Jump on in… Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

It has been a year and a half since I first took up the inflation/deflation debate as a matter of contemporary debate (a part 1 and a part 2). As much as I wished then (and now) that the great economic fight we would have for the next thirty years was inflation, I believed then (and now) that the great economic fight we will have for the next thirty years is better referred to as deflation (a term that itself will require more precise explanation. Some more in-depth updates on the subject have also been produced with a deep desire to really explain and contextualize the state of affairs. Nevertheless, the responsibility of clarity in messaging is with the writer, not the reader, and while there is only so much I can do to make sure those reading it understand it, I have a pretty strong desire to keep doing more. Let me just leave the introduction there and dive into this topic. I suppose I do hope some clarification comes out of this, but truth be told, I am more passionate about just reiterating the great economic message of our time. My agenda is not academic, and it is not political. I am responsible for actual client capital, which is to say, the instrumentation by which actual human goals and needs are met. I take it very, very seriously. And this subject sits at the center of what I believe is a generational economic challenge. Let’s jump into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I send this week’s Dividend Cafe at the end of a 24-hour trip to Las Vegas, where I spoke at a conference yesterday. 2,600 people have come to the 110-degree city of sin for the purpose of hearing various economic and political musings, and one such forum of musings was a panel with myself, Steve Forbes, George Gilder, and Mark Skousen discussing, of all things, my book! It was a surreal experience to be next to Gilder, whose Wealth and Poverty was a transformative book in my intellectual development as a pretty darn young guy (you would actually think less of me if you knew how young I was when I read it). Anyways, by the time you read this, I will be on a plane back to New York City Friday afternoon, where I will be working all of next week before returning to Newport Beach next weekend. We are living in a time where there have been more bad ideas than money to invest in (or at least bad prices at which to buy those ideas). Soon we will see more money than people acting on bad ideas. But right now, a little parsing out of what the laws of contrarian investing mean is in order, and I think you will find it fascinating. Jump on into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The fundamental tension in the economy today, and less directly so, in markets themselves, is really simple: Is a recession coming that slows down price inflation? That question is simple to identify as the economic tension point of the moment, but it is not simple to answer. One reason for this complexity is that some of the premises brought to the question are not to be taken for granted. And this is the subject of today’s Dividend Cafe – what do we know about current economic conditions, potential economic developments, and eventual economic results? What do some think they know that could be wrong? And what is an investor to do through all of this? I have some thoughts to share that can hopefully bring clarity to much of this, and some of those thoughts are merely clarifying, while others may be non-consensus views. Either way, convictions run deep at The Bahnsen Group, as does humility. That is another “tension” that we hold gladly. Let’s jump into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Happy Independence Day weekend to you and yours. Or for those without much historical interest, Happy Fourth of July. Today’s Dividend Cafe is not going to dive into the state of the market, though I can promise you that Tuesday’s DC Today will have plenty to say about the first half of 2022 and our expectations for the second half. But for today, I want to look at this Independence Day holiday that we celebrate in our country, and analyze what the Fourth of July has to do with markets and economics. I make no bones out of the fact that I love my country, and much have that has to do with understanding what this country is – an idea, and an exceptional idea, at that. How the exceptional idea of America ties into markets, economics, and investing, is where we are going in today’s Dividend Cafe. Jump on in – there will be time enough for BBQ and sun this weekend. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I’ll be very honest with you – I prefer single-topic Dividend Café issues. I wrote a multi-topic weekly commentary for many years before moving to a “mostly” single-topic orientation, and I have never loved writing Dividend Café more. I feel that the weekly information quality and value is higher with a singular focus each week, and I think the “variety” style works better in our daily market bulletin that is Dividend Café’s cousin, The DC Today. But today’s Dividend Cafe is a bit different. There are a few “big” issues that people are bringing up daily, and I want to do a little multi-question fireside chat with you. So jump on in to the Dividend Cafe … I promise you’ll find something of interest, and maybe even intellectually transformative! Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Volatility continues and certain market sectors are reeling, along with investors. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Once again we find ourselves in the midst of a tumultuous week in the markets, and yet with bigger fish to fry in the Dividend Cafe? What could be bigger than a 1,400 point drop in the market on the week, and a 3,000 point drop in the last two weeks (note: I am hitting “send” on this before the market opens on Friday, and pre-market action Friday does appear to be to the upside right now, but you know how that goes)? Well, for one thing, I think most of the commentary I have to offer on the specific things taking place this week in markets was well-covered in each edition of The DC Today this week. If day-to-day market distress is distressing you, I hope you will turn to The DC Today as a resource. Reading it cannot make the market go up any more than my act of writing it can, but hopefully, it can provide clarity around where this volatility fits into expectations for investors who have real financial goals in their lives. So the bigger fish to fry I refer to are not about the specific Fed meeting of this week, or this most recent interest rate hike, or even my broader theme about the carnage in “shiny object” investing … It has to do with discussions around a potential deeper level of concern in financial markets, and what they may look like. I hope after reading this week’s Dividend Cafe you will feel a bit smarter, a bit more informed, and a bit more at peace. Let’s jump into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I purposely wrote this week’s Dividend Cafe before the CPI number posted this morning at 8:30 am ET. Lots of traders were getting in front of this late Thursday, and a market that had rallied up +2,000 points in the last two weeks was down -1,000 points in the last five days and is now down a lot as markets open Friday. We are in a period of short-term traders trying to front-run the Fed, but more particularly, trying to front-run those who they think are trying to front-run the Fed. What I mean is not as complicated as it sounds: The basic belief is that if inflation data looks worse, for longer, the Fed becomes more Volcker-like in their hawkish tightening, and that hurts risk assets; therefore, if we see a whisker of “more inflationary than expected” some will start selling, and we should sell before they sell. Well, good luck with all that. Today I am going to look at what could make this market get worse, not in a “traders are going to do this” kind of way, but in a real systemic, significant, macro kind of way. It will turn into a two-parter, no doubt. But let’s look behind the headlines of the day, the CPI print of the moment, and the Fed actions of next week. Let’s dive into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I am doing three things in the Dividend Cafe today that I pretty much never do. For one thing, I am blatantly ripping someone off (you’ll see; it’s not as bad as it sounds). Secondly, I am getting pretty biographical (though I guess I do that every once in a while; last week being the most recent example). And then finally, I am really focusing on one pretty specific and even granular investment topic. Now that, I do every now and then – but not like this. You’ll see. So jump on into the Dividend Cafe to see me rip off someone else’s work, talk about a very personal and biographical aspect of my life, and apply it all to a really specific investment lesson and principle – one that should not be missed. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I really do not know how today’s Dividend Cafe is going to be received. I obviously believe in every word of what I have typed or I wouldn’t have typed them, yet I have found two things to be the case in my efforts at thought leadership in matters of markets and economics: (1) People sometimes do not like it when I veer off of a stock market focus, and (2) People do not like hearing what they do not want to hear The first one is more problematic when it comes to things like the bond market or public policy or monetary policy or alternative investing – the excitement of the stock market sometimes has to take a backseat to other matters that are absolutely integrally connected to it! But the second one is what I am worried about today. In over 20 years of professionally stewarding client assets, I have never seen investors be as emotional about any “asset class” as they are about housing. And if all that meant was “people are nostalgic and protective about where they live” – that would be one thing. But that is not what I mean. Opinions about the residential real estate market are, shall we say, sometimes laced with emotion, sometimes perhaps delusion, and often with various presuppositions that are hard for me to make sense of at times. Housing is back front and center in financial discussions, and all I want to do today in the Dividend Cafe is make sense of it, and give you some wisdom and insights that I believe will be useful in a holistic commentary of the day. So to that end, I work. We’ll still be friends if anything I say bothers you. Let’s jump into the Dividend Cafe for a special Housing edition … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I have done something really fun with today’s Dividend Cafe – at least fun for me. I have taken the most common questions I receive these days from clients, in emails, in meetings, in interviews, etc., and compiled a set of answers that walk through the big issues of today. I think you will find it valuable. I doubt I cover everything on your mind here, so by all means fire away with new questions (questions@thebahnsengroup.com). You may just see it covered in The DC Today, and you will certainly hear from me personally. In the meantime, let’s jump into the Dividend Cafe. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I had fun writing today’s Dividend Cafe and I think you may very well have fun hearing (and reading) it.  I also think some of you may be mad at me for it.  I hope I am wrong.  I believe there are a multitude of messages in the Dividend Cafe this week that are vital for investors in this current era, and the one that is to come.  I also feel these messages are timely.  Jump on in … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Market volatility is on a roll, with the VIX now double the level it started the year at. This week saw the biggest up day we have had all year, followed the very next day by the biggest down day of the year. A lot is happening, and we can and will unpack it in today’s Dividend Cafe, but we will not leave it there. The takeaway today will be what to do about it (or not do about it), and that is why you should enter the Dividend Cafe. Knowledge followed by action. To that end we work. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Recession.  The dreaded word, “recession.”  For those who have lost their job in one, it can feel like a depression.  For those who kept their own job in one but saw their portfolios drop, or saw neighbors or loved ones lose their jobs, or experienced a decline in income or business revenue, it may not have had the existential punch that it did for others, but it generates unpleasant memories of unpleasant times. There is a lot of talk about a recession right now, some of it imbecilic, some of it overtly political, and some of it, quite substantive and important.  But if the Dividend Cafe exists to bring simplicity and honesty to topics that are often spoken of with too much complexity and/or abundant dishonesty, the task at hand is readily apparent. And so we will look at recession reality in current times, when, what, and why, and unpack the investment implications on all of it.  I will always do my best at the simplicity part (I know I miss the mark there sometimes).  I will be unrelenting in the honesty part.  But as far as the pleasant part of it all, well, let’s just say my focus is on the honesty part. Jump on into the Dividend Cafe … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Volatility, Rate Hikes, Inflation, and so much more on this Dividend Cafe Special Edition Podcast Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

If there is one thing that animates me it is the application of real-life economics to investing. I have always been obsessed with economics – both theory and application – but it is in more recent years that I have really found it a calling to synthesize the foundational truths of economics to financial markets. And truth be told, that calling transcends the applications of economic theory to financial markets. I believe properly understood economics has profound implications for all aspects of human living. My extra-curricular endeavors in economics (the book I wrote last year, the class I teach at the high school I co-founded) are all extensions of this passion I have for a free and virtuous society. But yes, applying these things to financial markets is my real passion, and the inability and disinterest the financial advice community has for applying economic principles to markets is a constant source of irritation. Today’s Dividend Cafe is about the labor market – the state of jobs in America. For 99% of the media and even economic analysts these days this is an econometric subject. In other words, it is a data point that provides an input to a spreadsheet, and from there carries some numerical relevance to another input (i.e. if wages are here or unemployment is here, then consumer spending is possibly going to be here, etc.). Worse, it is often just a mere political data point, perhaps an even more imbecilic understanding of work than even reducing it to an economic data point. But economics is the study of human action around the allocation of scarce resources. Our understanding of what is happening and not happening in the world of work will be improved to see it through the lens of the human person. Political and econometric reductions will tell us almost nothing, and in fact, may tell us things that aren’t true at all. Investors and actors in financial markets need a fuller understanding of current realities in American labor. To that end, we work … (see what I did there). So jump on into the Dividend Cafe. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

In this market-shortened week I thought a shorter Dividend Cafe may be appropriate, especially as we prepare for a long weekend and the Easter holiday. More on that below … And not only do I think I controlled the length of this week’s Dividend Cafe (within reason), I also took advantage of the week to dive into a topic that is almost entirely avoided by the media and investing public. I can’t really explain why we mostly ignore private equity and private credit when we discuss financial markets. I understand public stock markets have a certain sensationalism to them, not to mention clear pricing visibility that facilitates a lot of noise. But the private markets are just as much the real economy as public markets, and if the heart of free enterprise is where there is human action, I assure you private markets are deep into the capture of human activity (for good or for bad). But it is not enough to “talk” about private equity and private debt as if they are either “good” or “bad” investments. There is a complexity here that requires a bit of unpacking, and the unpacking of complexity is the business of the Dividend Cafe. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com