News

Summer Time!

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Summer Time! 1

We at Finance Gourmet (it’s just me, but I like saying that) are getting ready to gear up for summer. That means a few things. First, some of the articles around here are going to be about VACATIONS and things like credit card rewards programs, airline miles, and how to save money on travel. Second, some of the articles are going to be focuses on outdoor activities and how you can take advantage of them while saving money, and living the good life. Third, there is a WHOLE LOT of weird stuff going on in the world economically speaking. Regardless of what you think of President Trump, the stuff he is doing is bombastic, and not at all carefully implemented, so expect plenty of whipshaw from investors, the markets, and economic numbers. As always, a well balanced portfolio is the answer to all your long-term investing issues, but changes are probably necessary for your short-term stuff because the volatility isn’t going away. And, finally, I’m “off” during the summer (I don’t have to go into an office anyway) so expect a bit of off-topic drift as me and the family have a whole lot of fun without breaking the bank, …

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Kohls Plus Amazon Equals Stock Bump

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Kohls Plus Amazon Equals Stock Bump 2

Weird story going around in market news today that Kohl’s, the American, brick-and-mortar, clothing / household goods chain has experienced a sizable stock bump over news that it will begin accepting Amazon returns at all of it’s 1,000+ locations. Say what? Traffic Equals Sales Whether you are online, or out here in the real world, when it comes to retail, traffic equals sales. For my online web properties, I earn more income, referral fees, ad sales, or commissions from sites that have more traffic. At Kohl’s, more traffic also equals more sales, and so… As you might guess, there are plenty of people who walk into a Kohl’s store with an Amazon-ordered survival knife to return, get the return setup, and walk right back out without even turning their head to look at what Kohl’s has in stock. But, you can also imagine the guy who walks in with his zombie-killing survival knife return, and notices a well-priced pair of binoculars, a pair of cargo shorts, or even a fun new top for his daughter on the way out. These sort of “drive by” buying impulses are the goal of sales, discounts, and advertising. A customer comes in to get …

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Trump, Iran, and the Markets

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The stock markets aren’t sure what to do anymore about Donald Trump. As it turns out, many of the things the market thought would be devastating (trade war with China) weren’t as big of deal as originally thought. Add to that the fact that Trump changes his mind on a regular basis for no particular reason, and you have a stock market that just sort of guesses. Big news today is that the Trump administration is pulling the waivers for countries over the Iran oil sanctions. Say what? So, Trump decided he had some sort of goal with Iran that involved oil sanctions against Iran. Typically, this is what American Presidents do when they are upset with Iran. Rather than bombing them, you cut off their ability to sell oil The catch is that the world oil market is really one big pool of suppliers and cutting any of the supply into that pool raises oil prices. Most countries, especially America, aren’t real fond of higher oil prices, so the sanction thing is sort of a double-edged sword. Enter waivers. When the Trump administration put its sanctions on Iran, they made sure to tell everyone, because that is how you …

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Is Southwest Airlines Risking the Company?

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Is Southwest Airlines Risking the Company? 3

Is Southwest Airlines risking the entire company with its decision to keep flying the Boeing 737 MAX airplanes? Consider this: Countries around the world are grounding the Boeing 737 MAX after a second crash soon after take off killed all people aboard an Ethiopian Airlines flight. This includes the European Union, Australia, China and others. Several airlines have similarly grounded their airplanes until all the data is in. Reports today conclude that the CEO of Boeing essentially talked Donald Trump out of grounding the airplanes, action that comes on the heels of large donations to Trump, and corporate visits to Mar Largo. Add this all up, and if a Boeing 737 MAX crashes in the U.S., the world’s most incompetent lawyer will be able to paint a picture of an airline that couldn’t see what numerous other countries and airlines could see. An airline that cared more about profits and using its new airplanes than it did about passenger safety. If that weren’t enough, comments that the airline is “confident” in the safety of the airlines could be considered false statements. False statements that led to deaths. This scenario couldn’t possibly be worse, and the jury verdict would undoubtably and …

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Neutral Interest Rates

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on the edge

Fed Chairman Jerome Powell made some very interesting remarks where he said he thought that interest rates were “just below” neutral. This is bizarre on many levels. First and foremost, neutral interest rates are perfect interest rates unless your economy is in a recession in which case you want stimulating interest rates, or if you are trying to control inflation in which case you want interest rates that have a constricting effect on the economy to stop price increases. So, if interest rates were close to neutral, and inflation was not increasing, then wouldn’t you want to keep interest rates at neutral? Check out my notes about Ebates and holiday shopping. But, Powell and the rest of the Fed have been telegraphing a December rate increase as loudly as possible. In other words, event though interest rates are “just below” neutral, Powell and company want to raise them. Why? Economy is Teetering The other weird bit is that everyone can see the economy is slowing down, and quickly. Housing starts are way down. Housing sales are decreasing. Both are very much affected by higher rates. The stock market is falling, having erased the whole year’s gains. Also, in very large …

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Fed Raises Rates On Schedule

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The Fed has been telegraphing a September (2018) rate hike for quite some time now, and they followed though with another 0.25 increase today. They also anticipate a December rate hike still this year as well. I mentioned last time, this increase marks the end of the “free” rate increases that really didn’t do much to affect the economy as the rates were laughably low so much so that getting any commercially available rate meant a lot of “padding” in the rate from the Fed rates. This rate increase pretty much ends that. From here on out, ever quarter percent increase goes right into the economy as an increasing headwind. Between political uncertainty, a burgeoning trade war, and an economic expansion getting long in the tooth, it’s my opinion that the Federal Reserve is acting recklessly here pushing ahead with its rate increase timeline without any evidence of inflation, and no evidence of wage growth. In other words, the Fed is raising rates despite there being almost no inflation. Traditionally, this does not work out for the American economy. Every time the Fed starts raising rate for reasons OTHER than fighting inflation, the result is a recession, often a big one. …

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Investing For Hurricanes

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I usually wouldn’t write an article like this, but I’m trying something new, so let’s do this. Do hurricanes affect the stock market, and the overall U.S. economy? How Hurricanes Affect The Stock Market Like the vast majority of stock market moves caused by news items, the actual impact on the stock market tends to be negligible when measured over any period of more than a week or two. In other words, investors love to freak out about the news, only to forget what the story was a short time later. Weather, like hurricanes, is no different. Check out my Ebates review. Consider that an upcoming hurricane, no matter how large, has a relatively small area of impact compared to the country overall. While a hurricane might completely decimate, say, South Carolina, that impact won’t be felt in Ohio, Texas, or pretty much any other state you can name. And, if we are being really honest, the biggest of hurricanes don’t really do much long-term damage unless accompanied by flooding. Whether it’s Hurricane Katrina, or Hurricane Sandy, the damage beyond some power failures, damaged roofs, and fallen tree branches was all done by the flooding. So, if you want to …

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Interest Rates Rising Into the End of the Year

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defenses economy

The Federal Reserve did not increase interest rates at its August 1st (2018) meeting. That was widely expected after the increase from the pervious meeting. Traditionally, the Fed tries not to raise rates in back to back meetings unless it feels like the economy is getting away from them. It allows the markets, and just as importantly, the economic data The Fed relies on to adjust to the previous hike before implementing another one. Rate Hike In September The Federal Reserve Bank did try and telegraph that it is currently looking at another rate hike for September. While the Fed did not raise rates, it did repeatedly say how “strong” the economy was, and how strong all the economic data was. Check out our Digit App review. And, for the first time in a long while, inflation is actually running near the Fed’s so-called target rate of 2%. While the Fed’s actions seem much more like 2 percent is a ceiling, rather than a target, recent data does suggest that inflation is running solidly near the two percent mark, so action is likely warranted. Will Higher Rates Trigger the Recession? Here is where things get tricky. While the Federal Reserve …

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Vacation Almost Over

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Wow. What a crazy time to be on vacation. Let’s see… The Fed raised interest rates. There was a bit of hiccup regarding that. In my humble opinion, this is the last “freebie” interest rate hike the Fed has in its quiver. In other words, this interest rate hike probably doesn’t have the possibility of tanking the economy. But, the next one might be a different story. If the Fed pulls the trigger on the next hike too quickly, that could be the one that pops the whole economic expansion and heads us into the next recession. If you are a conspiracy theorist, it’s too late to affect the mid-term elections, but a series of ill-timed rate hikes toward the end of this year, and into the next drops the economy into recession just in time for the next Presidential election. That’s pretty far fetched, that they would do it on purpose, but it could happen nonetheless. (I like that nonetheless is one word 🙂 Also, a trade war! Again. Not just with China this time, but with Europe and Canada?!? Actually, there are a few glitches in our trade with Canada, but this taking a club to some pealing …

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Another Euro Crisis?

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italy euro market volatility

Hold on to your lug nuts. It’s going to be a bumpy ride! Italy Euro Politics Once upon a time,  politicians in a given country disagreed about things. Those things were mostly domestic, although there has always been some foreign policy issues as well. What they didn’t used to do, was just throw out wholesale changes to the entire structure of the economy based upon a single election in which one side won 51% to 49%, or whatever. After the Brexit vote, all bets seem to be off in the world of political market stability. Which brings us to Italy. It seems that within Italian politics there are those who are what they call “Euro-skeptics”, which basically means that they aren’t in favor of the Euro and/or are not in favor of all the rules they must follow to be part of the Euro. Essentially, when the Euro was setup, everyone was very keen on all of the benefits a single European currency would drive. And, why not? There are many, many benefits. As with most things, however, there are some responsibilities too. This is because with a single currency not only are the benefits shared, but so are any …

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