Kurt Kallaus's Contributions

May 30 – When US steel tariffs kicked in a year ago, the yuan depreciated sharply, which reduced the effectiveness of tariffs with cheaper Chinese export prices. The yuan had been rallying in 2019 as a trade agreement seemed imminent, but their currency plunged...

May 16 – Over 2,000 years ago Iran, known then as Persia, was the world’s first super power. Since becoming an anti-western theocratic Islamic Republic in 1979, Iran has been in the crosshairs of conservative...

May 6 – Virtually every week this year confidence of a major trade agreement between the US and China has grown. Just a few days ago Trump surrogates spread rumors that a deal would be announced in a week. Suddenly, a lack of progress on trade deal enforcement terms...

Apr 22 – In 2018, the U.S. economy expanded beyond its sustainable production capacity, juiced by massive tax cuts and global preordering ahead of Trump’s tariff hikes. As winter approached...

Apr 3 – The stock market discounts future expectations. The roaring rally of the past 14 weeks cast aside recession ruminations and increasingly anticipates an economic rebound coincident with an important trade agreement...

Mar 29 – Normal economic expansions are supported by positive sloping yield curves where riskier long duration maturities offering higher rates of return than lower risk short duration debt. Investor aversion to an inverted yield curve...

Mar 12 – Corporate balance sheets are in excellent shape, but equally impressive is the net worth of the American household that grows virtually every single quarter year over year. During rare periods when it doesn’t expand, it typically...

Mar 6 – Working fewer hours at higher pay sounds like a good thing. It may be better than it sounds. Both high skilled white collar and lower skilled blue collar jobs are requiring less...

Feb 28 – By early 2008, a few months after a major bull market peak in stocks, yellow flags on the U.S. economy turned red across the spectrum. Bond spread risks were spiking, consumer and business confidence surveys collapsing, and many indicators...

Feb 19 – US debt surpassing 100% of our annual GDP sounds worrisome, yet China and Japan are much higher. While much of China’s debt is held in its quasi government owned corporations and municipalities, their total debt to GDP is estimated...

Feb 13 – European dysfunction is making Trump’s economic ‘strategy’ look prescient. We all know that trade wars are bad for all economies, yet the U.S. economy accelerated in 2018 while all others have slowed to a crawl as U.S. tariff threats across multiple...

Feb 08 – The China trade deal expectations continue to be the most important driver of US stock indices in 2019. Bullish Trump tweets and robust rhetoric from Chinese leaders had buoyed investors more than recent dovish Fed commentary. Having already priced...

Jan 14 – President Trump campaigned in 2016 on making the US dollar weak again to reduce the endless wave of record trade deficits with China. Clearly, he delivered on that pledge throughout 2017 as the dollar Index fell 12 percent and devalued almost 11 percent against the Chinese...

Jan 7 – With stocks having sold off roughly 20% from their October peak, the market has already priced in some global weakness as well as slower earnings and GDP growth in the US. While uncertainty remains, we continue to forecast...

Dec 21 – Frackers rule! The House of Saud may want to stabilize Brent Oil above $60 or $70 a barrel, but OPEC and Russia no longer control prices and haven’t since the 2015 energy recession. Every time OPEC cuts production they essentially transfer that lost output as a gift to...

Dec 7 – Concerns over the escalating U.S. – China trade war that could cause earnings to downgrade to contagion in 2019 has been a major factor in lower stocks prices. The S&P 500 and Dow stock indices just finished their third test of the...