Financial Market Commentary, 9/1/2017

The Federal Budget and Debt Ceiling

After September 5, Congress will return from its summer recess to negotiate the federal debt ceiling and budget for the new fiscal year starting October 1.  This comes at a time when political and social acrimony appear to have reached their highest levels in several decades for our country.

Howard Marks re: Today's Investment Environment

Howard Marks, co-founder of Oaktree Capital Management, is well-known for his memos to investors.  In his latest memo, "There They Go Again... Again," he provides his opinion on the current investment environment.  He has written several cautionary memos in the past which ultimately proved to be early but prescient.

Tad Rivelle re: Central Bank Policies

Tad Rivelle is Chief Investment Officer - Fixed Income at TCW (Trust Company of the West).  He has been skeptical of the Federal Reserve Board's policy.  In his latest commentary, "The Fed's Quixotic Journey," he demonstrates that the major central banks are adding reserves to their banking systems at the highest rate since 2010.

The Curious Case of CryptoCurrencies

A high school student recently asked me what I thought about cryptocurrencies.  He had been trading them and had some very positive results.  While I had heard and read about bitcoin, I was surprised to learn a few things when I started researching the subject further.  According to, as of June 5, 2017:

The Debt Ceiling and the Coming Budget Battle

The Bipartisan Budget Act of 2015 was signed into law on November 2, 2015.  An unusual feature of the legislation was that it suspended the legal limit on the issuance of debt and allowed the federal government to issue debt without any limitations until March 15, 2017.  On March 16, 2017, the debt limit was set again at the debt level of the prior day, $19,808,772,381,625. 

A Tribute to My Mother

My mother, Aurelia (Arlie) Lorona Kahl passed away on January 15.  The enhanced online obituary is here:

Click on the photo gallery tab for some pictures from the past.

Bob Kahl

Grant Williams re: The Petrodollar System, Oil, US Treasuries, and Gold

Grant Williams has an excellent commentary this month regarding the evolution of the petrodollar system, changes in central bank foreign exchange reserves, US Treasury securities, gold, and other topics.  Zerohedge has excerpts here:

Gold - Some Recent Developments

The price of gold rose over $70 per ounce while US stock futures declined dramatically on the night of the November 8 election when it was apparent that Donald Trump would prevail in the US Electoral College.  Donald Trump has said that he would like to return the US currency to a gold standard, which would appear to be positive for gold.  Other developments appear to be positive for

Asset Class Commentary

European Banks

The stock prices for many major European banks have been in decline since the financial crisis of 2008-2009.  In contrast to banks in the United States, European banks have generally shown no improvement in their capital/asset ratios.  A quick way to gauge the concerns of the financial markets is to look at the stock prices of European banks and their ratios of price-to-book

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