Robert Kaplan Update – Round Table State of Economy – “Sooner Rather than Later!”

One of our favorite Federal Reserve Presidents Dallas’s own Robert Kaplan had another Round Table discussion the most recent Monday night….

Those with great memories may recall my fiasco when listening to his Round Table discussions and accidentally raising my hand for a live question…. good news, avoided that this time! haha

Elephant in the Room – Inflation or Not?

While leading with stats and updates, the review order has been changed due to the very end of the discussion and importance…

Recalling from the Mauldin SIC conference of the last two weeks and and once again here we are…. Elephant topic for Kaplan – Inflation or Not?

(Have you ever been on a call or virtual visit like this and wondered who else is on? – Am I wasting my time here? Or is this a good use of the late evening? – See callers below for answer!)

Live Callers

After about four or five live callers, the moderator announce, “Our next caller is Byron Wien!” – WHAT!

Wien is an 88 year old veteran of the Capital Markets and currently Vice Chair of Blackstone the largest money manager in the US!

What is he doing listening to a Dallas Reserve President at this time of the night – he is one hour later!

In a no nonsense, direct question, Wien asks or more insists “There is inflation and it is coming faster than officials think! What are you guys going to do?”

Kaplan answers directly that he thinks tapering monthly purchases along with increasing of rates should come “Sooner Than Later!”

This statement was repeated more than any other statement and even at one juncture, Kaplan stated “I said this in March and have seen nothing to change my view!” Sooner Rather than Later!

Kaplan goes on to say ” It is better to let off the accelerator and coast and possibly tap the brakes rather than staying on the accelerator and having to jam the brakes quickly!” We Agree!

Last up from the live call ins :

Robert Sakowitz – Concerns about shipping and port trouble- his personal example of $2600 pod now costing him $8000- (Has to be passed on somewhere? right?)

Based on our research and his question, most likely a multi generational retail magnate!

Both calls were concerning inflation, with several others concerned the FED has stayed to long and their mandate has been met!

Interesting Stats from Kaplan

2 million worker age 55 and over retired since Covid, dropping a valuable portion of the workforce

1.5 million women left workforce to care for children- Wow !

Texas and the surrounding Dallas Fed Area High School Superintendents on average graduate 85% of seniors and now only 60% – creating a shortage of skilled workers –

Taper and Policy – How can FED withdraw without market disruption? SLOOOOWLY

Learned from 07-09 – Telegraph in advance and give market time to absorb

What signals will use for taper – FOMC in Dec of 2020 agree that substantial further progress (Kaplan believes this statement is key and is very open to be used and interpreted many ways)

Input supply demand imbalances – metals, food, wages, PCE of April – June – elevated levels – uncertain of how long will persist

Believe inflation run at 2% and anchored there-

11 million barrels of Oil last year, thinks can only to to 11.25 million per day- fossil fuel here for decades longer, maybe not at the same level as prior but will not go away

Great Final Question from the Moderator

What Keeps Me Up at Night? (Recall same exact question of Buffet at annual meeting and the EXACT same answer)

“No textbook for this recovery, this is unlike any other recovery we have ever had- no prior example – We must manage the risk be nimble if possible !”

There you have it… Local Dallas Fed President echoing a lot of things we have been hearing, spoken of and discussed here!

Good News – Time will Tell and it will not be a long time (quarters, not decades)

Have a Great “Kaplan Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

JOLTS – Job Opening Measurement ALL TIME Highs – Great News for Job Seekers, Tough News for Employers

Over the last two weeks during the Mauldin SIC conference (which we are still digesting), multiple speakers mentioned the Jolts Index -Job Openings Labor Turnover – A Bureau of Labor Statistic (BLS) that measures job openings.

Back in August of 2020, here we first took note of the movement in the Index as it made a turn at the bottom of this chart and actually surprised to the upside.

JOLTS Index Today

Fast forward to today and noting what the Mauldin speakers featured, this Index is at an ALL TIME high!

Key Takeaways

  • Tons of Jobs Available
  • Job Seekers Market
  • Tough on Employers
  • Could lead to higher wages (Inflation?)

Have a Great “JOLTS Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Fun Friday Challenge – Notice the Paper Vehicle Plates – Family High of Seven in One Four Mile Radius

We have spoken of this before, but recently on a fairly short jog of four miles, seven paper vehicle plates were spotted. Over the past few weeks the family has been counting relentlessly to see who can see the most in an outing.

Fancy locations seem to have fancy vehicle paper plates, with more normal areas having more normal vehicle paper plates, but THEY ALL seem to have tons of paper plates!

Who is buying all of these New or New to them Cars?

Buyers Versus Inventory – It Makes Sense Now

You know we could not leave this alone…just too interesting!

Inventory Down

Sales Up or at Least Rebounding FAST

Long journeys will likely lead to a much larger number than we have topped so far…

So your fun weekend challenge, see how many paper Vehicle plates you see over the next few days!

Have a Great Day, Friday and Weekend – Thanks for reading, talk next week !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Most Popular Cities Measured Monthly 2004 to 2020 – Animated Chart from Latos Charts

With a heavier, long Monday post and in the throws of Taxes for many, present party included…. we went light with a fun animated chart for you viewing pleasures!

From Latos Charts YouTube Channel

Had no idea how popular Paris France is!

Based on top 15 City Internet Searches

Music: Kevin Macleod

Have a Great “Most Popular Cities” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Make it to Year 2030 and You will Likely Live Over Age 100 – From Mauldin SIC Conference

As noted with our excited post last week, we are once again in the throws of the John Mauldin SIC – Strategic Investment Conference.

So far this years most ear catching moment has nothing to do with finance but comes from two Doctors who are repeat speakers from last year to give the group a Covid related update.

Their predictions last year (think at a time where a lot of uncertainty abounded) were spot on and almost unbelievable accuracy. So accurate they hardly needed to update their presentation.

Knowing we teased you with the headline, stay with us please … and take a quick moment to review these two Doctors backgrounds/Credibility! – Pretty Awesome stuff!

These guys are not show boaters!

So maybe not Dr. Culver’s best look … think super smart professor we have all had in our life!

Make it to 2030 and You will Likely Live Over Age 100

My mouth almost dropped when I heard these two stately Doctors utter the words above.

There is a super cool chart that the Doctors had in their slide deck, and of course it is the ONLY slide that had “Not for Reproduction” …. so in honoring their request … here is a recreated slide from their predictions.

Since 1850 average mortality has increase 2.5 years every ten years.

From 2020 to 2030 the Doctors believe we will see an increase age expectancy of 30 years, yep THIRTY!

That is the huge jump in the chart on the very far right upper expected mortality age 112 !

Much of this is due to the expected pull forward of knowledge earned from Covid and the various Vaccines.

The Doctors repeatedly mentioned that they expect a youthful elder years as well, not just extended longevity!

Recommended Life Style and Personal Health Monitoring

Here is a quick Legend for the abbreviations:

  • Blood Pressure
  • Body Mass Index
  • Fasting Blood Sugar
  • Cholesterol
  • No Tobacco
  • Stress Management – VERY INTERESTING! Newly added by the Doctors

For the record, those are not low hurdles using my own situation as an example!

Look for a more detailed review of this in the coming Newsletter!

Have a Great “Make it to 2030, live to over 100” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Musk Hosts SNL … Mauldin SIC Conference … Robert Kaplan Talks Taper

Being probably the least fan of SNL – Saturday Night Live – in our family, it is on the calendar to attempt to stay up this weekend and watch Elon Musk host SNL. Once announced there has been some grumblings among actors, a fiery Musk Tweet and fiery Tweet response that are likely no more than showmanship, but like many I can’t wait to see the show!

Ratings increase? Bet so!

John Maulden SIC conference

Last year the John Mauldin SIC – Strategic Investor Conference – was available virtually … and once again it is this year. This conference lasts for two weeks and started this week … has close to 50 high-powered guests, with complete replays and slide decks … we are excited to present the high points of some of these speakers just as we did earlier this week with the Warren Buffett Berkshire Hathaway annual meeting and our Q 3 2020 Newsletter

Taper Talk – Floating the Balloon ?

Local favorite Dallas Federal Reserve chair Robert Kaplan who is not a voting member of the FOMC but still remains on the board this year was the first to mention the word Taper – Well he didn’t really mention taper but mentioned the slowing of asset purchases.

No more than a few days later Treasury Secretary Janet Yellen also mentioned something with regards to asset prices and the possibility of slowing purchases.

With a rather yawning capital market response, it would not be beyond a reasonable belief that they are floating some of these out to see market responses.

Look for more comments from us on this and a very watchful eye for more speakers slowly adjusting the aircraft carrier.

Friday

Ahhhh… but today is a Friday heading into a wonderful spring weekend and a possibly very entertaining SNL skit tomorrow night!

Enjoy, Talk to you Next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Oracle of Omaha …. Warren Buffett Berkshire Hathaway Annual Meeting … Finally Made it Through … Thoughts

Each year for the last five (which is about when they began streaming the meetings), I am always enthusiastic about listening to the Berkshire Hathaway Annual Meeting, which prior to social distancing was more like a sporting event than a shareholder meeting.

Oh, for those that may be wondering, Berkshire Hathaway is headed by Warren Buffett age 90 (not Jimmy – being silly here) and Charlie Munger age 98. The name stems from a bankrupt textile company turned massive conglomerate filled with Insurance Companies (Geico) Railroads, and home builders (largest manufactured home builder in US) just to name a few.

Back to the meeting… Buffett honestly says (and it is true) the actual meeting is BOORING and Buffett even discourages folks to listen to the formal section, BUT there is an opening ceremony of such where Buffett has a 5-15 minute planned discussion followed by 3-3.5 hours of Q and A, most of which is known, but a few are sent in live and carefully reviewed and presented by Becky Quick of CNBC.

Finally A Way To Get Through The Meeting

So the last five years were a terrible failure as the attention span drifted before the entire meeting could be consumed…. Hey these guys are 90 and 98 and move at their own pace, but a wealth of VERY interesting opinions as well as knowledge.

This year a freak accidental trial was successful and made for a very enjoyable meeting review.

After finding a replay of the meeting on YouTube then cranking the speed up from 1x to 1.25 to 1.5 and finally landing on 1.75x normal speed, ta dah … the meeting was happily consumed with full 100% attention AND SOME NOTES!

These are in no sort of order, but basically organized as well as possible given the jumping of topics due to open questions – So here we go, hope you enjoy!

(These a not my opinions or thoughts, only a replay of Charlie and Warren’s high points)

Intro Discussion

Very Pro USA and Complimentary to Capital Creation in the USA

Brings a list of top largest 20 companies in the world, with total domination of USA

Currently have $145 Billion and only need $70 Billion – Current Asset Prices are Not Inviting to Warren and Charlie – Market is too fully priced (Sound Familiar?)

Sold Airlines to allow them to get Federal Funding

Munger Comment – His extra age seems to have loosened his muffler!

Higher State Taxes Chase some smart people away – Silly

SPACS are being created for Wall Street Not Investors and useless use of other peoples money – According to Charlie

Been and actor so long I do not know what I believe – Dogging on politicians and bad CEO’s

Buffett – More Politically PC

Low Interest Rates are causing very high asset prices

Inflationary prices are coming through the home building and other sectors, economy is red hot! Steel and scarcity of product

Furniture store red hot

More inflation going on than meets the eye- Yep

Both Admire Larry Summers convictions to Inflation concerns!

Great Closing Q & A Question:

What was greatest thing learned last year?

Munger: If you are not somewhat confused by what has happened you are not paying attention-

Buffett: Very interested in how this all works out!

Ok, so there you have it. 3.5 Hours condensed into one blog post with some high points that just by chance coincide with some of our thoughts….

Have a Great “Finally Made it Through a Berkshire Meeting” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

IMF Global GDP Estimates 2020-2022 From Visual Capitalist – Cool Three Year Global Estimate

We have noted multiple times to expect some roaring Economic Numbers, which is not a super prescient call due to easy year over year comparisons and the world actually reopening…. (Our curiosity is how this data is digested by Governments, Forecasters and Market Participants)

We ran across a neat Goldman micro time GDP chart recently, that has left our sight grrrrr, but is a quarter by quarter estimate that is fascinating…. we will likely find it eventually and present it here…

For now, we wanted to show this three year global GDP (Gross Domestic Production-Blunt Economic Growth Measurement) from the IMF (International Monetary Fund) –

The IMF, just like any organization misses in Forecasts …. it is not in stone, but this is a very interesting three year, more high level look at the globe as it reopens….

IMF – Visual Capitalist Global Three Year GDP Comparison

This chart was a slider and can be found directly at our friends from Visual Capitalist Here

Year 2020 Findings we find most interesting:

USA GDP Contracts only 3.3% Wow

Global Average the same 3.3% Contraction – Wow Wow

Year 2021 ESTIMATES

Note USA estimated Growth of 6.4% – surprising low

IMF World rebound Estimate of 6% – again, surprisingly low

Year 2022 ESTIMATES – The farther you go the harder they are!

IMF US Estimate at 3.5%

Global Estimate 4.4% –

Not really what to think of this…. both seem off to us ! Clearly a USA Laggard Estimate!

This will be marked as forecast and we can look back and see how good or bad the estimates were!

Have a Great “Multi Year Global GDP Estimate” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

April 2021 Financial Planning and Capital Market Review – By John Kvale

Hello and Welcome to our April 2021 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

April 2021 Video

YouTube

Financial Planning Tips

Rounds 1-3 Stimulus Funds Explained

In this late month post we reviewed our integrated Tax Filing learnings with an updated Stimulus check flow of funds…

The confusing part is mostly from the situation where a decrease in earnings from 2019 to 2020 brought Stimulus credits onto our 2020 Tax return, in the form of that Sneaky Line 30 of our 1040.

September 1, 2021 Round 3 of $1400 Stimulus Look back

There are several important lines in the sand….

Individuals/Families who had a higher 2019 income that knocked them out of some or all of the stimulus original money but a lower 2020 income assuming this person would have qualified for the $1400 per person stimulus based on year 2020 … what the IRS is going to do concerning this matter is on September 1st 2021 they’re going to review all of the 2020 tax returns for folks who had not received the $1400 credit for them and their family and if they meet that threshold they will then receive the $1400 credit period remember this is the much faster phaseout of only $160k and $80k Joint and for an individual.

2021 Tax Return Look Back

Assuming you were not below the thresh hold for 2019 or 2020 return, If a person’s income in 2021 were to drop below the new thresholds .. think next year around this time… you will still qualify for the $1400 credit . They are using the same play book as the original March 2020 rebate look back to give an extra year of the $1400 being credited and it would then show up on sneaky line 30 form 1040 tax return for 2021!.

Capital Market Comments

Fearful or Greedy

“Be Fearful When Others are Greedy and Greedy When Others are Fearful”

Warren Buffett

In this mid-month post we take a soft swipe at market Valuations, knowing that Valuations do not make markets drop, but does possibly set them up for faster drops if unexpected events occur

Time to Be Greedy

Capital Markets are the only store in town where when things go on sale, people flee the store!

Time to Be Cautious

For some reason we just want to hop on and go for a ride- feels good -but very dangerous!

Have a Great Day, Talk to You at the End of May!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Another SLOA – Standard Letter of Authorization Reminder, No Action Needed

Due to new rules which came out several years ago an annual notification is mandated by our transaction Vendor. This notification is dubbed SLOA reminder!

The More Than Annual SLOA Reminder

Sharp eyed folks with a good memory who maybe poured over our Q 1 2021 Newsletter will recall we reminded of the annual SLOA – Standard Letter of Instructions both here at Street-Cents and in paper form in the Newsletter….

Here is what it looks like, and the reason we are repeating our selves as several showed up in our personal mailbox at the start of the week…. much to our repeat confusion!

Pretty vanilla, and only shows accounts connected that we can move money to and from for you!

Hmmmmm…. but why the duplicate?

At the bottom of our paper copy, we noticed the Schwab copyright…. a new addition to the letter.

Bet the merger created a duplicate need for SLOA letters…

Take a look and see if any old or unused accounts remain, let us know if they do and we will disconnect!

Oh… and if a bank has changed names (bought out or sold) but has the same bank account number, there is likely no need for an update…

Have a Great “Why the Duplicate SLOA Letter” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents