Thursday, March 30, 2017

Real Estate Prices Climb But Not All Gains Are Equal

Earlier this week the Case-Shiller Housing Price Index released their latest report which you can read here. On a national level housing prices have been trending up since the 2012 trough.  The Case- Shiller data series does not adjust for inflation so the index measures nominal prices.

Here is a graph from the Federal Reserves FRED system detailing the 10 City Index and it's constituents.  Below that is a list of each cities index value at the peak in April 2006 compared to where it is today. As you can see on a national level home prices are still 9.75% below their peak. Additionally 7 out of 10 cities are still BELOW their peak prices including New York City, and most surprisingly Washington DC.  If you are wondering why that's surprising read my previous article on DC housing prices. Overall the gains are not even, and there is still a lot of work to be done. Rising interest rates will eventually start to put downward pressure on prices.

Here is the

S&P Case Shiller 10 City Index Value & Constituents
April 2006January 2017% Change
10 City Index226.88206.73-9.75%
Las Vegas235.76155.71-51.41%
Los Angeles273.09256.99-6.26%
New York City216.48186.75-15.92%
San Diego251.32233.56-7.60%
San Francisco218.82235.917.24%
Washington DC252.29220.59-14.37%

Wednesday, March 22, 2017

Big Announcement. I Mean HUGE!!!

I have a big announcement coming up. In fact everything around here will be completely different!!! OK maybe that gave everything away. Or did it?  There's going to be some really cool changes coming around soon.  They will include the following:

Financial Planning
Saving Money
Technical Analysis
Tax Planning

Obviously it will include that stuff. And yes I know it's not exactly as fun as corgi horse races, or mini pigs in a blanket, and whatever else people waste their time watching instead of taking charge of their finances to give themselves a worry free richer life.

It will include an all new blog that will allow easier access to older articles.And get this. It will combine the blog and website into one page. If you aren't aware the website is actually This is just the blog for the business website. What can I say I didn't think it out correctly when I first started.  The new blog will also have a discussion page where I talk about my own personal stock and investment holdings.  You'll get to hear(or read) my thoughts on what I own and why.  That's something currently reserved for clients only.

The website will be easy on the eyes while being visually stunning. It will still include an easy way to sign up for my free net worth and expense tracking tool. It will still feature the worlds most secure, and easy way to pay via PayPal.

There's plenty more that it will include, but I want to save some of the big stuff for later. See hint below.

This site and the business site will re-direct to the new webpage(hint)so no worries if you come here at first. That's about it for now. I'll have a full list of features and updates out as soon as I'm ready to deploy everything.

Saturday, March 18, 2017

MAD Economic Review - 3/18/2017

May the Irish hills caress you. May her lakes and rivers bless you. May the luck of the Irish enfold you. May the blessings of Saint Patrick behold you

It may have been the luck of the Irish, or Yellen, that gave the indexes the strength to post a gain this week after notching losses the week prior.  While each major index posted a gain there were some major divergences across the board. For example the small-cap focused Russell 2000 posted a 1.9% gain far out-pacing the major indexes. I'll note the Russell's gain this week represents 76% of it's gain for the year as it's lagged the first few months. The tech heavy Nasdaq also had a strong showing with 0.7% under it's belt. 

Friday, March 17, 2017

Is All Bond Performance Created Equal?

Below is a chart depicting the performance of the Direxion Daily 7-10 Year Treasury Bear 3x ETF(TYO). Yes it's an extremely long name. Basically the ETF is designed to move 3 times the daily move in 7-10 year US Treasuries for those looking to be "short" government debt. It's as if you actually sold bonds(without owning them), but bought shares of the ETF, to profit from the rise in interest rates as it knocks down the value of older lower yielding debt.

Wednesday, March 15, 2017

Fed Raises Rates

As expected the Federal Reserve raised rates today. You can read the press release(aka statement) here. On top of that the Fed gives us projections which include the famous blue dot plot.  For this year the Fed still sees 2 more .25% rate hikes. For 2018 the Federal Reserve actually expects 3 more hikes. So we can expect the Fed Funds rate to be in the range of 1.25%-1.50% this year,  and 2.0-2.25% in 2018.  Below is the dot plot and some excerpts from the statement. 

Nine of the 17 Fed officials who submitted projections indicated three rate increases would be appropriate in 2017, up from six in December. Only three officials saw the need for fewer than three moves this year versus six in December.

The latest projections are a sign that officials believe they are moving towards a faster pace of rate increases than in the past few years. The Fed began 2015 expecting to raise rates three times and 2016 expecting to raise them four times. But they ended up having to backtrack on those projections and made only one move in each of those years.

Fed Chairwoman Janet Yellen indicated in a March 3 speech that she expects a faster pace than in those earlier years


Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving close to the Committee's 2 percent longer-run objective; excluding energy and food prices, inflation was little changed and continued to run somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Saturday, March 11, 2017

MAD Economic Review - 3/11/17

This week had some interesting developments.  For one we saw Gold and Oil pullback from recent strength. The EIA report this week showed crude oil inventories were at record highs. We have a huge energy problem right now. We literally have to much OIL!!!  My how things change.  It seems not so long ago gas was piercing $5/gal and oil seemed poised to make a march through $150 and straight to $200. The world scrambled for alternatives, and now we have to much energy swishing around.

On top of that we had an ECB meeting, which is going to be followed up with an FOMC meeting next week.  The ECB did state it's easing program will still continue at least until December, and that it's in no rush to raise rates yet. That's a complete 360 from Janet Yellen and The Fed as she basically confirmed a March rate hike is happening.

So what's the prognosis?

Friday, March 10, 2017

Why You Don't Put All Your Eggs In One Basket - Central Bank Edition

Below is a chart detailing the total assets held by all Federal Reserve Banks, and the ECB(European Central Bank). In other words this represents the total amount of bonds, and other assets they have purchased.It's mostly comprised of government and agency debt for both entities, plus a few private sector assets.. For the most part their balance sheets mirrored each other. Then the Fed took a large lead in 2013, but recently the ECB has started to catch up with their own quantitative easing program.

Tuesday, March 7, 2017

The SNAP IPO - To Buy or Not To Buy

Every year there's a couple IPO's people clamor to get on board with. They are hyped up by the media, it seems everyone uses their goods and the company is the new wave for the future. Today we are going to focus on SNAP Inc's(SNAP), or more commonly known as Snapchat.

Below are all phrases that will either pass through your head, or hear others around you saying:

Monday, March 6, 2017

GoPro In Final Crash Mode?

So many people have asked me about GoPro(GPRO) stock over the years that it's easily in my top five most inquired stocks. I get it the company has cool new products that allow us to do new things. It's edgy, new, groundbreaking, and not boring

Heck I even own a GoPro Hero recently purchased for $90 on Amazon as a gift for my wife on Christmas.  Sticking to my core principles of not wasting money on technology I avoided one of the new models selling for $400+, and opted for an older but capable model.  I'll admit it did make some cool video's, but their editing software was extremely clunky. And my wife is more than happy that we saved some money, but still have a cool new toy to make new memories with.

BUT there's just one problem with the stock!

Saturday, March 4, 2017

MAD Economic Review 3/4/17

" But how do we know when irrational exuberance has unduly escalated asset values" - Alan Greenspan

That's a great question Alan. In fact it's so good you had a hard time figuring it out yourself. Many people remember that fateful speech December 5, 1996 when Alan Greenspan claimed stock markets were under a state of irrational exuberance. Of course that comment was made mid dot-com bubble in December 1996, and rightly so as shares appeared overvalued for that period of time. Of course stock markets rallied 4 more years after his comments, and many investors heeding his advice missed out on the S&P 500's 82% gain from December 1996-December 2000. If you include dividends your total return would have been 93%. 

Friday, March 3, 2017

21+ Years of Irrational Exuberance

It's been over 21 years since Alan Greenspan claimed markets were experiencing "irrational exuberance" on that fateful day in December 1996. Of course since then smart investors have managed to ride the ups and downs while still locking in the S&P 500's Total Return of 369%. Hopefully most people did not

Thursday, February 23, 2017

The Tale of Two Social Media Stocks

Well it doesn't look good for shares of Twitter(TWTR) lately. The company has failed to find a suitor, and user growth has slowed. Dramatically.  Currently Twitter is valued at $11.3 billion as the stock has seen a 69% decline in value since October 2014. It's not the best performance comparison chart I've seen in awhile

Saturday, February 18, 2017

MAD Economic Review - President's Day Edition

Many of us have a nice long weekend ahead of us as we celebrate what is actually still considered Washington's Birthday on Monday.  Despite his real birthday falling on the 22nd, it was decided in 1968 to move a lot of national holidays to Monday to encourage more 3 days weekends for the nation's workers.  Nevertheless let's not forget to honor our nations greatest general, and first President that humbly served 2 terms despite widespread clamor for him to run a 3rd time.

While we are at it do take advantage to shop sales at retailers. Of course regular readers will do this in a smart way.  I'm sure no one will be out buying new cars, and will use any savings to invest for the future. Just remember only buy items you ACTUALLY NEED!  For example if you've been in extreme need of a new quality set of cookware and you see nice sets are marked down 25% then by all means purchase them.  Just don't use any sale to buy a portable speaker for your phone, drones, any wearable tech, or other things that just aren't essential right now.  You are of course trying to save for your future early retirement, child's college education, or trying to pay off the house early.  All of which will make you much happier and stress free.

Friday, February 17, 2017

Is Investing In Tech Stocks For Losers?

New technology is fun, it's exciting, and it can sometimes lead to plenty of riches. Unless of course it was 1996 as the buyers of these companies eventually found out. Interestingly the article mentions Yahoo(YHOO) which happens to be the sole survivor from that batch of 90's tech stocks.

Yes investing in tech is seen as cool.  It is after all representative of our progressive future.  But take a look at the performance of these "tech" companies since January 2016.  Here we have Square(SQ), Lending Club(LC), Twitter(TWTR), and Fitbit(FIT).  With the exception of Square(SQ) all have been losers for their early investors. Although owning Square hasn't been as pleasant as the gain alludes. Let's look at a chart.

Friday, February 10, 2017

MAD Economic Review - 2/10/17

I sometimes try and put up a good quote from someone famous, or myself. I'm almost famous I swear 😉.  Nonetheless I couldn't find any I liked, nor could I recall some of the great things I said recently. I know slightly big headed of me, but I do come up with a lot of good slogans/phrases for people and their life finances.  Unfortunately I don't write them down all the time, but if it had anything to do with specific numbers I remember it right off the top of my head. Sigh.

Either way I thought I'd give us a new quote. It's possibly been said before as they say "there is nothing new under the sun."

So here it is:

"When life gives you it's biggest challenges that's when you stand up and tackle them head on" 

We have challenges everyday. Such as not wanting to get up out of bed for work during the winter months, procrastinating on un-enjoyable task's, or the worst offense of not paying attention to your finances.

Of course you can have challenges far greater than that.  Whatever they are just make sure you stand up and tackle them with everything you've got. You'll thank yourself later. 

Economic News

There was light economic news this week, but I'll highlight the JOLTS report and U of M's Consumer Sentiment(Is it football season again yet?).  The JOLTS report showed 5.501 million job openings in the country.  Let's assume employers are willing to pay $25/hr for a 40 hour workweek. That means roughly $286 billion dollars in wages are going un-claimed for the whole year. Go get yours! The JOLTS number has been trending down since April 2016's high of 5.845 million, but I'll be looking to see how it trends the rest of the year.  I still can't believe employers are having such a hard time filling positions. But that's a symptom of structural unemployment which means they can't find qualified/trained candidates. I'll have more on job growth and GDP in a post coming out next week, it's a must read. 

The University of Michigan's Consumer Sentiment Index was released with a reading of 98.5 for January 2017. If you're not aware the last time we saw numbers this high was back in the beginning of 2015, and just before the recession started in 2008.

What's interesting to me is the index has risen 33.4% in 4 years from January 2013(73.8) to January 2017's 98.5. That of course is right after Barack Obama was inaugurated for his last term. That's not as rosy at first glance since generally numbers above 90 are correlated with high confidence, and anything from 50-75 is associated with pessimism. It took 23 months from his inauguration for consumers to feel confident enough about the economy for the Index to break above 90 again after last seeing it in 2007.

 In fact it was only during the last couple years of his Presidency when we witness consumer sentiment over 90(21 months over 90 total).  Or in other words only 21.8% of the time did consumers feel good enough to put them in the upper echelons of economic ecstasy during his two terms.  Not to Monday morning quarterback him as he inherited a woeful economy at the time. But the index shows he didn't do a great job of getting American Citizens excited about their economic well-being. I think that's partially manifesting itself into the protests we see now. A lot of Americans never felt the "recovery", and are just angry at everything. As James Carville said "It's the economy stupid."  


We saw the equity markets all notch new highs during the week. Yep that's right. Every single index notched a new all time high this week.  The Nasdaq leads all indexes YTD with a 6.5% gain so far this year. So far 71% of companies have reported and it looks like they've registered 4.9% earnings growth. A lot of people are attributing this weeks gains to Trumps remarks about a "phenomenal" new tax plan.  Let's not get to excited. The tax world moves pretty slow.

Speaking of which make sure you file your taxes early to get your refund if you're due it, and to avert any possibility that someone files a return under your name fraudulently before you can. Remember you can still contribute to IRA's for the 2016 tax year, and if you get a refund consider investing it into an IRA. If you don't have one contact us. MAD Consulting can get you setup with a Traditional and Roth IRA for all your tax season refund needs. You can get started with as little as $3k in some cases so contact us to find out what we can do for you!

While Trump may have been good for the index's overall this week, or so they claim, he wasn't good enough for his favorite loud horn - Twitter(TWTR). The company reported earnings and user growth that greatly disappointed investors, and the shares dropped over 16% in two days. Looks like the Donald doesn't boost all things market related.  This earnings report finally got UBS to change it's rating on Twitter from "Neutral" to "Sell". UBS originally had a "Buy" on Twitter from 9/10/14 which was finally changed to "Neutral" in January'17. Uh a little late there UBS as the stock is down 70% from their original "Buy" rating. Oddly enough the company is trading at one of it's cheapest valuations ever

Bonds were slightly uneventful as they saw most of their action last week with the FOMC meeting.  At last glance the 10 year treasury was drifting around 2.41%. Hard to get excited about government bonds when the S&P is still yielding around 2%.

Have a great weekend everyone!

MAD Consulting

PS. To all my gentleman readers. Don't forget Valentines Day next week.  It marks the 5 year anniversary since my wife and I had our first date. Oh how quickly time flies.

***If you were counting I technically gave 4 tips. The quote, the tax advice, IRA advice, and Valentines advice!

What Do Markets Think About Society?

While you've been focusing on grinding out the last full month of winter, and protesting cause it's the cool thing to do right now, the markets have continued to climb steadily higher all week.  In fact every major index has HIT ALL TIME HIGHS this week!!

Saturday, February 4, 2017

MAD Economic Review - 2/4/2017

It was a busy week for economic data as we had a FOMC rate decision, Unemployment/NFP, ISM, and earnings from a few big names.  That was all enough to keep the market action interesting for the week. In fact we saw record levels of VOLATILITY!!!  The last time we saw this kind of volatility was back exactly 10 years ago in February 2007.  What does that mean?

Monday, January 30, 2017

Investor's Corner with Michael Distasio - Guru Trading & Investing: Jan 25, 2017

A "Guru" is a large fund manager that's been made famous for their long time out-performance of the market, and well timed trades that have led them to mega riches. Common names seen in the media most often are Warren Buffet, Carl Icahn, George Soros, Leon Cooperman, Bill Ackman and the list goes on.

In my most recent Squawk Radio Investors Corner segment I highlight some information sources you can use, guru's use of the media, and whether or not following these people is a good idea. In just one example you easily see how they don't have your best interests in mind all the time. Specifically George Soros whom in my opinion has been fleecing the American public to amass large profits for himself throughout the decades. He really should be investigated. You'll see why in the video. As I've called out Jeff Gundlach & Dennis Gartman before - George Soros now joins the list of CHUMPS!

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by MAD Consulting LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. MAD Consulting LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Saturday, January 28, 2017

MAD Economic Review - 1/28/2016

Well I'm back full time!!! Recently returned from my honeymoon with my fantastic wife with some tan lines, great memories, and feeling refreshed!  Traveling really helps you understand the world economy as you get to see first hand globalization at work in multiple places. I've been blessed to be able to travel this world to locales Christopher Columbus, Amergio Vespucci, & Ferdinand Magellan only dreamed of visiting.  They all set out with slightly different goals, but in the end their main quest was to increase trade.   It goes even further back than the Silk Road. That's always been human civilizations goal - increased trade & prosperity.

This week I did another Investor's Corner segment on Topstep Traders Squawk Radio with Eddie Horn, which I've recently found out is also very talented at multiple instruments including the piano. This week I highlighted some of the effects big money players such as Soros and Buffet use their influence through the media & other means.  I highly suggest you check it out. It might show you they don't always have your best interest in mind when they spew out comments on TV or social media. For further reading check out my review of Gundlach & Gartman.

This week also saw the Dow eclipse the 20k mark.  While it sounds cool, in reality it's not much of a big deal.  As the index head's higher each new whole number becomes less important on a percentage basis.  For example to reach 25k the index only needs to advance another  25%. That sounds impressive, but when you consider the Dow was up 15% in 2016 you realize this can easily happen in the next year or two.

As a matter of fact every index hit a new high this week. The Nasdaq paced the pack with a 1.9% gain for the week. It seems the #TrumpRally is alive and well so far.  From my perch some charts are starting to look overbought so it might not be out of the question for the indexes to take a breather soon and consolidate some of these impressive gains.  That's just a natural progression for the market.

Index                  YTD % Change
Dow -                         1.7%
S&P 500 -                  2.5%
Nasdaq -                     5.2%
Russell 2000 -            1.0%

Visit to see more great charts.

Economic Reports

We had a handful of important economic published this week, all of which seemed to get lukewarm responses.  Housing data came in with Existing and New Home Sales.  Neither of which met expectations.

Existing Home Sales - 5.49 million vs 5.55 million expected
New Home Sales - 536k vs 589k expected.

I'd say the miss is partly influenced by the recent rise in mortgage rates. I'll be putting together my semi-annual real estate report in the next few weeks as the remainder of 2016 data gets published.

4th Quarter GDP estimates came out showing the economy grew at a 1.9% clip from October-December 2016. I wouldn't worry about this to much despite it being a weaker number than we'd like.  The market has already passed by that data point and is digesting Q4 earnings from large multi-nationals(34% of companies already reported).  This number will be revised a couple more times so take it with a grain of salt.

For the year I think participants will be more focused on the possibility of another Fed rate hike(currently pegged at 71% chances in June), inflation, and regulation changes coming down from DC with plenty of proposals to simplify the tax code and other compliance procedures.

Tuesday, January 24, 2017

How Are Bonds Performing

There's been a lot of talk about bonds lately and how they are going to perform with the Federal Reserve raising interest rates.  Here is a chart from the last six months depicting 3 bond ETF's VCSH(short duration), VCIT(intermediate duration), and VCLT(long duration) bonds have been performing. Lately we see the short duration VCSH is performing better overall.

Visit to see more great charts.

Wednesday, January 18, 2017

What Is A Word Worth?

We are definitely in new times when a just a quick tweet or statement can send things spiraling in either direction.  Now for traders this phenomena is old hat for them.  They are well aware of the consequences of new communications technology, and reaction times.  However for long term investors, and casual followers many are probably not aware of how quickly our markets respond to news, or ahem, tweets & posts. I'll use two recent examples to highlight this.

Monday, January 16, 2017

Dr. King: Nonviolence is the Most Powerful Weapon

I had the honor of visiting Dr. Martin Luther Kings home and historic site in Atlanta a few months back. It was quite a learning experience. For one his family was highly educated, and included a degree holding grandmother. In case you aren't aware that was a rarity, and even rarer for an African-American woman during her generation. Also Dr. King was a humble man, and at one point did not want to buy a house because he was afraid people would think it showed he was profiting from the movement he was a big part of. That's the type of humble thinking absent from many civil leaders toady.

Nonetheless his message in this video is something I feel gets lost on people. I think we forget in every generation the truth to this message. Nonviolence IS the most powerful weapon.