Newsletter - Kamran Afshar Associates Inc.

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BROWSE POSTS

Are we on the verge of a financial crisis?

3/20/2023, 10:18:28 AM

The last financial crisis started as inflation continued to rise despite the FED raising its rates. Inflation eventually peaked at 5.6% in July 2008. The causes of the widespread financial crisis of 2008-2009 started in 2004 with the housing market exploding upwards, with more than 7 million houses sold nationally at higher and higher prices. For those history buffs, while not close, it had some resemblance to the 17th-century black tulip market crash in the Netherlands.

Car Sales in the US

3/5/2023, 5:18:26 PM

Cars are one of the biggest ticket items consumers purchase. Except for the large cities, public transportation in the rest of the country leaves a lot to be desired. Outside the major cities, our transportation infrastructure has become almost entirely based on private car ownership.

National debt as a percent of the GDP is dropping from its 2020 record high

1/23/2023, 10:00:38 AM

The national debt is now at $31.4 trillion and appears to continue to rise for the foreseeable future. This puts the National Debt at 119% of the country’s Gross Domestic Product; while huge, it is below its record high of 134% in the 2nd quarter of 2020. And while 2020’s Covid emergency made it an exception, even during WWII, the national debt did not exceed 121% of the GDP. Carrying debt has a number of issues, the most immediate one being interest payment on the debt. At the end of WWII, interest on debt accounted for 1.8% of the GDP, which was obviously due to the very low interest rates of the time.

The state of the Economy

11/1/2022, 1:47:01 PM

Are we in an economic boom, or in recession or something else, and where are we heading?
According to the published definitions for these economic conditions; a recession is a significant, widespread, and prolonged downturn in economic activity, typically associated with declines in economic activities, consumer demand, and employment. Inflation usually drops during recessions.
Economic boom, on the other hand is defined more as a widespread, and prolong upturn in economic activity, typically associated with increases in economic activities, consumer demand, and employment. Inflation usually rises during economic booms.

Unemployment rate dropped to 3.5% in December

1/8/2023, 3:52:17 PM

The U.S. unemployment rate fell to 3.5% in December, matching its lowest in over 50 years, according to the Bureau of Labor Statistics. And November marks the 11th consecutive month when the unemployment rate was below 4%.

Federal Reserves raised its lending rate by another 75 bases points

9/28/2022, 1:17:43 PM

The FED announced that according to its dual statutory mandates of seeking price stability and maximizing employment, has raised its lending rate by 75 bases-points on September 21st; the 3rd 75 bases-points increase in a row. And this is after two smaller increases earlier. Over the last 6 months, the FED raised its interest rate from almost zero to more than 3%, with promises of more to come.

Monthly inflation in January rose by half-a-percent

2/20/2023, 8:24:44 AM

According to the Bureau of Labor Statistics, the seasonally adjusted consumer price index (CPI) dropped by 0.5% in January. This calculates to 6.4% inflation over the 12 months ending in January 2023, still high but significantly lower than last June's 9.1%. Inflation in the previous six months has been a much lower 4.1%.

2022, Year in Review

1/1/2023, 11:04:30 AM

The first quarter of 2022 saw a small 1.6% drop in the GDP, which was expected, as the 4th quarter of 2021 saw an extremely rare 7% jump in the GDP. Unemployment rate dropped to 4.4% by the end of the first quarter. In the Valley, also employment was rising, and the unemployment rate had fallen to 4.7%.

Payroll employment rose by more than half a million in January

2/15/2023, 9:19:10 AM

According to the Bureau of Labor Statistics, nonfarm payroll employment rose by 517,000 in January, making the total number of jobs added in the previous 12 months 5 million. We passed the pre-pandemic high last June and now have close to 3 million more people employed than the pre-pandemic high.