Political Calculations

Posted October 09, 2015

The large and pronounced changes we have been observing in the level of stock prices is the result of what we'll call our quantum random walk hypothesis, which largely resolves and reconciles the fundamental and apparently incompatible differences in the theories advanced by such economists as Eugene Fama and Robert Shiller for how stock prices behave, for which they were jointly awarded the Nobel prize in economics (or whatever it's really called) in 2013.

Posted October 08, 2015

By now, we all know the stories of how the billionaires who own professional sports teams hold the cities of their teams hostage when they want to build new stadiums at public expense, threatening to move the team to another city if they don't get their way, and where all too often, state and local elected officials cave in to their demands.

Posted September 29, 2015

For the S&P 500, the week ending 25 September 2015 went pretty much as well expected, as the index' value remained well within the range we indicated it most likely be a week ago.

Posted September 25, 2015

October is often the most volatile month for U.S. stock prices. The reason why that's the case is because fourth quarter earnings season, which begins each year in the second week of October, is the time that publicly-traded U.S. firms announce if they are doing better or worse than expected for the year.

Posted September 23, 2015

Up until a week ago, if a publicly traded U.S. company was announcing it was cutting its dividends, we would have almost automatically assumed, based on what we've observed since the first quarter of the year, that it was an oil industry-related firm.

Posted September 22, 2015

Scott Sumner considers the immediate reaction of stock prices to the Fed's announcement that it would not hike short term interest rate hikes following its two-day meeting ending on 17 September 2015 last week, but has a problem in understanding it:

Posted September 18, 2015

We had a big day behind the scenes here at Political Calculations yesterday, as we updated four of our most popular tools!

Posted September 17, 2015

Imagine this scenario. You work for a company that has previously committed to provide you with a traditional defined benefit pension after you retire, but now wants to lock in its costs for those benefits by offering you a choice.

Posted September 16, 2015

Back in December 2014, we picked up on a change in business strategy by a number of U.S. home builders, where several such as D.R. Horton (NYSE: DHI), Lennar (NYSE: LEN) and Pulte (NYSE: PHM) were going to focus a much larger portion of their business in 2015 on builing more affordable, entry level homes.

Posted September 11, 2015

Believe it or not, there is good news coming out from China regarding the state of its economy.

Posted September 10, 2015

Yesterday, the Wall Street Journal reported on the growing controversy of a chart produced by Josh Bivens and Lawrence Mishel of the Economic Policy Institute and its meaning. Let's dive right into the center of the storm.

Posted September 09, 2015

With the news last Friday, 4 September 2015 that the employment situation in the U.S. economy was not as bright as had been expected, once again opening the door to the possibility that the U.S. Federal Reserve might pull back from its plans to begin hiking short term interest rates by the end of this month, it shouldn't come as a surprise to any of our readers that the S&P 500 fell from where they would be if they were closely focused on 2015-Q3 in setting the value of stock prices in the direction of where they would be if they focused on 2016-Q1 instead.

Posted September 03, 2015

We've previously written that the only time we get really ever get excited about what's going on in the stock market is when it changes by 2% or more from the previous day's closing value.

Posted September 01, 2015

From time to time, we'll conclude our more remarkable posts with the phrase "Welcome back to the cutting edge!" We're going to do that again today.

Posted August 28, 2015

Believe it or not, August is shaping up to be the second best month for dividends in 2015.

Posted August 27, 2015

Based on the outcome of the remarkable volatility of trading in the U.S. stock market on 25 August 2015, our rebaselined model of how stock prices work would say that investors are now fully focused on the first quarter of 2016 as they go about setting stock prices.

Posted August 26, 2015

A little over two years ago, the suggestion that Larry Summers was likely to be appointed to be put in charge of the Federal Reserve was enough to make the stock market swoon.

Posted August 25, 2015

USA Today's Matt Krantz considered an interesting premise at 4:59 PM EDT on 21 August 2015, just after the Dow Jones Industrial average lost 531 points and the S&P 500 lost 65: "How low the stock market can go".

Posted August 20, 2015

Earlier this year, we broke the news that the Apollo Education Group (NASDAQ: APOL), the parent company of the University of Phoenix, had suffered a major setback with respect to its strategic plan to become a major provider of educational software.

Posted August 18, 2015

After a rough July, in which the number of U.S. firms announcing dividend cuts directly paced what we saw during the first quarter of 2015, it would appear that the U.S. economy in August is shaping up to be much less severe.


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