The cost of property damage due to extreme weather is front and center in the news. Damage estimates due to Hurricane Helene range as high as $48 billion. Fitch Ratings, one of the “Big Three” corporate credit rating agencies, estimates Hurricane Milton could reach $50 billion in insured losses for Florida property owners. Florida state officials say if Milton had reached Category 4, the losses would have easily doubled.

Even before these calamities struck, homeowners had seen insurance costs increase. And it seems like natural disasters take a bigger toll each year. What can be done to curb the meteoric rise in premiums? Today we’ll take a look at the problem, the underlying causes and what can be done to help.

Creative destruction is an economic concept developed by economist Joseph Schumpeter in the 1930s and 40s. Schumpeter’s creative destruction is a concept that describes the process of innovation-driven change in an economy, where new products, processes and industries emerge, replacing and making existing ones obsolete. This perpetual cycle of innovation and obsolescence is a fundamental characteristic of capitalism. According to Schumpeter, “The process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

The biggest economic news of late has to be the Federal Reserve’s interest rate cut on September 18. The Federal Open Market Committee (FOMC) boldly decreased its target interest rate range by 0.5 percent to 4.75% - 5%. This is the first rate cut since the early days of the Covid pandemic in 2020.

In their post-meeting statement, the FOMC wrote, “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”

But important to note was the final vote on the rate cut was 11-1, with Federal Reserve Governor Michelle Bowman supporting a 25-basis point move. Bowman’s dissent was the first by a Fed governor since 2005.

Today we will examine the reasoning behind Governor Bowman’s firm stance and some reasons why the Fed needs to think again regarding further “jumbo rate cuts.”

According to recent data, investment frauds, including cryptocurrency scams, have seen a significant surge in the United States. The FBI’s Internet Crime Report 2023 reveals that overall investment frauds grew by 38% to $4.57 billion from $3.31 billion, with cryptocurrency scams accounting for a substantial portion of these frauds. Total investment fraud losses have ballooned over the last five years by nearly 10-fold. And these scams do not just target elderly Americans. Most of the scams are directed at adults aged 30-49.

Before I get into this week’s topic, a nod to the Fed Open Market Committee must be made. The September FOMC meeting starts today, with the much-anticipated announcement of a 25-basis point interest rate cut occurring tomorrow.

Last week, the Bureau of Labor Statistics released the August read of the Consumer Price Index. On an annual basis, the CPI fell to 2.5%, marking a decrease from July’s report of 2.9%. This level now matches the headline Personal Consumption Expenditure index of 2.5% as announced by the Bureau of Economic Analysis on August 30.

As we reported August 27, it appears the Fed now turns its attention to employment numbers, the second part of its dual mandate.

In researching employment information, I ran across a topic about job listings – fake ones. I have to say I was floored that companies are actually advertising fake jobs. Some of the reasons might be legitimate, while others are clearly not.

Read their reasons for using this tactic and let me know what you think.

When you think of stock or commodity market trading you probably picture large crowds of traders shouting and gesturing at each other. That was known as the open outcry system. It is still what I picture and was the norm when I got into this business 30 years ago. Open outcry has been on the decline for 15 years and is now dead as disco. The evolution of electronic trading roughly follows the course below.

Labor Day weekend is behind us! For many, this marks the unofficial end of summer. Children or grandchildren of our many clients and readers are either back in the classroom or about to gather the last needed supplies to start the new school term. 

We here at F&T thought it would be a good idea to revisit a topic very dear to Gary's heart. He had written many times about the Johnson O’Connor Research Foundation and how it has helped many people, including himself, be able to truly focus on their unique aptitudes and talents. He was a big fan and as the title says, he believed this is the greatest gift you can give your children or grandchildren.

Consider forwarding this article to someone who could benefit from Johnson O’Connor’s unique services. I’m sure they will thank you for it.

Last Friday at the close of the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Jerome Powell said it was time for the Fed to make a major shift in policy.

“The time has come for policy to adjust,” Powell said. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Recent economic data have shown that since 2022, the inflation rate has fallen from a 40-year high almost back to pre-Covid levels. At the same time, the unemployment rate has steadily risen, fueling worries that the economy could enter a recession if interest rates stay high.

Major market indexes welcomed the news with moves upward. There are many on Wall Street who are ready to price in interest cuts of up to 0.75% by the end of 2024.

But one analyst believes the Federal Reserve will cut rates by up to 2% in the coming months. We’ll take a look at his reasoning and make our own prediction of how quickly the Fed will move.

Most people recognize the necessity of investing for long-term financial security. Whether you are a passive index investor, an active trader or use professional third parties to manage your assets, one thing is true. Given enough time in the markets you will experience at least one major crash.

These extreme market events have had many different names over the centuries, yes centuries. From manias to panics, from crisis to crash, these high volatility dislocations share some commonality.

Recently, the CME Group’s FedWatch Tool that predicts the odds of a Fed interest rate cut has had more ups and downs than an Olympic trampoline gymnast. Recent economic reports have spurred calls for the Federal Reserve to cut interest rates big and now. We first take a quick look at why and see that the panic is probably unfounded.

Finally, a very promising development in the diagnosis of Alzheimer's disease. Researchers report that a new blood test can diagnose this devastating condition with the same accuracy as much more invasive and expensive techniques. This could be a real breakthrough in its early detection and treatment.