Boltwood Capital Management | Weekly Reads: 07/23/2018
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Weekly Reads: 07/23/2018

The Week’s Best Articles: Week of July 23rd, 2018

Fixed Income: Prolonged Slump in Bond Liquidity Rattles Markets – click here
The regulations born out of the financial crisis have helped shore up banks and make them more secure.  However, one of the major outcomes of the regulation was the banks’ inability to serve as a liquidity provider for bonds globally.  This combined with the fact that central banks are still buying a high percentage of all bonds makes trading in the bond market a risky proposition.

Economics: Trump Should Thank His Lucky Stars That the Fed Won’t Listen To Him – click here
One of the great structures of the American government system is the independence the Federal Reserve (Fed) was granted.  Specifically, that the Fed can remain non-political and pursue policies that are in the best interest of the economy, not those that the sitting political leadership desires.  This independence is even more pronounced now that President Trump is pushing back against its independence.

Politics: What Trump’s Threatened War With Iran Would Actually Look Like – click here
As is par for the course, President Trump has gotten into a Twitter spat with Iran.  Leadership on both sides seem to be willing to elevate the tensions in pursuit of their own goals.  If Trump’s history holds this set of Twitter attacks is an attempt to move his agenda forward with bravado and bluster.

Investing: Great Earnings Meet Trade Threat and It’s Splitting Markets – click here
There are times as investors when all things seem to be pointing up or down.  These periods of clear direction are rare, however.  The reality is that more often than not the market provides conflicting signals that investors must look through.  In today’s market, the signals that investors must decipher are strong earnings and business momentum vs. the threat of a trade war.

Energy: Next-Gen Nuclear is Coming, If Society Wants It – click here
The debate about the direction of clean energy has been waged for decades.  As is always the case as time goes on and research continues more and more options present themselves.  Today, there is innovative work being done regarding small-profile/safer nuclear reactors that could help to solve some of the clean energy issues the world faces.

Politics: Trump Wants To Revoke Security Clearances of Ex-Officials Who’ve Criticized Him – click here
President Trump is if nothing else someone who will speak his mind.  However, because the personal nature with which he goes after critics he opens himself up to intense criticism.  When news agencies report that he is attempting to revoke security clearances simply because of being critical it is hard to see his actions as anything less than vindictive.

Politics: What’s Behind A Pitch For the Little Guy Investor, Big Money Interests – click here
The Main Street Investors Coalition has a nice ring to it.  Those who do not know would assume that this organization is out to fight for the mom and pop investors.  In reality, this organization is a group that is funded by large business that is fighting against changes to the 401(k) business model.

Trade: Farmers Prefer Trump Do Trade Deals Than Hand Them Cash – click here
News broke this week that the Trump Administration would be handing out cash payments to farmers impacted by the recently enacted tariffs.  What is interesting is that many of these farmers do not wish to receive handouts.  Rather they would prefer the administration follow through on its promise to implement improved trade agreements for their products globally.

Investing: Hedge Fund Titans Who Bet Big on India Now Say They Were Scammed – click here
For us average investors being able to invest in the early stages of an economies growth path is unattainable.  However, the largest investors get opportunities that we cannot.  Yet this article outlines how even the most sophisticated investors can become misled when investing in the highly volatile areas such as the emerging markets.