finance

March 2023 Econ and Financial Forecast Slides

Thank you to everyone that attended the February 2023 Econ Forecast co-sponsed by the Newport Beach Chamber of Commerce and for Edwards Lifesciences for having me provide a forecast in March.

In summary, I believe we will have a recession but likely later in the year and the Fed is likely to be more aggressive than the market. We should be in for a choppy year for equity markets and a bullish year for long-term bonds. Below you can download my slides from March and watch a replay of the February forecast.

Slides here: 2023 February Econ and Financial Forecast

Video here: 2023 February Econ and Financial Forecast Recording

By Christopher Schwarz, ago

That Time of Year Again – Bobby Bonilla Day!

It’s already my favorite day of the year again! Forgot why? It’s a day when you can see the power of compounding and time value of money. The day Bobby Bonilla gets paid $1.19mm even though he hasn’t played baseball in over 20 years!

Bobby Bonilla was one of the killer B’s when I was a kid on the Pirates with Barry Bonds. He then eventually played for the Mets.

In 2000, the Met’s bought out Bobby’s contract. Instead of paying him $5.9 million in 2000, they agreed to pay him $1.19 million per year for 25 years starting July 1, 2011. The interest rate? 8%.

How does the math work? Well, $5.9 million grew by 8% with no payouts for 10 years. So the Met’s owed him $12.74 million in 2011 when the payouts started. 25 Payments of $12.74 still earning 8% interest is… $1.19 million. Here you can visually see the payouts.

Bobby Bonilla’s Payout Structure

The interesting part of this story is the Mets were happy to agree to this interest rate and payout structure because of the amazing returns they were getting from … Bernie Madoff.

I noted today a lot more news about the day. I’m sure everyone will catch on by 2035.

By Christopher Schwarz, ago