Yesterday, I talked about the problems that have led to the current surge of populism and ended with a link to a paper discussing the connection between conventional economic policies and political populism. Today, I will offer a look at what this connection might mean for politics and policies in the future and, of course, the impact for our investments.

There’s a lot of political turmoil around the world—here in the U.S. certainly, but also in Europe, Asia, and the Middle East. Much of it seems to involve at least some rise in populist ideas. I’ve been doing a lot of reading and thinking, trying to get a sense of the big picture, where these trends are coming from, and where they might be taking us. Today, I’m sharing my thoughts, along with a couple of white papers that I found both interesting and helpful.

Last week’s data was generally positive, with housing sentiment rising even further and industrial production posting a surprisingly large gain. Although there were weak points—multifamily construction is slowing—growth is broad based and may be accelerating. Overall, the results remain positive looking forward.

I am traveling today and away from my usual data sources. The market seems to be bouncing back, though, so I thought I’d take a break from addressing immediate investment worries in favor of some quick thoughts on a few disparate topics that, believe it or not, are connected by a common denominator.  

U.S. markets have bounced back a bit after yesterday’s decline, but I think investors are still rattled by recent developments. I said yesterday that I don’t think this is the onset of the big one, and we shouldn’t worry. At the same time, it is certainly possible that we’ll see markets fall even further. If it’s not time to worry yet, when will it be?

I am in California, which means that I woke up this morning to a market that was already open—and dropping. Washington, DC is the cause once again. Growing turmoil in the nation’s capital has called into question the ability of the Trump Administration and Congress to enact their policy goals.

Looking back over the past couple of weeks, my overall approach has been one of looking at the big picture rather than the details. And when you do that, the big picture is actually quite good. In many ways, we are in a boom time like we haven’t seen since the 1990s. I know that goes substantially against the narrative out there, and there are important differences. But there are also more similarities than you might expect given the news coverage.

Last week’s data was positive, reversing concern about consumer spending and suggesting consumer confidence remains strong. Lower inflation results were noteworthy but not of immediate worry. Overall, the data suggests that the slowdown in the first quarter is likely to get better—possibly significantly—over the next couple of months.

After writing yesterday’s post, it occurred to me that it would make sense to apply the measures I use for the U.S. to other economies where problems could affect us. Interestingly enough, just as I thought that, articles pointed out that one of my key metrics—the yield curve, which represents how much central banks are stimulating an economy—had just flashed a trouble signal in China.

I have written about this concept before, but given some conversations I’ve had recently, I think it’s a great time to revisit it. When trying to understand both what is happening and (ideally) what is going to happen, we need to be able to identify what is important—and what is not. In other words, what signals should we pay attention to—and what noise should we ignore?