The Ukraine crisis appears to be stalled for now, with Putin—having made his point and essentially occupied the Crimea—deciding to hold there, while the Europeans determine how to proceed. This is probably where we will be for some time, and the markets seem to concur, as they have bounced right back. Move along, nothing to see here.

I don’t necessarily think this story is over, but for the moment, let’s return to a longer-term issue that I discussed on Friday, the U.S. budget deficit. The Congressional Budget Office’s projections are below.

I was meeting with our asset management group this morning, and one of the topics of discussion was a strategy that hedges against inflation using swaps instead of TIPs. This is a fairly esoteric topic, certainly more so than I normally cover here, but it got me thinking about where inflation might be going and why. Is now the time to start thinking about this risk?

What is most interesting in the news is usually the dog that’s not barking. Economics and finance are pretty much absent from the headlines today. Instead, front-page articles in the major newspapers cover childhood obesity, NSA phone surveillance, the Ukraine, and seed-company data harvesting.

This is a shame, but pretty typical. Usually, the best place to look for what will be important in the future is deeper in the paper. Tomorrow’s front-page stories come from further back, and today they’re focused on taxes.

Check out Brad’s February 7 interview on Bloomberg Radio’s Taking Stock with hosts Pimm Fox and Carol Massar.

[audio http://theindependentmarketobserver.files.wordpress.com/2014/02/02072014-mcmillian.mp3]

Housing has been doing a back-and-forth over the past couple of days, with a number of stats down. Existing home sales were down 5.1 percent in January, with average home prices falling, and housing starts and homebuilder expectations also showing declines. At the same time, other stats, including price increases, remain very strong. In fact, in 2013, home prices rose the most since 2005. What’s going on?

The big picture here is that we should expect moderation in housing and understand that it’s actually a healthy thing. Within that big picture, we can look at several factors—weather, rising mortgage rates, and lower affordability—to decide whether the expected moderation in the housing recovery is going to turn into something worse.

As I’ve written many times before, profit margins are at or close to all-time highs. The reasons are many, but among the most significant are low wage growth (which has kept labor costs down), low effective (not face!) tax rates, and low interest rates. The argument that current equity valuations are reasonable implicitly assumes that these conditions will remain constant for the medium-term future, and I have had a problem with that.

So far, of course, I’ve been wrong. But I’m okay with it, because I expect over time to be right, and the trends are starting to indicate that might be happening. This week alone, several events have suggested these factors may become less favorable to business profits.

We have two interesting things to look at today: a report from the Congressional Budget Office on the effects of a higher minimum wage, and a report that consumer borrowing has ticked up as banks become more willing to lend.

I’ve been getting more “disaster chic” questions recently, and I thought I’d get ahead of what I expect will be the next driver of such concerns. Over the weekend, Mark Hulbert wrote a column about a scary chart that’s making the rounds, showing very real similarities between the way the market behaved before the crash in 1929 and right now.

First, a shout-out to my wife, Nora, who’s been stuck with the snow for the past two weeks while I’ve been traveling. She’s done a lot of work and a great job, and I am extremely grateful. Happy Valentine’s Day, sweetheart!

The bad weather has actually been an occasion for good karma. I’ve spent quite a bit of time over the past couple of years helping neighbors clear snow; it’s just the right thing to do for a lot of reasons. Yesterday, while waiting at the airport, I got a delighted text from Nora that someone had plowed our driveway, and when she and Jackson got home, the job was largely done. That was a wonderful surprise. Karma works, although sometimes it can take a while.

I have written before about the work of Professor Robert Gordon and others, who are projecting much lower growth in the next hundred years than in the past. The rationale, briefly, is that all of the easy gains have been taken. The world will not be electrified again. Agriculture has already been largely mechanized. Labor-saving inventions, like the washing machine, have already fully penetrated the developed nations and are working their way through the emerging markets. At some point in the not-too-distant future, it will be possible to satisfy people’s material needs fully.

With population growth topping out, as it is, and with material needs on their way to being addressed, will growth even be necessary? Imagine a world with a stable population, where everyone has enough material goods—what growth would we need? What would growth even mean in that context? Even if Gordon was right, would it matter?