--- title: The Independent Market Observer | Outlook. Opinion. Insight. | Market Updates (14) description: Market Updates | Commonwealth’s chief investment officer, Brad McMillan, provides insight on the economic, market, and political events of the day—both domestically and on a global scale. (14) --- [![The Independent Market Observer](https://blog.commonwealth.com/hubfs/IMO-Title-1.png "The Independent Market Observer")](https://blog.commonwealth.com/independent-market-observer) [![Commonwealth Financial Network](https://blog.commonwealth.com/hubfs/lockup_citron-1.png "Commonwealth Financial Network")](https://www.commonwealth.com/) - [Home](https://blog.commonwealth.com/independent-market-observer) - [About](https://learn.commonwealth.com/about/) ## [8/27/13 – The Boiled Frog Effect](https://blog.commonwealth.com/independent-market-observer/2013/08/27/82713-the-boiled-frog-effect) August 27, 2013 In what I really hope is an apocryphal story, it is said that frogs don’t notice small temperature changes. You can, therefore, put a frog in a pan filled with cold water, and, as long as you heat it very slowly, you can actually boil the frog without it jumping out. If you keep the temperature changes slow enough, it will never realize that the heat is rising to harmful, and then fatal, levels. I have, obviously, never tried this, but something similar has been happening in the U.S. economy. I am pleased to find, however, that people appear to be somewhat smarter than frogs. The heat I’m referring to is the pending debt ceiling crisis. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/27/82713-the-boiled-frog-effect) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/27/82713-the-boiled-frog-effect#comments-listing) ## [8/26/13 – Making College Irrelevant?](https://blog.commonwealth.com/independent-market-observer/2013/08/26/82613-making-college-irrelevant) August 26, 2013 I haven’t written much about education recently, but now that school is starting back up, it’s time to take another look. My oldest nephew, Jake, is entering college this week here in Boston, which adds a certain amount of immediacy to the discussion. When I compare the experience Jake will have with what my five-year-old son, Jackson, might have years from now, I expect there will be significant differences. First, Jake will be starting at an established university, with a physical campus, and take most or all of his classes sitting in a lecture hall—just as his parents and I did. For Jackson, I doubt very much that will be the case. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/26/82613-making-college-irrelevant) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/26/82613-making-college-irrelevant#comments-listing) ## [8/22/13 – I Like to Buy on Sale](https://blog.commonwealth.com/independent-market-observer/2013/08/22/82213-i-like-to-buy-on-sale) August 22, 2013 I had the chance yesterday to be a guest on the Bloomberg Radio program *Taking Stock*, which was an awful lot of fun. The hosts, Pimm Fox and Carol Massar, are both smart and well informed, and the other guest, Kevin Divney, had some very interesting views and was a pleasure to bounce ideas off of. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/22/82213-i-like-to-buy-on-sale) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/22/82213-i-like-to-buy-on-sale#comments-listing) ## [8/21/13 – What If I’m Wrong About the Economy?](https://blog.commonwealth.com/independent-market-observer/2013/08/21/82113-what-if-im-wrong-about-the-economy) August 21, 2013 Over the past week or so, I’ve had the chance to sit down with several groups to discuss how the economy and the financial markets are evolving. Each time, I’ve laid out many of the arguments, along with supporting data, that I’ve made here on the blog. Briefly, the real economy is improving, and growth can reasonably be expected to accelerate for the rest of the year; interest rates are going to remain volatile and increase over time, although they may drop back a bit in the short term; and stock markets are overvalued and risky. But what if I’m wrong? [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/21/82113-what-if-im-wrong-about-the-economy) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/21/82113-what-if-im-wrong-about-the-economy#comments-listing) [![](https://blog.commonwealth.com/hs-fs/file-448376345-png/blog-files/082013_1.png)](https://blog.commonwealth.com/independent-market-observer/2013/08/20/82013-where-are-interest-rates-going) ## [8/20/13 – Where Are Interest Rates Going?](https://blog.commonwealth.com/independent-market-observer/2013/08/20/82013-where-are-interest-rates-going) August 20, 2013 I’m meeting with the investment committee of one of our advisor groups this morning, and, in preparation, they sent me a list of very good questions they want to discuss. We’re also planning to start an “Ask Brad” section of the blog to address common questions. With both of these pending, and a couple of questions on everyone’s mind right now, I thought I’d start out with the big one, which is, of course, **What are interest rates going to do?** Interest rates have moved higher again over the past week. What is driving the current spike in rates, as I’ve written before, is [price discovery](http://theindependentmarketobserver.com/?s=price+discovery). As the Fed moves closer and closer to tapering away its bond buying, the market will increasingly be driven by supply and demand factors. In recent weeks, foreigners have been selling bonds, as have domestic banks. When and if the Fed starts to taper, demand will decrease even as supply is likely to continue to increase from the increased selling. When demand goes down and supply goes up, prices drop. In the case of bonds, this means yields go up. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/20/82013-where-are-interest-rates-going) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/20/82013-where-are-interest-rates-going#comments-listing) [![](https://blog.commonwealth.com/hs-fs/file-448376290-png/blog-files/081913_1.png)](https://blog.commonwealth.com/independent-market-observer/2013/08/19/81913-risk-returns-to-the-markets) ## [8/19/13 – Risk Returns to the Markets](https://blog.commonwealth.com/independent-market-observer/2013/08/19/81913-risk-returns-to-the-markets) August 19, 2013 August has been tough for the stock market. We’re now down a bit over 3 percent, even as interest rates continue to tick up. Based on the last time tapering hit the markets, we may have more downside risk ahead. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/19/81913-risk-returns-to-the-markets) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/19/81913-risk-returns-to-the-markets#comments-listing) [![](https://blog.commonwealth.com/hs-fs/file-448376235-png/blog-files/081613_1.png)](https://blog.commonwealth.com/independent-market-observer/2013/08/16/81613-rising-rates-and-slumping-stocks) ## [8/16/13 – Rising Rates and Slumping Stocks](https://blog.commonwealth.com/independent-market-observer/2013/08/16/81613-rising-rates-and-slumping-stocks) August 16, 2013 As more or less promised yesterday, let’s talk about the market. Yesterday, we saw two interrelated events: interest rates ticked up again, and the stock market declined. Why? Will it continue? First, we’ll look at the rise in interest rates. I use rates on the 10-year Treasury bond as a proxy for rates as a whole, as many other financial instruments use the 10-year Treasury as a basis off which to price. This is common in the market. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/16/81613-rising-rates-and-slumping-stocks) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/16/81613-rising-rates-and-slumping-stocks#comments-listing) [![](https://blog.commonwealth.com/hs-fs/file-448376085-png/blog-files/081413_1.png)](https://blog.commonwealth.com/independent-market-observer/2013/08/14/81413-the-real-risk-and-what-to-do-about-it) ## [8/14/13 – The Real Risk—And What to Do About It](https://blog.commonwealth.com/independent-market-observer/2013/08/14/81413-the-real-risk-and-what-to-do-about-it) August 14, 2013 Several advisors have called me over the past couple of days, asking about various doomsayers predicting various forms of calamity. A [dollar collapse](http://theindependentmarketobserver.com/2013/05/01/5113-why-the-dollar-isnt-likely-to-collapse-anytime-soon/) is one popular theme; another is a collapse of the stock market, of “up to” 90 percent, according to one reported expert. Make no mistake: I’m concerned about stock market valuations, as I have written extensively. It’s entirely possible we will see a correction, quite possibly a significant one. In fact, at some point, a significant correction isn’t just inevitable, it’s normal and even healthy. Let’s look at history. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/14/81413-the-real-risk-and-what-to-do-about-it) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/14/81413-the-real-risk-and-what-to-do-about-it#comments-listing) ## [8/13/13 – More Good Economic News and Thoughts About Developed Markets](https://blog.commonwealth.com/independent-market-observer/2013/08/13/81313-more-good-economic-news-and-thoughts-about-developed-markets) August 13, 2013 Several pieces of good economic news have come in that are worth highlighting. The most important is U.S. retail sales, which is up 0.2 percent. That might not seem like anything to cheer about, but this is a case where it’s important to look at the underlying figures rather than just the headline. The overall figure was dragged down by drops in auto sales and building material sales. While not positive, both of those figures are still at very high levels, and, even with the slight decline, growth rates remain at levels consistent with faster growth overall. Gasoline sales increased, which was a positive factor, but this is counterintuitive, as it depends to some degree on higher gas prices, which are actually harmful to the economy as a whole. These three series are also volatile, to the extent that there is a separate statistical series that excludes them in order to provide a better indicator of underlying consumer demand. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/13/81313-more-good-economic-news-and-thoughts-about-developed-markets) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/13/81313-more-good-economic-news-and-thoughts-about-developed-markets#comments-listing) ## [8/12/13 – Sources of Growth and Emerging Markets](https://blog.commonwealth.com/independent-market-observer/2013/08/12/81213-sources-of-growth-and-emerging-markets) August 12, 2013 One interesting trend recently has been the outperformance of the U.S. and other developed markets over emerging markets. A number of factors are behind this, notably capital flows, but shifting relative growth rates have been a primary driver. In this post, I want to take a look at the basic sources of growth to see how this trend might evolve over the next couple of years. [Continue reading →](https://blog.commonwealth.com/independent-market-observer/2013/08/12/81213-sources-of-growth-and-emerging-markets) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/2013/08/12/81213-sources-of-growth-and-emerging-markets#comments-listing) [Previous](https://blog.commonwealth.com/independent-market-observer/topic/market-updates/page/13) [Next](https://blog.commonwealth.com/independent-market-observer/topic/market-updates/page/15) ### Subscribe via Email ![TMO\_IMO\_615x408\_sidebar](https://blog.commonwealth.com/hs-fs/hubfs/TMO_IMO_615x408_sidebar.png?width=1033&height=686&name=TMO_IMO_615x408_sidebar.png "TMO_IMO_615x408_sidebar") [Episode 20](https://vimeo.com/1201911815/0f4f028be9?share=copy&fl=sv&fe=ci) June 17, 2026 [Episode 19](https://vimeo.com/1191658257/1b43ce84dd?share=copy&fl=sv&fe=ci) May 13, 2026 [Episode 18](https://vimeo.com/1183174918/e227cf7d80?share=copy&fl=sv&fe=ci) April 15, 2026 [Episode 17](https://vimeo.com/1174554734/636f0f7aba?share=copy&fl=sv&fe=ci) March 18, 2026 [Episode 16](https://vimeo.com/1163757312/bc2f802d74?share=copy&fl=sv&fe=ci) February 11, 2026 [More](https://learn.commonwealth.com/monthly-media-placements) [![Insights\_CTA\_IMO\_233x400-1](https://no-cache.hubspot.com/cta/default/295024/interactive-187935228457.png)](https://blog.commonwealth.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLrgF77dZIrM9LoKCKmza4wBUA2%2FTGwq%2BzR%2Ba6taenqftHDH0d03QBFRp0ynWSbgZXJnXiGBuo2MFwQXMRU3ZypbP2htlUVxxc0b1t0g5UFdtGrotvJBXbrKKr4PL4Hg7ARUw9qSviIKzBukKYezR%2FpKnoWqlb0mBUVVa%2B6MpdppvibdjOx%2B%2FE%3D&webInteractiveContentId=187935228457&portalId=295024) ### Hot Topics Select Category Ask Brad Commentary Economic Risk Factor Updates Economics Lessons Market Thoughts Videos In the News Investing Market Updates On My Bookshelf Politics and the Economy [![New Call-to-action](https://no-cache.hubspot.com/cta/default/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf.png)](https://cta-redirect.hubspot.com/cta/redirect/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf) ### Archives - 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