by diastole-admin | Sep 21, 2026 | Uncategorized
DIASTOLE ECONOMIC AND MARKET COMMENT
September 21, 2026
Warren Buffett continued his slow departure from Berkshire Hathaway last week when he stepped down from his position as chairman of the conglomerate. His son Howard will succeed him as chairman, while Warren moves to chairman emeritus but remains on the board. He appointed Greg Abel to serve as CEO less than a year ago. Warren Buffett is now in his 90s, and has provided a 19.7% compounded annual return to shareholders over his more than 60 years at the helm of BH. That’s almost twice the return of the Standard & Poor’s 500. Berkshire Hathaway class A shares are selling for about $763,600 apiece. Not a typo.
Since 2006, Buffett has donated roughly $66 billion worth of stock to charity. His remaining fortune (currently around $150 billion) will be donated to charity by his three children by the end of 2034.
The Federal Reserve Open Market Committee (FOMC) met last week and voted unanimously to raise interest rates by one quarter of one percent. Everybody anticipated this move because inflation is stalling/rising instead of falling, while the labor market is still solid. That led the FOMC to address inflation while its other mandate (full employment) takes care of itself. Economists now expect at least one more rate hike this year. And while stock markets fell on Wednesday when the rate hike was announced, markets ended the week stronger.
Bond rates rose last week as prices fell. Bond prices and yields move in opposition to each other. The yield on the ten-year Treasury reached and passed 5%, which is a significant psychological level, before sinking again to just below that mark. At 5%, investors begin to wonder if they would be better off selling stocks and buying Treasurys. Also, the ramifications of higher interest rates for borrowers are serious. And who are our biggest borrowers these days? AI hyperscaler companies who are borrowing for construction costs on huge data centers, and even for the costs of outfitting and running the centers.
Meanwhile, the price for American oil has fallen from over $100 per barrel to around $94. Of course, the reduction has not worked its way through to gas prices yet, but one can hope. Farmers are still struggling with the cost of diesel fuel, which drives their big equipment, AND the cost of fertilizer which is expensive and harder to buy because so much of it travels through the Strait of Hormuz.
U.S. consumers have spent approximately $107 billion EXTRA for gasoline and diesel during the war with Iran and disruptions from the Russian war in Ukraine. American oil executives are warning that commercial fuel stocks are depleted and strategic crude reserves are running low. Unfortunately, tax credits and tax breaks for electric vehicles and green energy have been ended. Retail sales rose 1.2% in August – largely due to the higher fuel prices, but also because groceries and shelter continue to rise in price. Standard 30-year mortgage rates are back up around 7%.
Iran has bombed many U.S. facilities in the Mideast, as well as facilities owned and operated by our allies. But now Amazon Web Services (AWS) says it can’t restore some of the data that was lost in the bombing raids at their own data centers in the Persian Gulf. Data stored by AWS in all its data centers in Bahrain, and some of them in the U.A.E. are now unrecoverable. Who has the back-up floppy disks?
For the week ending on September 18th, the S&P 500 finished at 7,647, the Nasdaq Composite at 26,508, and the Dow Jones Industrials at 51,681. The yield on the ten-year Treasury note finished at 4.95%. U.S. crude oil cost $93.50 per barrel, N.Y. gold cost $4,370.10 per ounce, and one Euro was worth $1.15.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, USA Today, The Wall Street Journal, Axios, Bloomberg, CNBC, Business Insider, Yahoo Finance, and WYNC.If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com.
New York City is installing 17 new public restrooms on its sidewalks. Two have arrived already and the rest are coming. The bathrooms are AI powered robotoilets that will require a phone app to use. They look bright and clean (for now) but have one downside: there is a ten-minute time limit and the door will open automatically when time is up. Read that again. You’re in the public toilet, on the sidewalk, and after 10 minutes the door automatically opens up. On the sidewalk. In New York City. Just saying.
by diastole-admin | Sep 14, 2026 | Uncategorized
Marked <safe> from murderous AI bots today. Hope you are too. Wouldn’t it be funny if, when AI misbehaves, it goes after the billionaires who own it? Not funny for them, though.
Please take it as a given that we have discussed the AI whistleblowers, the alarm registered by the titans of big tech, the accounts of AI gone rogue, the way that AI data centers are causing noise and water problems, to say nothing of using up all the electricity. Despite my lighthearted tone, this is a serious issue. One of the problems with solving it is that it will require Congressional action, and that’s hard to come by these days. My first take would be to unplug everything,
So, in addition to AI fear and fear mongering (does Sam Altman of OpenAI REALLY want more regulation?) most of last week’s news was about war and inflation. And bonds and inflation, and gas and inflation, and inflation. We received two important inflation numbers: the Producer Price Index (PPI) and the Consumer Price Index (CPI). The PPI indicated that wholesale prices rose 5.4% over the trailing-twelve months ending in August, while the CPI showed consumer prices 3.4% higher over the last year. The Fed’s inflation target is 2%, and we are not close to it. Diesel fuel has surpassed six dollars a gallon, on average, and the ten-year Treasury Note is yielding exactly one hair below five percent, a psychologically important level.
So, thoughts automatically turn to the Federal Reserve’s Open Market Committee (FOMC) which will announce its next interest-rate decision on Wednesday at 2:00 p.m. Fed Chairman Kevin Warsh indicated earlier that interest rates would rise naturally by way of market forces. In other words, bond buyers may sit on their hands until yields are high enough to attract them. Alternatively, the Fed could raise the Fed-funds interest rates on Wednesday, thus forcing large banks to charge more on their loans. Raising rates is considered “hawkish” and tightens credit, making it more expensive to borrow. When money is tight, people spend less and inflation eases.
Right now, the odds of a rate hike on Wednesday are above 80%. It would be closer to 100%, except that we know the president is advocating for LOWER rates, which puts newly installed Chairman Warsh in a particularly delicate position. At the same time, Treasury Secretary Scott Bessent is proceeding with his higher Treasury-bond buybacks, in the hopes that increased demand will push bond prices higher, and therefore yields will be lower. (Bond prices and yields move inversely.) So far it hasn’t worked.
The news from Saudi Arabia is disturbing. Not only have the Houthis (aligned with Iran) partially blocked the shipping route through the Bay al-Mandab Strait in the Red Sea, but the Saudi Arabian pipeline that brings their oil across their country (i.e. from the Persian Gulf to the Red Sea) has been attacked by drones. About one third of the world’s oil supply used to pass through the Strait in the Red Sea and the Strait of Hormuz in the Persian Gulf. Iran is now able to shut down oil exports from both sides of the Arabian Peninsula.
Home mortgage loans have passed 7% in recent days, their highest level in over a year. Not surprisingly, home sales dropped again. But you’ll never guess which sector of real estate is having a bumper year. Go ahead, guess. Oh wait. I’ll tell you. It’s malls! Over the past year mall values jumped 13% – more than double the overall commercial market’s gains. OMG! Why? (Personal confession: I haven’t been in a mall in several years, and the mall closest to my house has recently converted to industrial use.) It turns out that many mall managers made good use of the time during and after Covid to revamp their properties. More high-end tenants, more restaurants, and more retailers aimed at tweens and teens have helped the mall recovery. Maybe I’ll go.
At a recent speech in Texas, the president announced that he would pay every adult in the country $5,000 if the Republicans hold both houses of congress in the midterms. To put it in perspective, the money required for that would be more than we spend on defense in a year.
We are finishing the hottest summer on record. The previous record was 1936, in the dustbowl.
For the week ending on September 11th, the Standard & Poor’s 500 finished at 7,657, the Nasdaq Composite at 26,333, and the Dow Jones Industrials at 52,573. The yield on the ten-year Treasury Note closed at 4.97%. U.S. crude oil cost $103.55 per barrel, N.Y. gold cost $4,311.20 per ounce, and one Euro was worth $1.15.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, The Wall Street Journal, The Economist, Axios, Bloomberg, Fortune, The Bureau of Labor Statistics, Reuters, CNBC, USA Today, Yahoo Finance, Morning Brew, CNN, and AP. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thanks for reading!
Apple just introduced its first foldable iPhone, called Duo. You can use more than one app at a time on its larger screen. Chris Welch, in his review for Bloomberg, said, “Opening it doesn’t simply give you a bigger iPhone screen; the software changes with it, making the device feel closer to an iPad.” It is my understanding that next year the bigger iPhone will come in a harvest-gold version that will hang on your kitchen cabinet.
by diastole-admin | Sep 8, 2026 | Uncategorized
You are forgiven if you are not as excited as I am about the upcoming producer price index report (PPI) for August, which will be released on Thursday, and the consumer price index report (CPI), also for August, which will arrive on Friday. These are the last data points that the Federal Reserve Open Market Committee (FOMC) will have before it makes its next interest rate decision on Wednesday the 16th.
We know that the current presidential administration wants interest rates cut, but the data is leaning toward a rate hike. Inflation is still well above the Fed’s 2% target and is not falling on its own. A rate hike would make it less attractive to get credit and thus would tighten economic conditions. But the Fed has a dual mandate: keeping prices low and keeping employment high. So where do we stand on employment? Thank you for asking! The August jobs report was released on Friday 9/4 and stunned with its strong numbers. 162,000 net new jobs were created versus 53,000 expected. And the unemployment rate was steady at 4.1%.
If the job market were weak, the FOMC might sit tight on rates, not wanting to hurt job creation, but the job market is strong, so it doesn’t stand in the way of a rate hike to fight inflation. Current odds of a rate hike next week stand at 52%-60%.
And speaking of inflation, a Brown University study has determined that U.S. consumers have now paid $100 billion in higher energy prices since the beginning of the war with Iran. That reflects higher gas costs, but also home heating fuel and diesel (which raises prices on food and other goods that are transported on trucks). This figure does not include the cost of the war itself, just the extra costs of energy over where they were when the war began. And FYI, U.S. crude oil now costs more than $90 per barrel.
The bond market was one of the biggest influences on stock markets last week. As the U.S. faces a ballooning debt, investors find that Treasury debt is less attractive. In the old days, Treasurys enjoyed a special consideration as one of the safest investments in the world. But now they have been downgraded, and investors expect to receive a competitive yield in exchange for loaning money to the U.S. With the general assumption that interest rates will have to rise to control inflation, and will rise on their own to reflect inflation, investors are selling bonds, causing prices to fall and yields to rise. If you hold onto a fixed-rate bond while rates are rising, your bond will lose principal IN THE SHORT TERM (i.e. if you sell it early). If you hold it to maturity you will receive the face value or par value you originally purchased.
Back to stocks. What do you think happens to stocks when bonds yields are rising? Stock owners consider selling stocks to buy bonds. For many investors, a 5% yield (such as you can get currently on a 30-year Treasury), in a safe investment, beats the odds that you will be first to find the next Nvidia. And this trend is happening around the world. We are not the only profligate spenders.
What is keeping markets near record highs when bonds are working against it? I’m afraid the answer is artificial intelligence (AI). Just a couple of years ago, you had to work pretty hard to use AI. Now you have to work pretty hard NOT to use AI. The hyperscaler companies are the ones that are providing AI to users. They are led by Meta, and Google, and Amazon, and Microsoft. But there are other companies that provide support for AI without actually providing AI. Nvidia is prime among these. It makes the microchips that AI requires. And Caterpillar, long a favorite among value buyers, is now an AI-adjacent play because of the role that it has in building AI data centers. There were people finding gold in the California gold rush, but the people who made the real money were the ones selling shovels and Levi’s.
AI also contributes to an excess issuance of corporate (non-government) bonds to raise money to build data centers. And those bonds provide competition for Treasurys. In a crowded bond market, higher yields are required to lure bond buyers.
Fortune Magazine no longer calls our situation a “K-shaped” economy – one where the rich get richer and everyone else gets poorer. Now they call it a “G-shaped” economy, in which the boomer generation holds onto $90 trillion, and all other generations wait to inherit.
Which reminds me that our website: 80trillionspeaks.com is live and exists only to provide an easy way for you to contact your elected representatives. No fee, no political bias, and no proselytizing, just a portal for you to communicate your concerns to the people who represent you in government. Check it out.
For the week ending on September 4th, the Standard & Poor’s 500 finished at 7,718, the Nasdaq Composite Index at 26,506, and the Dow Jones Industrial Average at 53,414. The yield on the ten-year Treasury Note closed at 4.784%. U.S. crude oil cost $93.87 per barrel, N.Y. gold cost $4,411.48 per ounce, and one Euro was worth $1.16.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) The Wall Street Journal, The Washington Post, The New York Times, USA Today, The Financial Times, Barron’s, Yahoo Finance, Morning Brew, Bloomberg, Business Insider, 1440 Digest, Axios, Fortune, The Bureau of Labor Statistics, AP, CNN, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading!
Looking to spend a fortune on your teeth and not interested in another root canal? Look no further than Dyson’s CameraJet toothbrush. It’s $499 and uses AI to brush your teeth. Yay! It has a built-in camera which sends photos to your phone, and also to the AI model which looks for places where you need a little extra water flow or brushing. Yes, you have to use both hands, but admit it, your phone is already in the bathroom with you.
by diastole-admin | Aug 31, 2026 | Uncategorized
We begin where we left off last week, with internal government strife about interest rates. You will remember that Treasury Secretary Scott Bessent initiated a program to buy back Treasury bonds, hoping to push prices higher and yields lower (which would help the government make its bond-interest payments). This came shortly after Bessent instructed the Treasury to purchase billions in Japanese yen, hoping to prop up the currency of one of the Treasury’s biggest foreign buyers of its bonds. It worked, briefly. Still with me?
Then newly minted Federal Reserve Chairman Kevin Warsh held his first press conference and reiterated that the Fed’s inflation target is 2% – the same as it was under Jerome Powell’s Fed. On Friday, Bessent spoke again, this time from the Fed’s Jackson Hole retreat, and emphasized that inflation has to come down from current levels. One infers from his statements that interest rate hike(s) are coming. Not what Bessent wants to see. The odds of a September rate hike jumped from 35% to 58% on Friday.
Also on Friday, stocks fell following Warsh’s remarks. Ever since the federal debt reached $40 trillion recently, investors are more concerned about it, and higher rates make it harder to pay the interest we owe. (Current debt equals about $117,000 per American citizen.) And we must say again, higher interest rates reward lenders (bond owners) and lower interest rates reward borrowers (the U.S. government, through its issued bonds, notes, etc.).
Historically, Treasurys have been considered the ultimate safe investment. But as the U.S. debt grows, fewer foreign countries and institutions are buying the debt instruments. They are no longer paying a price premium for Treasurys (meaning that Treasury interest rates are lower than comparable investments). Now they want yield, and it’s possible that Kevin Warsh is about to give it to them.
It’s not just interest rates we’re watching. There is also interest-rates’ close relative: inflation. Prices are high and are expected to rise even higher. Fertilizer and fuel are both negatively affected by wars in Ukraine and Iran. There go crop prices. Ukraine used to be a major wheat exporter – now disrupted, while domestic corn is suffering under a season of bad weather. Corn is a major animal feed, so there go prices of beef, chicken, and eggs. J.P. Morgan has announced that it expects food prices to grow at a 5% rate in the first half of 2027. That’s on top of all of the inflation we’ve already seen.
The U.S. has come to an agreement with Venezuela for an ownership stake in Venezuelan oil. While this sounds like a good thing for the price of oil, Ron Insana of CNBC just said that it will take five to ten years and about $2 trillion dollars to get the oil pumping. While the benefit of the oil is likely to go to Big Oil companies, the costs may just go to the American taxpayer. The oil infrastructure of Venezuela is in poor shape.
Oil in China is another story. According to the Wall Street Journal, China’s oil reserves in 2025 probably exceeded those in the U.S. by nearly 600 million barrels. So, as the war in Iran messes with oil deliveries, China is in a good position to withstand the upheaval. And as we pointed out recently, China is developing an Arctic trade route to Europe, which will coincidentally take its ships right past Russia, from whom it buys quite a lot of oil.
The stock markets were mixed last week, on a seesaw only they can see. But for the year, the market indices are still positive. That doesn’t mean that all stocks are up. Big tech stocks – both AI hyperscalers like Amazon, Microsoft, Google, and Meta, and AI infrastructure mavens like Nvidia – are moving markets. It tends to be hyperscalers one day and chip manufacturers the next day. Meanwhile, value stocks, which are old-fashioned manufacturing and dividend-paying stocks, are also having a moment. Asset allocation, people! You must carefully allocate your assets to various classes and sectors so that you have exposure to what’s going up as well as what might be weakening. Diastole can help.
For the week ending on August 28th, the Standard & Poor’s 500 finished at 7,711, the Nasdaq Composite Index at 26,402, and the Dow Jones Industrials at 53,559. The yield on the ten-year Treasury Note closed at 4.72%. U.S. crude oil cost $85.81 per barrel, N.Y. crude cost $4,455.50 per ounce, and one Euro was worth $1.16.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Morning Brew, Barron’s, USA Today, The Wall Street Journal, The Economist, Axios, Bloomberg, AP, CNN, Fortune, NASA, The New York Times, Business Insider, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thanks for reading!
Are you a basketball fan? And are you wondering if 41-year-old LeBron James is ever going to retire? Well, one reason why he’s still hard at work (now in Philadelphia) may be that in 2018 he borrowed almost $300 million against his future earnings – payable in 2049. Superstars – they’re just like us! They’re deep in debt!
