March Madness
Good Day Dear Friends,
Last year for the NCAA Basketball Championship I selected Virginia(UVA) to climb to the pinnacle of the basketball tournament. Unfortunately, all NCAA basketball fans know what happened next…(for those who do not follow college basketball, UVA was the first #1 seeded team in championship history to lose to a #16 seed, lowest ranked team). While I felt the pain of the loss, I still believed that UVA had the best basketball coach in the country in Tony Bennett. He teaches his team to play the game with the same intelligence and vigor on the defensive end of the court, as they do on the offensive end. His players graduate. Few will go on to play in the NBA, but I suspect most, if not all, go on to make a name for themselves in some other career because of their intelligence, ability to be taught/coached, and their work-ethic. At a time when high profile coaching longevity is more often based on riding the coattails of signing the highly-touted recruit(s) that play one, maybe two years of college ball to showcase the individual’s talent before heading off to play professional ball in the NBA; Bennett takes less-marketed (but highly talented) prospects, and molds them into a cohesive synergy of basketball grace only seen with a few programs in the NCAA. There used to be many in the college ranks who coached in this synergistic fashion, and that is why the game was so enjoyable to watch. Make no mistake, they vied for the best basketball talent same as today, but under the NCAA auspices of garnering student-athletes who graduated. Today, the only Big 5 Conference coach I can think of who can take a supreme talent, a potential #1 NBA draft pick, and mesh them into a well-coached basketball system that supports the overall team’s success, is Coach K at Duke. He can do that now, due to decades of coaching success in a manner similar to that which UVA’s Bennett now brings to the court. I once was a “huge” college basketball fan, and then the game changed - as big money has a habit of doing to any fundamentally weak system. Watching UVA play basketball is a joy within this fraught system; and, once again, I hope to ride this horse called UVA all the way to a NCAA National Basketball Championship.
The Mueller investigation has concluded (sigh), and the brief created by Attorney General William Barr of Mueller’s investigation has been sent to all the main parties in the investigation/political process. Being politically agnostic, both political parties will parse the results in a fashion that best suit their future political needs (more sighs). What Mueller’s determination does do is allow for the U.S. negotiating team of Lighthizer and Mnuchin to have more “wind in their negotiation sales” as they fly to Beijing this week to continue the China tariff dialogue. I look for these discussions to come to a successful result; sooner now, rather than later - as both sides need the economic win.
March madness for Treasury yields. The NCAA tournament may be off to a less than crazy start depending on how you positioned the teams in your brackets, but action in U.S. Treasury interest rates has been arguably crazier. The 10-year Treasury yield dropped through the end of the week, briefly falling below the 3-month yield intraday on Friday for the first time since August 2007. Yield curve inversion (or when long-term rates fall below short-term rates) can be an ominous signal for the economy, as it's preceded each of the nine recessions going back to 1955. Keep in mind that the subsequent recession came anywhere from 7 to 19 months* after the Treasury yield inversion. We will remain fundamentally vigilant in this regard as we look to the future.
Have a brilliant and Blessed week!
James Anthony Pavik Sr.
President / Chief Wealth and Investment Officer
ChFEBC℠ - Chartered Federal Employee Benefits Consultant
Pavik Wealth Management, Inc.
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*JP Morgan Guide to the Markets 1Q19
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