Skip to main content
All Posts By

Donna Cournoyer

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: Paul Krugman’s Substack

Summer Reading Series: Substack

Paul Krugman’s Substack

Note to readers: Substack is an online platform that enables creators, primarily authors and journalists, to publish newsletters and build subscription-based communities.

The signal to noise ratio on Substack is generally… unfavorable. However, there is in fact some gold in them hills.

Notably, Nobel Prize winning economist Paul Krugman provides a frequent, diligent, and sober voice of reason.

Following his departure from The New York Times in 2024 (Departing the New York Times) Krugman has demonstrated the utility of a less controlled media environment – which is encouraging, given my general negative perception of these platforms.

Although I’d heartily recommend reading most of what he’s written (regardless of alignment with his particular views), the following Krugman article is an easy read: Bad Times for College Graduates.

The labor market is in a bizarre place. Unemployment is at near-historic lows, and yet, college grads are experiencing levels of unemployment more reflective of post-shock economies, e.g. the years following the 2008 Crash.

Krugman rejects the thesis that this is driven by advances in AI, noting instead it reflects a broader economy-wide attempt to hedge against the uncertainty of The Trump Economy – no one is hiring, and no one is leaving.

DOGE layoffs coupled with funding cuts to research programs have resulted in an influx of mid-career professionals who may be edging out more recent college grads.

Data on that assertion has yet to be collected, but my proximity to recent college grads offers some anecdotal evidence in favor of that hypothesis.

Although I think Krugman’s rejection of the “AI is taking the jobs” narrative is correct (for now, anyway), he probably fails to consider this as a long(er) term side effect of the “slow crisis” of the post-COVID years. I mean this on both a macro and micro sense.

From a 30,000 foot view, cheap money and altered user behavior (I know I was watching a lot more Netflix and buying more video games circa spring 2020 than I am now, for one) created a massive run up of hiring particularly concentrated in the tech sector, which of course had knock-on effects to other industries.

This likely resulted in a capacity overextension, which has led to a bleed-off of newer hires – sometimes slow, sometimes more violent (see The Guardian article: Meta to Fire Thousands of Staff).

Effectively this really just augments the trend Krugman notes: workers stay put, those fired re-enter the labor force as better labor than college grads willing to take roughly the same salary.

The critical point here is that contra to Krugman’s implicit assertion, a “crisis did happen”, but the pain and initial shock has been displaced intertemporally.

-Alex

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: House of Leaves

Summer Reading Series: Fiction

House of Leaves by Mark Z. Danielewski

This modern classic of metafiction is not exactly beach reading (unless you’re renting a cottage in Innsmouth), but it does serve as good company during restless summer nights.

The labyrinthine structure of the book itself invites re-reads and new explorations to discover secret passageways through the book’s multi-layered plot. This is my third time through – and I am not particularly one to re-read books.

House of Leaves is largely centered around a family who discover one day that the inside of their house is somehow bigger than the outside. Soon after, a door to a non-Euclidian hallway appears, and things get stranger and stranger.

This core story is framed as a film, the contents of which are described to the reader through the medium of an academic analysis of this fictitious film, complete with footnotes to sources both real and fictitious.

The contents of this analysis are assembled (with ample commentary) by one Johnny Truant; and if you’re lost already with how many Matryoshka doll layers we’re in now, don’t worry, that’s kind of the idea.

In practice the text is much more readable than what I’m describing here, made more comprehensible through clear delineations of typography – helpful, especially as the narrative layers start to bleed into each other.

Anyone proximally interested in either horror or seeing how far a mainstream book can push experimental text formatting owes it to themselves to grab a copy.

Get the full color version (no, there are no pictures, and yes, it matters) – eBook readers take heed, the structure of the text invites frequent flipping around of either the book – or your head.

-Alex

Donna Cournoyer
In Market Updates

June 2025 Market Recap: Q2 Market Review: Heat Wave

Wednesday, July 2 marks the halfway point for the calendar year of 2025 – 182 days behind us, with 1 Wednesday, July 2 marks the halfway point for the calendar year of 2025 – 182 days behind us, with 182 days remaining.

And summer has kicked off in the northeast with an intense heat wave. After a cool late winter and early spring, stocks, too, are sizzling once again.

The chart below shows the path thus far in 2025 of the S&P 500 Index of large company US stocks.

Source: Wall Street Journal

The release of the made-in-China, low-cost artificial intelligence (AI) model DeepSeek caused US technology stocks to wobble in late winter.

Then, the imposition of draconian tariffs by President Trump in early spring precipitated a stock market plunge of nearly 20% from the recent peak in February.

But a pause in the most severe tariffs allowed for a stock market rebound. As of Monday, June 30, stocks reached a new all-time high.

Top of mind for many investors: can the stock market good times continue to roll?

In the absence of further trade / tariff setbacks, the answer is: probably yes.

The near-term path now seems to favor stocks moving higher amid ongoing economic growth; greater certainty on taxes; contained inflation; the anticipation of falling interest rates by the fall; and a consumer that continues to spend.

For the intermediate term, the precise price path that any asset will follow is impossible to discern. The chart above could be Exhibit 1 supporting this statement.

But for long-term investors who map out a plan and stick to it, the odds of realizing a satisfactory return are quite good.

For example, JP Morgan Investment Management’s Guide to the Markets shows that, for a balanced portfolio of stocks and bonds (60% stocks / 40% bonds, rebalanced annually) returns for each and every 10-year period since 1950 have been positive.

For the month of June, US stocks were up 5.1%, foreign stocks rose by 2.4%, and US bonds returned 1.4%.

Year-to-date, foreign stocks were the biggest winner, up by 20%. A weaker US dollar has contributed to the stellar returns for US investors in foreign stocks. Also year-to-date, US stocks have climbed by 6% and bonds have returned 4%.

For a slightly longer historical perspective, the chart below shows returns by quarter for the past 12-month period for US stocks and bonds.

Source: Moore Financial Advisors & Morningstar

-RK

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: Abundance

Summer Reading Series: Non-Fiction

Abundance by Ezra Klein and Derek Thompson

Coming from a Gen Z’er, I can confidently say that the average young person’s thoughts about the future are bleak.

Climate change poses an existential threat to our planet and way of life as we know it, the prospect of owning a home – traditionally the foundation of building personal wealth – now seems like a far-fetched luxury, and the increasingly competitive job market paired with the rising cost of higher education make for a triple threat of uncertainty.

Throw on top of this our most formative years spent on Zoom and unprecedented political turmoil and divisiveness and no wonder you’ve got a discontented, unsettled, and frankly pessimistic generation.

However, all is not lost.

In fact, as Ezra Klein and Derek Thompson point out in Abundance, there is the world to be gained. We are currently at humanity’s zenith of technological innovation.

In the past 50 years green energy has reduced drastically in price, the internet and now artificial intelligence has transformed our access to information and each other, and advances in biotech have pushed some diseases into obsolescence.

Abundance makes it clear that the future we want is in our control.

The book points to the fact that well-intentioned regulations passed in the later-half of the 20th century have actually hindered the government’s ability to implement radical projects.

The private sector’s ultimate goal is to make a profit. Klein and Thompson argue that the government, if wielded correctly, can account for externalities and can afford to pursue projects that don’t have an immediate profit incentive.

Abundance provides a refreshing new identity to political change that has, for me at least, sparked hope for the future.

-Greg

Donna Cournoyer
In Reading Recommendations

Summer Reading Series: Circe

Sumer Reading Series: Fiction

Circe by Madeline Miller

This book is a reimagination of the life of a minor Greek goddess from Homer’s Odyssey.

The protagonist is portrayed as a complex, deeply human character who is exiled by the Titans to an island, where she hones her skills in witchcraft and encounters legendary figures like Odysseus, the Minotaur, and Medea.

Miller weaves together multiple Greek myths into one cohesive narrative while exploring timeless themes of family trauma, self-discovery, and what it means to choose mortality over immortality.

The most intriguing aspect may be how Circe grapples with her divine nature.

She’s portrayed not as an all-powerful deity, but as someone learning to navigate relationships, motherhood, and her own agency in a world dominated by capricious male gods, while she gradually transforms from a marginalized immortal into a powerful, self-aware woman.

-Susan

Donna Cournoyer
In Reading Recommendations

Bitcoin Pizza Day

Pizza Day is recognized every year on May 22 to commemorate the first real-world transaction in which Bitcoin was used as a currency. This article highlights the most expensive pizza purchase of all time; discusses cryptocurrencies, including stablecoins; and highlight’s Zeke Faux’s book Number Go Up.

On May 22, 2010, Laszlo Hanyecz, a programmer from Florida, paid 10,000 Bitcoins for two pizzas, marking Bitcoin’s first commercial use.

The Bitcoin for Pizza transaction translated to $41 fifteen years ago. Today, with the price of one Bitcoin at about $111,000, the transaction would be worth about $1.1 billion. That’s some dough!

Cryptocurrency captured the popular imagination in 2021 and during much of 2022, as we were emerging from the pandemic and as Bitcoin prices were surging.

But the collapse of the FTX cryptocurrency exchange in late 2022, and the unfolding of the misdeeds of the company’s CEO, Sam Bankman-Fried, served as a reminder of the speculative nature of cryptocurrency.

Investigative reporter for Bloomberg News Zeke Faux’s Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall takes a critical look at FTX and Bankman-Fried.

The FTX situation proved to be a Bernie Madoff-like Ponzi scheme, and having a refresher course on situations like this, from time to time, can keep investors grounded.

For those less interested in technicalities but curious about the personalities behind a new phenomenon, this story incorporates business, technology, and crypto counterculture narratives, along with themes of greed, hubris, and the impact of technology on finance.

While the crypto space may have fallen off the radar for many traditional investors, recent developments might be garnering some attention for the following reasons:

  • The development and growth of Bitcoin ETFs
  • Bitcoin reaching a new all-time high in May 2025
  • Each house of Congress currently debating bills that aim to put guardrails around a branch of crypto called “stablecoins”, which may take these digital assets more into the mainstream
  • The First Family’s active commercial interests in cryptocurrencies, including the stablecoin USD1

Stablecoins are digital assets designed to hold a steady value, in contrast to the price fluctuations seen in most cryptocurrencies, including Bitcoin.

Crypto enthusiasts currently use stablecoins to move US dollars into and out of the crypto ecosystem. The evolution of stablecoins holds the potential for vast sums of money to change hands without touching the formal banking system.

For those curious about following developments in the digital asset space, the House bill is The Genius Act of 2025, and the corresponding Senate bill is The STABLE Act of 2025.

In part, the new legislation, if enacted, would allow regulators to police issuers of stablecoins and apply rules to how stablecoin reserves are managed, similar to the rules that govern how banks manage their reserves.

Debate in the Senate on The STABLE Act has been contentious, because some lawmakers are questioning whether the bill goes far enough to combat the conflict of interest that USD1 might pose for the president.

Readers of Faux’s book will learn more about stablecoins and get a critical account of Tether, which is currently the world’s largest stablecoin.

-RK

Donna Cournoyer
In College Planning

Federal Funding Cuts: Consequences for Higher Education

This article, by College Financial Planner Donna Cournoyer, discusses the consequences of the federal funding cuts for US college undergraduate and graduate students.

Graduate Student Challenges

Reduction of Programs, Reduced Admissions

Some of the most severe funding cuts so far have been in the area if graduate research.

The NIH (National Institute of Health) funding is relied upon heavily by top research universities throughout the country for their advanced programs.

This research impacts both the US and global advances in medicine, science, technology, and engineering.

Regarding the consequences of reduced research funding, take Massachusetts Institute of Technology, for example.

MIT announced in May that graduate enrollment will be reduced by 8% (about 100 students) due to federal funding cuts.

Also, the House of Representatives passed a bill increasing the excise tax on college endowments from the current 1.4% to a potential of 21% for the highest endowments. This bill is now in the Senate for approval.

See President of MIT Sally Kornbluth’s letter from the Office of the President on May 20, 2025 warning of the consequences of these challenges being faced across America.

Loss of Assistantships and Research Funding

With agencies like the National Science Foundation (NSF) and the National Institutes of Health (NIH) facing budget cuts, numerous research projects have been scaled back or canceled altogether.

Many graduate students rely on federal grants for their stipends as well. Graduate students are losing opportunities and needing to shift their education paths.

This also limits some of our best and brightest students from the ability to contribute to advancements in science, engineering, and medicine.

Effects on the “Innovation Edge”

These cuts in federal research funding are pushing some students out of research altogether. Some students are considering international opportunities in countries with a more stable environment for research.

There are also some experts who have expressed a long-term fear of “brain drain,” with the potential for the US to lose its standing as a global leader in innovation and scientific excellence.

It is possible that the changes in funding may have the long term effect of dulling the edge the US has as a global leader in innovation.

Undergraduate Student Challenges

Potential Cuts to Federal Student Aid

The federal Pell Grant Program projects a $2.7 Billion shortfall for the 2025 fiscal year. This could mean cuts to the program in 2026. The federal Work Study program could also be facing cuts.

This is especially hard on students from first-generation and low-income backgrounds. With federal cuts, many schools will not be able to increase their grants to make up the loss of federal aid for these students.

This may mean some of these students will not be able to attend college at all.

Budget Cuts, Declining Campus Services, Hiring Freezes & Layoffs

The federal funding cuts are causing schools to face tough decisions on budget cuts, layoffs and hiring freezes. This impacts a broad range of services and support available to students.

Public universities are facing budget cuts that are resulting in larger class sizes, fewer course offerings and halted facilities improvements. This can hinder academic success for students.

Increased Costs & Delayed Graduation

Some students may not be able to afford full-time enrollment, and may have to extend their studies, incurring more debt and delaying graduation and employment.

Federal Policies on International Students

Proposed bans on certain categories of foreign students and visa restrictions are hindering admissions for both undergraduate and graduate programs.

Many universities rely on international students for cultural diversity and for funding, as most international students receive no aid and pay tuition in full.

Without these full-paying students, endowments and budgets will be more stressed.

The Road Ahead for Institutions

Without policy reversals and sustained federal investment, institutions are responding in a variety of ways.

Universities are looking at reallocating endowment funds, which is not always easily done, as these funds are closely linked to budgets and donors are often very specific on the use of funds given.

Some institutions are seeking additional private funding and philanthropic partnerships.

And there are several universities seeking policy reversals.

Conclusion

Federal funding cuts in 2025 mark a pivotal moment in American higher education.

Without restoration of federal funding, both undergraduates and graduate students are at risk of losing affordable, high-quality education and research opportunities that benefit their educational goals and their future.

Reduced federal funding also bodes ill for the future of US innovation across a variety of fields and may well have negative effects for the future path of US economic growth.

Right now, our policymakers, educators, and the public are faced with confronting the long-term risks of underfunding the very systems that cultivate the nation’s intellectual and professional capital.

-DC

Donna Cournoyer
In Economy

America: You’re Downgraded!

Just like consumers, countries get credit scores. On Friday, May 16, the USA’s rating took it on the chin, when Moody’s said: “You’re Downgraded!”. This article puts the ratings downgrade into perspective.

Losing its status as a AAA-rated credit wasn’t a great look for our country.

Moody’s had the following to say about the US credit situation:

  • Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs
  • Persistent large fiscal deficits will drive the government’s debt and interest burden higher
  • The US’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns

The US national debt is currently about $36 trillion, which is the equivalent of about $106,100 for every person in the country. And Moody’s said federal interest payments are likely to absorb around 30% of revenues by 2035, up from about 18% in 2024 and 9% in 2021.

Moody’s recent action moved the US credit rating down one notch, to Aa1 from AAA.

Moody’s describes Aa1-rated debt as high quality and subject to “very low risk”, compared with its highest-quality Aaa rating, which has “minimal risk”.

The USA is now rated one notch below the top tier AAA by all three major credit rating agencies: Moody’s, Standard and Poor’s, and Fitch. These organizations provide credit ratings to bond issuers – larger companies and countries of all shapes and sizes.

S&P was the first to act on the US’ deteriorating financial situation over a decade ago: the agency downgraded the US in August 2011. Fitch downgraded the US in 2013.

The “Sovereign AAA Club”, composed of countries that hold the top tier rating, is now more rarified, with only 10 countries maintaining the gold standard: Australia, Canada, Denmark, Germany, Luxembourg, Netherlands, Norway, Singapore, Sweden, and Switzerland.

However, the downgrade isn’t a death knell for America’s access to credit, or the country’s ability to borrow at relatively attractive rates. US Treasury bond and bill yields (the cost of borrowing for the US government) barely budged on the news.

As of Friday, May 30, the interest rate at which the US government borrows in large quantities, by issuing Treasury bonds and bills, was 4.4%.

Borrowing rates today for the AAA-rated countries are generally lower by about 2 percentage points, on average, than the US. However, this “yield gap” has persisted for some time.

Here’s a chart of the US 10-Year Treasury bond yield from 2006 to the present, showing how interest rates have evolved over the past two decades, with the country’s credit rating across this timeframe, noted in green and red (courtesy of DataTrek).

Source: DataTrek

It’s worth noting that long-term borrowing costs for the US were higher when all three rating agencies had the US debt rated AAA. This was in 2006 – 2007, when 10-year Treasuries often paid +5.0 percent and yields were never below 4 percent.

Fortunately, US credit rating downgrades in the past have not triggered structurally higher interest rates, recession or declining stock prices.

Even so, the Moody’s downgrade serves as a reminder that the US federal government’s debt and deficit trends are troublesome.

In a June 3 article entitled Wall Street is Sounding the Alarm on US Debt, the Wall Street Journal points to the following:

  • Annual interest on the US debt is currently above $1 trillion
  • The tax-and-spend legislation currently being debated in Congress would add about $3 trillion to the national debt over the next decade ($5 trillion if certain features were made permanent)
  • Federal interest payments this fiscal year will be more than the defense budget; or more than Medicaid, disability insurance, and food stamps combined

It’s particularly difficult for individuals who are careful and prudent when managing their own personal financial situations to imagine that such large fiscal imbalances can continue indefinitely.

As a country, we are moving closer to a point when uncomfortable actions likely will be necessary – either through significant reductions in government programs to reduce spending, or by sizable tax increases, or via some combination of spending cuts and tax hikes.

-RK

Donna Cournoyer
In Financial Planning

Pass the SALT, and More on Taxes

Lawmakers are considering new bills to make several provisions of the TCJA permanent and to introduce additional modifications to tax law. The following article provides an update on new tax legislation, and presents an example of how raising the SALT cap could provide a measure of tax relief.

Tax policy is now at the top of the agenda for the US Congress.

The Tax Cuts and Jobs Act (TCJA) of 2017 brought significant changes to the US tax code, including lowering income taxes for many. But much of the TCJA is set to expire at the end of 2025.

The House narrowly passed their version of a new tax bill, entitled “The One Big Beautiful Bill Act” on May 22. The Senate is now debating their version. Identical legislation must pass through both chambers before becoming law.

Here are some of the key provisions of the House version of the new tax law:

 Makes permanent the current 7 individual federal income tax brackets

  • Bumps up standard deduction by $1,500 in 2025; and $1,000 per year in future years
  • Provides an additional standard deduction of $4,000 for those over 65 until 2028; phases out for individuals earning above $75,000 and couples earning above $150,000
  • Increases child tax credit to $2,500 per year for next four years
  • Introduces new kind of child savings account (“Trump Savings Account”) designed to help parents save, where parents can contribute $5,000 annually in after-tax dollars until child reaches age 18
  • Expands estate tax exemption to $15 million per person / $30 million per couple
  • Raises cap for the State and Local Tax (SALT) deduction to $40,000 per household starting in tax year 2025 from the current $10,000

We will report more fully on the tax changes when legislation is finalized.

However, since the increase in the SALT cap, if it does pass, likely will result in more people itemizing their taxes (versus taking the standard deduction), and could yield significant tax savings, we’ve provided an example of how it may work, below.

The House bill increases the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for taxpayers earning up to $500,000. The cap and income threshold would increase by 1% annually over the next ten years under the proposed bill.

The SALT deduction allows taxpayers who itemize to deduct certain state and local taxes—such as income and property taxes—from their federal taxable income.

The $10,000 cap was introduced in 2017 under the TCJA and has been a point of contention, particularly for residents in high-tax states where state and local taxes often exceed this limit.

If enacted, this change in the SALT cap could provide substantial tax relief for taxpayers who have significant state and local tax liabilities.

Homeowners with high property taxes or individuals with substantial state income taxes could see a notable reduction in their federal taxable income, potentially lowering their overall tax burden.

As an example, let’s assume that a family with annual income of $275,000 has the following expenses:

  • Property taxes: $18,000
  • State income taxes: $10,000
  • Mortgage interest: $8,000
  • Charitable contributions: $12,000

Since their property and state income taxes are currently subject to the SALT cap of $10,000 under the current law, their deductions would total $30,000:

  • SALT: $10,000
  • Mortgage interest: $8,000
  • Charitable contributions: $12,000

Since their total itemized deductions of $30,000 would be less than the standard deduction, they would take the standard deduction of $33,200 in 2025 (assuming no change from the current law).

If the SALT cap is increased to $40,000, this same family would be able to deduct all their property and state income tax, and they would have the following deductions:

  • SALT: $28,000 ($18,000 property plus $10,000 state income tax)
  • Mortgage interest: $8,000
  • Charitable contributions: $12,000

This family would then be able to itemize $48,000 in deductions, giving them an additional $14,800 in deductions. If they are in the 24% tax bracket, the increased SALT cap would save them $3,552 in Federal taxes.

While the House has passed their bill, it still requires approval from the Senate, where the outcome is uncertain due to differing views on fiscal policy and tax equity.

Therefore, while the proposed changes could offer tax advantages for some, they are not yet law.

We will continue to monitor the progress of this legislation and assess its implications for your individual tax planning strategies.

-RK

Donna Cournoyer
In Market Updates

May 2025 Market Recap: Game On

In Wayne’s World, the early 1990s cult-classic movie, protagonist Wayne and his sidekick Garth play street hockey on the neighborhood thruway. Automobiles pass frequently. Wayne and Garth don’t mind.

Street hockey provides an interesting model for thinking about financial markets. The cadence of shoot-score / shoot-miss / pause / move net off the street-move net back onto the street / restart is all part of the contest.

At times there are scores (when the market goes up). Other times, there are misses (when the market goes down). And, once in a while, external factors alter the field (for example, new and confusing government policy changes).

But the game continues under all conditions and players have an easier time if they take the changes in stride and continue to move forward.

Drawing the analogy to today’s situation, we’ve just passed through a miss / pause / net off the street phase. The net is now back in the road and the play has restarted.

And what of all the concerns about tariffs?

Some of us remain gravely concerned about tariffs, and also about unconventional (and even radical) policy approaches.

But many investors seem to think that Trump learned a lesson back in April, when the rout in stocks, bonds, and the US dollar forced a suspension of much of the global tariff rollout.

The financial market consensus reached in early May was that the final tariff plan is likely to be far more modest than the initial plan revealed on “Liberation Day” in early April, which has cleared the way for a sizable stock market rally.

Also, earnings reported by large US companies for the first quarter of 2025 were generally better than feared, and recently released economic data has exceeded expectations.

Gloom was pervasive in April, but lifted a bit in May as results haven’t been so bad.

A corollary to earnings is the confidence evidenced by company managers through their willingness to continue to spend money on current projects, and plan for new projects that will support and grow their businesses.

According to information compiled by Bloomberg, most of the largest publicly-traded companies (71%) that provided guidance after Trump’s early April bombshell have decided to maintain their capital expenditure outlook.

About 8.5% of firms have increased their spending plans, while 18% have revised them lower; 3% have withdrawn guidance. These results show that business confidence largely remains intact.

Some moderation (or at least temporary reprieve) in the tariff regime, as well as business profitability holding up and business spending plans remaining mostly intact, paved the way for “Game On” in the financial markets.

The old saying “sell in May and go away” was a dud in 2025, because last month was the best performing May in a quarter century.

The chart below shows monthly stock market performance for each May going back to 1990.

Source: Bloomberg

A second old saying, “markets climb a wall of worry” is holding true for 2025. Uncertainty has been outsized, but nonetheless, most asset classes at home and abroad have now registered positive returns.

Here’s how the performance of various asset classes stacked for the month of May and thus far in 2025:

Source: Moore Financial Advisors & Morningstar

-RK

Close Menu