Markets

China’s Back!

By |2020-03-31T18:53:32-04:00March 31st, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Washington Post began this week by noting how the US economy seems to have lost its purported zip just when it needed that vitality the most. Never missing a chance to take a partisan swipe, of course, still there’s quite a lot of truth behind the charge. An actual economic boom produces cushion, enough of one that President Trump [...]

What Is The Fed’s New FIMA? The Potential For A SHADOW Shadow Run Is Very Real

By |2020-03-31T15:56:36-04:00March 31st, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s another day ending in “y”, therefore there must be some new liquidity scheme being announced by the Federal Reserve. For a crisis that many seem confident has been put in the past, the optimists still are going to have to factor that even US central bankers feel they have to keep pulling repo rabbits out of their…somewhere. Today it [...]

Stocks Are Still Not Cheap

By |2020-03-31T13:08:04-04:00March 31st, 2020|Bonds, Commodities, Currencies, Financial Planning, Markets, Real Estate, Stocks|

A Prognosis for U.S. Stocks The future for U.S. stocks over the next decade appears ominous, regardless of the impact of the Coronavirus. Why? Because valuations matter. And stocks at the end of February were priced for perfection. Any significant negative development was poised to drive them lower. The COVID-19 Virus that shut down the U.S. economy has certainly qualified. [...]

(No) Dollars And (No) Sense: Eighty Argentinas

By |2020-03-30T17:46:41-04:00March 30th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

India like many emerging market countries around the world holds an enormous stockpile of foreign exchange reserves. According to the latest weekly calculation published by the Reserve Bank of India (RBI), the country’s central bank, that total was a bit less than half a trillion. While it sounds impressive, when the month began the balance was much closer to that [...]

A Marathon, Not A Sprint

By |2020-03-30T09:20:12-04:00March 30th, 2020|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Financial Planning, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

Stocks rose last week, a breathtaking, nearly 20% run off the recent lows before a pullback Friday trimmed the gain for the week to about 11%. That was certainly helpful but investors would be well-advised not to get too excited. This is what bear market rallies look like. They come out of nowhere, they run much further than anyone thinks [...]

Vital Lessons Still Not Learned: Be Careful About GFC2

By |2020-03-27T16:41:55-04:00March 27th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s one of those crisis-level-of-illiquidity things that if you heard about it in normal times it would make you shake your head in disbelief. During a full-blown meltdown maybe it’s not standard stuff, but given the chaotic conditions it doesn’t seem so preposterous, either. Negative convexity is an otherwise benign phenomenon in fixed income that when combined with a lack [...]

It’s Not About Jobless Claims Today, It’s About What Will Hamper Job Growth In A Few Months

By |2020-03-26T17:45:09-04:00March 26th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You’ve no doubt heard about the jobless claims number. At an incomprehensible 3.28 million Americans filing for unemployment for the first time, this level far exceeded the wildest expectations as the economic costs of the shutdown continue to come in far more like the worst case. And as bad as 3mm is, the real hidden number is likely much higher. [...]

Collateral Shortage Goes Global, Hinting At The Way The (euro)Dollar Reaches Its Eventual End

By |2020-03-25T18:56:44-04:00March 25th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The trick is that both types [...]

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