There is no doubt that the investment world, particularly bubble sectors of finance, need reminding how paper thin the layer of ease and order actually is. The calm created by central banks, and this applies to every jurisdiction with the possible exception of Switzerland (which took its very bad medicine in 2008), is only that. There has been nothing fixed, [...]
It wasn’t earth-shattering news to the broader stock market, but shareholders in ConAgra certainly took notice. The latest quarterly update, in anticipation of full quarterly earnings in a few days, was pretty bad. The packaged food company, that also processes and mills foodstuffs, “shocked” investors with both very weak results and an unanticipated writedown of goodwill. ConAgra has been on [...]
In the 1920’s, it was the interruption of the distribution of gold flows via sterilizations and the creation and maintenance of foreign “reserves” and influencing the nascent wholesale markets of the age that served to maintain a high degree of leverage throughout the economy. That it did not show up in consumer prices is only due to the nature of [...]
After building up billions of dollars in reserves placed through NYC banks into Street loans, or call money, the crash of ’29 created a profound disturbance in not just stocks but banking. Here too we get little mainstream examination into the link between stocks and the liquidity event that unleashed at least three discrete and successive waves of bank failures; [...]
A full part of gold sterilization meant not just maintaining the total level of liquidity (though ignoring the distribution) but also in foreign “reserve” balances. The movements of gold created a trail of foreign exchange “reserves” which central banks around the world were using as tools to affect currency movements contravening of any gold pull or push. It was the [...]
The conventional view of asset bubbles is that they are difficult to discern even after the fact. The current policy position is one of bubbles that are “obvious.” Looking back at the late 1920’s, there is no doubt it took a similar track to that seen in the late 1990’s. But that, by itself, does not necessarily denote the presence [...]
Looking at the changing pattern of recoveries throughout domestic economic history, it is clear that there is a correlation between the level of monetarist intrusion and the shape of recovery (I would go so far as to claim a causative relationship, but at the very least there is no denying some kind of link). That observation extends to the 1930’s [...]
Following up on yesterday’s observations about valuations in stocks, margin debt declined in April for the second consecutive month. The absolute change across both March and April is not very large, amounting to $27 billion or 5%. Total cash balances were essentially unchanged, meaning that investors retired margined positions and reduced overall leverage in retail accounts. Since there was little [...]
The quarterly update of the Flow of Funds Report (now called the Financial Accounts of the United States, but still Z1) means we can update a couple measures of stock market exuberance – Tobins Q and Market Value of Equities compared to GDP. The delay in preparing and releasing the data, however, means staleness since the latest estimates are for [...]
Nearly all (97.5%) of the S&P 500 companies have reported for the first quarter. EPS for the index companies stumbled rather spectacularly, though weather is being blamed for nearly all of it. Back on January 23, index EPS in Q1 was expected at around $29.40 (as reported). As of the latest update, EPS is only at $24.79, a 15% miss [...]
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