“Where are we going?" I asked "I don't know," he said. "Just driving." "But this road doesn't go anywhere," I told him. "That doesn't matter." "What does?" I asked, after a little while. "Just that we're on it, dude," he said.” ― Bret Easton Ellis, Less Than Zero The title of this post is, obviously, a reference to the state [...]
Leverage: the use of credit to enhance one's speculative capacity Merriam-Webster Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. Archimedes The Swiss National Bank - the Swiss equivalent of our Federal Reserve - didn't exactly move the world last week but the fallout from their surprise change in [...]
Mr. Market is the fictional business partner Benjamin Graham invented in his classic value investing book, The Intelligent Investor. As Mr. Graham describes him, Mr. Market is the business partner of the investor, offering on a daily basis to buy your share in the business or alternatively to sell you his share. There are times when he is wildly optimistic [...]
If I had to define the recovery period that developed after the trough in the Great Recession, it would have ended sometime in the middle of 2011. Up to that point, there was almost a uniform behavior in financial and even economic accounts (though, on the economic side, there was much left to be desired). It was by no means [...]
Well, it's that time of year again, when all the pundits offer their crystal ball views of the coming new year. I don't usually participate in the prediction game and this year won't be any different. Like everyone else I wonder what the future holds but I know I have no special ability to predict how it might unfold. What [...]
Stocks fell last week for the fourth week in a row and there was the whiff of panic mid-week. Despite that losing streak the S&P 500 is only 6% from its all time high but the pain for the leveraged investing crowd (the misnamed "hedge" funds) appeared to hit a crescendo last week - at least for now. Wednesday last [...]
The stock market rallied hard into Janet Yellen's speech Friday at Jackson Hole, expecting some epiphany I suppose about the future course of monetary policy. What we got instead was Labor Market Dynamics And Monetary Policy, the purpose of which I can only suppose was to bore the market to death. Economics is not the most exciting subject in any [...]
I think sometimes, with the stock market doing its best imitation of the Energizer bunny, we forget just how extraordinary are the times in which we live. We've been lulled to sleep by the relentless and mesmerizing march higher of stocks and all manner of risky assets. Maybe it's just that having lived through two booms and busts already that [...]
By now the bond market is really starting to annoy all the “right” people. The bear flattening that has taken place since operational taper commenced is a direct contradiction to those that implore dismissal of recent GDP (after pleading quite the opposite during the inventory build last year). Mainstream, orthodox economists have settled that Q1 is an aberration, a speed [...]
The S&P 500 made a new high last week, finally closing over the 1900 level. European stocks were also higher on the week and have continued the rally today even after election results over the weekend showed an uncomfortable gain for some parties that are, well, let's just say that some of their ideas are not exactly in keeping with [...]
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