I may be a week late to the “most important chart in the world”, but it demands a rational response. I had thought that the commentary surrounding this week’s retail sales release was the height of rational expectations theory deception, but I was clearly wrong. In what is passing for analysis, some are proclaiming a recovery narrative based on the [...]
In many ways, though, the overall stock market, economy and Federal Reserve policy don't suggest that a bear market is looming, say longtime money managers and economists. While continued turmoil in stock prices is likely, bear markets usually occur "when the Fed is trying to slow the economy down and other events intervene to make things worse," says Ethan Harris, [...]
There is definitely some disturbance in swaps markets as spreads have been far more volatile lately than at any point since the dramatic shift in March. While most of the action had been concentrated in the 10-year, there has also been a noticeable change in 5-year spread volatility. I don’t think there is much doubt that recent volatility in treasury [...]
I've been laid up the last week after a minor surgical procedure and while I haven't been that productive at getting any actual work done, it has given me a lot of time to watch CNBC and Bloomberg. The portfolio managers, strategists and assorted market soothsayers stream across my screen, talking about markets the way they always have, as if [...]
For Bernanke and QE 3 (the MBS strand) there was only good news in Q1 ’13 GDP. Residential housing “investment”, i.e., housing-related construction, was revised upward to a 14% growth rate from 12.1%. That meant the frothy real estate “markets” provided 0.34% of the 1.8% growth rate in Q1 GDP. Unfortunately, that was less than the 0.41% provided in Q4, [...]
Clearly the Federal Reserve has taken seriously the consequences of QE and its relation to asset prices in so many markets. That itself represents a leap forward as perhaps the central planners in the Marriner Eccles building in Washington, DC, are beginning to understand that markets are not classroom exercises. In this bizarro world of unintended consequences, stocks actually are [...]
First ECB head Mario Draghi hinted at discussions of an ABS plan at his press conference. Now we get word from Die Welt that not only is it more than a rumor, it has been discussed by the ECB’s governing council. The German paper also notes that it seems likely that the governing council is far more in favor than [...]
Buy low, sell high. It is one of the most abused of market axioms and says both quite a lot and nothing at all. Of course you need to buy assets when they are cheap and sell them when they are dear but low and high aren't exact terms and are, like beauty, amorphous qualities assigned by each observer based [...]
There is a lot to worry about these days and no shortage of individuals capitalizing on that fact. If you think the Mayans knew something about the cosmos that modern star gazers haven't figured out there are numerous websites that will assist you in deciphering the workings of the long count. If you believe the end of the calendar will [...]
I’m sure many of you have recently read about the risk of bonds or that bonds are the next bubble. Should we consider bonds a safe place to invest, to earn income or to diversify the risk present in today’s world? The current environment is definitely challenging. The Fed, in its attempt to charge the economy, is nearing the end [...]
Stay In Touch