Everyone knows about lies, damned lies, and statistics. The quote has been attached to Mark Twain who apparently attributed to British Prime Minister Benjamin Disraeli. It remains among popular clichés because there is universal truth to it, a sort of caveat emptor lying in the background whenever one consumes an argument. Nowhere is that more the truth than economics and [...]
All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to be forward-looking discounting mechanisms. However, [...]
So much of the basis for monetary policy was put in place in the 1960’s study of the 1930’s. It has become commonplace simply to assume 21st century tactics as being directly lifted from the start of the Great Depression. One of the causes of that calamity was certainly restrictive money supply, but any dereliction on the part of the [...]
EPS estimates are always in the practice of falling over time, so that natural process should be considered when comparing across the movement of the calendar. That said, however, earnings continue to defy projections of a rebound. This is not to say that analysts aren’t expecting one, only that the expectation keeps pushing further out in time. According to Howard [...]
If there seems to be more safe haven demand of late, the increasing odds of British exit from the EU is being blamed. According to Yahoo!Finance, Goldman Sachs sees “kinks” in the option structure, an agglomeration of hedging demand that points to maturities around the UK referendum. The absence of any heavy hedging this week suggests that markets have no [...]
The People’s Bank of China today fixed the CNY exchange (reference) rate below 6.56 for the first time since early February. That means all the tremendous effort that went into erasing December and January’s “dollar” pressure (not devaluation) has been unwound, as the currency now trades just about where it was at the start of China’s Lunar New Year Golden [...]
On March 29, 1900, Louis Bachelier successfully defended his doctoral thesis at the University of Paris. It was breathtakingly innovative and complex, so much so that it would take decades for his ideas to be fully understood let alone adopted. This was the case even though his thesis advisor was none other than famed physicist Henri Poincairé and that he [...]
It was an impressive rebound from the doldrums of February 11. Stocks managed to get back nearly even, as the S&P 500 closed above 2,100 on successive days April 19 and 20. Since then it has been more of a struggle; sideways to slightly lower. Gold has remained near and above $1,250 while funding markets and UST’s have been bid [...]
As the major stock indices overtake or threaten psychological round numbers again (S&P 500 2,100; DJIA 18,000), they have done so with the same problem as occurred in 2015. Stocks have been overvalued for some time in historical comparison especially after QE3 and QE4, but it was supposed to be in anticipation of the full recovery that QE would make. [...]
Just a few weeks ago FactSet was reporting analysts’ estimates for Q1 2016 EPS were looking to be a 6.9% decline year-over-year. Their latest update now suggests -8.0%, as the deterioration in earnings outlook is becoming the most significant part of the trend. During the first two months of Q1 2016, analysts lowered earnings estimates for companies in the S&P [...]
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