Given the volatility in bond markets and the introduction of the word “taper” it is little surprise that equity investors increased the equity or free cash in their stock accounts. Taking a little off the rapid rise in margin debt usage, the high level of complacency and extended leveraged positions was due for a re-allocation as it was. The last [...]
At the end of January 2013, UPS management patted themselves for company’s results in an admittedly tough environment. In between regular allusions to “strong” numbers and operational tendencies, Chairman and CEO D. Scott Davis wrapped it all up in the positive: “Although we fell short of our goals for the year, we did achieve record earnings per share.” The dichotomy [...]
Remember a few years back when the term decoupling was all the rage? Emerging markets and Europe were supposedly going to decouple from the US economy's troubles and continue growing while the US suffered through its real estate bubble collapse. Well that didn't work out so well with most every market in the world eventually succumbing to the undertow of [...]
In trying to sound modest and even magnanimous, Ben Bernanke in November 2010 penned an oped in the Washington Post justifying the recently implemented QE 2. Toward the end of his piece he acknowledged that the Federal Reserve and monetary policy could not work miracles. But given that obsequious qualification, the Fed Chairman was very clear on what he expected: [...]
The Federal Reserve released its calculations for the Flow of Funds Report (Z1) for the first quarter of 2013. That means we can update the Tobin’s Q and our modified Q for the latest figures. As expected, stock prices accelerated through March 31, at a rate much faster than nonfinancial corporate net worth. That means, using this methodology, stock prices [...]
Stocks lost ground last week to the tune of about 1% but the route to that loss involved more volatility than we've seen in some time. The volatility index has moved higher by a third since that key reversal day a week ago Wednesday. And the volatility hasn't been confined to stocks. The bond market has tacked on about 50 [...]
I wanted to concur but take Joe's weekend proposition in a slightly different direction. I think it is relatively clear that the Federal Reserve and Chairman Bernanke are intentionally hinting at “tapering” QE purchases in order to “talk the market down”. There are a lot of similarities between the monetary communications right now and 1996 when Alan Greenspan famously appealed [...]
If we close on or near the low today, we will have printed what is known in candlestick charting as shooting star. I don't put a lot of faith in technical analysis but this pattern and its reverse, called a hammer, are the most predictive technical patterns I've seen in my long career. The shooting stars and hammers are indications [...]
Our friend and colleague Eric Hull pointed out that NYSE margin debt was just a hair below record levels in March (the latest figure available), at $379 billion. Eric also noted that the past two peaks in NYSE margin debt have corresponded with 3-5 months of additional “exuberance” (given the persistence of QE’s in this climate, I would argue that [...]
The Pew Research Center last week released a report showing that from 2009 to 2011 the top 7% of American households (based on net worth) realized a 28% gain in wealth while the bottom 93% saw a 4% decline. In a statement of the blatantly obvious, Pew said the difference was a result of the wealthy being more likely to [...]
Stay In Touch