The Wall Street Journal – The Snowballing Power of the VIX, Wall Street’s Fear Index Created to track expectations of volatility, it has spawned a giant trading ecosystem that could magnify losses when turbulence hits. Volatility—or the lack of it—has become the central obsession of the markets as the S&P 500 trades around its all-time high.… Continue reading More On Low Volatility
OPEN Net Positions – Defining The Fed’s “Household” Sector Comment In our latest webinar Greg Blaha walks through the calculation the Federal Reserve uses to arrive at its household sector in its Flow of Funds report, explaining why the category’s name is a bit misleading.
Bloomberg – Bond Market Doomsayers Sound Alarm as Margin of Safety Vanishes Are bond traders right for wrong reasons? Complacency a risk Chadha, the chief global strategist at Deutsche Bank’s U.S. securities unit, is part of a group of die-hard bond bears who say Treasuries have become unhinged from reality and yields have nowhere to go… Continue reading Extremes Abound as Numerous Central Banks Meet
The Wall Street Journal – Fed’s Effort to Guide Markets Falls Short The Federal Reserve’s interest-rate increases aren’t having the desired effect of cooling off Wall Street’s hot streak. While Fed officials meeting this week will likely decide to raise short-term interest rates for a fourth time since December 2015, much of that tightening effort… Continue reading Fed Hikes Are Not Having The Desired Consequence
CNBC – Ethereum hits another record high after bitcoin and is now up over 5,000% since the start of the year Ethereum prices surged on Monday to record levels, after bitcoin also hit all-time highs, as appetite for digital assets continues to grow. The cryptocurrency was trading at around $407.10 in the early Monday morning trading, according… Continue reading Ethereum Gaining Ground on Bitcoin
The Wall Street Journal – Watch Out for FANG Inc. The four tech giants have added $405 billion in market capitalization since the start of 2017, a gain of 31% versus a gain of 8.7% for the S&P 500. An increase of that magnitude should typically be underpinned by an improved earnings outlook. Earnings expectations at… Continue reading More On FANG
Economic Policy Institute – Is 2 percent too low? Rethinking the Fed’s arbitrary inflation target to avoid another Great Recession This paper argues that the very low inflation rate currently targeted by the Federal Reserve as a long-term macroeconomic policy goal (2 percent annual inflation) should be reassessed in light of economic developments over the past… Continue reading Rethinking The Fed’s 2% Inflation Target
The Wall Street Journal – Effort to Crush Shale Producers Only Made Them Stronger Surging productivity in America’s shale oil patch is an indirect result of pressure applied in recent years by OPEC and may have permanently lowered oil prices In the three most prolific shale plays, the Permian, Bakken and Powder River Basins, the Oxford… Continue reading Crude Oil Supply/Demand
Linkedin – Ray Dalio: The Last 24 Hours’ Developments in the UK and US Increase the Odds That Conflict Will Lead to Political Ineffectiveness In my opinion, the trend toward conflict leading to greater dysfunctionality, leading to greater conflict, in a self-reinforcing way is increasingly apparent in the US and UK. Over the last 24 hours we’ve… Continue reading Ray Dalio On The Political Landscape
The Wall Street Journal – When Currencies Fall, Export Growth Is Supposed to Follow—Until Now For decades, economics textbooks argued that suddenly weaker currencies are a boon to growth, because they make a country’s exports more competitive or profitable on the global stage, which in turn boosts domestic production and employment. What if that theory… Continue reading Currency Wars In A Global Economy
The Financial Times – Cost of ‘Black Swan’ bet on falling markets hits pre-crisis low The cost for hedge funds of taking out “Black Swan” insurance against a sharp fall for US equities has fallen to the lowest level since before the financial crisis as stock markets continue to touch all-time highs. Months of low… Continue reading Betting On Disaster