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Timing The Markets

November 12, 2015

Institutional Investor – Market-Timing-Is-Back-in-the-Hunt-for-Investors Exhibit 2 plots the cumulative performance (always versus risk-free cash) of buy-and-hold, this simple contrarian CAPE-based timing system and the difference between the two (the outperformance). Note these are gross returns before trading costs, but very low costs are not unrealistic over the past 30-plus years and going forward. We handicap… Continue reading Timing The Markets

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Corporate Bond Inventories Negative For The First Time Ever

November 12, 2015

Bloomberg Business – Five Strange Things That Have Been Happening in Financial Markets Negative swap spreads, fractured repo rates, big moves, and much more. Interesting things have certainly been happening in the underpinnings of global markets—things that either run counter to long-standing financial logic, or represent an unusual dislocation in the “normal” state of market… Continue reading Corporate Bond Inventories Negative For The First Time Ever

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Newsclips

The Chinese Yuan/Dollar Exchange

November 12, 2015

<Click on chart for larger image> The Wall Street Journal – China Changes Its Currency-Market Ways China’s typically ham-handed approach to currency interventions—exemplified by its market-wrenching August devaluation—may be giving way to a lighter touch. In recent weeks, traders say, Beijing has been getting its message out more subtly, buying and selling in the freely… Continue reading The Chinese Yuan/Dollar Exchange

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Monetary Policy In Europe And The U.S. About To Diverge

November 12, 2015

Bloomberg Business – May 1994 – What Happened When the Fed Last Diverged With Europe Fed may increase key rate in December as ECB adds stimulus It’s been more than 21 years since the Federal Reserve last raised interest rates the same month as its main counterpart in Europe eased monetary policy. May 1994 was… Continue reading Monetary Policy In Europe And The U.S. About To Diverge

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Newsclips

Emerging Market Corporate Debt

November 12, 2015

The Financial Times – Credit crunch threatens emerging market moves to kick-start growth The dynamic in developed markets is quite different. There, overall debt is at roughly the same level it was five years ago, at 396 per cent of GDP. But by far the biggest share, 130 per cent of GDP, is in the… Continue reading Emerging Market Corporate Debt

Newsclips

Chances of A Stock Market Bubble

November 12, 2015

MarketWatch.com – Opinion: There’s only a 4% chance we’re in a stock market bubble Bubbles, in fact, are extremely rare, even after big run-ups Stop using “bubble” every time you want to express disenchantment with the stock market. Please. Stock market bubbles are extremely rare events. When we indiscriminately throw “bubble” at everything we think… Continue reading Chances of A Stock Market Bubble

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Newsclips

Swap Rates

November 12, 2015

Bloomberg Business – Paying to Get Dollars Is Most Expensive Since 2012 in Swaps Central bank divergence adds to year-end demand for greenback A crunch is developing in international funding markets. The cost to convert local currency payments in the euro area, U.K. and Japan into dollars has jumped amid speculation the Federal Reserve will… Continue reading Swap Rates

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Unsustainable Debt Throughout The World

November 12, 2015

h/t The Big Picture Seeking Alpha – The Correlation Between Decelerating Debt And Falling GDP As promised, today we’re doing something more interesting with the Federal Reserve’s data for the level of private debt that has accumulated over time in the United States than just calculating its amount, its year-over-year rate of growth (or velocity)… Continue reading Unsustainable Debt Throughout The World

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Newsclips

Gold And The Fed’s Rate Decision

November 12, 2015

<Click on chart for larger image> The Wall Street Journal – Gold Prices Remain Flat as Traders Cautious Ahead of Federal Reserve Rate Decision Move on rates from central bank would spell bad news for dollar-denominated commodities like gold Gold prices were flat on the London spot market Thursday, as traders maintained their cautious stance… Continue reading Gold And The Fed’s Rate Decision

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Debating Bernanke

November 12, 2015

The New York Times – A Debate With Bernanke Over the Fed’s Easy Money Policies Mr. Bernanke championed the twin policies of keeping short-term interest rates near zero, for seven years, and of quantitative easing, in which the Fed bought $4 trillion of squirrelly debt securities in the market and stuck them on its balance… Continue reading Debating Bernanke

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Newsclips

Cartoons

November 12, 2015

Charts of the Week

Charts of the Week

November 10, 2015

Charts of the Week Topics Covered This Week Include: Q3 2015 Earnings and Revenue Expectations Earnings and Revenue Beat Rates Company Guidance Timing The Rate Hike U.S. Unemployment Rate Falls Unemployment Rates By Country And Education The Labor Force Participation Rate By Age The Public Likes Stocks, They Just Hate Active Managers Wages Manufacturing, Construction… Continue reading Charts of the Week