CNBC – GOP tax plan is ‘more of a tax rearrangement than a tax cut,’ says Jim Bianco Bianco Research founder Jim Bianco thinks the market would likely do just fine without the GOP’s tax plan, which he believes would result in more of a “rearrangement” than a cut. “We are raising individual taxes in… Continue reading Talking Tax Cuts
Comment The chart above shows the odds that Merkel will be the next Chancellor of Germany according to the Predictit.org markets. Again, we view betting markets as the aggregation of consensus opinion. They do not possess special knowledge but react to news quickly. Merkel’s odds of being the next Chancellor have been under 50% since October 12 and… Continue reading Angela Merkel
The Wall Street Journal – Powell Suggests Fed Is Likely to Raise Rates in December Federal Reserve governor Jerome Powell signaled Tuesday he would stick to the same monetary-policy course his predecessor charted if he is confirmed as the central bank’s next leader, likely raising short-term interest rates in December and lifting them gradually higher in the next… Continue reading Powell Discusses The Fed Rate Hike In December
Bloomberg View – Ash Alankar: Brace for Steeper Yield Curves as the Wolves Return Just as ultra-low rates drove down volatility, the same economic forces should work in reverse. However, as rates rise, the logic behind selling volatility to earn income weakens and once the pressure from selling options eases, perceived risk will come back into… Continue reading The Yield Curve
Mises.org – Are Markets Really as Calm as they Seem? Higher interest rates have the potential to make the credit pyramid coming crashing down. They would make it hard for many consumers to service their debt, would reveal malinvestment and result in corporate losses, and stock and housing prices would ultimately follow the law of gravity.… Continue reading The Flat Yield Curve And The Risk Of A Crash
CNBC – Bitcoin sees sudden, sharp spike after smashing through $10,000 Bitcoin saw a massive, sudden spike just after it broke through a closely watched milestone Tuesday night. The cryptocurrency traded at an all-time high of $10,831.75 just after 12:30 a.m. ET, according to industry site CoinDesk. That represented a more than 10 percent jump from its… Continue reading Bitcoin Blows Past $10,000
The Wall Street Journal – A 20% Surge in Tech-Company Earnings Fuels U.S. Stock Gains Fast-growing technology companies are carrying the S&P 500 toward its fifth consecutive quarter of earnings growth. Third-quarter gains have been broad, spanning companies from industrial stalwarts likeCaterpillar Inc. to oil-and-gas giant Exxon Mobil Corp. But with around 98% of S&P 500 firms having reported results for… Continue reading Concentrated Stock Returns
Bloomberg Business – Goldman Warns Highest Valuations Since 1900 Mean Pain Is Coming “It has seldom been the case that equities, bonds and credit have been similarly expensive at the same time, only in the Roaring ’20s and the Golden ’50s,” Goldman Sachs International strategists including Christian Mueller-Glissman wrote in a note this week. “All good… Continue reading High Valuations In Both Stocks And Bonds
The Wall Street Journal – Fed Bank Rules Are Tough Enough, Nominee Powell Says U.S. banks are no longer too big to fail and Federal Reserve bank rules are “tough enough,” Fed governor Jerome Powell told senators in a hearing to review his nomination to head the central bank. Mr. Powell toed a fine line at… Continue reading Powell Believes Bank Regulation Is Tough Enough Already
Bloomberg Business – Home Prices in 20 U.S. Cities Rise by Most Since Mid-2014 The residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices. Eight cities have surpassed their… Continue reading Home Prices Rise Again
Comment The chart above shows the South Korean stock market KOSPI. It was unchanged yesterday and is up 25% YTD. Yesterday’s news of North Korea’s missile launch did little to affect this market. We would be inclined to take this news much more seriously when the KOSPI takes note. Nikkei Asian Review – Seoul’s financial… Continue reading Another North Korean Missile