Market perceptions of risks to the global economy and general liquidity have diverged among various markets – credit markets in certain regions indicate heightened risk awareness and perceived probabilities, while equities, the US market in particular, looks increasingly like it has under central bank interventions from the recent past. Negative yield curves in particular European sovereigns (Swiss, German, Holland, etc) [...]
By Brian Cronin The thing about beating a dead horse is that the poor animal can’t feel anything anymore but it does give the one with the stick continuing pleasure. So at the risk of being accused of animal cruelty, let me return, like a dog to an old bone, to my particular dead horse: Europe. Last week I took [...]
Is there an interest rate bubble? Has the bond market topped? It is something that has been on our mind for the past year and especially at the long end of the curve during Operation Twist. If and when bond yields normalize, the capital risk to investors is large, about 8.25-8.5% risk per 1% increase in interest rates at the [...]
There's Something Happenin' Here, What it is ain't exactly clear... "For What It's Worth" - Buffalo Springfield My friend Josh Brown (okay, he's linked to some of our stuff; maybe friend is a bit of an exaggeration) often quotes and links to videos of rap songs on his blog, The Reformed Broker. At the age of 50 (51 this month), [...]
Every time you turn on CNBC you will see advertisements by Mutual Fund companies trumpeting why they are a good investment. However, when it comes to the real world of your money ; I say Action talks - BS walks. A general premise of passive investing is that unmanaged index funds outperform managed funds year after year. This year is [...]
§ For much of the past fifteen months, personal income on a real per capita basis had been declining due to inflation pressures and non-uniform income distribution. Since the early part of 2012, inflation pressures have largely abated (as indicated below) providing some relief for personal income. As a result, the trend in personal income has changed back toward rising [...]
A version of this article by Jeffrey Snider appeared last week on Real Clear Markets: For those who appreciate the powerful abilities of free markets to advance the cause of humanity, the occasion of Milton Friedman’s birthday is a time to celebrate. For many it is also an opportunity to revisit his work and muse about how it applies to [...]
From friend of Alhambra, Brian Cronin: The first rule in politics is that you never believe anything until it’s officially denied. “The euro is irreversible and is not in danger of collapsing” said ECB president Mario Draghi as the central bank left rates unchanged last week. He said they will come up with more measures over the coming weeks to [...]
When contemplating the FED, one needs to be aware that monetary policy is not an exact science. The FED will definitely try to effect policy; but, to a great extent, they are a reactive bunch. The FED attempts to stay ahead of the curve and anticipate if/when the broader economy needs restraint or accommodation, but there are a few problems. [...]
There's an old saying on Wall Street that the market will always act in a way that frustrates the majority of market participants. If that is true, then it goes without saying that the majority must be bearish because this market has had ample opportunities to move lower and steadfastly refuses to do so. Coming into last week the conventional [...]
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