201507.05
2
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Greece Calls Europe’s Bluff

The analysts streaming across my screen last week all had the same opinion – Greece will vote yes, accept Europe’s terms and stay in the Euro. Well, as I write this, the early polls prove, if nothing else, that one should beware of experts bearing consensus opinions. According to the headlines at all the major…

201506.28
0
0

The Market Waits For No One

Our lens suggests that the very low interest rates that have prevailed for so long may not be “equilibrium” ones, which would be conducive to sustainable and balanced global expansion. Rather than just reflecting the current weakness, low rates may in part have contributed to it by fuelling costly financial booms and busts. The result…

201506.21
6
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Don’t Fight The Market

An old Wall Street saying opines that one shouldn’t “fight the Fed” and it is said to be good advice. The popular belief about this saying is that it means one should embrace risk when the Fed is easing because ultimately the goal of the easing (more growth) will be accomplished. When the Fed is tightening…

201506.21
1
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Greek Scenario Analysis

Here is a simple conditional probability table one might use to gauge the potential risks and rewards stemming from the Greek credit negotiations. The table considers 3 paths which may arise from ongoing talks. It assigns a probability for each and what an investor might expect for market returns under each scenario. Given recent events, the…

201506.14
4
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One More Time: The Economy Is Not The Market

The title is a shorthand way of saying that the most recent performance of the economy isn’t predictive of the future performance of the stock market. The bottom line is that GDP growth today doesn’t necessarily mean stock price growth today – GDP growth and stock returns are not highly correlated. In fact, some analysis…

201506.14
2
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Smoothing Global Growth through Regionally Counter Cyclical Credit

“While most investors were preoccupied with deflation, related to last year’s plunge in oil prices, and the seemingly hopelessness of quantitative easing, a stealth recovery in private sector global credit demand was underway. We examined prospects for credit growth..which highlighted some surprising developments relative to the economic pessimism that had caused government bond yields to…

201506.07
1
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No Place To Hide

It was a nasty week for investors with almost no place – or at least no logical place – to hide. Of the 16 broad market ETFs I monitor on a daily basis, only one, was higher on the week – IWM, the Russell 2000 small cap ETF. That’s what I mean by no logical…

201505.31
Off
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Going Nowhere Fast

It wasn’t a pretty week for stocks globally. Almost every major market was down – one prominent exception was Japan – and the minor ones were down more. China experienced a 6.5% hiccup mid-week that everyone seemed to want to see as, at least, the beginning of the end of that bull market so it…

201505.25
9
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The Pretense Of Knowledge

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will…

201505.25
1
0

Japanese Banks

Japanese bank stocks surged over 50% from December 2012 through the first half of 2013. Since, they have been in what one might call a consolidation phase. The initial surge coincided with expectations of the effects of Abenomics. The consolidation was a 1.5 – 2 year wait and see period, somewhat of a battle between believers…