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…

201505.25
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…

201505.17
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10 Year Expected Returns and the Taylor Rule

After 3 decades of disinflation and 15 years of very aggressive monetary policy, asset prices are high. Returns are expected to be below average for the next decade. Given the hyper-aggressive monetary policy of the last 6 years, the historically low yields on bonds means multi-asset class portfolios will be hampered by low returns on…

201505.10
2
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Greatly Exaggerated

The reports of my death are greatly exaggerated. Mark Twain Over the last few years I’ve read a plethora of articles about this supposedly hated bull market in stocks. It is said that this is the most hated bull market in history and while I’d argue with that a bit, it isn’t far off the…

201505.03
3
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A Considerable Transitory Period

Transitory: 1. tending to pass away; not persistent 2. of brief duration Transitory is the term the FOMC used to describe the factors that held back the US economy in the 1st quarter. With the GDP report coming earlier in the day the FOMC had no choice but to acknowledge the slowdown but as many seem…

201504.26
2
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Down The Rabbit Hole

When logic and proportion have fallen sloppy dead And the white knight is talking backwards And the red queen’s off with her head… Grace Slick, White Rabbit ‘Twas brilling, and the slithy toves Did gyre and gimble in the wabe: All mimsy were the borogoves, And the mome raths ougrabe Lewis Carrol, Jabberwocky For those…

201504.20
1
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Getting October 15 Right, Even to Crude

It is becoming settled wisdom that the most dangerous aspects of any current financial contours are due almost entirely to some version of HFT or electronic trading. That is undoubtedly true, as far as it might relate to one aspect, but to claim that computers are the single biggest source, let along only source, of…

201503.29
2
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Shifting Momentum

US stocks continued their recently more volatile ways this week giving up almost all the gains of last week. In fact, the S&P 500 is now basically flat for the last four months, making no headway since late November despite a series of nominal new highs along the way. As the Fed has backed away…

201503.22
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Macro Observations

Dollar strength may be over extended. Dollar action after the Fed announcement last week seemed to indicate that investors (speculators) were ready and willing to sell the greenback. Looking at the chart, one can see a potential peak in the Dollar Index earlier this month. And, our macro economic partner’s indicators are a short term extended…

201503.10
1
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Looking More Like Next ‘Dollar’ Problem

It is Tuesday which only means that whatever oil trading takes place today will be easily overwhelmed by whatever interpretation about inventory levels released tomorrow dominates. However, the last week has been interesting in the respect of a shift in the behavior of the futures curve for WTI. Up until then, almost all volatility was…