The Unearned Age of Certainty

In continuing yesterday’s pointed critique of the current state of monetarism, there is another element to consider here. To reiterate, last year the yen devaluation was unquestionably seen as a catalyst toward rebirth of Japan Inc, and thus Japan economically (and maybe even demographically). This sentiment was as ubiquitous as it was accepted on faith: .. read more

The Inconvenient Marriage of Yuan and Gold

The latest money growth figures from China seemed to have brought back worries over more disorder in finance. Tomorrow the Chinese government will release GDP figures for the first quarter and current expectations (I know) are for 7.3% Y/Y growth. That would be the slowest rate of expansion in memory. The two are inextricably linked .. read more

A Weak Dollar Environment

The US Dollar index exhibits the classic characteristics of a downtrending asset: Declining 50 and 200 day moving averages with the 50 solidly below the 200. Momentum indicators (MACD, PMO) both on sell signals. A longer term view shows the index on the edge of support: A break of the 78-79 support level would open .. read more

Dollar and Trade Delinked Globally; It’s All Finance Now

The news from China this morning was unexpected only to those who still cling to the idea that the PBOC control is omnipresent. Exports were down 6.6% Y/Y in March (after dropping 18.1% Y/Y in February), while imports simply collapsed 11.3% Y/Y. Since China has been operating as the global trade pivot, the results on .. read more

Asian Titanic

I think it is very clear that the Bank of Japan is becoming more and more sensitive to swings in the Japanese stock market. Policy pronouncements, toothless as they usually are, seem to correlate very well with downturns in stock prices. Perhaps some of the Federal Reserve literature is making its way East. There were .. read more

Yuan Devaluation Is Not ‘Hot Money’

Analyzing anything of and around China is difficult to begin with, so any misconceptions that form are understandable. That being said, there are certain methodologies to global finance that penetrate even these potential bends in conventional wisdom. I think that applies to recent commentary on the Chinese financial system as it relates to currency changes. .. read more

Why The Market Really Sold Off Last Week

Josh Brown at the Reformed Broker had a post last Thursday titled Why Did The Stock Market Sell Off Today?. It is a very clever and funny post that plays off the biases of various media. A sampling: Wall Street Journal: Tensions in Ukraine and the Crimean peninsula Yahoo Finance: Russians Fox Business: Obamacare CNBC: .. read more

Subtle Shifts

While most everyone in the investment world has been focused like a laser beam on the amazing US stock market, some subtle shifts are happening that could have major implications for investors. These shifts are not large yet but they are significant if they are the beginning of a trend. For the last couple of .. read more