201508.02
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Bi-Weekly Economic Review

Economic reports scorecard 7/20/15 – 7/31/15 The economic data releases since my last update were a bit better than expected but as the GDP report showed, the US economy continues to plod along at a disappointing pace. In fact, the GDP report was, in my opinion, not as good as the headline with investment a…

201508.02
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The Weekly Snapshot

Top News Headlines Chinese stocks plunge, then stabilize Linn Energy shows shale bust isn’t over Whole Foods stock hammered on earnings Twitter beats estimates, stock makes 52 week low Gold stops going down Economic News Durable goods orders rebound, still down almost 3% year over year Dallas Fed improves but still negative Case-Shiller shows surprising…

201507.26
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Frustrated Yet?

The last year has been a tough one for investors. There are a few places one could have booked a double digit gain in the last 12 months but not many and certainly not in assets that are in the standard portfolio. Currency hedged ETFs for European and Japanese stocks produced big gains but a…

201507.19
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Rose Colored Glasses

All that we see or seem is but a dream within a dream. Edgar Allan Poe All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power not truth. Friedrich Nietzsche I was walking down the street wearing glasses when the prescription ran out. Steven Wright I think…

201507.19
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Bailout – “the Greequel”

The Greek government, EU, IMF and ECB agreed to new terms for a third bailout. As I see it, there are two very important items for markets today. The Greek government will be selling assets to pay down debt and re-capitalize the banking sector. Creditors essentially accessed the Greek collateral they were seeking. In return, the…

201507.15
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Stock Bubble And Its Buyback Genesis Suddenly Vulnerable

Having now passed the anniversary of the “rising dollar”, it is interesting to see the related and continued effects on the stock bubble(s). As should be obvious by now, stock buybacks, funded via corporate bonds and loosely categorized C&I loans, are responsible for the post-QE3 nearly uninterrupted rise. Repurchases are forming a separate “liquidity” conduit,…

201507.12
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Cracks In The Facade

There was a point last week – probably about midday Wednesday – when it seemed that the financial world was spinning out of control. China’s Shanghai exchange was continuing its slow motion crash, down almost 6% overnight, Europe was getting hammered as Greece teetered, the NYSE suddenly stopped working, United/Continental Airlines was grounded due to…

201507.11
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Greek Crisis causes Market Volatility

Jeff Snider and I often speak of the balance sheet leverage effect in markets. In the modern system, computer models assess the risk of portfolios throughout the industry. One key input to any value at risk model is volatility. If the standard deviation of prices rises, the computer will tell the managers that there is…

201506.28
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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…

201506.28
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On the Doorstep of a Fed Rate Hike Cycle

The Fed has weighed in with their opinion of the economy. Given their economic assessment, they have presented their opinion of the appropriate level for interest rates. Interestingly, investors don’t seem to be of the same opinion as the committee on the appropriate level for rates or the timing of upcoming interest rate moves. Perhaps…