Hope Springs Eternal

In many ways, though, the overall stock market, economy and Federal Reserve policy don’t suggest that a bear market is looming, say longtime money managers and economists. While continued turmoil in stock prices is likely, bear markets usually occur “when the Fed is trying to slow the economy down and other events intervene to make .. read more

Back Over The Rainbow

The Wizard: I AM OZ…the Great and Powerful! Who are you? The Wizard: Pay no attention to that man behind the curtain! The Great Oz has spoken! Dorothy: How can you talk if you haven’t got a brain? Scarecrow: I don’t know. But some people without brains do an awful lot of talking, don’t they? .. 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

Liquidity Anesthesia

Reuters reports this morning that RBC has joined with several other banks (only Goldman Sachs and Interactive Brokers were named by Reuters; Coutts & Co were named in a Bloomberg BusinessWeek article from yesterday) in a lawsuit against Blumont Group Ltd. At issue, apparently, are shares several executives and owners pledged as collateral to the .. read more

Homage to Steinism

Herb Stein was an economist that drew the unenviable task (though I don’t think he saw it as such) of being chair of the Council of Economic Advisors under Presidents Nixon and Ford. He was a man who knew imbalance up close and personal. To that end, he once quipped, “Economists are very good at .. read more

Random Thoughts

This will be a short note as I have family obligations to attend this afternoon. My daughter is home for spring break from the great frozen north and we’re headed to John Pennekamp park down in the Florida Keys this afternoon so she can thaw out. So just a few random thoughts and observations from .. read more

Frightening Fragility When Running Consensus Fails

Mortgage rates have swung back to a 2-month high, a unfortunate concurrent timing to Janet Yellen’s recent assurance that the FOMC remains in full support of the mortgage market. Taper is not tightening to her, so the 53% decline in the monthly issuance of MBS and agency securities in February against May 2013 (before the .. read more


In February 2013, more than a year ago, Jeremy Stein, Federal Reserve Board Member, openly expressed concern over behavior in certain sectors of the financial markets. He categorized this as “reaching for yield”, but there was more than a whiff of caution in his exposition of leveraged loans and junk debt. “The annualized rates of .. read more