Margin Debt Returns

Margin debt again escalated in June, putting some emphasis back into the smaller caps and their high beta compatriots. After surpassing the dot-com bubble’s previous levels for both nominal margin usage and negative investor net worth in February, some caution was re-admitted if only briefly. There wasn’t much discernable impact on the broader market indices, .. read more

Predicting The Future Is Hard

“Conditions for a hard economic landing — like slack in the labor market and weak balance sheets — are still largely absent.” If the case for U.S. stocks is built on global growth and lower interest rates, other factors, too, suggest that the market is heading higher. For one, Washington is determined to avert a financial .. read more

A Change In Policy?

The Committee recognizes that low interest rates may provide incentives for some investors to “reach for yield,” and those actions could increase vulnerabilities in the financial system to adverse events. While prices of real estate, equities, and corporate bonds have risen appreciably and valuation metrics have increased, they remain generally in line with historical norms. .. read more

A Return To Normalcy

I think sometimes, with the stock market doing its best imitation of the Energizer bunny, we forget just how extraordinary are the times in which we live. We’ve been lulled to sleep by the relentless and mesmerizing march higher of stocks and all manner of risky assets. Maybe it’s just that having lived through two .. read more

It’s A Big World Out There

Home country bias is the tendency for investors to focus more on their domestic economy and markets. For most of the people reading this the US markets are home and with the Dow breaking 17,000 this past week the US is certainly getting a lot of attention. And it deserves it I guess considering the .. read more

Yellen Looks the Other Way

More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to .. read more

The Source and Scourge of Inequality

If there had been an actual recovery delivered as it was intended, promised and offered, the idea of inequality would be an afterthought in an otherwise prosperous age. Inequality, however defined, is a necessary feature of a dynamic economic system. We want inequality because that defines opportunity. A healthy economic system produces disparities due to .. read more

Careful What You Wish For…

So be careful what you wish for ‘Cause you just might get it And if you get it then you just might not know What to do wit’ it, ’cause it might just Come back on you ten-fold Eminem, Careful What You Wish For There was a collective gasp on Wall Street last week as .. read more