Tactical Update

Sell EZU: Buy HEDJ We have added a currency hedge to our European exposure. Dollar funding costs are rising. Eurodollars for December 2016 fell 25 basis points in one day after the March Fed meeting. Europe relies on Russia for energy. Economic sanctions against Russia would hurt Europe. The price of North Sea oil rose 2% .. read more

On March 30th, 2014, posted in: Markets, World Allocation by

Tactical Update

The recent weak economic trends have, to date, not equated to stock market weakness. The rise in interest rates is being, reportedly, caused by talks of tapering. Perhaps, but the negative feedback loop that can follow is the concern. As interest rates rise, the cost of funding rises. Short duration debt to fund purchase of longer .. read more

Tactical Update

Easy money, especially quantitative easing, presents unique challenges for investors. The FED has lowered the cost of credit, therefore lenders make less.  The other side of the accounting ledger is that debtors pay less.  But, the risks of lending money have not changed to justify the lower return you receive. In fact, the FED has .. read more

Tactical Update

As we’ve been reporting, the economic data has been showing weak performance.  But, the market hasn’t seemed to mind.  QE is in high gear.  It is supporting asset prices as the over-leveraged sectors of the economy heal themselves.  The banking and household sector received bailouts and a slow healing process puts them in a better .. read more

Tactical Update

The Nikkei moved down over 7% in one day this week.  The S&P put out a potentially bearish technical sign, A Key Reversal.  The market experienced flash crashes toward the end of the week. Despite the out-sized monetary support, there is still plenty to find concerning. Global Opportunities: Rebalance the small Vix hedge.   We have recently added .. read more

Tactical Update

One of the top story lines of the past 6 months has been the BOJ, Abenomics, and the dramatic repricing of the Yen.  To date, we are looking at about a 25% drop in the value of the Yen.  This is a transparent initiative to double the monetary base over the course of 2 years and .. read more

Tactical Update

Here is a list of things that concern us. Fed incentivized risk seeking  A recent surge in risk asset prices Continued global rebalancing Continued global deleveraging Bail-ins as much or more than bail-outs Continued excess leverage in the banking sector Technical indicators rolling over and flashing orange Tired fiscal houses Tired fundamentals Experimental Monetary Policy .. read more

Tactical Update

The 21st century, global, economic saga continues to provide plenty of nuance.  The past few weeks, we’ve been introduced to a few new characters, Cyprus and Russia.  There is a bit of a rogue element with Russia.  Regardless, the same common themes are present for analysis: leverage, speculation, global capital imbalances and the accompanying political, .. read more