The financial commentariat first started to worry about recession in April of 2022 when the spread between the 10-year Treasury rate and the 2-year Treasury rate turned negative - the yield curve inverted. It subsequently righted itself to positive territory until July of 2022 and has stayed inverted ever since. Since an inverted yield curve has preceded almost every recession [...]
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett Buy when there's blood in the streets, even if the blood is your own. -Nathan Rothschild Rothschild is said to have made a fortune buying assets in the wake of the Battle of Waterloo so in his case, he meant this literally. Another quote attributed [...]
Look around the poker table. If you can't see the sucker, you're it. Warren Buffett I actually don't know if Warren Buffett was the first to say that and I'm not sure that's exactly the right phrasing. When I sat down to write this I thought it was from Amarillo Slim, a professional gambler from Arkansas. Or maybe that other [...]
Gold is on fire, but why is it on fire? When the precious metals’ price falls, Stage 2, we have a pretty good idea what that means (collateral). But when it goes the other way, reflation or fear of deflation? Stage 1 or Stage 3? If it is Stage 1 reflation based on something like the Fed’s turnaround, then we [...]
What was the difference between Bear Stearns and Lehman Brothers? Well, for one thing Lehman’s failure wasn’t a singular event. In the heady days of September 2008, authorities working for any number of initialism agencies were busy trying to put out fires seemingly everywhere. Lehman had to compete with an AIG as well as a Wachovia, already preceded by a [...]
I think broad trading today actually confirms yesterday’s hypothesis of the marked appearance of fear. In reversing exactly (or nearly so) almost everything from yesterday, across the board, it seems as if the juxtaposition settles that interpretation. I noted that it wasn’t just gold bid in contrast to the selling and “dollar” frenzy, the Swiss franc had joined on the [...]
As additional comparison for the current state of European credit, as you can easily get lost in the train wreck, I thought it interesting to include separately a wider perspective. I’m sure what I present below will make “sense” to someone at the ECB or one of the other central bank confederates in the context of monetary economics as it [...]
If the ECB is deliberately trying to prove how little efficacy it still may hold, they are doing an excellent job at it. There has been nothing but QE, QE and more QE in Europe since the New Year, which in the past might have at least courted some significant positive thoughts. If you recall back in September, at the [...]
Well, as I said in last week's update, volatility has returned. It was another wild week in global markets with politicians, central bankers and even some actual economic data providing the fireworks. Japan barely kept the JGB/Nikkei roller coaster on the tracks with a wild week that ended with the Nikkei in what some are calling a bear market since [...]
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