If You Can’t Win, Change the Standards
In trying to sound modest and even magnanimous, Ben Bernanke in November 2010 penned an oped in the Washington Post justifying the recently implemented QE 2. Toward the end of his piece he acknowledged that the Federal Reserve and monetary policy could not work miracles. But given that obsequious qualification, the Fed Chairman was very .. read more
Stocks Got Historically Expensive
The Federal Reserve released its calculations for the Flow of Funds Report (Z1) for the first quarter of 2013. That means we can update the Tobin’s Q and our modified Q for the latest figures. As expected, stock prices accelerated through March 31, at a rate much faster than nonfinancial corporate net worth. That means, .. read more
The Return Of Volatility
Stocks lost ground last week to the tune of about 1% but the route to that loss involved more volatility than we’ve seen in some time. The volatility index has moved higher by a third since that key reversal day a week ago Wednesday. And the volatility hasn’t been confined to stocks. The bond market .. read more
Greenspan’s Market Persists
I wanted to concur but take Joe’s weekend proposition in a slightly different direction. I think it is relatively clear that the Federal Reserve and Chairman Bernanke are intentionally hinting at “tapering” QE purchases in order to “talk the market down”. There are a lot of similarities between the monetary communications right now and 1996 .. read more
A Key Reversal?
If we close on or near the low today, we will have printed what is known in candlestick charting as shooting star. I don’t put a lot of faith in technical analysis but this pattern and its reverse, called a hammer, are the most predictive technical patterns I’ve seen in my long career. The shooting .. read more
Revisiting Dot-com Exuberance
Our friend and colleague Eric Hull pointed out that NYSE margin debt was just a hair below record levels in March (the latest figure available), at $379 billion. Eric also noted that the past two peaks in NYSE margin debt have corresponded with 3-5 months of additional “exuberance” (given the persistence of QE’s in this .. read more
Central Banks, Inequality & Market Manipulation
The Pew Research Center last week released a report showing that from 2009 to 2011 the top 7% of American households (based on net worth) realized a 28% gain in wealth while the bottom 93% saw a 4% decline. In a statement of the blatantly obvious, Pew said the difference was a result of the .. read more
Only One Can Be Right
So, which is it, Larry Fink (Blackrock), “I’m hyperbullish on the US economy” or Federal Express? I don’t think they can both be right. Mr. Fink, for his part, is conforming to the sell side script. FDX, for its part, is conforming to the monetarist script – lower earnings, reduce capex, reduce headcount, increase stock .. read more
