Nobody Is Paying Attention To Junk?
Just over a month ago we noted the clear exuberance in the junk bond space in the context of the growing usage of the word “bubble”. At the time, various junk or high yield indices had seen yields fall laughably below or near 5%. It was not all that long ago that short-term US bills .. read more
Volatility Can Be The Expiration of Reflation
While our focus is usually trained on markets, volatility as a concept can apply to much more than asset inflation extremities. The Japanese bond and stock markets are conforming to the QE script, as US markets begin to correlate (across the JPY-USD). What’s really interesting, however, is that despite now four years into a “recovery” .. 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
Chasing Two Rabbits – Thoughts On A Gold-Yen Crossover
I have been espousing a theory that QE-steriods in Japan has led to a decline in liquidity conditions for Japanese banks. That, in turn, may have been partially responsible for the most recent downturn in the price of gold. It may or may not have been a factor in the gold smash of April, but .. read more
Bernanke and Bubbles
Moreover, I worry about the effects on the long-run stability and efficiency of our financial system if the Fed attempts to substitute its judgments for those of the market. Such a regime would only increase the unhealthy tendency of investors to pay more attention to rumors about policymakers’ attitudes than to the economic fundamentals that .. read more
Housing Pothole or Data Volatility
The last Census Bureau Survey of New Home Sales showed a lower increase than most expected (417,000, or 1.5% above the previous month). Part of the reason for the lower growth rate was an upward revision to February (to 411,000), but both months are far below the January pace (445,000). These are all adjusted numbers, .. read more
Contrarian Alert
There is one thing I know for certain – markets do not like uncertainty. If we measure uncertainty by the level of volatility in the market, we are at the 2nd most uncertain point in the last 7 years. Markets are fairly certain of the following domestic items: US monetary .. read more
Contrarian Alert
The markets were everything but settled this week. Volatility spiked 100% (see VIX Chart below), as the market swung wildly, especially early in the week. Price movements over the course of a week are not always the concern of long term investors; but during a week such as this one, we must take notice and .. read more
