ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Hedge fund manager Kyle Bass, managing partner at Hayman Investments, earned his claim to fame by predicting the crash in housing prices and the financial crisis that would follow. Now, he has focused his cold stare on the bubbles in sovereign debt in developed economies. The folks at CNBC’s Strategy session interviewed Bass last week … Read more
Bob Shullman, President of Ipsos Mendelsohn, appeared on CNBC Tuesday to hawk the latest results of his market research company’s “Affluent Survey.” The affluent are afflicted with recession-related blues but remain ready to spend. The affluent control the majority of America’s income and wealth: they constitute 20% of all American households, but earn 60% of … Read more
If David Stockman, former director of the Office of Management and Budget under President Ronald Reagan, created the political party of “Fiscal Conservatives,” I might have to give serious consideration to signing up. For now, I have to settle for non-partisan organizations like the Peter G. Peterson Foundation who work hard to promote fiscal discipline … Read more
I decided to take the plunge and read “How the Great Recession Was Brought to an End” by economists Alan Binder (Gordon S. Rentschler Memorial Professor of Economics, Princeton University) and Mark Zandi (Chief Economist, Moody’s Analytics). Binder and Zandi conclude that the various stimulus programs and creative use of montary policy over the last … Read more
The British pound’s bounce from May’s 14-month lows versus the U.S. dollar has surpassed all my expectations. The currency has stumbled at key resistance points as expected, but the trend upward has been persistent and undeniable. The pound has followed a steep channel straight up. The pound is now sitting right at its 200-day moving … Read more
Graphs depicting economic data can convey different meaning to different people. For example, several models exist to explain economic growth and the variables important for forecasting economic performance. My most recent experience with this dynamic occurred after reading John Maudlin’s latest treatise on the deflationary threat facing the global economy (free subscription required). I remain … Read more
Day-to-day, Mr. Market’s mood seems to swing dramatically up and down with little consistent rhyme or reason. The neat rationalizations of the bulls one day give way to the equally neat rationalizations of the bears the next day. For example, the market is very undervalued because of record low Treasury bill rates, highly stimulative monetary … Read more
As fears mount that the United States is dipping into a double-dip recession and headed down the road of deflationary Japan, Federal Reserve Ben Bernanke tip-toed, tap-danced, and downright side-stepped these landmines during his testimony to the Senate today. The market still did not like what it heard, sold off nearly the instant the Semiannual … Read more
I have often wondered whether Germany’s initial reticence to help the Eurozone solve its debt problems was “engineered”, in part, to devalue the euro from its suffocating highs in 2009. We will likely never know for sure, but the euro’s remarkable slide in 2010 has apparently generated impressive economic results, especially in Germany. There is … Read more
I am always intrigued by the words of optimism and the steadfast bullish arguments in the midst of market sell-offs. I am not talking about technical assessments calling for a short-term bounce. I am talking about the “everything is just fine” variety. Monday’s Nightly Business Report provided a picture-perfect example of such talk from Bernarnd … Read more