ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
For the past few months, I pestered my youngest brother to write a review of his cogent 2009 analysis of the housing market. In that post, he predicted housing would bottom in April, 2010 and as late as 2013 in a worst case scenario. He has finally produced the follow-up, and I post it below. … Read more
In “The Dollar Is Headed Lower“, Randall W. Forsyth wrote in Barron’s that “The dollar’s trend now is unequivocally lower. And that’s apparent whether you look at fundamental factors or the technical picture on the charts.” He does a good job of summarizing the current condition of de facto competitive devaluation that is increasing the … Read more
“…the Republicans, I think, have been cutting taxes with borrowed money, and the Democrats have been spending with borrowed money. They agree only on the borrowed money. And the system cannot take that…We are now at a state where, excluding World War II, we are in the worst shape of the relationship between borrowing capacity … Read more
Bill Fleckenstein, President of Fleckenstein Capital and one of my favorite money managers, was on CNBC’s Fast Money Wednesday night giving his typical, colorful commentary on gold. I am posting an approximate transcript to his brief interview because it included what I think should be a classic moment in gold commentary. Toward the end of … Read more
The dollar put on another weak showing on Thursday as it struggles to maintain critical support at the 200-day moving average. If it were not for the Bank of Japan’s intervention to weaken the yen the previous day, it seems the dollar would be well on its way down through a technical breakdown. *Chart created … Read more
Last week, the iShares Barclays TIPS Bond Fund (TIP) surged to a fresh 2-year closing high on the same day the Federal Reserve issued its latest monetary policy statement. (TIPS = Treasury Inflation-Protected Securities – I will refer to “TIPS” when discussing the actual bonds and use “TIP” to refer to the ETF that uses … Read more
The U.S. dollar rallied into the Federal Reserve’s latest decision on monetary policy. This move seemed to launch (finally) the start of a relief rally that I have tried to anticipate as the dollar approached its support at the 200-day moving average (DMA). The uncertainty over the outcome of the Fed decision encouraged me to … 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
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