John Mauldin and Yra Harris both touched on the absurdities we see today in the financial markets. As Mauldin puts it "I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week." I couldn't agree more. With their permission to reprint here on my blog, I've posted parts which you shouldn't miss. Click on the titles if you … [Read more...]
The First Real Evidence Of A Bubble
Today I’d like to talk about what I think is the first real evidence of a bubble forming in the global markets. We’ve been hearing this since at least 2014. And while I too convinced myself that 2016 was it, which result in a failed attempt to time the market, I believe the first real signs of a bubble have just appeared. But that too doesn’t mean it will burst right away or … [Read more...]
What a Long Strange Trip It’s Been
This year has been a year of surprises as conventional wisdom-based forecasts have proven to be like oral agreements: not worth the paper on which they are written. The coming year promises to bring more confusion and volatility as the markets are preparing for the U.S. to be a Trumpian utopia of wealth creation. I caution against blindly accepting this narrative for it will … [Read more...]
Virtue Signaling, or … Why Clinton is in Trouble
If you’ve ever played a team sport, you’ve experienced a game that was a mismatch on paper. Now usually that game goes according to form. The better team scores early and often, and the inferior team doesn’t sniff a win. But sometimes the game gets tight. Sometimes the better team makes a few unforced errors, and the inferior team capitalizes. Sometimes there’s a lucky bounce … [Read more...]
Six Ways NIRP Is Economically Negative
If you have any doubt that we’ve wandered into a new and unexplored economic universe, consider this number: $12.6 trillion. That’s the face value of government and corporate bonds currently trading worldwide with nominal yields below zero. Note that word trading. These bonds are in fact trading. Liquidity has not dried up. An active market exists for negative-yield bonds. … [Read more...]
A Change Has Come
Summary Technicals, Valuation, and other statistics point to change. The bull market is over. Investors need to consider action to protect their portfolios. I have significantly reduced my net exposure via short positions in overvalued stocks. Followers may remember that on August 31st, I published an article (see here) and stated that "The recent drop is an … [Read more...]
S&P 500 Still In A Bull Market
Summary The market dropped because many stocks were fully valued. Many stocks have now corrected. Basic macros: GDP growth and normal yield curve are positives. Technicals have weakened but still appear to support the bull case. Investors should not panic and assess both fundamentals and technicals before changing their views significantly. The recent drop is … [Read more...]