Latest Posts

  • Finance 0

    Monetary Hierarchy, Independence, And Shaming Greenspan Yet Again

    In June 2003, while discussing the vote that would take the federal funds rate to its then-lowest point, 1%, Alan Greenspan committed what may have been the greatest monetary sin of modern times. The focus for much of the discussion was Japan, that country’s central bank pioneering at that early date all the things the Fed and other majors would do later. It wasn’t working, and some American officials, including Greenspan, were unnerved. CHAIRMAN GREENSPAN. One is that I don’t think we know enough about how the private financial system works under these conditions. It’s really quite important to make a judgment as to whether, in fact,...
    On September 22, 2018 / By
  • Finance 0

    E Stock Analysis: Mastercard Incorporated

    (Video length 00:05:21) We have new numbers on MasterCard just as it is making new highs in the markets....
    On September 22, 2018 / By
  • Finance 0

    Hollow Victories: The Best Anyone Can Hope For In Trump’s Trade Wars

    Greg Ip, my favorite WSJ columnist, discusses iPhone assemblies and hollow victories of Trump’s trade wars.  Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA — Donald J. Trump (@realDonaldTrump) September 8, 2018 Wall Street Journal columnist, Greg Ip, says Bringing iPhone Assembly to U.S. Would Be a Hollow Victory for Trump....
    On September 22, 2018 / By
  • Finance 0

    Bank Of America Spots A “Watershed Data Point”

    Retail investors are back with a bang: in the last week, investors plowed $13.9BN in global equities (of which $18.3BN was in the form of ETF inflows, while active money saw another $4.5BN in outflows) with another $0.7BN flowing into bonds, $0.4BN out of gold (as has been the case lately). Of note: a return of the big inflows to tech funds ($1.1bn), while EM funds also saw a change in sentiment with the biggest inflows in 8 weeks of $0.5BN. These reversing flows are clearly manifesting in the market: after a sharp selloff… from 2018 highs: Eurozone -12%, global banks -15%, Emerging Markets -17%, industrial metals -18%… … al...
    On September 22, 2018 / By
  • Finance 0

    ETF Flows Suggest Bulls See Room To Run Despite Lofty Valuations

    In a week where US household wealth gapped up to $123 trillion, investors continued to pour money into exchange-traded funds that track US indices. The three main markets shrugged off trade war fears and pressed higher, with the exception of the Nasdaq. Still, demand for the tech-heavy index was similarly robust. The chart above contains the aggregate flows for three of the largest ETFs that track US indices. Equity strength was largely drawn from the underwhelming impact of trade wars. While the Dow was somewhat driven by rising crude prices. Together, net flows saw roughly $11 billion in cash enter the funds. Increased exposure comes at a...
    On September 22, 2018 / By
  • Finance 0

    E World Trade Is Slowing, Perhaps Even Shrinking. This Is A Bad Sign

    “The U.S.-led trade war is starting to hurt the world economy. Latest data from the CPB confirm global trade volumes were flat last quarter, the worst performance since 2016, as U.S. tariffs on steel and aluminum imports and retaliatory measures from affected trade partners came into effect.” (National Bank of Canada, Monthly Economic Monitor, September 2018) While many of the world’s economies seem to be synchronized in terms of GDP and industrial production growth, this kind of synchronization is not always a positive factor. Indeed, in the current circumstances, synchronization seems to point to slower economic growth, particularly f...
    On September 22, 2018 / By
  • Finance 0

    Who Could’ve Known “Crash Brexit” Would Be Problematic?

    In the aftermath of the Salzburg summit, where the Chequers plan was dismissed by the EU, and PM May demanded “respect”, the pound has plunged. Source: TradingEconomics.com. Deutsche Bank (Harvey, et al., “Deep impact: DB forecasts in a crash Brexit”) yesterday lays out why: In our analysis, we calculate that UK growth will be around 4% cumulatively lower than under our baseline scenario by end-2020. The UK will enter a two year recession, with output shrinking -0.3% and -0.6% in 2019 and 2020 respectively. The main contributers to the fall in demand are household consumption, which shrinks around 6% relative to our baseline, and bu...
    On September 22, 2018 / By
  • Finance 0

    US/Global Stocks, Commodities, Precious Metals And The ‘Anti-USD’ Trade

    The most recent leg of the US stock market rally and the bounces in global equities, commodities and precious metals are coming as part of an “anti-USD trade”. Certain US stock sectors, most global stock markets, commodities and precious metals were pressured by the USD rally that began in April and now, as the buck eases, a relief valve opens. All charts below are as of Thursday’s close. US – S&P 500 The S&P 500 – in essence a collection of sectors that are ‘pro’, ‘anti’ and ‘neutral’ the USD’s status – appears to be on the way to our target of 3000+, based on a conservative measurement of its daily chart p...
    On September 22, 2018 / By
  • Finance 0

    ETFs To Tap Amazon’s Growth And Expansion Story

    Amazon (AMZN – Free Report) has gained nearly 64% year to date in comparison with the S&P 500, which has gained 8.8%. On Sep 4, it became the second company to reach the trillion-dollar feat after Apple (AAPL). Amazon has miles to go with the recent developments taking place. Plan of Opening 3000 Cashierless Stores by 2021 Amazon is planning to expand its cashierless AmazonGo stores chain to 3000 by 2021. Per a report by Bloomberg, it plans to have 10 such stores by the end of this year, another 50 stores in major cities like San Francisco and New York by 2019. The target market is the affluent urban section of the society. At pre...
    On September 22, 2018 / By
  • Finance 0

    Not Stealth Taper, Scared Taper

    Just like Jay Powell is surely hoping for some help from Mother Nature, the central bankers at the BoJ have to be wishing for more on their side of the Pacific. The US Federal Reserve will be looking for a repeat of last year’s Harvey and Irma effects out of Florence. It looks like they’ll need them. Japanese officials have been aided now twice in 2018 already, with inflation perking up again in August. Japan’s CPI rose 1.3% year-over-year last month. It was the first time above 1% since the first three months of the year. In both cases, the acceleration was and is predicated on food. In the earlier instance, despite the massive hype, ...
    On September 22, 2018 / By