Global Market Commentary, Analysis and Investments
To make money investing, you have to be ahead of the crowd…or at least looking for the story no one is telling.
That was a tough task this morning. Suddenly, discussing the unthinkable – a double-dip recession and a retest of the March 2009 lows – is in vogue. Even readers are bored with the end of the world as we have known it…
[Read more...]Oh Bama…could this really be the end?
To be stuck inside this mobile, with the Memphis Blues again…
– Bob Dylan, sort of
Who believes in the ‘recovery’ now?
Robert Reich (former Labor Secretary under Bill Clinton):
“The only reason the economy isn’t in a double-dip recession already is because of three temporary boosts: the federal stimulus (of which 75 percent has been spent), near-zero interest rates (which can’t continue much longer without igniting speculative bubbles), and replacements (consumers have had to replace worn-out cars and appliances, and businesses had to replace worn-down inventories). Oh, and, yes, all those Census workers (who will be out on their ears in a month or so).”
[Read more...]Oh my…oh my…
Locusts…earthquakes…tornadoes… What next? Fire and Brimstone!
There’s a plague of locusts eating crops in Australia…
Earthquakes are becoming more common…after devastating quakes hit Haiti and then Chili.
“We could definitely feel it in Buenos Aires,” said our friends. “It was very unsettling. The heavy blinds we have up outside began smacking against the house as if there were a wind storm. But there wasn’t any wind.”
[Read more...]Most investors believe that markets behave cyclically, like an ocean tide that ebbs and flows. Bull markets give way to bear markets; booms turn into busts; low interest rates yield to high interest rates. And it’s true, markets are cyclical…but not like ocean tides.
Financial markets are cyclical…like an Ouroboros – the mythological snake that devours its own tail. Economic trends are forever in the process of devouring parts of the financial markets. Recessions consume stocks; recoveries consume bonds.
[Read more...]“How can you keep talking about a depression,” asks a Dear Reader, “when the economy is clearly recovering just as it should be.”
Ah ha! We’ll explain in a minute.
First, the latest from Wall Street: The Dow fell 18 points yesterday. We’re still not sure whether the final, fading phase of the bear market has begun or not. This bounce took the Dow back to 10,725 on January 19th. It hasn’t seen that level since. Was that it? Was that as high as it’s going to get? Is it down from here on out…until the Dow finally bottoms out somewhere south of 5,000?
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No Longer Indicating Recession
Alas, a little-known recession indicator has stopped flashing red — at least for now. The Philadelphia Fed’s State Coincident Index — crunching four employment indicators from all 50 states — clocked in at 76 in October.
Readings below 50 have predicted every recession of the last 30 years, with only one false alarm — last year, in the midst of QE2.
[Read more...]