Global Market Commentary, Analysis and Investments
Markets closed today. And not much from us either. We’ve got family chores to attend to.
As expected, Europe is falling apart. Yields are rising. France’s debt no longer looks safe. And Germany can’t sell its bonds.
The failure of the German bond auction earlier this week was the latest shock. It tells us that pressure on the ECB is mounting.
[Read more...]Major stock indexes are drifting today, seemingly awaiting some sort of news from Europe.
It’s as if traders are now hanging on every word emanating from some commissioner, director, functionary or spokesmodel on the continent before they make their next move.
Up one day, down the next, the mood swings like a love-struck girl pulling petals off flowers…
[Read more...]Last week in the financial markets was unsatisfactory. No clear trend announced itself. The Dow should have gone down. Gold should have gone down too. But they diddled around…and on Friday, both seemed to be back in counter-trends, moving against the direction we think they OUGHT to go.
As for stocks, everything we’ve found out about the economy since 2007 suggests that our Great Correction view is right. This market aims to correct something; we just don’t know what.
[Read more...]There is beauty in life, and there is truth. The two are not mutually exclusive, necessarily, though a coincidence can be rare. Often times, the truth is not as attractive as we would like for it to be. And sometimes beauty is but a lie. But every once in a while, the two converge…and the result is rarely displeasing.
[Read more...]Continued from part two.
As far as investors are concerned, merely reducing exposure to dollars and dollar financial assets may not be enough. To what extent the dollar devalues versus other currencies is, ultimately, a speculative guessing game.
[Read more...]Continued from part one.
So what might such a ‘dollar crisis’ look like, how would the US government likely respond, and what impact should we expect this to have on financial markets? While we do not purport to have the specific answers to these questions, there are some general considerations we can discuss with some reasonable confidence.
[Read more...]The dollar has been in focus of late, primarily due to its substantial decline in value versus other currencies and most major commodities. Indeed, when measured in broad, trade-weighted terms, the dollar’s April decline is one of the largest monthly drops of the past decade and extends what has now become the largest cumulative decline since the US economy exited recession in 2009. When measured versus a broad basket of global commodities, the recent decline has been even more dramatic.
[Read more...]While we are confident in our ability to understand the deleterious effects that the current set of suboptimal policies are likely to have on the global economy over time, we nevertheless don’t purport to know exactly how these policies might change from here or what impact or on what time horizon financial markets will adjust accordingly. There are too many unknowns, too much pure uncertainty. As such, when seeking to protect and preserve wealth, we need to rely primarily on the most fundamental form of insurance available to investors: Diversification.
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Why “Risk On” Trades Have Suddenly Become Fashionable
The stock market rallied big-time last Wednesday after the Fed and a gaggle of other central banks announced their latest scheme to rig the financial markets. On the surface, the central banks merely promised to cut the cost of borrowing dollars. Beneath the surface, as we explained last week, the central banks committed themselves to subtle forms of money-printing.
[Read more...]