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  • Finance 0

    The Crash Of 1987 — Happy 30th Anniversary

    I was at the center of the October 19, 1987 stock market crash, when the U.S. equity market dropped 20% in a single day. The second chapter of my book, A Demon of Our Own Design recounts my experiences during the 1987 Crash and provides an explanation of what went wrong. The essence of the problem was a programmatic positive-feedback strategy, namely, the dynamic hedging program of portfolio insurance, coupled with the time disintermediation between the speed of the index futures market in Chicago and the more deliberate pace of those in the equity market in New York. This is not so different structurally from what we have now with the time...
    On October 19, 2017 / By
  • Finance 0

    Interest Rates And The New Normal

    from the San Francisco Fed — this post authored by John C. Williams The Federal Reserve is moving towards more normal monetary policy, which means rising interest rates. But factors including the real natural rate of interest, a slower sustainable pace of growth, and inflation all point to a new normal where interest rates are lower than in the 1990s and early 2000s. The following is adapted from a speech by the president and CEO of the Federal Reserve Bank of San Francisco to the Community Banking in the 21st Century Research and Policy Conference in St. Louis on October 5. Today I’m going to talk about interest rates…in a lot of d...
    On October 19, 2017 / By
  • Finance 0

    If You Bought 30 Years Ago Today…

    30 year ago today, traders were having a bad day: the Dow, S&P 500, FTSE, DAX and CAC fell -23%, -20%, -11%, -9% and -10% respectively. The FTSE fell a further 12% the day after, reflecting the difficulties in fully reopening the market after the great storm a few days before. The day would eventually become known as Black Monday. In a “bit of fun” Deutsche Bank’s credit strategist, Jim Reid, decided to calculate where returns would be today had you bought various assets the morning after the crash. For this, the credit analyst used his regular monthly template of assets, and notes that the most important decision to ha...
    On October 19, 2017 / By
  • Finance 0

    Conference Board Leading Economic Index: First Decline In Over A Year

    The latest Conference Board Leading Economic Index (LEI) for September decreased to 128.6 from 128.8 in August and saw its first decline in over a year, partially due to the impact of the hurricanes. The Coincident Economic Index (CEI) came in at 115.7, up fractionally from the previous month. The Conference Board LEI for the U.S. declined slightly for the first time in over a year. Negative contributions from initial claims for unemployment insurance (inverted), building permits and average weekly manufacturing hours more than offset the positive contributions from the ISM® new orders index and the financial components. In the six-month p...
    On October 19, 2017 / By
  • Finance 0

    How Gold Bullion Protects From Conflict And War

    Gold and silver’s historical role in conflict shaped the world today and the modern financial system Gold played an important function in the great conflicts up to and throughout the 20th century Gold and the effective use of bullion played a crucial role in the outcome of the American Civil War Gold was an important economic agent in both World Wars, conferring a huge advantage on the allies In a world beset with risks of war both in the Middle East and with North Korea, Russia and China … gold will protect Gold and silver have played important roles during periods of conflict and have protected people but also protected nations and co...
    On October 19, 2017 / By
  • Finance 0

    AUDUSD Intra Day Elliott Wave Analysis

    AUDUSD short-term Elliott Wave view suggests that Primary wave ((W)) ended at 0.7731 on October 6th low. Up from there, Primary wave ((X)) is currently unfolding as a double three Elliott Wave structure. Intermediate Wave (W) of ((X)) ended at 0.7807 and Intermediate wave (X) of ((X)) ended at 0.7815. On the near-term, while pullbacks stay above 0.7815, but more importantly above 10/6 low at 0.7731, expect the pair to extend higher. At this stage, the pair still needs to break above Intermediate wave (W) at 0.7815 to give more validity to this view. Until then, we can’t rule out a double correction in Intermediate wave ((X)). AUDUSD 1 Ho...
    On October 19, 2017 / By
  • Finance 0

    Initial Jobless Claims Crash To Lowest Since 1973

    So much for the hurricane distortions of the US labor market… Just a few short weeks after initial unemployment claims jumped in the aftermath of Hurricanes Harvey and Irma, in the latest week the DOL reported that filings for unemployment benefits tumbled to the lowest level in 45 years, or since 1973, as all those workers who were unable to work due to the two hurricanes, returned to their jobs. The initial claims print for the latest week – which however included Columbus Day and thus could have been seasonally distorted – was 222K, below the 240K expected, and down 22K from the 244K last week. The less volatile 4-week i...
    On October 19, 2017 / By
  • Finance 0

    BNY Mellon (BK) Beats On Q3 Earnings As Revenues Improve

    The Bank of New York Mellon Corporation’s (BK – Free Report) third-quarter 2017 earnings per share of 94 cents surpassed the Zacks Consensus Estimate of 93 cents. The figure also came in 4.4% higher than the prior-year quarter tally. Results benefited from an improvement in both net interest revenues and fee revenues. Also, assets under management (AUM) reflected growth. However, a marginal rise in expenses acted as a headwind. Net income applicable to common shareholders came in at $983 million, increasing nearly 1% year over year.  Revenues Improve, Costs Rise Total revenues (non-GAAP) for the quarter increased 2.1% year over yea...
    On October 19, 2017 / By
  • Finance 0

    E Book Review: Deep Risk

    It’s not often that you read a book by mistake. While browsing the Kindle store, I thought I’d stumbled upon a new book by Peter L. Bernstein. Some time ago, I had really enjoyed his book, Against The Gods; the remarkable story of risk. I was initially confused and then realized I was instead looking at William J. Bernstein’s book Deep Risk: How History Informs Portfolio Design. Interesting title. I’m glad I went ahead with the purchase since Deep Risk turned out to be an interesting read, with plenty practical and straight-shooting advice. For those who are hardcore Peter L. Bernstein fans, be forewarned that this book is a diffe...
    On October 19, 2017 / By
  • Finance 0

    Governments Crack Down On Cryprocurrencies

    It’s been a very volatile ride for holders of Bitcoin recently. Bitcoin’s value right now is about four and half times as much as an ounce of gold. Back in 2013 enthusiasts were lucky to see bitcoin top $100. By the end of that year it was over $1000. In the beginning of this year, 2017, the virtual currency was trading at only $966. It remained on an upward trend until the end of the summer when it dropped below $3000 in September. Despite what has been a great year so far, bitcoin’s intense fluctuations are what scare many investors away. One factor affecting the roller coaster movement of digital currencies is increasing government b...
    On October 19, 2017 / By