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  • Finance 0

    Treasury Yield Curve Crashes To 8-Year Lows, Financials Follow

    The U.S. Treasury yield curve has plunged further today (2s10s -5bps at 107bps) breaking to its flattest since January 2008. The curve has been flattening since The Fed began to taper QE3 and as financials begin to catch down to that ugly reality… One wonders just what The Fed can do about this?...
    On February 8, 2016 / By
  • Finance 0

    Bizarro World Of Negative Interest Rates And Central Banks Pushing For Wage Increases

    In many ways, the world has turned upside down. It is not just central banks that have set policy rates below zero, but the entire German curve out through eight years have negative yields. Japan, which has the largest debt burden relative to GDP, has negative yields out through nine years. The Swiss curve is negative through 15 years.     It is not just core countries either. Ireland, which holds national elections in a couple of weeks, has negative yields out four years. Spain, which is struggling to put together a government following the election at the end of last year, has negative rates through two-years.   Another aspect of the wo...
    On February 8, 2016 / By
  • Finance 0

    Bank Stocks & Government Debt — Things To Avoid

    The two main areas to avoid are (1) ANY investment in government bonds (federal, state, local), and (2) bank stocks. These will be the two areas of major concern as we move forward in time. You can keep cash in U.S. TBills for right now, but as we move into 2017 you are better off with AA corporate paper. These two sectors will become contagions. European banks are in the lead for a collapse. The U.S. banks are still OK for now, but caution in advisable....
    On February 8, 2016 / By
  • Finance 0

    When Plan B Is Not Enough: Some Lessons From The United Airlines CEO Succession(s)

    In the annals of business folklore, there is an oft-used quote from the revered former CEO of GE (GE), Jack Welch: “From now on, [choosing my successor] is the most important decision I’ll make. It occupies a considerable amount of thought almost every day.” The clincher here is that he said this in 1991, a full nine years before his anticipated retirement. Regrettably, most are not as forward-thinking about succession planning. In fact, Jack Welch and GE are known for their leadership in this arena. What they and companies like them understand is that planning for succession at the top of an organization is not only sound strategy but ...
    On February 8, 2016 / By
  • Finance 0

    The Bubble Deflates – And Crash Risk Rises

    A Harrowing Friday – Momentum Stocks Continue to Break Down The release of Friday’s payrolls report was the worst of all worlds for the US stock market. This typically happens in bear markets: suddenly fundamental data that wouldn’t have bothered anyone a few months ago are seen as a huge problem. Why was it seen as problematic? The report somehow managed to be weak and strong at the same time – it showed weakness in payrolls growth, but the entirely artificial U3 unemployment rate, which is distorted by the fact that a huge number of unemployed are no longer counted as unemployed, but rather as simply having “left the labor force...
    On February 8, 2016 / By
  • Finance 0

    Bonds Continue To Flash Warning Signs For Stocks

    Defensive Assets Strong Early In Week When investors are fearful, common sense tells us demand picks up for more conservative assets, which is exactly what happened early Monday morning. From Bloomberg: “Signs of distress in financial markets are gathering force as concern over the state of the global economy deepens. The Standard & Poor’s 500 Index declined as much as 2.2 percent, as U.S. shares joined a retreat in European and emerging-market stocks. Investors sought the safest assets, sending yields on Treasury 10-year notes to the lowest level in a year, and those on Germany’s 10-year bunds to the lowest since April. Meanwhile,...
    On February 8, 2016 / By
  • Finance 0

    India Stock Market At An Inflection Point. Is This A Lifetime Buying Opportunity?

    We are watching India very closely, as said several times lately. It could seem difficult to invest in India, but with a simple ETF like INDA or INDY the Indian stock market is easily accessible to anyone. We do not recommend stock picking, but rather investing in an ETF of the index. Fundamentally, India has a incredible real GDP growth of 7.3%, making the country an attractive target for investors. Its stock market broke out at 6250 points, in early 2014, which was a major breakout. Going forward, we see two scenarios unfolding Either the Indian index goes for a retest of the breakout point. Or the index finds support at this secular tren...
    On February 8, 2016 / By
  • Finance 0

    Bullish Setups… If You Dare

    I don’t dare. I don’t dare one bit.  This market appears destined to test and possibly break support on SPX at 1812. Until that happens, I have no desire to touch a long position with a 10 foot pole.  However, I know that there are those traders out there that are forever going to buy the dip. And regardless of the market, I always keep a bullish and bearish watch-list, just in case there is a sudden shift in the market. If that happens, I always want to be prepared.  I scrub this list every day, adding to and subtracting from it. But for your week ahead, this is a great starter list to build your own watch-list of stocks ...
    On February 8, 2016 / By
  • Finance 0

    4 Moments When “Stay The Course” Is The Wrong Investment Advice

    The worst January start for U.S. stocks since 2009 should get your attention. If you’ve been hiding underneath a rock or hibernating in a cave-like dwelling, it’s time to come out. “A little sunlight is the best disinfectant,” as Judge Brandeis might say. Most global stock yardsticks from China (NYSEARCA:ASHS) to Japan (NYSEARCA:EWJ) and even the United Kingdom (NYSEARCA:EWU) have already crashed 20% or more. Thankfully, the Dow Industrials (NYSEArca:DIA), Nasdaq Composite (Nasdaq:ONEQ), and S&P 500 (NYSEARCA:VOO)  are not yet in a bear market. That’s the good news. The bad news is since the average investor (both amateur and...
    On February 8, 2016 / By
  • Finance 0

    Breaking Up The Big Banks Is Easy

    Steve Eisman, the hedge fund manager of Big Short fame, argued against breaking up the big banks in a NYT column.  His basic argument is that we now have things under control because the regulators have effectively limited the banks’ ability to leverage themselves. He also says that even if we wanted to break up the banks, we don’t know how to do it: “Furthermore, no advocate of a breakup has come forward with a plan on how to do it. Large banks are global, complex, integrated institutions. Breaking them apart would be incredibly difficult, long and disruptive, and the banks might have to freeze loan growth during the process, slow...
    On February 8, 2016 / By