Latest Posts
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Finance 0
Rate Hikes Vs. Balance Sheets
by Benn Steil — co-authored with Emma Smith How the Fed Should Tighten Monetary Policy On January 27, the U.S. Federal Reserve held interest rates steady and, in a modest nod to a market that has been consistently more fearful about the economy than the Fed itself, dropped a line from its December statement saying that the risks to the outlook were “balanced.” Clear signs of a deteriorating global economy reinforce our view that Richard Koo, chief economist at the Nomura Research Institute, is off the mark in his critique of the Fed’s approach to monetary policy. In his recent article, Koo argued that the Fed is tig... -
Finance 0
Earnings Growth Challenge Continues
Plenty of earnings reports are still to come, but the Q4 reporting cycle is past its peak, with results from 62% of the S&P 500 members already out. With 68 index members reporting results this week, the earnings season will be over for 76% of S&P 500 members by the end of this week. The picture emerging from this earnings season is one of all around weakness, with growth hard to come by in the face of a slowing global economy, the strong U.S. dollar, and weakness in the oil and other commodity sectors. This isn’t a new problem, we have been discussing these headwinds the last few reporting cycles as well. In other words, the ear... -
Finance 0
KISS
K.I.S.S. – Keep It Simple Stupid – An acronym used in the US military; a design principle; unnecessary complexity should be avoided. The acronym KISS is just another way of expressing Occam’s Razor or maybe Einstein’s admonition that everything should be as simple as possible but no simpler. That the simplest answer is usually the most correct is an adage that investors would be wise to commit to memory. That applies to the design of your investment program as well as your explanation for the market’s movements. The explanations I’ve been hearing recently for why the stock market is weak do not meet the criteria for KISS. Oil is f... -
Finance 0
8 Reasons This Economic “Recovery” Is A Grand Illusion
By Sol Palha (tacticalinvestor.com) Is this economic recovery real? Well, if you base your observations on how far the Dow has risen since the financial crisis of 2008 the answer would be a yes – but if you do just a little cursory digging you will notice that this economic recovery is nothing but a grand illusion. The following 8 factors clearly prove that this recovery is not real. 1.Copper A leading indicator is in a death spiral so all must not be well. It is trading at multi-year low. If the economic recovery were real copper would be trending upwards. 2. The Baltic Dry Index This leading indicator appears to be locked in a ra... -
Finance 0
The “We Shouldn’t Even Try” Brigade
Instead of “Yes we can,” many Democrats have adopted a new slogan this election year: “We shouldn’t even try.” We shouldn’t try for single-payer system, they say. We’ll be lucky if we prevent Republicans from repealing Obamacare. We shouldn’t try for a $15 an hour minimum wage. The best we can do is $12 an hour. We shouldn’t try to restore the Glass-Steagall Act that used to separate investment and commercial banking, or bust up the biggest banks. We’ll be lucky to stop Republicans from repealing Dodd-Frank. We shouldn’t try for free public higher education. As it is, Republicans are out to cut all federal education spen... -
Finance 0
The Power Of The Triangle
Last week, we talked about support and resistance – both of which drive the technical study of the financial markets. Let’s expand on this theory by introducing another key technical idea, one that applies to far more than just investing. That is, the fact that history repeats itself. For example: Whether you believe in seasonality or not, January’s stock performance mirrored that of the last 10 years. Since 2006, the Dow Jones Industrial Average (DJIA) has logged an average decline of 2.3% in January. Over the first month of 2016, the DJIA declined 4%. The prevailing monthly downtrend has held. From intraday peak to trough, the DJIA ... -
Finance 0
Iran Says No Thanks To Dollars; Demands Euro Payment For Oil Sales
Iran enjoys trolling the United States. In fact, it’s something of hobby for the Ayatollah, who has maintained the country’s semi-official “death to America” slogan even as President Rouhani plays good cop with Obama and Kerry. The ink was barely dry on the nuclear accord when Tehran test-fired a next-gen surface-to-surface ballistic missile with the range to hit archrival Israel, a move that most certainly violated the spirit of the deal if not the letter. Two months later, the IRGC conducted live rocket drills in close proximity to an American aircraft carrier and then, on the eve of President Obama’s final state-of-the-union addr... -
Finance 0
Highest Unemployment Rate In 2 Years Stalls CAD Rally
This week’s moves have put the Bank of Canada, and CAD traders in a precarious position. From the Bank of Canada’s position, you have a stronger currency as the CAD continued rallying this week while at the same time, the data is showing less stability in the economy. Should this trend continue, we’ll eagerly look to the March 9th Bank of Canada meeting for a less confident tone from Stephen Poloz, which could continue the weak CAD theme. Fundamental Forecast for CAD: Bearish Friday quelled many of the traders who thought the CAD would continue strengthening without rest. In fact, many commodity currencies end the Friday near lows o... -
Finance 0
New Year In China, News Expected From Yellen
The second week of February features the Chinese New Year celebrations and this could be good news for the Aussie, as Chinese news has usually not tilted to the upside. A two-day testimony from Fed Chair Janet Yellen stands out. Will she bury any chance for further rate hikes in 2016 as markets imply? Or surprise with hawkishness? In addition, euro-zone GDP and a focus Friday on the US consumer stand out. Video previews of this week’s events: ...
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