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Finance 0
Dow & The Immediate View
The Dow needs a closing above 16350 to stabilize for now temporarily. Otherwise, we are not out of the woods here until we pass March. To suggest that the major low has been made, the Dow would need to climb over 17750 level on a weekly closing basis. Keep in mind we are in a string of Directional Changes for the next 3 weeks. So expect this to remain vulnerable and choppy. The maximum on the downside if we elect a monthly bearish is to 12900 to 13000 zone. There, a closing below 16013 will be at least a warning of weakness for month-end.... -
Finance 0
Bank Of Japan Surprises Analysts
In a move which appears to have caught most financial analysts by surprise, the Bank of Japan has moved its interest rate into negative territory, to the tune of minus 0.1%. This means that banks depositing funds with the Bank of Japan will have to pay for the privilege rather than earning any interest for it. The decision is being viewed as an attempt to boost investment in equities (where share dividends or bond yields actually provide a net return) and drive inflation higher. As a consequence of the move, the Yen has depreciated against other major currencies, partially reversing the gains it made this month as panic hit stock markets foll... -
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EC Reading & Misreading The Fed’s Role In The Great Recession
A New York Times op-ed piece from earlier this week has reignited discussion about housing and the Federal Reserve as factors in the 2008-2009 Great Recession. Minds will differ on exactly how much of the financial crisis and economic contraction was triggered by the housing crisis. As for assigning blame to the Fed’s monetary policy, there’s a popular but misleading narrative that deserves attention: the central bank wasn’t culpable because it was cutting interest rates in late-2007 through 2008. True, but the Fed still deserves criticism based on other measures of monetary policy during that period—measures that arguably offer mor... -
Finance 0
Global Stocks, Bonds Jump On BOJ NIRP Stunner; Rally Fizzles After Crude Fades Gains
It is safe to say that nobody expected the BOJ stunner announced last night, when Kuroda announced that Japan would become the latest country to unleash negative interest rates, for one simple reason: Kuroda himself said Japan would not adopt negative rates just one week ago! However, a few BIS conference calls since then clearly changed the Japanese central banker’s mind and as we wrote, and as those who are just waking up are shocked to learn, negative rates are now a reality in Japan. The immediate reaction was to send the USDJPY surging by nearly 200 pips, back to levels seen… well, about a month ago. “The Bank of Japan gav... -
Finance 0
Kuroda Surprises, Introduces Negative Rates In Japan, Sinks Yen
The Bank of Japan surprised the market. It did not expand its asset purchase plan, which was the main focus of many market participants, including ourselves. Instead, following a rash of disappointing data, the BOJ introduced negative interest rates on some excess reserves and vowed to do more if necessary. Today’s action, like the expected decision in October 2014 to increase what Japan calls Quantitative and Qualitative Easing was on a 5-4 vote. It has sent the yen and Japanese interest rates sharply lower while lifting equity prices. The dollar initially soared to nearly JPY121.50 from JPY118.50. There are large option... -
Finance 0
A Thai Canal To Be Part Of China’s Silk Road
It was an idea that first emerged in the 17th century; but it may take 21st century technology to turn it into reality. The idea is to build a canal across the less-than-30 mile Kra Isthmus in Thailand – connecting the Andaman Sea in the Indian Ocean to the South China Sea. The logic supporting the Thai Canal, or Kra Canal, is solid – ships would no longer have to go the long way around Singapore, through the pirate-infested chokepoint known as the Strait of Malacca. Shippers could shave off three or four days from their travel time, translating to a $300,000 savings on the cost of a 100,000 ton cargo ship voyage. More than 15 million b... -
Finance 0
BOJ Adopts Negative Interest Rate; Yen Tumbles
The Bank of Japan introduced a negative interest rate policy in order to achieve a price stability target of 2 percent at the earliest possible time. At the Monetary Policy Meeting held Friday the policy board of the Bank of Japan has decided to introduce quantitative and Qualitative monetary easing with a negative Interest Rate. In a statement released by the BOJ, the central bank will pursue a program of monetary easing by making full use of possible measures in terms of three dimensions: quantity, quality, and interest rate. The BOJ will also adopt a three-tier system in which the outstanding balance of each financial institution’s curre... -
Finance 0
Forget About “Stocks For The Long Run”
BALTIMORE – After a year of wandering the globe, we are back in the homeland… and ready to turn in our passport. Travel can be fun. It can also be “broadening.” But the most interesting thing about it is not so much what you find out about other places. It’s what you discover about your home. You return to the land you once knew, as T.S. Eliot put it, and know it for the first time. So, we are ready to rediscover Baltimore – a place where children refer to handguns as “school supplies.” And what’s this? Judging by yesterday’s mailbag, many of our dear readers are Sarah Palin fans. Several helped us decipher Ms. Palin’s ... -
Finance 0
Is The U.S.A. Heading For A Recession?
There is a lot of talk at the present time as to whether the economy of the United States is going to enter a recession any time soon, and we have previously covered this question quite recently. There are only two reasons for the debate: firstly, because the major U.S. stock market index, the S&P 500, has fallen by more than 12% in value since the start of the year; secondly, because the United States has not been in a recession for about 5 years now and it tends to be an event that is expected to happen every few years as part of the natural economic cycle within a capitalist system. Before we look at the question as to whether the U.S... -
Finance 0
The Rapture, Donald Trump, Hillary Clinton And 50 Other Excuses People Use For Not Prepping
Have you ever come away discouraged after trying to talk about prepping with friends or family members that just don’t seem to be interested? Over the years, I have heard countless excuses from people for why they aren’t getting prepared for what is about to happen to America. Some of the excuses, like a lack of money, are definitely legitimate. But in many other instances, the objections don’t seem to make a lot of sense. In America today, most people let others do most of their thinking for them. And in general, our political, religious and cultural leaders are telling Americans that there really is no reason to be overly concerned ab...
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