I am not one of those people who believe that if the Fed is dramatically easing, you simply must own equities. I must admit, charts like the one below (source: Bloomberg), showing the S&P versus the monetary base, seem awfully persuasive.
Financial market news and analysis from around the Web (bright and cheery edition as Nasdaq hits blue sky… take it fwiw)
- USD, Gold, Yields & Words –NFTRH.com
- Tech rally takes Nasdaq deeper into record territory –MarketWatch
- Growth is Becoming More Valuable –ValueWalk
- Mortgage Delinquencies Declined in March… –Calculated Risk
- Robert Hall: Secular Stagnation in the US –Economist’s View
- March Semiconductor Equipment Book-to-Bill of 1.10 –SEMI [biiwii comment: we got into the details in an NFTRH update yesterday. the headline number is not the key, but the headline 1.10 is good and so is the underlying data]
- The Plunge in Policy Uncertainty –GaveKal
- Manufacturing Up, Pollution Down: How? –Conversable Economist [biiwii comment: economists being economists, he talks about regulation as the reason. having lived the industry for many years i’d say yes, most definitely. regulations steadily marched stricter and stricter and that is a good thing (i’ve seen companies totally disregard the environment and human health). but don’t discount the degree to which automation has played into this as well. progress is progress after all.]
Financial Market News & Analysis From Around the Intertubes…
- Real Time Global Indices –Investing.com
- Earnings & Revenue Beat Rates –B.I.G.
- “Activity vs. Inactivity” –Jeff Saut
- Monetary Policy in the Future –Ben Bernanke
- Dollar’s Turn? –Dr. Ed
- Labor Market Slack & Monetary Policy –Economist’s View
- The Data Revolution & Economic Research –Conversable Economist
- Change They Don’t Believe in –JH Kunstler
“If the second largest economy in the world, right, says ‘we’re going to inject as much liquidity as we have since the financial crisis’, that is a big deal. So I think that is a message that PBOC’s sending that says like risk assets; grow your appetite for risk assets.”
This reminds me of last October when super Fed Hawk James Bullard puked out talk of QE 4 the minute US markets showed something impulsive to the downside. Turned out (as we noted at the time) that the Semiconductor element of that mini panic was entirely hype and the Dove in drag went away to gather himself, most recently coming back to the mic with his sharp beak and talons and that glaring look in his eyes.
Ha ha ha… now China panics in an effort to soft peddle the rational policy it enacted of allowing shorting of its ‘free’ markets. We called the ‘China allows shorting’ news non-fundamental hype on Friday and we call the ‘China eases’ news today hype as well. Though its implications could be felt well beyond a hype burst, if players are indeed compelled to “like risk assets” and to grow their “appetite for risk assets.”
The bottom line is that we are on a long journey toward losing confidence in these policy moles. Here in the US a cranky and sometimes malcontented website has dubbed the phase Peak Fed ©.
Bulls and bears are getting ground up during the process, which will either resolve up (manic acceleration) or down (cyclical trend change). But it is a process and by definition a process is “a natural or involuntary series of changes”. Believe it or not, the process is natural. In this case it is addressing unnatural things.
Financial news & analysis from around the web
- Credit Managers’ Index: Credit Contraction –NFTRH.com
- German wage hikes: A small step in the right direction –Ben Bernanke
- Managing Risk –Jeff Saut
- Secular Stagnation: The Long View –Economist’s View
- Bank Earnings in Focus –SeeItMarkets
- Flash Crash Redux? –Across the Curve
- Have Profit Margins Peaked? –Dr. Ed
- Emerging Market Equities Are on Fire –GaveKal
- Small Business Optimism Plunges to 9 Mo. Low… –Zero Hedge
- Europe’s Richest Fight Off Dropping Euro… –Bloomberg
- The Ultimate Conspiracy Theory –Barry Ritholtz
Market News and Analysis From Around the Intertubes
- March Payrolls Tank –NFTRH.com [biiwii comment: incl. our thoughts and those of respected geek Calculated Risk]
- When the Employment Report Has Been Released on Good Friday –QuantEdges
- Why the Biotech Sector (IBB) is “Distributing” Pain –See it Market
- Why You Should Read Louis James of Casey Research –IKN
- The Great Titration Continues –Market Anthropology
- You’re Really Bad at This –Josh Brown [biiwii comment: ha ha ha… i love this guy]
- Ilargi: Warren Buffett is Everything That’s Wrong With America –Naked Capitalism
- On its Own, Declining Profits Are Not a Risk to Equities –Fat Pitch
- Is the Fall in the EUR Over Done? –GaveKal [biiwii comment: the monthly chart, which finally hit the lower big picture trend channel line already answered yes]
- Is US Economy Coming Out of Ice Patch? –Dr. Ed [biiwii comment: no doc, not yet]
- Price Deflation, Asset Prices and Threats to Growth –Conversable Economist
Market News & Analysis From Around the Web
- US Stock Market (extensive update) –NFTRH.com
- Weekly Market Summary –Fat Pitch
- Secular Bull Market –Jeff Saut
- $20 Billion Jump in Margin Debt in February –GaveKal
- Frenzied speculative activity in China’s equity markets –SoberLook
- Ben Bernanke Reaches the Pinnacle of His Career –IKN
- Why Are Interest Rates so Low? –Ben Bernanke’s Blog
- 6 Cylinders Firing in Euro Zone –Dr. Ed [biiwii comment: hmmm, let me see… what was the name of that market management service that front ran this condition for its subscribers about 4 months ahead of today’s widely known news?]
- Machine Tool Sales Continue to Sink in February –NFTRH.com
Tell me, which of them (the big brokers and investment houses) warned anyone about it being time to sell in 2000, or in 2007? There are exceptions out there, especially in smaller boutique style shops. But generally speaking, this thing we call Wall Street (big firms and the media that is their propaganda arm) exists to sell people the dream, then mark it up, front run it (in one way or another, legally or otherwise) extract fees from it and ultimately fleece it on the way down again (as regular people puke a tanking market and pay trading commissions for the privilege).
Here I cue up the old story about when I bought my first and only BMW (it was fine, but really it was not me) back in 2002. The deal was done and I sat with the business manager to finalize the transaction. He was a kid who had been fired from Merrill Lynch not 2 years earlier for keeping his clients in cash and totally safe at the market top. Problem was, he was not turning
tricks, err I mean commissions for Merrill. All done.
Then there are the Certified Financial Advisers (the ones not incentivized with ties to performance) who are little more than mutual fund salesmen. Don’t try to tell them about well rounded market analysis because they’re just going to go ‘la la la la la… I can’t hear you… have you stopped talking yet?… la la la…’ when you ask them about legitimate risk management strategies they employ. Mine told me in 2000 ‘well, MFS and Putnam have professional money managers who would never allow big losses like you yourself would probably experience’.
Well thank you Putnam for cutting my wife’s IRA in half by 2002 (and it turned out, front running it) and MFS for chopping 40% off of mine. This is when I pulled every penny from said adviser, did it myself and have since put on an annual average (including the last 3 very underwhelming years) of around 35% from 2002 to present day.
More than that though, the seeds were sewn for this website and its ‘not very pleased with Wall Street and the mainstream Financial Services industry’ orientation.
I get email updates from the White House and a recent one was talking about legislation to bring accountability to those financial advisers who are basically free to eat their clients (my words of course) and do not impose fiduciary responsibility upon themselves, and I think that is a good thing. These pigs need this responsibility imposed on them.
One thing that running NFTRH has done for me since 2008 is make me aware that there are plenty of advisers (some of whom subscribed) who are ethical and probably cannot live comfortably with themselves unless they are trying to do the right thing at all times. This post is obviously about the other guys. There’s a lot of them too. Indeed, I’ll bet the big firms are infested with them.
- GDP Lame, Corporate Profits Decline & Bad Chicken –NFTRH.com
- Liquidity –Oak Tree Capital (pdf)
- Redistributing Income to Reduce Inequality –Dr. Ed
- 1/4 Of All MSCI World Stocks Are Trading Above 30x PE and 4x BV –GaveKal
- Interest Rates Aren’t Going Anywhere –Ritholtz
- Rounding Out a Tough Week for Stocks –B.I.G.
- Fed’s Top Cop Gets Grilled About Leaks –Bloomberg
- Prices Are an Issue –NFTRH.com
- Cash Balances Hit New Record High –FactSet
- The Other “Most Crowded” Trade is (Still) to Short Long-term Treasury Bonds –GaveKal
- China’s Consumption Transition –Conversable Economist
- March 19, 2015 –Trading Channels
- AAII Optimism Survey: Optimism Falls to a 2 Year Low –AAII @SeekingAlpha
- Going for Gold –Slope of Hope
- C’mon Angela, Let Them Greexit –David Stockman @Stealthflation
- Chinese Stocks Part Ways With Copper Price –Dr. Ed
- Overconfidence Index Signals Danger for German Stocks… –Sentix
- USD, Economy & Policy –NFTRH.com
- FOMC Preview: Remove “Patient” –Calculated Risk
- Another Weaker Than Expected Empire Manufacturing Report –B.I.G. [biiwii comment: no, really?]
- 37% of Americans Spooked by the Stock Market –Valuewalk