This confidence in central banks raises a pernicious systemic risk. Do you drive carelessly because your auto is equipped with airbags? Perhaps not. But would you drive more cautiously if you were perched on the front bumper? If even the slightest collision would crush the driver’s legs to pulp, I think it is safe to say…
There is a post by Dietz Vollrath, Labor’s Share, Profits, and the Productivity Slowdown. D. Vollrath has some math there for how a decline in labor share along with a rise in aggregate mark-ups can show that productivity growth is slowing. Mark-ups are the price over marginal cost. Normally in perfect competition, price is equal to marginal cost,…
The two-way action whether daily or intraday, are enough to keep most investors on the sidelines. September’s end of month ramp seemed more an exercise in end of quarter manipulation and short covering. October starts with more volatility as markets opened sharply lower then rallied late in the day to eke-out small gains. One spot…
Yesterday, Macquarie released a must-read report titled “Further deterioration in China’s corporate debt coverage”, in which the Australian bank looks at the Chinese corporate debt bubble (a topic familiar to our readers since 2012) however not in terms of net leverage, or debt/free cash flow, but bottom-up, in terms of corporate interest coverage, or rather the…
(Video length 00:02:19) During the session on Friday, we have the Nonfarm Payroll Announcement coming out of the United States, which of course will move the markets rather strongly. However, a lot of the time we simply get a lot of shuffling, which means that ultimately most of the markets won’t change much. 1 – With that…
This is a pickle wrapped in a conundrum surrounded by a puzzle, or something like that. The Fed declined to hike rates, which everyone thought was bullish, and then stocks got on the vomit comet. They’ve been going down on an elevator ever since. I think what’s interesting here is how shamefully far behind the…
T2108 Status: 19.7%T2107 Status: 18.8%VIX Status: 22.6General (Short-term) Trading Call: Bullish (upside target of 1996 on the S&P 500 before overbought conditions finally occur again. See “From the Edge of A Breakout to the Ledge of A Breakdown” for more details).Active T2108 periods: Day #4 under 20%, Day #10 under 30%, Day #32 under 40%,…
The peak in real estate may have arrived. At the same time, this reflects the shift away from government bonds. Blackstone Group LP, the largest real estate fund to assemble, has come right on point. Blackstone raised $15.8 billion, creating the largest real estate fund in history. As we have warned, this reflects investment capital shifting into real…
After the markets failed to embrace its most recent interest rate dither, the Fed dispatched pretty much its entire PR team to make sure we understood that rates would rise Next Month For Sure. Then everything kind of fell apart. Emerging market capital flight accelerated… Is this the mother of all warnings on EMs? (CNBC)…
GBP/USD: GBP will have to break and hold below its support located at the 1.5133 level to trigger further weakness. That level continues to hold as support for almost the whole week. Support comes in at 1.5100 level with a follow-through lower seeing it targeting more weakness towards the 1.5050 level. A break if seen…
