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?
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…
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…
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…
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…
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…
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…
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….
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…
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…
