Monthly Archives: May 2013

Evaluating 3 Bullish Arguments, by Lance Roberts

S&P-500-PE-Reversions-052813 These are indeed interesting times that we live in.  As the markets elevate higher on the back of the global central bank interventions it is important to keep in context the historical tendencies of the markets over time.  It is not uncommon at major market peaks to see"irrational exuberance" begin to grip the markets.  In March of 2000, as foreign capital inflows drove markets higher, Jim Cramer came out with his 10 must own stocks for the next decade. By the end of 2002, of the few that were

Japan Is On The Brink Of Disaster, by John Mauldin

Japanese_10Year_Continuous_Futures_Contracts The Mother Of All Painted-In Corners Alice laughed: "There's no use trying," she said; "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was younger, I always did it for half an hour a day. Why, sometimes I've believed as many as six impossible things before breakfast." – Alice in Wonderland, Lewis Carroll I wrote several years ago that Japan is a bug in search of a windshield. And in January I wrote that 2013 is the Year of the

Weekly update, by A.D

Japan Dear all, After an 80% increase since October, the Japanese market experienced its biggest drop (in a single trading day) since Fukushima last week (-7.3%). We will need to wait to see whether the selloff continues (it did last night) or whether it is only a minor correction before another rise; it is a warning anyway and shows the weakness of central banks fueled rallies (like the US, UK, Eurozone ones). In that note I will explain the reasons for this sudden and pretty sharp drop, and go through

Japan Has Its Own Reasons For Crashing, by James Saft (Reuters)

shinzo_abe_qe_to_infinity_n_beyond (Reuters) - Spiking interest rates in Japan threaten to undermine, and possibly end, the recovery being engendered by Abenomics. That could reverse gains not only in Tokyo stocks, but in stock markets world-wide which have benefited from Japanese liquidity. While a rebound in activity has allowed the Bank of Japan to upgrade its assessment of conditions for a fifth straight month, bond yields have risen sharply in extremely volatile conditions. Yields on 10-year Japanese government bonds have

Weekly update, by A.D

s&pmacro Dear all, What we have been experiencing during the last few months is insane! The markets keep heading higher despite disappointing and worsening fundamentals, and thanks to very accomodating central banks. But how much longer could this situation last? Many data got released last week. Let's go through the most important ones. 1. China slowing down, Eurozone in recession, US data mitigated   Let's start with China. There was a number of data released last week, and they confirmed

European Banks and Why the Deleveraging Has Only Just Begun, By Martin T., Macronomics

mt2 “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” – Winston Churchill Figure 1 was extracted from Bank of America’s note “Banking on the Banks” from the 16th of May, clearly illustrates why the deleveraging has only just started in Europe. “Meanwhile, Europe continues to lag the improvements seen in the US economy and markets. Quite simply, Europe’s economy struggles with too many banks, too much debt and too little

5 Questions That Every Market Bull Should Answer, from Lance Roberts

PCE-SP500-051513 Another excellent piece from Lance Roberts. A must read! There have been a litany of articles written recently discussing how the stock market is set for a continued bull rally.  The are some primary points that are common threads among each of these articles which are that interest rates are low, corporate profitability is high and the Fed's monetary programs continue to put a floor under stocks.  The problem is that while I do not disagree with any of those points - they are all artificially

Clues To Watch For The End Of QE “Infinity”, by Lance Roberts

Fed-Balance-Sheet-VS-SP500-050913 So, apparently, according to Jon Hilsenrath, "QE to Infinity" is actually "finite" after all.  With Ben Bernanke set to "exit stage left" in 2014 the question of who replaces him at the helm of the massive USS "Federal Reserve" will be important as to the future of the current course of monetary policy.   One of the top contenders for that job is Janet Yellen.  However, according to the variety of erudite speakers at the recent Strategic Investment Conference, there are many hurdles

Fed Maps Exit From Stimulus, by JON HILSENRATH (The Wall Street Journal)

ibm-business-partners-federal-stimulus-package Federal Reserve officials have mapped out a strategy for winding down an unprecedented $85 billion-a-month bond-buying program meant to spur the economy—an effort to preserve flexibility and manage highly unpredictable market expectations. Officials say they plan to reduce the amount of bonds they buy in careful and potentially halting steps, varying their purchases as their confidence about the job market and inflation evolves. The timing on when to start is still being debated.   The

A. Gary Shilling – Six Realities In An Age Of Deleveraging

gary-shilling-7 Submitted by Lance Roberts of Street Talk Live blog, In Part III of Lance's series of reports from the 10th annual Strategic Investment Conference, presented Altegris Investments and John Mauldin, the question of how to invest during a deleveraging cycle is addressed by A. Gary Shilling, Ph.D.  Dr. Shilling is the President of A. Gary Shilling & Co., an investment manager, Forbes and Bloomberg columnist and author - Mr. Shilling's list of credentials is long and impressive.  His most recent