- the source for market opinions


December 11, 2018 | The World’s Biggest Hedge Fund Is Getting Whacked, And Why “Moneyness” Matters

A few years ago the Swiss National Bank (SNB) – which traditionally held “monetary assets” like government bonds, cash and gold to back up the Swiss franc — decided to branch out into common stocks. This was a departure, but for a while a brilliant one. The SNB loaded up on Big Tech like Apple, […]

December 9, 2018 | Yet Another Trillion-Dollar Unfunded Liability: WHY California Is Burning

The apocalyptic fires that hit California last month have left observers scratching their heads and wondering how destruction on that scale could be possible – and how much it will cost in the future if the causes aren’t addressed immediately. This morning’s Wall Street Journal concludes that 1) the problems aren’t being addressed and 2) […]

December 7, 2018 | Why We’re Ungovernable, Part 17: In Latin America, Soaring Population + Soaring Debt = “Brutal Justice

There are two ways of looking at the intersection of debt and population. One way says that if debt is rising population should also rise to allow future workers to pay for the retirement of today’s. More people thus make debt easier to manage. The other point of view is that debt and population soaring […]

December 4, 2018 | Empty Words Are Failing. A Timeline For What Comes Next

A quick recap of the past couple of months: Stocks plunge. The politicians, bureaucrats and bankers who depend on artificially-elevated financial asset prices start to panic. The Fed announces that maybe it won’t have to raise interest rates any more, and the president announces a temporary cease-fire in the trade war with China. The markets […]

December 2, 2018 | Why We’re Ungovernable, Part 16: France On Fire

Back in 2017, when some countries were handing power to populists promising variations of “drain the swamp,” France went for continuity with Emmanuel Macron, a young, moderate-sounding technocrat from the world of finance who promised to modernize the country without threatening the elites, the welfare state or the bureaucracy. Fast forward a couple of years […]

November 28, 2018 | Home Sales Plunge, Trade Deficit Spikes, Fed Blinks

Looks like we just hit an inflection point. So far this morning: U.S. new home sales drop to more than 2-1/2-year low (Reuters) – Sales of new U.S. single-family homes tumbled to a more than 2-1/2-year low in October amid sharp declines in all four regions, further evidence that higher mortgage rates were hurting the […]

November 27, 2018 | The Cost Of Insurance Is About To Jump

The argument over whether we’re in for global warming or global cooling and whether what’s coming is natural or human-made is fun but totally irrelevant from a financial perspective. The fact is that for whatever reason and in whatever direction, the climate is getting more aggressive. Monster snowstorms and apocalyptic fires are clearly becoming more […]

November 25, 2018 | Has This Become A “Short Everything In Sight” Market?

One of the strangest things about this strangest-ever expansion has been the way pretty much everything went up. Stocks, bonds, real estate, art, oil – some of which have historically negative correlations with others — all rose more-or-less in lock-step. And within asset classes, the big names behaved the same way, rising regardless of their […]

November 24, 2018 | Gold Is Setting Up For A Nice First-Half Rally

Precious metals investors don’t have much to console them these days. Just about the only bright spot is the nice, though ephemeral, pop in the gold/silver price that seems to happen every January. Sometimes it persists for six or so months, sometimes it ends before the snows do. But either way it’s more fun than […]

November 21, 2018 | Corporate Share Buybacks Looking Dumber By The Day

A recent MarketWatch article notes that: GE was one of Wall Street’s major share buyback operators between 2015 and 2017; it repurchased $40 billion of shares at prices between $20 and $32. The share price is now $8.60, so the company has liquidated between $23 billion and $29 billion of its shareholders’ money on this […]

November 20, 2018 | Michael Pento: Falling Corporate Earnings Will Fuel The Next Leg Of The Bear Market

If corporate earnings rise in 2019 like Wall Street analysts expect, stocks are a screaming buy at these bear-market levels. But earnings won’t rise and stocks are not a buy, says money manager Michael Pento: Earnings Recession of 2019 President Trump’s plan to stimulate the economy, known as The Tax Cut and Jobs Act, was […]

November 16, 2018 | GE, Nvidia, Nordstrom, Bitcoin All Tank, And The Fed Notices

The sense that something isn’t right out there just got a ws: Chipmaker Nvidia plunges after missing on revenue and guidance (CNBC) – Nvidia stock fell as much as 19 percent Thursday after the company reported earnings for the third quarter of its 2019 fiscal year, which ended on Oct. 28. The chipmaker fell short […]

November 13, 2018 | As Oil Plunges, Energy Junk Bonds Turn Dangerous — Again

Back in 2104 oil was falling and hundreds of billions of dollars of energy junk bonds and leveraged loans looked to be at risk. Wolf Street had this to say at the time: Oil and Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next The price of oil has plunged nearly 40% since June […]

November 12, 2018 | A Palpable Sense Of Panic

Based the last few days’ headlines you’d never know the world is in year 10 of a pretty good expansion. Check this out: Not terrified of a recession? These stocks hint you should be Cyclical commodities continue to weaken, gold moves in relation Italian banks on verge of new crisis on €400 million hole at […]

November 10, 2018 | Yet Another Trillion-Dollar Unfunded Liability, California Wildfires Edition

Yesterday an entire California town burned down. Paridise, CA has (had) 27,000 residents and over 1,000 buildings, and now it’s pretty much gone. A fire started nearby on a windy day and within hours everything was ash and cinders. That fire and several others are still expanding across the state, threatening tens of thousands of […]

November 9, 2018 | Oil And General Electric Join The Roll-Over Parade

First developing countries blew up. Then real estate topped and started to roll over. Now oil has entered what CNBC just called its “longest losing streak in three decades.” The oil rout just became a bear market for U.S. crude In a volatile turnabout, the U.S. crude benchmark fell into a bear market Thursday just […]

November 7, 2018 | The Election’s Finally Over. Now Things Can Go Back To “Normal”: Rising Interest Rates, Rising Debt, Rising Volatility

As contentious as the US midterm elections were, there was never a scenario in which they mattered. Any possible configuration of Republicans and Democrats in the House and Senate would have yielded pretty much the same economy going forward: Ever-higher debt, upward trending interest rates and (through the combination of those two) rising volatility. So […]

November 3, 2018 | The World’s Smartest Investors Can’t Figure Out The Markets – And That’s A Really Bad Thing

Hedge fund managers sit at the top of the financial world’s food chain. They’re generally seen as the smartest money managers, and their companies have the most flexibility to pursue new opportunities. The result is supposed to be the best possible returns – for clients who can afford the high fees. But lately things haven’t […]

November 1, 2018 | New York City Joins The “Imminent Bankruptcy” Club

The “public pension crisis” is the kind of subject that’s easy to over-analyze, in part because there are so many different examples of bad behavior out there and in part because the aggregate damage these entities will do when they start blowing up is immense. But most people see pensions as essentially an accounting issue […]

October 29, 2018 | Why We’re Ungovernable, Part 15: After Germany’s Merkel Comes Chaos

After a long, initially-successful run promoting European integration and mass immigration, German Chancellor Angela Merkel saw the bottom fall out of her political fortunes this year. This morning she stepped down as leader of the formerly-dominant Christian Democrat party and promised not run again when her term as Chancellor ends in 2021. What happens next […]

October 24, 2018 | Here Comes The Housing Bust “Reverse Wealth Effect,” Australia Edition

For the past few years, homeowners just about everywhere have been able to finesse life’s problems by thinking “at least my house is going up.” This home equity accretion allowed them to buy stuff on credit, safe in the knowledge that even as they maxed out yet another credit card their net worth continued to […]

October 21, 2018 | This Is What A Paper Gold Short Squeeze Looks Like

Huge recent imbalances in the gold futures market led many to predict that speculators (usually wrong at big turning points) would be forced to close out their historically extreme short bets. Put another way, too many traders were using gold futures contracts to bet that precious metals will go down, and when those bets are […]

October 19, 2018 | Gold Is Becoming Cool Again

The sentiment shift is still subtle, but it’s both real and widespread. After a few years of being ignored and/or dismissed as basically useless, gold is cool again, attracting positive press and increasing accumulation by big investors. India, for instance, imported less gold than usual in the first part of this year but lately has […]

October 17, 2018 | One More Thing To Worry About, Saudi Edition

Ah, Saudi Arabia, land of heat and contradictions. One day they’re jailing women’s rights activists for wanting to drive, the next day they’re dismembering still-living Washington Post journalists. And yet they can count the world’s capitalist democracies as friends, because today’s dysfunctional economic/geopolitical system depends on both Saudi oil and Saudi willingness to keep their […]

October 14, 2018 | Last Week Was Just A Taste Of The Coming Gold Short Squeeze

The gold and silver futures markets got even more unbalanced last week, with speculators (who are usually wrong at the extremes) going as short as they’ve ever been and commercials going even more long. Here’s the gold data in chart form: These are historically huge imbalances that – if the action in the paper markets […]

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