- the source for market opinions


April 23, 2019 | We Give Up! Part 6: Federal Reserve “Resigned” To Blowing Bubbles

After raising interest rates and getting slapped around by the markets last year, the Fed now appears to accept that future monetary policy can only be easy, even at the cost of ever larger and more destabilizing financial bubbles. On one hand this is a truly epochal change. On the other hand it’s just a […]

April 22, 2019 | Gold: Seasonality Bearish, Futures Turning Bullish

Early 2019 looked like a great set-up for gold, but failed to live up to its billing. A nice December-through-March run took the price back to the $1,350 resistance that had repelled it four times in the past five years. And that was that. No penetration and fast spike into the $1,500s. Just another failed […]

April 19, 2019 | China’s Fake Numbers And The Risk They Pose For The Rest Of The World

Not so long ago, London Telegraph’s Ambrose Evans-Pritchard was one of the handful of must-read financial journalists. He probably still is, but since he disappeared behind the Telegraph’s pay wall his work is invisible to non-subscribers, only emerging when a free outlet runs one of his stories. That happened this morning when the Sydney Morning […]

April 16, 2019 | Central Banks Soften Us Up For Higher Inflation

There was a time when “price stability” – that is, money that buys the same amount of stuff every year – was considered a good thing. But as debts began to pile up around the world, it became clear to policymakers that managing that debt required money that got a little less valuable over time, […]

April 14, 2019 | Things That Seem Normal But Definitely Aren’t, Part 1: Soaring Chinese Debt

The era of fiat currencies and central bank printing presses has desensitized us to massive leverage and its implications. So when it is reported, for instance, that China‘s private sector borrowing has risen to levels that are unprecedented in financial history, this is greeted with a collective yawn. It shouldn’t be, though, because no society […]

April 12, 2019 | Stuff We Can’t Afford, Part 1: Paying People To Live On Flood Plains

Everyone has been there: Times are good for a while and it starts to seem reasonable to buy – or agree to – things you want but don’t need. Later on, when money gets a little tighter, you start prioritizing and realize you really didn’t need the leased Mercedes or the McMansion with all those […]

April 11, 2019 | What Went Wrong With Pensions — And Why The Whole World Should Be Worried

The past decade was a uniquely smooth stretch of financial highway. Pretty much every major asset class – stocks, bonds, real estate, fine art, you name it – did well, making it hard for conventional investors to lose money and easy for them to earn outsized returns. So why then are US public sector pensions […]

April 3, 2019 | The End Of The Bull Market, In Three Charts

Stocks have completely recovered from their flash bear market of late 2018. But now they face a hard question: Can already record high prices continue to rise in the face of falling corporate profits? Let’s start with the “falling corporate profits” part: A business generates improving profits when the things it sells rise in price […]

April 1, 2019 | If You Thought It Couldn’t Get Any Worse For Chicago …

This is the second post in a week on Chicago’s epic financial train wreck. That’s a lot of attention and it probably won’t happen again, given the target-rich world we live in. But, jeeze, talk about not learning from past mistakes. This latest chapter begins with the Chicago mayoral race and the two candidates’ stances […]

March 29, 2019 | Who In Their Right Mind Would Lend Money To Chicago?

When you see that Italy’s debt is rising, the logical question is, who the hell is dumping good money after bad into such an obviously failed state? The answer is that by lending money to Italy (or Greece, Portugal, Spain, or France) you’re really lending money to Germany, since the latter will have to bail those other […]

March 28, 2019 | Welcome To The Third World, Part 28: Medieval Diseases “Flare

A driving trip down the Pacific Coast normally involves prioritizing a long list of great views and spectacular hiking/biking trails to fit the allotted (never sufficient) time. But now there’s a new element to consider: Homelessness. Go to, say, Trip Advisor, and read the reviews of California attractions and you’ll find a disturbing number along […]

March 25, 2019 | Michael Pento: China Can’t Stop What’s Coming

As this longest-ever expansion finally runs out of steam, the question on everyone’s mind is, “who will save us this time?” The last big crisis was “fixed” by a combination of lower interest rates globally and massive buying of commodities by China. But with interest rates still at cyclical lows in a big part of […]

March 18, 2019 | The Coming Wave Of High-Tech Authoritarianism

One of history’s hard lessons is that collapsing financial systems beget authoritarian politics. Today’s world, alas, is following this script, as rising debts lead to wrenching political changes in nearly every country that holds free elections, while fascism and socialism are once again being taken seriously by people who in normal times would inhabit the […]

March 15, 2019 | The Coming Wave Of Junior Gold Miner Buyouts

Spend a little time researching gold mining stocks and you’ll notice that once you get past a handful of familiar names there’s a long list of companies you’ve never heard of. Most of these are the proverbial “hole in the ground with a liar standing next to it.” But a fair number are real miners […]

March 10, 2019 | Central Banks Cave, Usher In The Crack-Up Boom

This was going to be the year when the other big central banks joined the Fed in “normalizing” interest rates and reversing the past decade’s QE experiment. Instead, the other central banks blinked and went back to aggressive ease, and the Fed is following them. This is a very big deal. Let’s consider some before-and-after […]

March 6, 2019 | Poetic Justice For The Aristocracy

Two points about today’s political economy – and then a prediction involving Illinois: Point One: What’s coming is poetic justice for the aristocracy. The wave of populism/socialism/proto-fascism that’s sweeping the US and Europe is a direct result of the breathtaking hubris of a ruling class that didn’t know when to quit stealing. While it is […]

February 28, 2019 | Remember, The Fed Hasn’t Actually Done Anything Yet

When the financial markets got, um, choppy towards the end of 2018, the Fed caved almost instantly. But only rhetorically. Fed chair Powell promised to stop raising interest rates and shrinking the money supply, and the financial markets, trained to salivate at the sound of Fed happy talk, immediately morphed from “risk-off” to “risk-on.” Stocks […]

February 22, 2019 | Really Bad Ideas, Part 7: Open Borders

Now that we’re all free to speak our minds (maybe we should we call this the “post-political-caution world”) a lot of previously discredited ideas have re-emerged and are being tossed into the debate – apparently without much thought to, for instance, their horrendous unintended consequences. One such idea that’s, ahem, gaining a lot of currency […]

February 21, 2019 | Finally, Asset Forfeiture Is Ruled Unconstitutional — Sort Of

Among all the many things governments do that seem to violate the Constitution — not to mention common sense and basic fairness – asset forfeiture stands out. Believe it or not, states and cities now partially fund themselves by arresting people, taking their stuff and then failing to return said stuff after deciding not to […]

February 18, 2019 | Hello Old Friend…Gold Nears $1,350 Resistance That Has Repelled It Four Times In 5 Years

The past five years have been baffling for gold bugs. In an environment of massive central bank money creation, rising government deficits and a populist takeover of many countries’ political systems – all of which should be great for safe haven assets – gold has spiked to around $1,350 four times, only to be smacked […]

February 16, 2019 | Doug Noland: Central Banks Are “Hostages Of Market Bubbles”

Doug Noland’s weekly Credit Bubble Bulletin is always required reading. The latest – befitting the amazing things that have happened lately – is more necessary than usual. But at 10,000 words it’s also a lot longer than usual. So while everyone should definitely read the whole thing, here are some excerpts to get you started: […]

February 14, 2019 | Fed Tightening Is Over: Markets Now Expect Cuts In 2019

People who assumed the Fed, along with the rest of the government, would cave the minute the financial markets got a little choppy turned out to be right. A couple of bad months and the “normalization” of both interest rates and the Fed’s balance sheet have stopped cold. Now the markets expect falling rates and […]

February 9, 2019 | Ocean Shipping Rates Plunge: Just A Blip Or The End Of Globalization?

The Baltic Dry Index represents the cost of renting an ocean-going container ship to move goods from, say, Chinese factories to the Port of Los Angeles. The more stuff being made and sold, the higher the demand for such ships, and thus the higher the price to rent one. And vice versa. This is definitely […]

February 4, 2019 | What Blows Up First? Part 6: “Almost Junk” Bonds

The key insight of the Austrian School of Economics (maybe the key insight of ALL economics) is that the amount you borrow matters, but so does the use to which you put the money. A case in point is US corporate debt, which has changed structurally lately in very scary ways. The short version of […]

February 2, 2019 | No Longer The Luckiest Generation: Boomer Finances Start To Roll Over

We Baby Boomers timed it perfectly. We came of age during in an era of plentiful jobs and relatively high wages. Public pensions were generous. Stock, bond and home prices were low, and have since risen strongly, enriching anyone who managed to save regularly. College was (by current standards) insanely cheap, allowing us to upgrade […]

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