I lightened up on Emerging Markets (EM) a little this week. Many of the EM markets took off to the upside after Bernanke announced no change to the current Quantitative Easing program. However, I see the current rally as just another cyclical blip that will quickly lose steam. At the heart of the issue remains…
Sovereign Debt Crisis
There have been some interesting developments over the past week that give me additional conviction that the next crisis the investment markets face will be a sovereign debt crisis (government bonds). We’ve already seen the early stages in Europe when yields in Greece, Portugal, Ireland, Italy and Spain spiked higher. Now we have bond yields…
Emerging Markets
Emerging Markets have been outright crushed this year. This is part of the capital flows exiting these hot economies as fear of the Fed cutting back on QE grows. It’s important to be patient when investing in any asset class, but it’s double important when it comes to the Emerging Markets. These economies/companies are very…
Money Talks
I’ve talked about the importance of following capital flows in the past. It’s not just watching where the money is flowing, but the interrelationships between investment classes that explains why shifts are occurring and gives clues about what to expect moving forward. This ever-changing nature of the markets is what I find so fascinating. For…
G’day Mate!
I’ve been looking more to the currencies as a bond alternative lately. Artificially low interest rates have skewed the market to where I don’t feel investors are being fairly compensated for a lot of the risks associated with bonds right now. Recently, I’ve had my eye on the Aussie dollar. The Australian dollar has benefited…
Thoughts of the Week
Ags The USDA releases their world supply and demand outlook today for all agricultural commodities. We generally see big price swings off this release. We’re also in the middle of planting season for most of the US. It’s interesting that my concerns of soil being too dry and not holding enough nutrients flipped to where…
The Driving Force Behind Stocks
I’ve had a few conversations recently with people about the stock market and its ability to continue this climb higher. A lot of people look at the economy and ask questions like “How is the stock market making all-time highs with unemployment as high as it is?” It can be pretty confusing at times and…
Deflation
This major sell-off in gold and cyclical stocks is the deflationary effect of Europe’s mismanagement of their debt crisis/bailouts. Regardless of what guarantees should be honored and who should pay for bailouts, when you confiscate assets and destroy all confidence in your banking system, everything freezes. People hoard what they have, money stops moving, and…