I haven’t posted anything in a while because every time I’m about to write an update, a new piece of pretty big news develops that potentially shifts the picture. So here’s a high level overview of my thoughts from the past month. There’s a debate going on right now if the current slowdown will…
Last week’s FOMC meeting may have signaled a coming change in the investment markets. During the press conference, Janet Yellen began to lay out how the Fed will start to reduce its balance sheet (i.e. all of the bonds that they have purchased through QE). She said it could begin in the very near future. …
I know this was a very emotional election so, as always, I preface this post by saying that my comments are purely from an objective point of view regarding the impact on the economy and investment markets. I realize there are many other very important social ramifications beyond just finance but I’ll leave those topics…
The world’s top 6 central banks have now monetized, which means purchased with “printed” money, total assets worth almost $20 trillion (40% of global GDP). Since they’re running out of government bonds to buy (you know, since they’ve pushed yields negative), they’ve moved on to corporate bonds and stocks. The Swiss National Bank (SNB) is now…
These charts tell the whole story regarding the current state of the global economy and investment markets: Global central bank asset purchases compared to global equity % change (let’s be honest, there’s only one thing that matters…) Deutsche Bank’s recent report on the current stock market rally (’12 to ’16) compared to past market climbs…
This goes to show how distorted Quantitative Easing (QE) has made things. It’s a value investors nightmare… It’s important to use your head when investing in this market. A common mistake that investors tend to make is to pick a fund (or stock) based on past performance. They’ll think “look how well this fund has done…
Why has the economy been stagnant since 2008? Not the stock market…the real economy: real growth, higher wages, etc. Because we never let the system clear itself of waste, excess, inefficiency and poor investment decisions. I think a good analogy to explain this concept is to think of the economy like a balloon. In order…
This week’s Chart of the Week comes from Jesse Felder, a very astute investor. I’ve posted charts like this in the past, illustrating the effects of the Fed’s Quantitative Easing on asset markets, but it’s worth revisiting after the former head of the Dallas Federal Reserve branch, Richard Fisher, openly stated that the main goal of…