Monthly Archive:: January 2016
Last night the Bank of Japan implemented Negative Interest Rate Policy, or NIRP. It is the second Central Bank to do so. The European Central Bank or ECB first went to NIRP in June 2014. Thus, between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP.
The stock rally of the last few days has investors wondering if the bottom is in. Unfortunately, it very likely is not. High Yield bonds have lead stocks to the upside. They are now leading to the downside, and the High Yield bond market indicates we have further to fall. The stock rally looks out
The world has yet to fully digest what is currently happening in Japan. Japan is the global leader for Keynesian Central Banking insanity. The ECB and US Federal Reserve began implementing ZIRP and QE after 2008. The Bank of Japan has been employing both ZIRP and QE since 2001. Put simply, by the time the
As we outlined last week, the bursting of the bond bubble has begun. CNBC and the financial media may spend 99% of their time talking about stocks, but bonds are the single most important issue for Central Banks. When you consider everything in the context of the bond bubble, every Central Bank policy begins to
Stocks are rallying this morning. They are not rallying because of a change in fundamentals. They are not rallying because of a significant debt restructuring. They are not rallying because of great quarterly results from key economic bell-weathers. They are rallying because of hope for more Central Bank stimulus. This is the game traders have
Last year we predicted that the world had reached peak centralization and that going forward things would begin to fracture. What is centralization? Centralization is the process by which the world grows increasingly centralized, relying on Centralized organizations (Central Banks, sovereign governments, etc.) to determine the direction of capital and focus. From an investment perspective,
Last week a Central Banker made the most incredible admission in the history of banking. It came from the Bank of Japan. The Bank of Japan has been the leader in global Keynesian insanity. The US Federal Reserve launched its first QE program in 2008. The European Central Bank launched its first QE program in
As we wrote earlier this week, bursting of the bond bubble has begun. The decision by Central Banks to “inflate” the system’s debts away post-2008 has resulted in the misallocation of trillions of Dollars of capital. The worst offenders were Chinese corporates. China has created the single largest mountain of bad debt in the world.
The bursting of the bond bubble has begun. As I’ve outlined previously the primary concern for Central Banks is the bond bubble. CNBC and other financial media focus on stocks because the asset class is more volatile and so makes for better content, but the foundation of the financial system is bonds. And bonds are
Stocks will likely rally this week for the simple reason that it is options expiration week. The Fed almost always gives Wall Street extra money to play around with during options expiration. On average the Fed expands its balance sheet by $9.1 billion during options expiration weeks (expansions means money flows into Wall
The stocks futures markets are off the lows from last week as traders are playing for the usual Monday rally. However, the fact remains that the technical damage from last week’s breakdown has been SEVERE. Stocks even violated the “neckline” on the Head and Shoulders pattern they’ve carved out since early 2014. ———————————————————————– The Single
Stocks are rallying into the open. However, the technical damage of the last week has been severe. The S&P 500 crashed through its trendline (blue line). It also crashed through critical support established by the bounces in September and October (green line). We might get a bounce here to retest that green line, but unless
Dear Investor, Stocks are crashing before the market’s open. As I warned earlier this week… it’s very likely that the Bull Market in stocks is over. Indeed, the breakdown is actually MUCH bigger than most investors realize. We’ve actually broken THE bull market line that goes all the way back to 2009! If you are
The FANGs are beginning to break down. FANG is an acronym that stands for Facebook, Amazon, Netflix, Google. These are four of the top performing stocks of 2015. Netflix was the top stock for the S&P 500 returning 134% in 2015. Amazon was #2, returning 118%. Google returned 44% and Facebook returned 34%. In very
Happy New Year! Last year (2015) likely will represent the top for the bull market that began in 2009. Stocks finished the year down, representing the first down year since the March 2009 bottom. Many analysts will point to the August sell-off as the reason stocks performed so badly, however, looking at the chart, stocks